Stay Stay Stay: High Court’s OSHA ETS Opinion Provides Tea Leaves for Federal Contractors

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Sighs of relief due to newfound clarity about whether they were required to quickly implement a vaccinate-or-test policy, coupled with off-pitch renditions of Taylor Swift’s Stay Stay Stay were likely heard from the offices of large employers Thursday afternoon, January 13, 2022, after the Supreme Court’s decision to temporarily stay the Occupational Safety and Health Administration’s (“OSHA”) COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) was released. The decision finally gave large employers the clarity they were looking for with respect to their obligations under the ETS while it proceeds through litigation. Those sighs of relief (and off-pitch notes) likely turned the faces of federal contractors green with envy, however, as federal contractors still face uncertainty with respect to whether they will be required to comply with a vaccine requirement of their own, commonly referred to as the contractor mandate (which we’ve discussed in previous posts here and here). Nonetheless, for those federal contractors willing to read the tea leaves, the Court’s opinion suggests that federal contractors might eventually breathe the same sigh of relief as large employers should the mandate make it before the Supreme Court.

In the per curiam opinion staying the ETS, the Court’s six more conservative justices made short shrift of the emergency standard, using all of nine pages to hold that that the ETS’ challengers were likely to succeed on the merits of their claim that OSHA lacked authority to impose the ETS. Central to the Court’s analysis was the lack of clear statutory authority for OSHA to implement the ETS, saying that it “expect[s] Congress to speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” The Court held that while Congress provided OSHA with the power to set workplace safety standards, Congress did not clearly provide the agency with authority to implement “broad public health measures” such as the ETS. The Biden administration’s reliance on the Procurement Act is likely to receive similar treatment, and indeed it already has. In upholding a lower court’s temporary injunction of the federal contractor mandate, the Sixth Circuit stated that it lacked “a clear statement from Congress that it intended the President to use a property-and-services procurement act . . . to effect major changes in the administration of public health.”

The history of executive action taken under the auspices of the Procurement Act also suggests that the Court would look with disfavor upon the contractor mandate. In addressing the ETS, the Supreme Court pointed to the lack of similar action taken by OSHA in its half-century of existence. “[N]ever before,” the Court said, has OSHA “adopted a broad public health regulation of this kind—addressing a threat that is untethered, in any causal sense, from the workplace.” The same dearth of analogous action plagued the contractor mandate before the Sixth Circuit. “The imposition of an irreversible medical procedure [is] without precedent in the history of the Property Act’s application,” said that court.

The contractor mandate is also more of a “blunt instrument” than the ETS. The justices were critical of the ETS’ broad scope, referring to the regulation that, if enforced, would affect the lives of over 80 million workers as a “blunt instrument” with “illusory exemptions.” And while the contractor mandate wouldn’t cover quite the same number of workers, it is estimated that the mandate would affect approximately one-fifth of the nation’s workforce—no small potatoes. Also problematic for the contractor mandate is its stringency; the mandate does not offer a mask-and-test alternative like its ETS counterpart. As the Sixth Circuit said, “given [the] expansive scope of the [mandate], the interpretive trouble is not figuring out who’s ‘covered’; the difficult issue is understanding who . . . could possibly not be covered.”

While the Supreme Court’s recent ruling provides reasons to suggest that federal contractors may not have to implement a mandatory vaccination policy, federal contractors aren’t out of the woods just yet. Challenges to the contractor mandate are ongoing throughout the United States, including separate stays of the mandate now before the Sixth Circuit and Eleventh Circuit Courts of Appeals. The stay before the Eleventh Circuit applies nationwide, while the stay before the Sixth Circuit applies to Ohio, Kentucky, and Tennessee. Federal contractors might not have to wait much longer before the case reaches the Supreme Court, as briefing in the Eleventh Circuit is due by the end of January, and by the beginning of March in the Sixth Circuit. Federal contractors should continue to monitor the status these cases and wait to join their fellow Swifties until a more definitive ruling is reached.

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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