U.S. District Judge J. Paul Oetken. Photo by Diego M. Radzinschi/ALM

U.S. District Judge J. Paul Oetken of the Southern District of New York said Monday that the rule's provisions conflicted with the intent of the Families First Coronavirus Response Act, a temporary relief program which requires certain employers to provide their employees with paid sick leave or expanded family and medical leave caused by the coronavirus.

The ruling, which expanded access to COVID-19 relief, came as a win for New York Attorney General Letitia James, who sued the Labor Department over the requirements in April. The department was tasked with implementing the emergency relief statute in March.

In the lawsuit, James' office claimed that the agency's final rule forced some residents to choose between taking unpaid leave and going to work while sick. In either event, the state said, New York faced the likelihood of either diminished revenue on taxable income or increased costs associated with fighting the virus.

Among the challenged provisions were restrictions for workers whose employers "do not have work for them," a broad grant of authority to the department's secretary to define who qualifies as a "health care provider," as well as requirements that employees file paperwork before taking leave.

In his ruling, Oetken said that under the regulation nearly all of the health-care sector could be excluded from federal relief, and other workers could be shut out from accessing up to 12 weeks of paid sick and family leave.

"This extraordinary crisis has required public and private entities alike to act decisively and swiftly in the face of massive uncertainty, and often with grave consequence," Oetken wrote in a 26-page opinion. "But as much as this moment calls for flexibility and ingenuity, it also calls for renewed attention to the guardrails of our government. Here, DOL jumped the rail."

A spokesman for the Manhattan U.S. Attorney's Office, which represents the Labor Department in the litigation, did not immediately provide comment Monday on Oetken's ruling.

The DOL had moved to dismiss New York's lawsuit, arguing that the state lacked standing to sue over the rule. Oetken, however, found a "causal chain" between the federal regulations and the potential harms New York feared it could suffer.

"The chain consists of few links, none of which DOL can seriously contest: Restricting eligibility and increasing administrative burdens for paid leave will reduce the number of employees receiving paid leave; some employees who need leave will therefore take unpaid leave; their income will decrease, shrinking the state's income tax base," the judge said.

Under Oetken's ruling, the provisions could be removed from the rule without affecting the rest of which New York did not object to.

James' office did not immediately respond Monday to a request for comment.

Read More: