DOJ Seeks Stay of KY, OH, and TN Injunction; Hearings Go Forward in Other Government Contractor Vaccine Mandate Cases

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As we previously reported, on November 30, the District Court for the Eastern District of Kentucky (ED of KY) enjoined the government “from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee.” This follows nationwide injunctions of both the OSHA vaccine and testing Emergency Temporary Standard applicable to employers with 100 or more employees and the CMS interim final rule mandating vaccinations applicable to Medicare- and Medicaid-certified providers and suppliers.

As expected, on December 3, the Department of Justice (DOJ) asked the ED of KY for an immediate stay of the injunction and filed a notice of appeal to the Sixth Circuit. The plaintiffs have asked for three business days to respond, and it is unclear when the ED of KY will act on DOJ’s request. But the ED of KY case may be overtaken by other events, as preliminary injunction hearings in additional challenges to the government contractor vaccine mandate occurred on December 3 in two cases and are expected to happen on December 6 and 7 in two others.

Limited or Nationwide Injunction?

In the past few years, several commentators have questioned the conditions, if any, under which district courts may issue nationwide injunctions. While this is a very complex issue that brings into question the rights of the parties in a particular case, those in favor of limiting injunctions to the plaintiffs in the case generally favor having multiple district courts consider an issue so that the legal arguments are better developed before consideration by the appellate courts. Those in favor of nationwide injunctions believe that consistency is favorable, any district court is authorized to enjoin any executive branch action that it determines to be unlawful, and the government’s ability to appeal an injunction provides sufficient protection against improperly issued injunctions.

Here, the questions raised by the limited injunction of the government contractor vaccine mandate by the ED of KY, which prohibits the enforcement of the provision but does not appear to prohibit its inclusion in contracts, show the complications in implementation raised by  geographically-limited injunction and suggest that a nationwide injunction might be more appropriate. Some of those questions include:

  • How does this apply to contractors that have operations both in Kentucky, Ohio, or Tennessee and in states where the injunction does not apply?
  • Does the injunction apply to a government contract performed in Kentucky, Ohio, or Tennessee by a company based in another state?
  • Is the government permitted to impose the contract provision, FAR 52.223-99 or DFARS 252.223-999, in options exercised or contract extensions with contractors in Kentucky, Ohio, or Tennessee as long as the obligation is not enforced?
  • Would the government violate the injunction if it declined to exercise an option solely because a contractor in Kentucky, Ohio, or Tennessee refused to accept the vaccine mandate provision?
  • In competitions for new contracts, is the government prohibited from including the vaccine mandate contract clause if the awardee is based in Kentucky, Ohio, or Tennessee?  What if the awardee is based in one of those states, but the contract is in a non-injunction state?

As contractors and government grapple with the injunction’s impact, other questions will undoubtedly arise.

DOJ’s Request for a Stay

This confusion is further exacerbated by the fact that the injunction may be stayed. In its December 3 emergency motion, DOJ requested that the ED of KY stay the injunction pending its review of the motion to stay or stay the injunction pending the Sixth Circuit’s consideration of the government’s appeal. The brief argues that the balance of the harms and public interest warrant a stay pending appeal, suggesting, with reference to a declaration from Office of Management and Budget’s (OMB’s) Acting Administrator and Deputy Administrator for Federal Procurement Policy, that non-enforcement of the mandate “would result in a significant reduction in economy and efficiency in the Federal Government’s procurement of essential services that are required to support the American people ….” DOJ also asserts that the plaintiffs would suffer no irreparable injury were the government permitted to force contractor employees to get vaccinated or lose their jobs or if states were forced to comply with a mandate that the ED of KY found likely exceeds applicable statutory authority and violates multiple constitutional provisions. It is not clear how persuasive the argument will be because attrition caused by the imposition of the vaccine mandate may have the same impact the government seeks to avoid.

Also, DOJ argues that delaying the implementation of the contractor vaccine mandate will disrupt activity outside of Kentucky, Ohio, and Tennessee because prime contractors in other states that rely on subcontractors in the enjoined states may experience delays due to non-compliance with the mandate. The fact that even the government recognizes that it is not possible to constrain the impact of the injunction to entities in Kentucky, Ohio, and Tennessee, seems to suggest that a nationwide injunction might be more appropriate.

It is always a long shot for the party that has just lost on an injunction in district court to then convince the district court that the injunction just entered should be stayed. Perhaps in an attempt to make that case, DOJ leads its brief with the balancing the harms argument, which DOJ unusually argues first in its brief, the government also argues that it is likely to succeed on the merits of appeal.  It seems unlikely the ED of KY will agree.

DOJ also argues that the court should stay the injunction to the extent that it prohibits the enforcement of the vaccine mandate in federal contracts with non-parties in Kentucky, Ohio, and Tennessee. While each of those states are themselves federal contractors, the exclusion of non-parties from the scope of the injunction would render it almost irrelevant and certainly spur any number of follow-on “copycat” lawsuits.

Finally, DOJ requested clarification as to whether it could continue to agree to the inclusion of the government contractor vaccine mandate contractual provisions notwithstanding the injunction, “thus allowing those federal contractors to voluntarily comply with the Task Force Guidelines, including requiring their employees to be vaccinated.” This argument seemingly ignores the fact that state law in some states, including Tennessee, prohibits companies from taking specific actions that are necessary to comply with the vaccine mandate. For that reason, a contractor in Tennessee cannot “voluntarily” comply with the federal government contractor vaccine mandate while the injunction is in place Constitution’s Supremacy Clause, would be resolved in favor of federal law. In addition, if a contractor is inclined to “voluntarily comply with the Task Force Guidelines ….” to the extent permitted under state law, it is not clear why the contract provision is required at all.

Hearings in Other Challenges to the Government Contractor Vaccine Mandate

Even if the Kentucky, Ohio, and Tennessee injunction is stayed or restricted, it is possible that a nationwide injunction will be issued by one of the other district courts currently considering challenges to the contractor vaccine mandate.  On December 3, there were preliminary injunction/temporary restraining order hearings in the case in the Southern District of Georgia filed by Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia, and in the case in the Southern District of Texas filed by Texas. There are hearings scheduled for December 6 and 7 in the cases filed in the Western District of Louisiana by Louisiana, Indiana, and Mississippi, and in the Middle District of Florida filed by Florida.

Takeaways for Government Contractors

While the contractor vaccine mandate is wounded, reports of its demise are premature. For now, contractors outside of Kentucky, Ohio, and Tennessee should continue to prepare with the expectation that employees need to receive their last vaccine dose by January 4. But until that date passes, no contractor is out of compliance simply because some employees are not fully vaccinated. And, even after that date, as discussed on this blog the Safer Federal Workforce Task Force Guidance expressly permits contractors to utilize their own “usual process for enforcement of workplace policies” to encourage compliance and encourages agencies to work with contractors that are “working in good faith and encounter challenges with compliance.”

For contractors in Kentucky, Ohio, and Tennessee, as long as the injunction is in place, those entities must comply with applicable state law. That said, because the injunction is being appealed, it would be prudent to have a compliance structure in place to meet the contractor vaccine mandate requirements if the injunction is stayed or overturned.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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