Last week, the Federal Circuit decided Adams v. United States, an employment case we have been following since the court scheduled an en banc hearing. The case presents the question of the relationship between COVID-19 and Hazardous Duty Pay (HDP) and Environmental Differential Pay (EDP) regulations, and in particular whether prison guards who come into contact with COVID-19 through either human to human contact or human contaminated mediums are entitled to EDP or HDP. Last week, the court issued a majority opinion affirming the Court of Federal Claims, which held that OPM’s regulations do not provide for HDP and EDP for working with or in proximity to individuals infected with COVID-19. According to the Federal Circuit, these veterans are entitled to a maximum of 36 months of benefits. Two judges dissented, however, arguing for reversal. Here is our summary of these opinions.
The majority concluded that “OPM simply has not addressed contagious-disease trans-mission (e.g., human-to-human, or through human-contaminated intermediary objects or surfaces) outside two settings not present here—e.g., certain situations within laboratories and a jungle-work situation.” While “OPM might well be able to provide for differential pay based on COVID-19 in various workplace settings, it has not to date adopted regulations that do so.” In other words, the court held that prison guards such as Adams are not eligible for HDP or EDP, unless and until OPM modifies existing regulations or passes new regulations.
Judge Chen, joined by Chief Judge Moore and Judges Lourie, Dyk, Prost, Taranto, Hughes, Stoll, Cunningham, and Stark, wrote the majority opinion. He began by stating the sole issue in this appeal: whether Adam’s “theory of recovery satisfies OPM’s specifically delineated categories for hazardous duty or environmental differential pay.”
Judge Chen rejected Adams argument that he “stated viable claims for environmental differential pay involving ‘micro-organisms’ and hazardous duty pay involving ‘virulent biologicals’ because they ‘were assigned to work with or in close proximity to objects, surfaces, and/or individuals (including inmates and coworkers) who were infected with COVID-19.” According to Judge Chen, “the text, structure, and history” of the relevant regulations, as well as the Federal Circuit’s precedent, guided his decision.
Judge Chen cited precent “involv[ing] exposure to second-hand tobacco smoke in a prison environment, which the plaintiff alleged was a ‘toxic chemical’ covered by the Toxic Chemicals category of OPM’s HDP and EDP schedules.” That prior case concerned toxic chemical hazards which, similar to micro-organisms, also involved a high risk subcategory (“handling and storing toxic chemical agents, visually examining chemical agents, transferring chemical agents between containers”) and a low risk subcategory (“the nature of the work does not require the individuals to be in direct contact with, or exposure to, the more toxic agents”). In that case, Judge Chen explained, the Federal Circuit held that, “although the examples are not exhaustive, they all describe scenarios where the job assignment requires directly or indirectly working with toxic chemicals or containers that hold toxic chemicals as part of a job assignment.” He further explained that the “EDP Schedule’s Toxic Chemical category is not so broad that they would ‘cover situations in which the employees work with inmates who incidentally smoke, for there is no work “with” [second-hand smoke] in th[at] context.'”
Judge Chen further analogized Adams’ case to the court’s precedent because, like “EDP Schedule’s Toxic Chemicals category requires ‘working with or in close proximity to’ ‘toxic chemicals,'” “EDP Schedule’s Micro-organism category requires ‘working with or in close proximity to’ ‘micro-organisms.'”
He described how the EDP Schedule’s high risk micro-organism subcategory requires (1) “direct contact with primary containers of organisms pathogenic for man;” (2) “operating or maintaining equipment in biological experimental or production;” or (3) “cultivating virulent organisms on artificial media.” And he explained that “the examples do not cover situations in which employees working with inmates face contagious-disease transmission via ambient exposure to COVID-19 in the workplace by way of infected humans, for ‘there is no work “with” [COVID-19] in this context.'”
Regarding the low risk micro-organism subcategory, Judge Chen indicated there is a “strong inference that the low risk Micro-organisms subcategory requires that an employees assigned duty’s must at least involve working indirectly with the primary containers of pathogenic organisms,” which is “consistent with the language and overall design of the EDP Schedule and . . . our conclusion” in the earlier case.
Judge Chen recognized that the micro-organisms category examples “are not exhaustive,” but they “reflect the nature and locus of work contemplated in the Micro-organisms category—i.e., they require working directly or indirectly with ‘micro-organisms which involves potential personal injury such as death, or temporary, partial, or complete loss of faculties or ability to work due to acute, prolonged, or chronic disease’ as part of a job assignment.”
Judge Chen also rejected Adam’s argument that “primary containers” in the EDP Schedule includes “infected humans because humans are primary carriers for incubating and spreading COVID-19.” He noted that primary containers are “objects of research or experimentation” under the EDP Schedule, and holding infected humans to be a container would be an “unreasonable stretch.”
In analyzing the HDP Schedule, Judge Chen determined it “does not expressly recite examples illustrating when an employee ‘work[s] with or in close proximity to . . . [v]irulent biologicals,” but he cited “contemporaneous guidance from OPM” that provides several exemplary duties that are “very similar to the . . . EDP Schedule’s high risk Micro-organism subcategory.” Similar to the EDP Schedule, he found that the examples “do not cover situations in which employees working with inmates face contagious-disease transmission via ambient exposure to COVID-19 in the workplace.”
Judge Chen then relied upon “OPM’s inclusion of language covering general ambient exposure in the Tropical Jungle Duty and Asbestos categories.” According to Judge Chen, this language indicates “OPM knows how to distinguish categories involving ambient exposure to hazardous materials from categories involving exposure to hazardous materials themselves resulting from work with those materials.” Thus, he concluded, OPM intended the “Virulent Biologicals and Micro-organisms categories to apply only when the employee is working with or near a virulent biological or micro-organism itself, not doing any task that might incur exposure to a virulent biological or micro-organism generally” because OPM “certainly ‘knew how to say'” so if it did.
In conclusion, Judge Chen stated that the court agreed with the Court of Federal Claims that Adams’ alleged duties “are not analogous to the class of exemplary duties” and affirmed the dismissal of the complaint for failure to state a claim.
Judge Reyna wrote the dissenting opinion, which Judge Newman joined. In his opinion, he indicated the “Court of Federal Claims adopted overly narrow interpretations of the applicable statues and regulations;” the government, he said, made “admissions . . . consistent with extrinsic material referenced in the complaint that showed that COVID-19 exposure could give rise to HDP and EDP;” and, moreover, he claimed “the Court of Federal Claims departed from established law on 12(b)(6) determinations by requiring actual proof of HDP and EDP eligibility.”
According to Judge Reyna, the first element required to plead HDP and EDP is an “unusually hazardous duty.” Because “[n]either the statues nor the relevant regulations define ‘unusual,'” Judge Reyna applied “its ordinary meaning.” In applying this ordinary meaning, he reasoned, “COVID-19 is clearly distinguishable from” the circumstance presented in the precedent relied upon by the majority, “exposure to secondhand tobacco smoke.” He also noted how “there is no evidence that Congress at the time of last amendment [of the HDP statute] was aware of COVID-19 or of the risks associated with exposure to COVID-19.”
In addressing the government’s assertion that “COVID-19 exposure was not unusual” and “outbreaks of communicable diseases are not unusual in prisons,” he argued that the government “misapplies well-established pleading principles.” He explained how Adams was not required to plead “detailed factual allegations as to how their duties were ‘unusually hazardous,'” but merely “enough facts to state claims that are plausible on their face, which they have done.”
According to Judge Reyna, a second element required to plead HDP and EDP based on the regulations is that a party “worked ‘with or in close proximity to’ a ‘virulent biological’ (for HDP) or a ‘micro-organism’ (for EDP).” He began by addressing the government’s assertion that the regulations “cover only employees who work in a laboratory or perform substantially similar duties.” He noted how this position was abandoned at en banc oral argument.
Next, Judge Reyna offered reasons why COVID-19 exposure should “fall within the scope of the regulations.” First, he argued the government’s narrow interpretation is “at odds with the common meaning of the regulatory language,” and a “narrow construction of ‘working directly or indirectly’ . . . also renders the phrase ‘in close proximity to’ in the regulations superfluous.” Second, he argued the narrow interpretation “effectively eliminates the virulent biologicals and microorganisms categories” because “the duty must also be unusual compared to the employee’s typical job duties.”
Judge Reyna also disagreed with the majority’s reliance on the court’s precedent concerning smoke. He considered that case a “completely different factual situation,” and found Adams’ allegations “substantially more aligned with the regulatory language and more plausible.”
Lastly, Judge Reyna pointed to extrinsic materials that he said support including COVID-19 exposure in the regulations. He cited an OPM memo that indicates COVID-19 exposure qualifies under the HDP when an employee is “exposed to the virus during the performance of assigned duties (e.g. as in the case of a poultry handler or health care worker).” He argued that poultry handlers and health care workers are “obviously not laboratory employees working directly with or indirectly with COVID-19,” and he noted that the OPM memo recommends granting EDP in similar situations. He also identified two agencies, the Indian Health Service, and the U.S. Department of the Interior, which indicated that employees may be entitled to HDP and EDP.
In short, in his view, “the regulatory language encompasses COVID-19 exposure,” and thus the appellants “have stated plausible claims on which relief may be granted.”