It is likely that the Federal Government will appeal the District Court’s ruling.
What does this ruling mean for federal contractors and subcontractors?
Until further court action, the requirement that covered contractor employees be fully vaccinated will not be enforced. We expect additional developments in the short term. For now, however, private employees, if they so choose, may move forward with enforcing the vaccine mandate, in anticipation that the courts ultimately will uphold its validity. Alternatively, federal contractors and subcontractors may prefer to adopt a “wait and see” approach. We expect that even if the injunction is vacated, the current January 4 deadline for employees to be fully vaccinated will be modified.
Background and Discussion
The vaccination mandate first was announced by the Safer Federal Workforce Task Force in a Guidance issued on September 24, 2021, in response to President Biden’s directive under EO 14042 to develop “adequate COVID-19 safeguards for federal contractors and subcontractors. The Guidance subsequently was updated by the Task Force on November 10, 2021. EO 14042 also directed the FAR Council to amend the FAR to include a clause in most federal procurement solicitations requiring compliance with the Task Force Guidance, including the mandatory vaccination requirements.
A consortium of states, including Georgia, Alabama, Idaho, Kansas, South Carolina, Utah and West Virginia; several governors; and various state agencies, filed a lawsuit challenging the legality of EO 14042 and seeking declaratory and preliminary and permanent injunctive relief against its enforcement. The Associated Builders and Contractors, Inc. (“ABC”), which represents tens of thousands of contractors and subcontractors throughout the country that regularly bid and work on federal service contracts, was permitted by the court to intervene in this action. The plaintiffs contended that the President exceeded his authority under the Federal Property and Administrative Services Act, 40 U.S.C. §101, et seq. (the “Procurement Act”) by directing the federal agencies to take the actions set forth in EO 14042, including requiring employee vaccinations as a mandatory term in current and future federal contracts.
The court agreed. While observing that “the Procurement Act grants the President particularly direct and broad-ranging authority over those larger administrative and management issues that involve the Government as a whole,” the court was “unconvinced, at this stage of the litigation, that [the Procurement Act] authorized him to direct the types of actions by agencies that are contained in EO 14042.” The court noted that “the direct impact of EO 14042 goes beyond the administration and management of procurement and contracting.” By “requiring a significant number of individuals across the country working in a broad range of positions and in numerous different industries to be vaccinated or face a serious risk of losing their job,” the judge concluded that EO 14042 operates as a regulation of public health.” He further found that the EO will have a major impact on the economy at large, as it limits contractors’ and members of the workforce’s ability to perform work on federal contracts,” and “appears to have vast economic and political significance.” As such, the court concluded that there is a strong likelihood that the plaintiffs would be able to prove that Congress, in the Procurement Act, did not clearly authorize the President to issue the kind of mandate contained in EO 14042, which “goes far beyond addressing administrative and management issues in order to promote efficiency and economy in procurement and contracting.”
The court further concluded that in balancing the harm that would result from enjoining EO 14042 against the harm to federal contractors and subcontractors, and their employees if the EO was not enjoined, the scales tipped in favor of the latter. The court noted that an injunction would do nothing more than maintain the status quo, and entities would be free to encourage their employees to get vaccinated and employees can choose to do so. “In contrast, declining to issue a preliminary injunction would force plaintiffs to comply with the mandate, requiring them to make decisions which would significantly alter their ability to perform federal contract work which is critical to their operations. Indeed, it appears that not granting an injunction could imperil the financial viability of many of ABC’s members. Additionally, requiring compliance with EO 14042 would likely be life altering for many of plaintiffs’ employees as plaintiffs would be required to decide whether an employee who refuses to be vaccinated can, in practicality, be reassigned to another office or another task or whether the employee instead must be terminated.”
Although the lawsuit was initially filed by seven states and entities and governors located within those states, the court explained that the intervention of ABC significantly changed the proper scope of the preliminary injunction that it should issue. Because ABC represents federal contractors throughout the United States, an injunction that was limited to the seven plaintiff states would leave tens of thousands of ABC members located elsewhere without any injunctive relief. The court, therefore, found it necessary to issue an injunction that was applicable throughout the United States.
This decision comes on the heels of federal court decisions issued within the last few weeks temporarily blocking throughout the nation the two other federal agency vaccination mandates. These include the Centers for Medicare and Medicaid Services rule covering healthcare entities receiving Medicare and Medicaid funding and the OSHA Emergency Temporary Standard applicable to all employers employing at least 100 employees. These actions are being hotly litigated in the courts.
