Judge R. Stan Baker of the US District Court for the Southern District of Georgia issued an order (Order) on December 7, 2021, enjoining the federal government “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.” This comes on the heels of the November 30, 2021 order by a federal court in Kentucky (see our article here) blocking the federal government’s ability to enforce the obligation embedded in clauses in federal government contracts and other instruments requiring employees of federal contractors with covered contracts in Kentucky, Ohio, and Tennessee to be fully vaccinated by January 18, 2022.

The Georgia case was originally brought by the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia (and agencies within those states). Unlike the court in Kentucky, Judge Baker elected to extend the order nationwide because one of the intervening plaintiffs, Associated Builders and Contractors, Inc. (ABC), has members with covered contracts located throughout the United States Further, the court concluded that “given the breadth of ABC’s membership, the number of contracts [they] will be involved with, and the fact that EO 14042 applies to subcontractors and others, limiting the relief to only those before the Court would prove unwieldy and would only cause more confusion.”

In any request for a preliminary injunction in which the Government is the party whose actions are being enjoined, a complaining party must show a likelihood of success on the merits, irreparable injury, that the injury threatened outweighs any harm the injunction would inflict on the Government, and that the injunction would not be adverse to the public interest. In this case, Judge Baker concluded that it was likely that President Biden exceeded his authority under the broad statute (the Federal Property and Administrative Services Act) giving the executive branch the authority to procure goods and services through an “economical and efficient system.” Citing US Supreme Court precedent, the court concluded the mandate cannot stand given the lack of explicit language in the enabling statute because of the mandate’s “vast economic and political significance.” The court concluded, at least preliminarily, that the implementation of the mandate would impose an “extreme economic burden” on contractors, that it would pose an “impediment” to the ability of some contractors with recalcitrant employees to continue to perform federal work, that it would have a major impact on the economy, and that it “operates as a regulation of public health.”

In its irreparable harm finding, the court focused less on the potential loss of contracts due to employees who refuse vaccination and more on the economic costs of implementing the mandate. Relying on testimony, the court noted the “incredibly time-consuming processes…to identify the employees covered by the mandate and to implement software and technology to ensure that those employees have been fully vaccinated (or have requested and been granted an accommodation or exemption) by the deadline in January.” The court noted, perhaps incorrectly, that the burden extended to “requir[ing] that any subcontractors’ employees working on or in connection with a covered contract are in compliance.” (The operative clause (clause) and the Safer Workforce Task Force Guidance merely require the clause be flowed down to certain subcontractors—there is no enforcement mandate.) Quoting the US Court of Appeals for the Fifth Circuit’s opinion and order (BST Holdings) staying the vaccine mandate for private employers promulgated by the Occupational Health and Safety Administration (OSHA), the court concluded that the costs of complying with a regulation that is later held invalid “always produces the irreparable harm of nonrecoverable compliance.”

In balancing the harms, the court was not persuaded by the Government’s arguments that an order would delay vaccinations and permit the continued spread of COVID-19 and that the harm it and the general public would suffer far outweigh any harm the contractors would suffer. The court said that the injunction merely preserves the status quo and contractors remain free to encourage employees to get vaccinated. “In contrast, declining to issue a preliminary injunction would force [the contractors] 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.” The court went on: “[R]equiring compliance [with the mandate] would likely be life altering for many of the…employees as [the contractors] would be required to decide whether an employee who refused to be vaccinated can, in practicality, be reassigned to another office or another task or whether the employee instead must be terminated.”

Finally, the court found the public interest was served by the injunction. Again quoting BST Holdings, the court found “From economic uncertainty to workplace strife, the mere specter of [EO 14042] has contributed to untold economic upheaval in recent months” and “the principles at stake when it comes to [EO 14042] are not reducible to dollars and cents.”

Key Takeaways:

• This is a preliminary injunction and not a final adjudication. By its nature, it is temporary and could be revoked by a later order or by an appellate court (in this case, the Eleventh Circuit Court of Appeals). However, it is probably here to stay for at least weeks if not months.
• The Order does not invalidate the clause or enjoin the Government or prime contractors from including the clause in contracts and subcontracts. The remaining provisions of the clause—i.e., the workplace safety restrictions—are not affected by the Order, and covered contractors are still bound by them.
• The Order undoubtedly covers subcontractors in addition to prime contractors, although the Government has no privity with subcontractors. Although the Order enjoins the Government from enforcing the vaccine mandate, it specifically speaks of the vaccine mandate as it applies to both “federal contractors and subcontractors.” Should a prime attempt to force a subcontractor to comply with the mandate, it is almost a certainty that the subcontractor would be able to take refuge in the Order on the theory that in this case the prime is acting as the agent of the Government, and is similarly enjoined.
• Contractors are not constrained from voluntarily encouraging employees to get vaccinated. Moreover, except in states where employers are prohibited from requiring their employees to get vaccinated (e.g., Texas and Florida), employers can establish human resources policies requiring vaccination against COVID-19 as a condition of employment as long as they allow for a medical or a religious exception consistent with established law.

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