Federal Contractors Remain in Limbo over Vaccine Mandate

By | Published On: January 31, 2022

Despite recent decisions by the U.S. Supreme Court on COVID-19 vaccine mandates for large employers and health care facilities, questions still abound over the future of Executive Order 14042 (the “Executive Order”). The Executive Order, which was issued by President Biden last September, aims to “promote economy and efficiency in procurement” by requiring businesses with federal contracts or contract-like instruments to “provide adequate COVID-19 safeguards for their workforce.” Specifically, under the Executive Order, subject businesses have to comply with safety protocols established by the Safer Federal Workforce Task Force (the “Task Force”), which includes a mandate ensuring that employees working in designated contractor workplaces are fully vaccinated against COVID-19.

Since its inception, the Executive Order has been mired in controversy and litigation. In December, a Georgia federal district court granted a nationwide injunction against the implementation and enforcement of the Executive Order. That ruling is currently pending before the Court of Appeals for the Eleventh Circuit, thereby leaving federal contractors and subcontractors in legal limbo on their compliance obligations moving forward. (Thereafter, the Office of Management and Budget announced that it “will take no action to enforce” the Executive Order “absent further written notice from the agency” where the performance of the contract is subject to a court injunction.)

The impact of the Supreme Court’s COVID-19 vaccination rulings on the Executive Order

As federal contractors anxiously await further judicial guidance on the fate of the Executive Order, the Supreme Court may have tipped its hand on the legality of vaccine mandates in two January 13, 2022 landmark opinions. In National Federation of Independent Business v. Department of Labor (No. 21A244), the Supreme Court overturned the Court of Appeals for the Sixth Circuit and blocked an Occupational Safety & Health Administration (“OSHA”) regulation that required employers with 100 or more employees to ensure that their employees were either fully vaccinated against COVID-19 or subject to weekly testing. And, in Biden v. Missouri (No. 21A240), the Supreme Court declined to stay a Department of Health & Human Service’s (“HHS”) interim final rule, which required covered health care facilities and providers to ensure that their staff was fully vaccinated against COVID-19 in order to receive Medicare and Medicaid funding. Although the Supreme Court did not address the Executive Order in either of these cases, its opinions may nonetheless set the framework for how the Eleventh Circuit and other federal courts may ultimately rule on the Executive Order in the coming months.

In both cases, the Supreme Court focused its inquiry on whether OSHA and HHS had the requisite congressional authority to impose a vaccine mandate. In the OSHA case, the Supreme Court posited that OSHA could not impose a vaccine mandate on large employers because OSHA’s purpose is to regulate “occupational hazards,” and it did not have the authority to regulate COVID-19, which the Supreme Court characterized as a “hazard of daily life.” Conversely, in the HHS case, the Supreme Court concluded that HHS had acted in accordance with its congressional authority by implementing a vaccine mandate because health care facilities “tak[ing] steps to avoid transmitting a dangerous virus to their patients is consistent with the fundamental principle of the medical profession: first, do no harm.”

Based on the Supreme Court’s analysis in each of these cases, it appears that the Executive Order is more akin to the OSHA mandate than the HHS vaccine rule. Whereas Congress enacted OSHA in furtherance of ensuring workplace safety, Congress enacted the Federal Accounting Standards Advisory Act (“FASA”), the act upon which the President issued the Executive Order, to optimize economy and efficiency in government contracts. This is a far different objective than HHS, which is rooted in a mission of enhancing the health and well-being of all Americans by providing health and human services. Logically, it would seem that if the Supreme Court held that OSHA would exceed its authority if it were permitted to impose a vaccination mandate on large employers, it would also be reluctant to find a suitable basis upon which to conclude that the President had congressional authority to use FASA as a means to mandate vaccination of federal contractors.

How should federal contractors proceed in light of the Supreme Court’s vaccination mandate rulings?

Although federal contractors now have a reprieve from complying with the Executive Order while it works its way through the judicial system, they should stay abreast of all news pertaining to vaccine mandates and follow these guidelines:

  • Consult legal counsel to ensure that there isn’t another vaccine mandate which federal contractors have to comply with now that there is a nationwide injunction of the Executive Order. (For instance, in light of the Supreme Court’s HHS ruling, health care facilities with federal contracts now face the daunting task of complying with the HHS vaccine mandate.)
  • Draft (if you haven’t already done so) a comprehensive vaccination policy that complies with the Task Force’s guidance and be prepared to implement the policy quickly in the event a court lifts the nationwide injunction of the Executive Order.
  • If you have added a vaccine clause in your contracts that mirrors the requirements of the Executive Order, then make sure your subcontractor is aware of your expectations with respect to its fulfillment of any employee vaccination mandate.
  • Determine whether there are any applicable state vaccination requirements that may apply to your organization. The injunction only pertains to federal contracts and there may be state regulations requiring the vaccination of employees as a condition to maintaining a state contract.
  • Continue to maintain open and regular communication with employees including ensuring they understand your organization’s position on implementing a vaccination policy as well as understand any changes you may make to that policy. The array of vaccination mandates (each with a different legal status) is confusing to many. Employers should provide employees with as much clarity as possible and make sure employees are aware that the organization’s vaccination policy is dependent on the outcome of pending cases, which may require the organization to change its vaccination policy with minimal notice.
  • Keep an eye on the “For Federal Contractors” section of the Task Force website for updated guidance, instruction and deadlines pertaining to the implementation and enforcement of the Executive Order.

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