A federal judge in Camden, New Jersey, dismissed a suit that claimed an employer wrongly denied paid sick leave to a worker who contracted COVID-19, and then fired him in retaliation for asking to take sick leave.

Senior U.S. District Judge Noel Hillman dismissed the case after the defendant employer, Physician and Tactical Healthcare Services of Pennsauken, a medical billing company doing business as PATHS, argued that it fell within the health care provider exemption to the Families First Coronavirus Response Act. The U.S. Department of Labor narrowed the health care provider exemption after a U.S. District Court judge in the Southern District of New York deemed that exemption overbroad and inconsistent with the FFCRA's unambiguous terms. But Hillman found that the defense of good-faith reliance applies to the FFCRA and protects the defendant company from liability.

U.S. Senior District Judge Noel Hillman/courtesy photo

When the pandemic struck, PATHS allowed some, but not all, of its employees to work from home. When plaintiff Brian Spells, a medical billing specialist earning $15 per hour, showed COVID-like symptoms but tested negative in April 2020, his doctor advised him to self-quarantine for two weeks. But the company declined his request to work from home and said he could either use his accrued sick and vacation paid time off or take a voluntary layoff.

Hillman, citing case law, said Congress did not intend for employers to be subject to penalties for good-faith reliance on administrative regulations, especially those that have been interpreted by a compliance officer of the Wage and Hour Division of the Department of Labor.

Hillman said that PATHS never intended to allow every employee to work remotely, but it gave priority to certain employees for working from home, such as those with health conditions. "There is nothing in the record demonstrating that PATHS knew of any reason that plaintiff should be prioritized. In fact, plaintiff, who had only been on the job for about six months, was one of four billing representatives from his department who PATHS determined could not work remotely because they needed supervision based on their lack of experience, a need for further training, and other issues," he said.

Effective April 1, 2020, the FFCRA provides for up to 80 hours of paid sick time to eligible full-time employees who are unable to work or work remotely due to the effects of COVID-19. The FFCRA, which went into effect April 1, 2020, provides paid sick leave to people who are quarantined or have COVID-19 symptoms, and are waiting for a diagnosis.

Benjamin Teris of Dilworth Paxson. Courtesy photo

Hillman also rejected Spells' retaliation claim, finding that the employee was not fired for attempting to exercise his FFCRA rights. Rather, at worst, PATHS terminated Spells for asserting a right that PATHS believed in good faith he was not entitled to, Hillman said. "Simply put, plaintiff was not 'retaliated' against either legally or in the ordinary sense of the word," Hillman said.

Benjamin Teris of Dilworth Paxson in Cherry Hill, representing PATHS, said he observed an initial wave of FFCRA suits, but those cases are rare because the law's paid leave requirements expired at the end of 2020. But suits over COVID and leave that are based on other laws are still widespread, he said. The PATHS case illustrates the importance of staying current on changes in the law, he said.

"It is important for employers to stay up to date on new employment laws and rules and guidance promulgated by administrative agencies to ensure compliance and to act in good faith to apply those laws. This is not only good business practice, but is also beneficial should  employers face litigation," Teris said in an email.

Timothy Seiler of Karpf, Karpf & Cerutti in Bensalem, Pennsylvania, who represented Spells, did not respond to a request for comment.