Key Points

• New York federal district court vacates the DOL’s “health care provider” definition in the DOL’s Final Rule implementing the Families First Coronavirus Response Act.
• The court also vacates the DOL’s employer consent requirement for intermittent leave and the “unable to work” requirement for receipt of leave benefits.
• The national impact of the decision is currently unknown as the DOL contemplates next steps.

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The Lawsuit

On April 14, 2020, the State of New York (State) sued the Department of Labor (DOL) claiming that the DOL exceeded its authority under the Administrative Procedure Act (State of New York v. U.S. Department of Labor, et al., No. 1:20-cv-03020) when it issued its Final Rule for the Families First Coronavirus Response Act (FFCRA). The parties submitted cross-motions for summary judgement and, on August 3, 2020, Judge J. Paul Oetken the Court ruled in the State’s favor vacating four provisions in the Final Rule: (1) the “work-availability” requirement, (2) the definition of “health care provider,” (3) the employer consent requirement for intermittent leave, and (4) the documentation requirements.

The Court’s Decision

1. The Court Vacates the DOL’s Final Rule “Health Care Provider” Definition

The most far-reaching aspect of the Court’s decision was its ruling related to the DOL’s definition of “health care provider” as it relates to the FFCRA’s two paid leave benefits that the law mandates the employer provide to eligible employees.

The FFCRA affords leave benefits to employees affected by the COVID-19 pandemic. The Emergency Paid Sick Leave Act (EPSLA) portion of the FFCRA provides that covered employers must make available 80 hours of emergency paid sick leave to employees with one of six qualifying COVID-19-related conditions. The Emergency Family and Medical Leave Expansion Act (EFMLEA) section provides that employees who are unable to work because they must care for a dependent child due to COVID-19 closures are eligible to take an expanded Family Medical Leave Act (FMLA) unpaid two-week leave and then a partially paid 10-week leave.

Importantly the FFCRA provides that employers do not have to offer EPSLA and EFMLEA benefits to their “health care provider” employees.

The DOL's Final Rule defines a “health care provider” as:

anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions, any individual employed by an entity that contracts with any of these institutions described above to provide services or to maintain the operation of the facility where that individual’s services support the operation of the facility, [and] anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments.

The FFCRA itself, however, uses the FMLA rather limited definition of “health care provider"—a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the State in which the doctor practices; or any other person determined by the Secretary to be capable of providing health care services. See 29 U.S.C. § 2611(6).  Nonetheless, many employers utlilized the DOL's “health care provider” definition and did not provide FFCRA leave benefits to their employees.

In striking down the DOL's expansive definition of a "health care provider," the Court took a narrow, strict view of the FFCRA’s statutory language defining who is a health care provider finding its terms “unambiguous.” The Court found that the DOL’s concession that an English professor, librarian, or cafeteria manager at a university with a medical school would all be “health care providers” under the Final Rule demonstrated that the Final Rule is “vastly overbroad” in that it “includes employees whose roles bear no nexus whatsoever to the provision of healthcare services, except the identity of their employers.”

2. The Court Also Vacated Three Other DOL Final Rule Interpretations of the FFCRA

1. The Work-Availability Requirement. The EFMLEA applies to employees “unable to work (or telework) due to a need for leave to care for … [a child] due to a public health emergency.” FFCRA § 101(a)(2)(A). The EPSLA grants paid leave to employees who are “unable to work (or telework) due to a need for leave because” of any of six COVID-19-related criteria. FFCRA § 5102(a).The EFMLEA applies to employees “unable to work (or telework) due to a need for leave to care for … [a child] due to a public health emergency.” FFCRA § 101(a)(2)(A).

   The Final Rule excludes from the EPSLA  and EFMLEA benefits employees whose employers “do[] not have work” for them.  The Court rejected the DOL's Final Rule work-availability requirement finding that the DOL did not provide a rationale for interpreting the FFCRA language in such a limited way, especially in light of "monumental consequence" to employees by narrowing the breath of Act's leave entitlements to cover only when the employer does not have work for the employees.  

2. Employer Consent Requirement for Intermittent Leave. The DOL’s Final Rule allows employees to take intermittent leave for qualifying conditions “only if the Employer and Employees agree.” The Court found that “[i]nsofar as it requires employer consent for intermittent leave,” for qualifying conditions that do not pose a high risk of viral infection, the DOL’s requirement was unreasonable.

3. Documentation Requirement as a Precondition for Leave. The DOL’s Final Rule requires that before taking leave the employee must provide their employer documentation stating “their reason for leave, duration of the requested leave, and, when relevant, the authority for the isolation or quarantine order qualifying them for leave.” The Court found the DOL’s documentation requirement more stringent than the FFCRA’s notice provision, and therefore, vacated the requirement.

What Should Employers Do?

The NYS v. DOL case is a federal district court case in the Southern District of New York within the Second Circuit. As a general rule, federal district court opinions do not serve as binding precedent on district judges even within the same district, and thus for now, NYS v. DOL is a lower court case with limited reach.

We expect that the DOL will appeal this decision given the potential for far-reaching impact. There is also the possibility that the DOL will seek a stay pending appeal or that it will issue clarifying regulations in an effort to save the current interpretation of the Final Rule.

Finally, although the decision currently has limited effect, the decision could have broad implications if other states take on the challenge and other courts find the argument persuasive or if the DOL determines that it is more efficient to treat the New York court’s decision as a nationwide one.

In light of the many factors to consider, awaiting any one of these developments before changing policies might be the most prudent action to take. Employers should consult with their counsel about this decision.