477 F.Supp.3d 1
S.D.N.Y.2020Background
- Congress enacted the Families First Coronavirus Response Act (FFCRA) to require certain employers to provide paid sick leave (EPSLA) and expanded family leave (EFMLEA) for COVID-19–related reasons, with employers receiving tax credits to offset costs.
- The Department of Labor promulgated a Final Rule implementing the FFCRA; New York challenged four regulatory features as exceeding statutory authority: the work‑availability requirement, DOL’s definition of "health care provider," restrictions on intermittent leave, and pre‑leave documentation requirements.
- New York sued under the Administrative Procedure Act and moved for summary judgment; DOL cross‑moved and sought dismissal for lack of standing.
- The district court held New York had Article III standing based on a proprietary injury (projected loss of state tax revenue resulting from reduced paid leave) and proceeded to the merits.
- The court invalidated (vacated) several parts of the Final Rule: the work‑availability requirement, DOL’s employer‑based definition of "health care provider," the employer‑consent requirement for intermittent leave, and the rule’s requirement that documentation be provided before taking leave; it upheld the ban on intermittent leave for qualifying conditions implicating contagion risk and other non‑temporal parts of the documentation rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing | NY: Final Rule will reduce paid leave, lower taxable wages, and increase state costs — causing concrete loss of tax revenue and redressable injury | DOL: NY lacks concrete, quantified empirical proof of imminent fiscal injury | Held: NY has standing based on a credible proprietary injury to tax revenue; dismissal denied |
| Work‑availability requirement | NY: DOL exceeded authority by imposing a but‑for "no work" bar that narrows statutory leave beyond FFCRA's terms | DOL: "Because/due to" language requires but‑for causation; if employer has no work, employee is not "unable to work due to" a qualifying reason | Held: Rule ambiguous on causation; DOL's work‑availability requirement is arbitrary and capricious and vacated (fails Chevron step two) |
| Definition of "health care provider" | NY: DOL's employer‑based, expansive definition exceeds the FMLA text requiring the Secretary to determine persons capable of providing health‑care services | DOL: Broad definition furthers public‑health purpose by exempting workers essential to health system operations | Held: Definition unambiguously exceeds statutory text (must focus on person/role capability); vacated |
| Intermittent leave | NY: Final Rule improperly restricts intermittent leave and may forfeit leave taken nonconsecutively | DOL: Rule prohibits intermittent leave only for individual qualifying reasons that pose contagion risk; otherwise allowed with employer consent | Held: Court adopts DOL's narrower reading (forfeiture not required); ban on intermittent leave for contagion‑risk reasons upheld; employer‑consent requirement for other reasons is arbitrary and vacated |
| Documentation timing | NY: DOL's pre‑leave documentation prerequisite conflicts with statutory notice scheme allowing practicable notice or one‑day delay | DOL: Documentation is reasonable and not onerous; distinguishes notice from documentation | Held: Temporal precondition (must provide documentation before taking leave) conflicts with FFCRA and is vacated; substantive documentation requirements otherwise survive |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requirements)
- Wyoming v. Oklahoma, 502 U.S. 437 (state tax revenue as proprietary injury supporting standing)
- United States v. Students Challenging Regulatory Agency Procedures, 412 U.S. 669 (even a small identifiable injury can support standing)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (agency deference framework)
- Kisor v. Wilkie, 139 S. Ct. 2400 (limits on Auer/interpretive deference)
- NLRB v. SW General, Inc., 137 S. Ct. 929 (interpretive canons including expressio unius)
- Bostock v. Clayton County, 140 S. Ct. 1731 (statutory interpretation of causal language)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (statutory standing and the role of the cause of action)