For those of you who have been following along with my coverage of the federal contractor COVID-19 Safety Protocols guidance and related compliance concerns (previous coverage here, here, and here), and my colleagues’ coverage of the Occupational Safety and Health Administration’s (“OSHA”) emergency temporary standard (“ETS”), you may remember the following:
• In September, the federal government promulgated, among other new COVID-related initiatives, COVID-19 Safety Protocol requirements for federal contractors. Initiated through the Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors (“the Executive Order”) the idea was that federal contractors would be obligated, through the incorporation of a FAR deviation clause (“the Deviation Clause”) into their covered federal contracts, to comply with certain COVID-19 Safety Guidance (“the Guidance”) issued and periodically updated by the Safer Federal Workplace Task Force (“the Task Force”). There were three main components of the Guidance. The component that the majority of contractors was most concerned about was a broad employee vaccination mandate. The other two requirements concerned masking and physical distancing, and the designation of a COVID-19 Safety Coordinator. Contractors were also mandated to flow compliance requirements down to their subcontractors.
• The government thereafter promulgated the separate and independently-applicable OSHA ETS, for companies with at least 100 employees.
• The White House’s November 4th Statement informed contractors that
“OSHA is also clarifying that it will not apply its new rule to workplaces covered by … the federal contractor vaccination requirement,” meaning that the ETS would not apply to contractor workplaces already subject to the Executive Order and related Guidance, but that workplaces not (or not yet) subject to the Executive Order and Guidance would be covered by the ETS.
• Enforcement of the OSHA ETS was subsequently stayed by the United States Federal Court of Appeals for the Fifth Circuit.
• A U.S. District Court in Kentucky blocked the mandate for federal contractors, but only as it related to covered contracts in Kentucky, Ohio, and Tennessee. (Commonwealth of Kentucky et al. v. Biden et al., 3:21-cv-00055, before United States District Court for the Eastern District of Kentucky). It was unclear exactly how those geographic restrictions would apply, but that quickly became a moot point when a United States District Court in Georgia enjoined enforcement of COVID-19 requirements for federal contractors nationwide. (The State of Georgia et al. v. Biden et al., 1:21-cv-163, before the United States District Court for the Southern District of Georgia). The Georgia District Court held that “Defendants are ENJOINED, during the pendency of this action or until further order of this Court, from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in any state or territory of the United States of America.” Note that although certain language in the decision questioned the federal government’s authority to issue the Executive Order, and therefore seemed to deny the legitimacy of the Guidance in its entirety (i.e. including the enforceability of all three components of the Guidance: the vaccination mandate as well as the masking/physical distancing & COVID-19 Coordinator requirements), the language used by the Court in ordering the actual injunction and enjoining enforcement seemed to pertain only to the vaccination mandate.
Unsurprisingly, this created uncertainty, confusion, and disagreement over whether the other portions of the Guidance can or cannot be enforced. (More on that below.) The Court issued a preliminary injunction, which operates to stay enforcement of the Executive Order and Guidance while the merits of the case (which concern a challenge to the authority of the federal government to issue these rules) are litigated before the District Court. (Given that the Court indicated it felt the federal government was likely to lose, I think we can all see where that final decision is likely headed…)
Following the Georgia court decision, the Task Force updated its website to reflect that, with limited exceptions, “[f]or existing contracts or contract-like instruments … that contain a clause implementing requirements of Executive Order 14042: The Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency.” But, the Task Force warned:
“Federal agency COVID-19 workplace safety protocols for Federal buildings and Federally controlled facilities still apply in all locations. Contractor employees working onsite in those buildings and facilities must still follow Federal agency workplace safety protocols when working onsite.”
Presumably, then, unvaccinated employees could still be denied access or restricted in their access to Federal workplaces, which could in turn cause contractors other performance problems. The Task Force advised that
“[t]he Office of Management and Budget has issued guidance on implementing requirements of Executive Order 14042 while ensuring compliance with applicable court orders and injunctions, including those that are preliminary and may be supplemented, modified, or vacated, depending on the course of ongoing litigation.”
All of this left contractors confused, and with some hard choices, depending on considerations such as: what agencies the contractor does business with; whether the contractor had already signed modifications incorporating the Deviation Clause into contracts; whether the Agencies (or individual COs) were still pushing for signatures on pending modifications; whether the contractors planned to compete for future contracts that included the FAR COVID Deviation Clause; and whether the contractor had employees who, if denied access to federal workplaces due to unvaccinated status, could force a default, or other performance or breach issues. Many contractors were still in the process of working through these issues when the following new developments occurred.
One: STATUS OF FEDERAL CONTRACTOR MANDATES
The federal government challenged the Georgia District Court’s preliminary injunction before the United States Court of Appeals for the Eleventh Circuit. On Friday, the Administration’s request for a stay of the District Court’s injunction was denied. The Circuit Court refused to stay the injunction (which itself blocks enforcement of the Executive Order and COVID-19 Guidance compliance requirements) from going into effect, pending appeal, because, the Court said, the federal government-appellant hadn’t shown that it would be harmed by the injunction in the meantime. The Eleventh Circuit directed the federal government to file its appeal brief by January 3, with responses due on January 24th.
In light of this ongoing litigation at the appeals level, the Georgia District Court, at a hearing held on December 21, reportedly agreed to stay proceedings in the District Court case pending the appeal before the Eleventh Circuit. The federal government appellants had previously, in a December 9 Motion before the District Court, requested that the Court clarify the scope of the preliminary injunction. Specifically, and as described in that motion, they asked: (1) “whether the preliminary injunction is limited to enforcement of the Safer Federal Workforce Task Force’s vaccination requirements, o[r] whether it also prevents federal agencies from enforcing requirements related to masking and physical distancing and the identification of a person or persons to coordinate COVID-19 workplace safety efforts at covered contractor workplaces”; and (2) whether the preliminary injunction does or does not “prohibit private federal contractors from mutually agreeing with Defendants to include COVID-19 safety clauses in their federal contracts, thus allowing those federal contractors to voluntarily comply with the Task Force guidelines, including requiring their employees to be vaccinated” – i.e. whether bilateral modifications incorporating the FAR Deviation Clause could still be negotiated, finalized and enforced. (With regard to the second issue, the government noted that it had already negotiated and entered into many such bilateral agreements, implying that this was something many contractors were more than happy to agree to. Given the heavy-handed coercion that I saw occur with a lot of those “bilateral” modifications, I personally think this is a bit of a stretch. But I digress…). As of right now, these two questions appear to remain open and are – in my opinion – ripe for much further uncertainty, anxiety, and angst amongst contractors and COs alike. These open questions will continue to generate confusion and disagreements until the precise scope of the injunction is clarified by the Court. In the meantime, the stay remains in place, blocking enforcement of (at least some) of the Executive Order and Guidance requiring COVID-19 Protocol Compliance from federal contractors.
TWO: STATUS OF OSHA ETS
After the Fifth Circuit issued its decision, preliminarily enjoining enforcement of the OSHA ETS, a number of parties challenged the injunction. Following a multi-district litigation lottery in November, these challenges were consolidated for a review before the United States Appeals Court for the Sixth Circuit. On Friday, the Sixth Circuit dissolved the stay that the Fifth Circuit put in place with regard to OSHA ETS. You can read more about that decision from our excellent HR legalist team here.
As specifically concerns government contractors, there are additional considerations to keep in mind in connection with the OSHA ruling. Remember, as mentioned above, that OSHA had clarified that it would not apply its new ETS rule to workplaces covered by the federal contractor vaccination requirement. This meant that the ETS would not apply to contractor workplaces that were subject to the Executive Order and related Guidance, but that workplaces not (or not yet) subject to the Executive Order and Guidance would be covered by the ETS. Given that the Federal contractor rules have currently stayed, arguably, nothing is currently “subject to the Executive Order and Guidance.” Meaning that government contractors with at least 100 employees who would not, if the federal contractor COVID requirements remained in place, be subject to OSHA ETS might, for the time being, be subject to OSHA ETS. Those contractors would, therefore, be obligated to comply with OSHA ETS’ various requirements, including the vaccination/testing requirements.
LATEST TAKEAWAYS
So what are the takeaways here for federal contractors? Well, in a nutshell, don’t sleep on this! Even though enforcement of the COVID-19 Guidance for federal contractors currently stays, the precise scope of the underlying injunction and permitted enforcement is unclear, as evidenced by the questions asked of the Georgia court by the federal government itself. Contracting Officers, in my recent experience, have taken differing views on what is and is not appropriate in the meantime. Moreover, things are changing constantly, as a result of the complicated and layered web of court decisions, appeals, and, injunctions pertaining to each government mandate. It would be unwise for contractors to assume that all aspects of all COVID mandates are unenforceable or null, or to ignore the ever-changing compliance landscape here. In addition, for those of you responding to solicitations including the FAR Deviation Clause, you have some choices to make. Remember that, if and when the stay is lifted, to the extent the solicitation/your new Contract includes the FAR Deviation Clause, you will be required to comply with the Guidance. What does this mean about the costs you choose to build into your bid/proposal? Do you need to alter your subcontract templates to flow the Deviation Clause down to your subs, in case it becomes enforceable again, or are you willing to risk having to renegotiate with your subs later? You will need to decide how the uncertainty regarding the COVID mandates impacts your go/no go choices, and the contracts you do or do not want to pursue as you roll into 2022.
It will be critically important for contractors to stay on top of any new developments relating to both the federal contractor COVID rules and, if you have at least 100 employees, the OSHA ETS, as well. Contractors should also be in close communication with their legal teams, discussing all options and risks relating to existing contracts, modifications, and pending solicitations/future contract awards. If you have questions about the applicability of OSHA ETS to your company, your compliance requirements relating to OSHA ETS, or issues relating to the (currently, at-least-partially-stayed) federal contractor Guidance, you should discuss with an attorney.
We will keep you posted, but in the meantime, we wish you a wonderful holiday season and a very happy new year!
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