Tuesday, November 30, 2021: Decision Striking Down the Federal Contractor/Subcontractor Vaccine Mandate Portends Difficulty for OFCCP to Enforce its AAP Certification Portal
We discuss the case above in our re-cap of the whirlwind week of vaccine mandate injunctions. It is State of Kentucky et al. v. President Biden, et al.
While the Court struck down the vaccine mandate for several different reasons, as we note in the above WIR story about the State of Kentucky case decision, it rejected the legal challenge to the vaccine mandate attacking The Biden White House’s initial failure to follow the Rulemaking requirements of the Administrative Procedure Act (“APA”). BUT it was only because the White House, through the Office of Management and Budget (“OMB”) finally published the federal contractor vaccination mandate in the Federal Register for public Notice and Comment (however belatedly) that the Court rejected the APA challenge.
Failure to publish for formal Rulemaking (i.e., public Notice and Comment) pursuant to the APA is the same warning federal contractors have sounded to OFCCP about the legal deficiency with the OFCCP’s announced AAP-Verification Interface and AAP certification “requirement” (the now called “Contractor Portal”) as we wrote about here.
What’s Happening?
The Biden White House started this administration with the belief that federal contractors could be ordered about in the discretion of the President without the need for formal APA Rulemakings. The White House looked at federal contractors as mere extensions of the federal workforce, over which the President has hegemony as the Chief Executive Officer of the Executive Branch of the federal government. So, we saw OFCCP issue notifications about its Contractor Portal and told OMB it did not intend to publish a Rulemaking to satisfy the APA. The White House greenlighted that thinking because it was still in the fog of thinking, at that time, that federal contractors were just federal employees, once removed, but still in the federal workforce family and thus subject to the discretion of the President to order about in his discretion by contract. Then, the President ordered up four vaccination mandates, two applying to federal employees and federal contractors, respectively, with no APA Rulemaking formalities (i.e., public Notice, but seeking no pre-enforcement public Comments) and two vaccination mandates with formal Rulemakings (the OSHA “Emergency Temporary Standard” (“ETS”) which covered employers with 100 or more employees) and a second separate Rulemaking as to Medicare/Medicaid Service Providers).
When the vaccination mandate Complaints started to be filed, the Plaintiffs did not challenge the Rulemaking mandates under the APA (although the OSHA ETS Complaints have challenged whether an “emergency” truly exists to warrant an abbreviated Rulemaking via an “Emergency” Temporary Standard). However, as to the federal contractor vaccine mandate, the plaintiffs did offer challenge under the APA because there was no formal APA Rulemaking, at least at first, and not before plaintiffs filed their Complaint in the Courts. Anticipating the coming litigation, and while the federal contractor lawsuit was pending, the White House then pivoted away from its prior (poor) belief that Rulemakings were not needed for federal contractors. Once “enlightenment” about the need for APA Rulemaking hit, the White House suddenly ordered OMB to issue a proposed Rule as to federal contractor vaccination mandates. (Oh, and by the way, the more they (in the White House) began to understand the APA, and the Occupational Safety and Health Administration (“OSHA”) at USDOL thought about the many lawsuits filed to stop its ETS, OSHA then pivoted away from the “Emergency“ Rulemaking route, as our above story also reports. Notice also our separate WIR story, above, reporting OSHA’s request for Comments now on the ETS.)
Here is what the Kentucky federal court had to say about the need for APA Rulemaking and the vaccine mandate for your consideration as you think about the OFCCP Contractor Portal initiative greenlighted by The White House back before “enlightenment” about the need for APA compliance as to federal contractor policy shifts:
“The Administrative Procedure Act (APA) requires a reviewing court to “hold unlawful and set aside agency action, findings, and conclusions found to be…without observance of procedure required by law.” 5 U.S.C. § 706(2)(D). Specifically, Plaintiffs argue that 41 U.S.C. § 1707(a) requires procurement policies, regulations, procedures, or forms to be published in the Federal Register for sixty days before it can take effect, which Plaintiff’s state Defendants failed to do with regards to the FAR Council Guidance and OMB Determination. (fn omitted)*** Although the procedural path taken by the agencies was, at times, inartful and a bit clumsy, the Court finds based on the record before it that the Defendants likely followed the procedures required by statute.” (emphasis added)
So, the Court rejected the APA formal Rulemaking challenge because it found that OMB had engaged in APA Rulemaking, even if only belatedly. What the Court meant when it wrote that the “procedural path taken by the agencies was, at times, inartful and a bit clumsy,…” was that the White House had originally ordered a collection of federal agencies (the FAR Council and something called the “Safer Federal Workforce Task Force”: notice the reference to “Federal Workforce,” by the way) to create rules for federal contractors/subcontractors without APA Rulemaking and to issue informal memoranda, website notices, FAQs and even Press Releases to instruct federal contractors to comply with a unique federal vaccination mandate the President had ordered up via Executive Order 14042. Then, with litigation coming, OMB took over to formalize the process and issued a “Determination” imposing the federal contactor vaccination mandate on federal contractors/subcontractors and to ratify the messy string of informal written instructions which the Safer Federal Workforce Task Force had pumped out without Rulemaking. And then, after the Plaintiffs’ filed suit to attack the OMB “Determination,” OMB retracted that Determination and heavied it up with a new and revised “Determination.” That revised Determination, then for the first time, also (finally) made reference to and acknowledged the APA, but argued first that formal Rulemaking could be avoided because of a vaccination emergency (just like OSHA has argued it could skip the APA formal Rulemaking formality and just issue an “Emergency” Temporary Standard…for which it is now, since enlightenment about the power of the APA, undergoing (as we write) APA Notice and Comment). Second, OMB argued, it had belatedly complied with the APA by issuing a request for public Comment which would satisfy APA formal Rulemaking standards.
So, while the federal contractor vaccination mandate started out without concern for APA Rulemaking, the White House wised up, snapped to, referenced its sudden thoughtfulness about the APA, invoked an emergency exception to it, extended the deadline for compliance and started a formal APA Rulemaking public Notice and Comment period to cure its initial failure to comply with the APA. That “Hail Mary” pass from the White House to OMB, and OMB’s belated invocation of APA Rulemaking may save the White House the embarrassment of losing the federal contractor vaccination mandate on the procedural grounds that it failed to comply with the APA.
But, What About the OFCCP AAP-Verification Initiative, Greenlighted Before the White House’s Enlightenment About the APA?
Three things are true.
First, OFCCP is holding the line that its AAP certification initiative is legal, based on a sprinkling of OFCCP Rules selected from here and there from the far distant past to serve as what the agency hopes are sufficiently large legal hooks on which to hang its claim of having long ago satisfied its APA Rulemaking requirement…even before it created the AAP verification concept.
Second, OFCCP hopes it has put “enough fog on the ground” that timid contractors may not look behind OFCCP’s conclusion to see and examine the claimed proof of APA compliance.
Third, OFCCP is holding its breath that contractors (a) just voluntarily comply to avoid OFCCP precipitating a lawsuit against a non-complying federal contractor the agency will more likely than not lose, and (b) no one sues OFCCP for violating the APA.
But, OFCCP has time to save itself, as OSHA is now doing as to its vaccination mandate ETS and OMB is doing as to the federal contractor/subcontractor vaccination mandate. And there are important questions and wrinkles with the Contractor Verification initiative, at any rate, which beg for formal APA public Notice and Comment. The purpose of the APA is, among other things, to allow the federal agency sponsoring a new policy which impacts the agency’s stakeholders to build trust with the stakeholders and to understand how their policy initiative might be further improved, from the stakeholders’ point of view, to avoid ambiguity or unnecessarily difficult or burdensome compliance.
Wisdom late about the need for formal APA Rulemaking is better than wisdom never, as OSHA and OMB and The White House have now understood. Will OFCCP?