In a long-awaited decision, on August 26, 2022, the United States Court of Appeals for the Eleventh Circuit significantly narrowed the scope of a nationwide preliminary injunction of the vaccine mandate in Executive Order 14042, the Biden Administration’s effort to impose on federal contractors a variety of COVID-19 safety protocols, including a vaccine requirement. Despite agreeing with plaintiffs that their challenge to the vaccine mandate was likely to succeed, the Eleventh Circuit nonetheless concluded that nationwide relief was unwarranted, instead limiting the preliminary injunction to the parties before the Court: seven States (Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia), their agencies, and members of the construction-industry trade group Associated Builders and Contractors.

 

The Eleventh Circuit’s decision is the first of several court of appeals decisions expected to address Executive Order 14042 in the coming months, and may ultimately tee up Supreme Court review. Once the Eleventh Circuit’s mandate issues, however, non-party contractors in those seven states and roughly half the states in general will no longer be covered by a preliminary injunction that blocks either the vaccine mandate or Executive Order 14042 in its entirety. In the interim, the Safer Federal Workforce Task Force (“Task Force”) will hopefully issue new guidance or, at the very least, a response addressing the impact of the Eleventh Circuit’s decision and the resulting patchwork of preliminary injunctions.

 

In a 45-page majority opinion by Judge Grant, the Eleventh Circuit largely adopted the challengers’ reading of the Federal Property and Administrative Services Act (commonly known as the Procurement Act). While that statute “gives the President the authority to direct subordinate executive actors as they carry out its specific provisions,” the Court wrote, “[a] presidential directive can stand only if those subordinate officials have the statutory authority that they are told to exercise.” Here, “[n]othing in the Act contemplates that every executive agency can base every procurement decision on the health of the contracting workforce.” That conclusion was supported by the major questions doctrine—the rule that Congress is expected to “speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” The authority conferred by the Procurement Act to create an “economical and efficient system” for federal contracting, the Court said, “is worlds away from conferring general authority for every agency to insert a term in every solicitation and every contract establishing health standards for contractors’ employees.”

 

The Eleventh Circuit was not persuaded by the federal government’s argument that the Procurement Act’s purpose of enhancing contracting efficiency granted sufficient authority to support Executive Order 14042. “An executive order cannot rest merely on the ‘policy objectives of the Act,’” the Court said. And it disagreed with a long and established line of cases from the D.C. Circuit applying a “purpose-based approach.” “The purpose the Act serves is, if anything, a secondary restriction on the President’s authority rather than an expansion,” the Eleventh Circuit wrote. Past examples of broad executive orders under the Procurement Act were no help either. “[W]e cannot use past practices to stretch the statute’s text,” the Court reasoned, and the most comparable recent order—sick leave rules issued by President Obama—had never been tested in a court of appeals.

 

The Court found that other equitable factors also supported injunctive relief. Plaintiffs were irreparably harmed by Executive Order 14042 because compliance costs were unrecoverable. Not only did the “federal government . . . not push back on the existence of those costs,” it also acknowledged that “the Contract Disputes Act only makes monetary relief available for disputes involving existing contracts.” And while it was “indisputable that the public has a strong interest in combating the spread of Covid-19,” the Court wrote, “our system does not permit agencies to act unlawfully even in pursuit of desirable ends.”

 

Despite affirming the basis for the district court’s preliminary injunction, the Eleventh Circuit nonetheless heavily restricted its scope. “In their universal reach to plaintiffs and nonplaintiffs alike, nationwide injunctions push against the boundaries of judicial power, and very often impede the proper functioning of our federal court system,” the Court wrote. Conflicting decisions among courts aid development of the law, and Congress is always free to streamline nationwide review in appropriate circumstances. While the Court noted that nationwide relief may be appropriate when necessary to provide plaintiffs with full relief, such was not the case here. The Eleventh Circuit thus vacated the preliminary injunction “to the extent that it bars enforcement of the mandate against nonparty contractors through new and existing contracts.” And because “plaintiffs would be disadvantaged in the solicitation process if the federal government could consider whether a bidder is subject to the mandate,” the Court also left the preliminary injunction in place “to the extent that it bars federal agencies from considering the enforceability of the mandate” when making an award determination and a plaintiff belongs to the pool of bidders. Other contracts and solicitations are not subject to the preliminary injunction.

 

Judge Edmonson concurred in the result, agreeing that plaintiffs were likely to prevail and that the injunction was overbroad. Judge Anderson concurred in part and dissented in part. He joined the majority in narrowing the scope of the preliminary injunction, but he disagreed that plaintiffs were likely to prevail on the merits. Executive Order 14042 “fits comfortably within the Procurement Act’s grant of power,” Judge Anderson wrote, because it aims to achieve the statutory goals of establishing an economical and efficient system of government contracting. In his view, that purpose-based approach was more consistent with both decisions from other courts of appeals and longstanding historical practice. And he disagreed with the majority’s application of the major questions doctrine, noting that the Procurement Act’s delegation of authority was to the President, not a politically unaccountable administrative agency, and was, in any event, sufficiently clear.

 

The Eleventh Circuit is the first federal appellate court to weigh in on Executive Order 14042, but it is far from the last. The following is an overview of recent and upcoming developments in similar cases to watch next:

A number of challenges to Executive Order 14042 are also proceeding in federal district courts. As always, we will continue to monitor and provide updates on these developments.

 

Until the Task Force issues updated guidance, contractors performing work in states no longer covered by the nationwide preliminary injunction, and which are subject to the requirements of Executive Order 14042, should consider reaching out to their cognizant contracting officer(s), in writing, seeking directions on how to proceed. Contractors should also continue to monitor for updates to the Task Force’s guidance, which was last updated on August 17, 2022, particularly if performing work at one or more federal facilities.