Rabbi Michoel Zylberman 1
The ongoing pandemic has had far reaching economic ramifications. With so many contracts canceled or rendered unperformable, the pandemic has brought the halachic theory of contracts and risk allocation into the foreground. In a previous article, we analyzed that question as it pertains to rental contracts. In this article, we will focus on employment contracts. The purpose of our presentation is to present a framework for understanding the issue and not to draw definitive conclusions.
II. Compensating Employees for Unperformed Work–The Halachic Framework
Generally, according to halacha, an employee is only entitled to payment for work that he or she performed on behalf of the employer. However, when an unanticipated ones (extenuating circumstance) prevents the employee from performing the work that was agreed upon, a different standard may apply.
As noted in our previous article, if an unanticipated ones occurs that was either equally expected or equally unexpected by both employer and employee, then the employee is not entitled to any compensation for unperformed work. Only when the employer should have anticipated an impending ones that was unknown to the employee may the employee be entitled to compensation (see Bava Metzia 77a and Choshen Mishpat 334:1).
Does the onset of a makas medinah create a different calculus for such evaluations? Might an employee be entitled to compensation for unperformed work in a makas medinah situation?
- Mordechai and Rema
Mordechai (Bava Metzia 343) writes that if a rebbe is unable to teach Torah because, subsequent to his hiring, the government promulgated an edict forbidding teaching Torah, then the rebbe remains entitled to compensation from his employer. While there are two variant texts of the Mordechai that may differ as to whether he is entitled to full compensation,2 Hagahos Ashri (Bava Metzia 6:60) explicitly holds that the rebbe is entitled to the entirety of his wages. Rema appears to rule this way (Choshen Mishpat 321:1 and see 334:1),3 and this approach is accepted by Shach (334:2) and Taz (334:1).4
However, Sema (321:6 and see 334:2) strongly disagrees with Rema and argues that there is no basis for an employee to receive full wages for unperformed work. In fact, Sema considers the possibility that the employee would be barred from collecting any unpaid wages, under the principle of ha-motzi me-chaveiro alav ha-rayah–i.e., that the burden of proof is upon the party looking to collect money. Ultimately, however, Sema does not go this far. Instead, he concludes that the loss should be split, and the employee would be entitled to half of the lost wages. Sema contends that this was actually the position of Mordechai as well.
The rationale for Sema’s approach is grounded in the halachic principle that when neither party is withholding performance, and both parties are equally affected by the ones, they are to share the loss equally. This principle is demonstrated by the wine-shipping case (Bava Metzia 79; see Choshen Mishpat 311:3) discussed in our previous article. If a wine merchant hired a boat to transport his wine across a river and the boat sank in transit, we assign the loss of the value of the contract to the party withholding performance. Thus, if neither party is withholding performance, such as when both parties can technically still perform (e.g. the merchant commissioned a non specific boat (sefinah stam) to transport a non specific quantity of wine (yayin stam) such that the wine merchant can still perform by shipping other barrels of wine and the shipper can still perform by sending a different vessel) but neither party is interested in continuing performance, they share the loss of the value of the contract equally.
Sema argues that the case of the rebbe is analogous to this one. The employer is willing to provide the children to be taught and the employee is willing to teach them. It is a third party that prevents both parties from performing their contractual duties. Both parties are thus equally blameless for the inability to perform, and thus, should split the loss.
- Nesivos HaMishpat
Like Sema, Nesivos HaMishpat (334:1) takes issue with Rema entitling a non-performing employee to collect full wages in a situation of makas medinah Nesivos argues that the opinion of the Mordechai which serves as the basis for Rema’s ruling applies only to the specific facts of the case Mordechai addressed: that of a rebbe teaching Torah. Why should the case of a Torah teacher be different?
Nesivos explains that in principle a rebbe may not be compensated for teaching Torah, as the Talmud prohibits payments in exchange for Torah teaching (Nedarim 37a). Thus, payments to a rebbe are structured not as compensation for his teaching, but rather as compensation for the more basic role of watching and entertaining the children. If, then, the government forbids Torah teaching, this decree does not technically affect the source of his livelihood. The rebbe essentially gets paid for babysitting, and the decree does not impede him from continuing to watch and entertain the children in his class, which he is ready, willing, and able to do. If the rebbe’s employer is unwilling to pay the rebbe merely to watch the children, then it is the employer who has frustrated their agreement.5 As such, Nesivos concludes, there is no special standard for compensating a regular employee impacted by a makas medinah than for a conventional ones.6
III. Contemporary Applications
How does the above analysis apply to employment agreements that were frustrated due to the current pandemic? In the United States, employment is generally at-will unless otherwise contracted. This means that an employer may dismiss an employee without cause. 7 While halacha would anyway typically defer to common practice regarding the default term of employment, Jewish law independently recognizes the notion of at-will employment. Chazon Ish (Bava Kamma 23:2) discusses whether absent a contrary common practice, the implied duration of the contracted term is day by day or for thirty days at a time (at least when thirty days is the normal payment period).8
Where employment is at-will, the analysis of makas medinah is largely moot, since the employer can simply terminate the employee immediately, absolving himself of any future obligation toward the employee. In practice, then, our discussion is limited to employees with contracts that stipulate a term of employment or vendors hired for specific events that were unable to take place due to the pandemic.
In addition, our discussion is presumably limited to situations where halacha would award remuneration in excess of what the worker may collect from unemployment or other government benefits.9
Finally, in a situation in which parties do business under the assumption that their contract will be governed by common law principles, their dispute might be governed by the commercial custom.10 Our analysis here examines the issue from a purely Jewish law perspective.
A. Party in Possession of Funds Prevails
As we have seen, there is no clear consensus among halachik authorities regarding how much to award an employee in a situation of makas medinah. For this reason, R. Yosef Rosner (Mishpat HaPoalim 2007 p. 163) writes that the muchzak (the party currently in possession of the disputed funds) can successfully assert a claim of kim li–namely, that he holds the halachik view which favors his side, even if it is the minority view,, and that he cannot be compelled to relinquish those funds without compelling evidence that the minority opinion is incorrect (see our previous article). According to this approach, the party currently in possession of the disputed funds always prevails. Thus, if the salary was paid in advance then the worker need not return the money for any unperformed work; if the salary was not yet paid then the employer need not pay for any unperformed work.11 See, however, R. Asher Weiss (Minchas Asher Corona Telisa’ah 16), who argues that one may invoke kim li only in the context of an individual dispute, but not when establishing policy for a whole community.
B. Employer Pays Half Wages
A different approach requires the employer to pay half-wages for unperformed work, regardless of who currently possesses the funds. To that end, many quote a comment of the Chasam Sofer (Sefer Zikaron Pressberg 1879 p. 37) addressing the compensation of rebbeim who were unable to teach due to a war. Chasam Sofer writes that he himself was inclined to the ruling of Rema and Shach, according to which the rebbeim are entitled to their full wages in such scenarios (see also Shu”t Chasam Sofer Choshen Mishpat 161). However, he also recognized the compelling argument for splitting the loss evenly and that it was difficult to require others to pay the full wages. Therefore, Chasam Sofer ultimately recommended that people pay half of the lost wages.12
A number of contemporary authorities have used this suggestion as the starting point for evaluating COVID-related employment termination claims.13 If, for example, a babysitter or playgroup teacher is unable to provide the contracted services–either because of government restrictions or because parents were unwilling to have their children watched by others due to contagion concerns–and if the employee was unable to collect governmental unemployment benefits, then, these authorities suggest, the employee should receive half of their wages.
C. Employer Pays Less Than Half Wages: Po’el Batel
However, an additional consideration may further reduce the amount of money that the employee is entitled to recoup under the forgoing analysis. For while an employee may be entitled to compensation for work left unperformed due to ones or termination, halachah also recognizes that the employee receives some benefit from not having to work. In light of this benefit, the compensation to which he is actually entitled should be that of a po’el batel. 14 This means that the employer may deduct from his wage that amount of money which the employee would be willing to forgo in exchange for not needing to work (see Shulchan Aruch 333:1 and 335:1; Sema 333:7; and Shach 333:8).15
Taz (333:1) quotes earlier sources as indicating that po’el batel wages are half of normal wages.
According to this analysis, one might argue that if a worker is only entitled to half of his wages to begin with, the po’el batal consideration may knock that down to 25%. However, there may be other considerations that would limit the applicability of po’el batel to our situation. R. Rosner (Chapter 13 footnote 13) suggests that the context of the Taz may be limited to a day or week laborer who may prefer to receive a lower salary and not have to show up to work for an already limited period of employment. However, a regular full time employee would always prefer to remain employed and salaried at a higher rate than to stay home and make much less money. R. Asher Weiss (Shu”t Minchas Asher Corona Telisa’ah 16) further argues that if the starting point is already a 50% deduction in salary no one would agree to a further deduction in compensation, even in exchange for not having to work. This argument may either eliminate the relevance of po’el batel or significantly limit the amount of the deduction.16
- Rabbi Michoel Zylberman is the Associate Director of the Beth Din of America. The author wishes to thank Rabbi Itamar Rosensweig and Rabbi Alex Maged for their review of the article.
- Mordechai writes: ואם הביטול של המלמד מחמת גזירת המושל שבעיר וא”א למלמד ללמוד הוי מכת מדינה ויהא הפסד(\ההפסד) של בעל הבית. “If the unemployment of the instructor is due to an edict of the ruler in the city and the instructor cannot teach, it is a makas medinah and loss (/the loss) is of the employer.” If the correct text is ההפסד – the loss – that implies that the employee is entitled to full wages. If the text is הפסד – loss – it is possible that while the employer must pay the employee, he need not pay the entirety of the wages. See Sema 321:6 and R. Asher Weiss, Shu”t Minchas Asher 2:120.
- See Nesivos below who understands Mordechai and by extension Rema to be limited to a rebbe. R. Yosef Fleishman (Alon Mishpat 119 Tamuz 5780), Rosh Kollel of Kollel Choshen Mishpat in Yerushalayim, suggests a variant novel reading of Mordechai and Rema that would render their rulings of limited contemporary relevance. In the times of the rishonim the common practice was that a rebbe would travel and hire himself out to teach in a town far from his residence (see, for example, Mordechai Bava Metzia 459 and Tosafos Kiddushin 59a s.v. ani). If a rebbe found employment in a specific town and then the local authorities restricted his ability to teach, that development could be attributed solely to the mazal of his local employer, as the rebbe could just as well travel to any other town where he could teach freely. In such a case the employer would be responsible for the full wages of the rebbe, but in a case in which a makas medinah affects an entire region, not just a single city, perhaps the loss would be split.
- See R. J. David Bleich, Coronavirus Queries Part 2, Tradition Winter 2021, pp. 101-103, for a suggestion as to the logic of this position.
- This understanding of Nesivos serves to answer a seeming contradiction in rulings of Rema. Rema (334:1) rules that if the residents of a city flee due to an epidemic, a worker or a rebbe who is unable to continue working is not entitled to compensation. This appears inconsistent with the ruling about the rebbe who cannot teach Torah due to a governmental decree. Nesivos explains that when the residents of a town flee, none of the workers are able to perform any of their normal tasks and are therefore not entitled to compensation. In the case of the governmental decree the rebbe is still available to babysit and he is entitled to be paid for that even if he is unable to teach Torah. See Shach (334:3) and Aruch HaShulchan (334:10) for alternative resolutions to this discrepancy in Rema.
- This may be the same position as that of the Vilna Gaon (321:7-8). Arguably, if the government shuts down not only yeshivos but child care facilities as well, as was the case during the first months of the current pandemic, then according to the Nesivos even a rebbe would not be treated differently than any other worker, as the rebbe could not even function as a babysitter.
- See https://www.ncsl.org/research/labor-and-employment/at-will-employment-overview.aspx
- See, however, R. Moshe Feinstein (Igros Moshe Choshen Mishpat 1:75) who argues that the default presumption is that an employee may not be terminated without cause so long as his services are still needed by the employer.
- If an employee receives unemployment benefits he should not be entitled to “double dip” and receive additional compensation beyond what he would be entitled to halachically. See, for example, R Fleishman (ibid.), R. Yitzchak Zilberstein, (Vavei HaAmudim 79 Nissan 5780, 8), R. Yona Reiss (Sappirim Issue 31 July 2020)), R. Zvi Landman (Heviana Chadarav p. 405 in the name of R. Mendel Shafran). R. Avraham Darmdriker, Av Beis Din Hayashar V’hatov Yerushalayim (Heviani Chadarav p. 357) writes that if such an employee receives more than 50% of his expected wages from governmental compensation he would be entitled to no further remuneration from his employer. The Lakewood batei din, in a document approved by R. Yaakov Forhheimer, issued similar instructions.
- For a discussion of commercial custom and minhag ha-sochrim, see Rabbi Itamar Rosensweig, “Commercial Custom and Jewish Law,” Jewishprudence (June 2020). For a discussion of the particular common law principles that might be relevant to covid-19 contracts, see Tzirel Klein, “Commercial Custom, Common Law, and Contracts Impacted by Covid-19” Jewishprudence (July 2020).
- See also R. Ovadia Yosef Toledano, Shu”t Meishiv Mishpat 1:47.
- J. David Bleich (Contemporary Halachic Problems Vol. 4 p, 367) understands that Chasam Sofer’s ruling is based on the principle of kim li, namely that since there is a dispute between Rema and Sema, the employers can claim that they hold like the Sema and only pay half of the wages. However, R. Yosef Fleishman (ibid.) and Rav Asher Weiss (ibid.) understand that Chasam Sofer’s conclusion was in the realm of p’shara – compromise – and not because he allowed the employers to claim to hold like the Sema.
- See R. Yosef Fleishman (ibid.), R. Yitzchak Zilberstein (ibid. 7), and R. Yona Reiss (ibid.).
- For a discussion of the po’el batel rule, see Rabbi Itamar Rosensweig and Tzirel Klein, “Depriving a Worker of Employment Opportunities,” Jewishprudence (October 2020), Section II, B.
- Not all workers are subject to a po’el batel deduction. The Gemara (Bava Metzia 77a) tells us about ochlushei de-Mechuza, individuals in the town of Mechuza who carried heavy loads for a living. Such people get weaker from not working and thus receive no benefit from unemployment. Similarly, Rema (334:3 and 335:1) rules that rebbeim become intellectually weaker from not teaching Torah and therefore are not subject to a po’el batel calculation (see Sema 335:4). In practice, even during the initial height of the pandemic, virtually all yeshivos and schools provided remote instruction while they were physically closed, and therefore rebbeim were entitled to their salaries anyway, as they may have invested as much total preparation and teaching time as they normally would.
- The aforementioned Lakewood document indicated the po’el batel should be taken into consideration when calculating compensation for playgroup teachers but did not indicate an amount. A directive from a beis din in Neve Yaakov (Heviani Chadarav p. 369) recommended a po’el batel deduction of 16%. A directive from a beis din in Bnai Brak (ibid. P. 431) had a more complex calculation with a higher percentage but also suggested that there should be a lower po’el batel rate for playgroup teachers in the weeks before Pesach, since they would be more appreciative of having time off during those weeks.