On November 30, 2021, the U.S. District Court for the Eastern District of Kentucky issued an order granting a preliminary injunction to block the enforcement of the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee. At the outset the court stated the question presented was narrow: "Can the president use congressionally delegated authority to manage the federal procurement of goods and services to impose vaccines on the employees of federal contractors and subcontractors?" and answered it, "In all likelihood, the answer to that question is no."
Other Lawsuits Over Federal Vaccine Mandates
This is the latest development in pending lawsuits challenging one of the three federal vaccine mandates, which were initially announced on September 9, 2021, as part of President Biden's COVID-19 Action Plan, Path Out of the Pandemic. On November 12, 2021, the U.S. Court of Appeals for the Fifth Circuit stayed enforcement and implementation of the federal Occupational Safety and Health Administration's (OSHA) COVID-19 "vaccine or test" emergency temporary standard (ETS). All petitions for review of the ETS, including the Fifth Circuit ruling, were consolidated and are now before the U.S. Court of Appeals for the Sixth Circuit. Also, on November 29, 2021, the U.S. District Court for the Eastern District of Missouri granted a preliminary injunction blocking the CMS rule against any and all Medicare- and Medicaid-certified providers and suppliers within the States of Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming pending a trial on the merits. Now all three of the federal vaccine mandates are blocked in full or in part.
Background on the Federal Contractor Vaccine Mandate
As previously reported, on September 9, 2021, President Biden signed Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors (Order) pursuant to the U.S. Constitution, 3 U.S.C § 301, which provides the president with general delegation authority, and the Federal Property and Administrative Services Act (FPASA), which provides authority to manage procurement.
The Order requires executive departments and agencies to contractually obligate federal contractors to comply with workplace safety standards to be developed by the Federal Workforce Task Force. Those standards were issued by the Task Force on September 24, 2021 as a guidance document (Guidance). On September 28, 2021 the director of OMB determined that the Guidance would "improve economy and efficiency" and on September 30, 2021, the Federal Acquisition Regulation (FAR) Council published a memorandum on the Issuance of Agency Deviations to Implement Executive Order 14042.
The Guidance requires all covered contractor employees working on or in connection with the covered federal contracts and all other employees that share workplaces with such employees or come into contact with them as part of their employment to be fully vaccinated unless they qualify for a legal exemption. The Guidance defines "fully vaccinated" as two weeks after receiving the second dose in a two-dose series (e.g., Pfizer or Moderna), or two weeks after receiving a single-dose vaccine (Johnson & Johnson/Janssen). Initially, the deadline for the vaccine mandate was December 8, 2021, but that deadline was extended to January 18, 2022. So, this means that covered contractors would need to receive their Johnson & Johnson vaccine or the second dose of a Pfizer or Moderna vaccine by January 4 to be fully vaccinated by January 18.
The Court's Order
As a matter of first impression in the Sixth Circuit on the scope of FPASA, the court found Congress's broad delegation of power to promote economy and efficiency in federal contracting had limits, and FPASA could not be used to promulgate a public health measure, such as a mandatory vaccination. The court described a "slippery slope" where if the vaccination mandate were found to have a sufficiently close nexus to economy and efficiency, then FPASA "could be used to enact virtually any measure at the president's whim under the guise of economy and efficiency."
The court described three "concerning statutory and constitutional implications" from President Biden's exceeding his authority under FPASA:
Competition in Contracting Act: Defendants have not demonstrated that they provided full and open competition through the use of competitive procedures in excluding unvaccinated contractors and subcontractors from government contracts.
The Nondelegation Doctrine and Concerns Regarding Federalism: Defendants cannot point to a single instance when the statute has been used to promulgate such a wide and sweeping public health regulation as mandatory vaccination for all federal contractors and subcontractors.
Tenth Amendment: Because the regulation of health and safety matters is, primarily and historically, a matter of local concern, Defendants have stepped into an area traditionally reserved to the states.
Based on these concerns, the court enjoined the government "from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee."
However, the court sided with the government on (1) whether the defendants issued the FAR Council Guidance and OMB Determination in violation of the procedure required by law; and (2) whether the agencies' actions were arbitrary and capricious. The court acknowledged, "[a]lthough the procedural path taken by the agencies was, at times, inartful and a bit clumsy, the Court finds based on the record before it that the Defendants likely followed the procedures required by statute."
Because the court found that the president exceeded his authority under the FPASA, and for the serious constitutional concerns identified above, the court held that the plaintiffs are likely to succeed on the merits as to their preliminary injunction, are likely to suffer irreparable harm without preliminary relief, and that preliminary relief is not contrary to the public interest. The court wrestled with the scope of the preliminary injunction, even admitting, "[w]hile it is true that the evidence presented by the parties primarily relates to Kentucky, Ohio, and Tennessee, this court's ruling rests on facts that are universally present in the federal government's dealings with contractors and subcontractors in all of the states." In the end, though, the court limited its preliminary injunction to Kentucky, Ohio, and Tennessee.
Absent some further action by the courts, the vaccine mandate for federal contractors and subcontractors is no longer enforceable in Kentucky, Ohio, and Tennessee. Therefore, covered federal contractors need not require employees working in these states to be fully vaccinated by January 18, 2022. Nevertheless, as there is no state law limiting or banning vaccine mandates in Kentucky and Ohio, employers may still choose to adopt voluntary vaccine mandates applicable to employees in these states. But, if a state law should be adopted in one of those jurisdictions, employers would not be able to rely on federal preemption as a defense to the application of such a state law. Tennessee, for example, permits an employer to mandate vaccination, but provides a number of bases on which an employer must provide an exemption from this requirement to employees who object; to date, neither Ohio nor Kentucky has adopted state laws or executive orders limiting an employer's ability to mandate vaccination.
As to other jurisdictions, the Order and Guidance remain enforceable for now. However, there are challenges pending in a number of other federal district courts, which could extend the injunction to additional states. Littler will monitor these developments and provide periodic updates as new petitions and rulings develop.
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