SDNY Court Invalidates Parts of Recent DOL Guidance

PSMJ Resources, Inc.
Posted on: 09/10/20
Written by: PSMJ Resources, Inc.

A recent court decision has thrown into question some key federal government guidelines on COVID-related sick leave and family leave that AEC firms are following during the pandemic.

Passed in March 2020, the Families First Coronavirus Response Act (FFCRA) requires firms with fewer than 500 employees to provide paid sick leave and expanded family and medical leave for reasons related to COVID-19. On April 1st, the U.S. Department of Labor (DOL) published its “Final Rule,” regulatory guidance for employers and employees on how the protections and requirements of the FFCRA should be administered.

RECENT DECISION
But a decision out of the U.S. District Court for the Southern District of New York (SDNY) in August has invalidated several parts of the DOL guidance, including three sections with direct consequences for A/E/C firms:

1. Work availability: The DOL guidance provided that no FFCRA benefits need be paid to furloughed employees if the employer had no work to give them. However, the court says employees are still entitled to paid leave if they meet the criteria set out under the Act, regardless of whether the firm has work for them.

2. Intermittent leave: Under the FFCRA, intermittent leave is available for employees who need time off to care for a child whose school or place of care was closed. The court set aside that part of the DOL guidance which stated that the employer’s consent is needed to take intermittent leave in circumstances unrelated to illness.

3. Documentation: Under the DOL guidance, employers are permitted to demand documentation in advance from employees outlining their reasons. The court struck down this requirement and held that an employer cannot demand certain documentation from an employee before granting the FFCRA benefit.

While the court’s ruling may not be binding beyond the SDNY, it has “persuasive authority” on other courts, says Paul J. Sweeney, partner at Coughlin & Gerhart, LLP in Binghamton, NY.

“This is not a binding precedent on other courts for future rulings, but It may guide the decisions of judges in other districts,” Sweeney says. He thinks this is especially likely in the U.S. Court of Appeals for the Second Circuit (the states of Connecticut, New York, and Vermont) and some traditionally progressive federal courts such as those found within the U.S. Court of Appeals for the Ninth Circuit (which includes California and eight other western states).

DOL’S MOVE
“The Department of Labor may very well appeal this ruling, but a decision could take months or years,” Sweeney says. In the meantime, he cautions that A/E/C firms may have “widespread exposure” If a denial of FFCRA benefits was based on those parts of the Final Rule struck by the SDNY.

He advises affected employers to examine their policies to make sure they are in full compliance with the ruling or at least understand the exposure if a firm declines to revise a policy, and encourages firms to track any future changes in the guidance, which can be found here: https://www.dol.gov/agencies/whd/pandemic.

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