Mapping The Federal Contractor Vaccine Mandate: Legal Challenges and Practical Advice for Employers with Unvaccinated Employees

More than 25 states have now filed lawsuits challenging President Biden’s September 2021 executive order that resulted in vaccine mandates for federal contractors. Recently, on December 7, 2021, the United States District Court for the Southern District of Georgia issued a nationwide injunction staying the effect of this executive order.

Executive Order 14042, the executive order that created the vaccine mandate, and the rules implementing it are far-reaching, and if the stay is lifted, will impact companies working on federal projects, their affiliates, and employees. Under the vaccine mandate, in some cases, employees who work entirely from home would have to be vaccinated or comply with rigorous testing requirements, or potentially lose their jobs. Affiliated companies and home office personnel are also subject to the mandate, and will be affected if the injunction is lifted.

Under the mandate, companies with contracts or contract-like agreements with the government or with a government contractor on a federal project, faced the potential for significant time and cost impacts, not to mention increased overhead, management, and complications in performing their work as milestone dates under the mandate were to take effect. 

In response to this, several states across the country filed lawsuits challenging the enforceability of the federal contractor vaccine mandate. In their suits, the states make both procedural arguments and constitutional ones. The chart below shows which states have brought lawsuits, and provides a status update on each. 

Nationwide injunctions like the one issued by Judge Baker of the United States District Court for the Southern District of Georgia are not unprecedented. A federal judge in Hawaii issued one against the Trump Administration’s travel restrictions on six predominantly Muslim countries in 2017. However, there is no specific federal statute providing power to a single federal district court to issue a binding injunction on all federal jurisdictions and the United States Supreme Court has not ruled upon the propriety of nationwide injunctions. There is therefore scholarly debate on the constitutionality of nationwide injunctions. Some scholars find support for nationwide injunctions in the constitution itself and see added justification for nationwide injunctions when dealing with actions of federal agencies like the Office of Management and Budget that affect the entire nation. 

The recent injunction is quite fresh, and it remains to be seen whether the government may attempt to challenge the scope of the injunction in some fashion, or whether it may seek an immediate, pre-trial appeal. The requirements for an immediate appeal, prior to a trial, are onerous and the government may not be able to meet them here. The government may, instead, seek to alter the mandate in such a way that the court would lift the stay and allow it to be enforced in some lesser capacity. This happened to some extent with the Trump Administration’s 2017 travel ban. At present, however, the vaccine mandate has been enjoined in all United States jurisdictions.

How the Vaccine Mandate Became a Contract Term

President Biden created the Safer Federal Workforce Task Force in January 2021 to address COVID-19 concerns on federal projects. More recently, on September 9, Biden issued Executive Order 14042, “Ensuring Adequate COVID Safety Protocols for Federal Contractors,” which directs federal agencies to ensure that certain government contracts and contract-like instruments include a clause requiring that contractors and certain subcontractors comply with guidance issued by the task force. 

The guidance, which includes all content in an FAQ section on the task force website and is continuously updated, presently requires covered contractor employees to conform to three general safety protocols, including:

  • Vaccination and Testing – Complete COVID-19 vaccination of covered contractor employees by January 18, 2022, except in instances where an employee is legally entitled to an accommodation based on a strongly held religious belief or disability.
  • Masking and Distancing – Compliance by unvaccinated individuals, including covered contractor employees and visitors, with masking and physical distancing requirements established by the Centers for Disease Control and Prevention (CDC).
  • Designation of COVID-19 Coordinator – Designation by covered contractors of a person or persons to coordinate COVID-19 workplace safety efforts at covered contractor workplaces.

The Office of Management and Budget (OMB) approved of this guidance; and the Federal Acquisition Regulatory (FAR) Council, the agency charged with creating government-wide procurement regulations, amended federal procurement regulations to include a contract clause (the FAR amendment) requiring federal contractors to comply with the task force guidance. 

Recent Cases

While the preliminary injunction from the Southern District of Georgia has put the mandate on hold for the moment, it is worth a review of what some other states and parties have argued in their separate challenges to the mandate.

For their procedural arguments, the states specifically challenge the executive order and its implementing guidance, the OMB’s approval of the guidance, and the issuance of FAR Council’s guidance absent proper procurement notice and comment rulemaking. The procedural arguments focus on ways in which the administration allegedly pushed the mandate through without following procedures, and effectively used a procurement statute to make a public health policy a contractual obligation for people working with companies involved in federal projects. For their constitutional arguments, the states have generally made Tenth Amendment, federalism, and separation of powers arguments, which emphasize states’ rights and limiting federal governmental power.

On October 28, Florida filed a lawsuit in the U.S. District Court for the Middle District of Florida challenging the lawfulness of the executive order, the OMB rule, and the FAR Council guidance based on procedural and constitutional grounds. Florida alleged that the OMB rule and the FAR Council guidance are agency actions that exceed permissible agency authority; are unreasonable and baseless decisions under the Administrative Procedure Act (APA) by failing to explain the rationale for any guidance; violated a federal statutory provision that gives the FAR Council sole authority to implement a government-wide procurement regulation by, among other things, having OMB, rather than the FAR Council, create the procurement policy though it lacked the authority to do so; are inconsistent with the Competition in Contracting Act (CICA) by barring contractors from obtaining federal contracts without considering their capability to perform the contract; and violated a federal statutory provision requiring publication of proposed regulations in the Federal Register and allowing for a public comment period before enforcement of that policy by failing to publish or take public comment. 

Florida also alleged unconstitutional delegation of legislative power based on President Biden’s delegation of power from the Federal Property and Administrative Services Act of 1949 (FPASA) to the OMB; and unconstitutional exercise of the spending power based on the conditions placed on the state’s receipt of federal funds, which requires Florida to comply with “uncertain” task force guidance.
Other similar state challenges to the federal contractor vaccine mandate are in various stages of procedural process. There are cases involving allegations and claims that are similar to those at issue in the Florida case, including

  • On October 29, 2021, seven states (Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia) filed a lawsuit in the U.S. District Court for the Southern District of Georgia. The states also alleged, in challenging the federal contractor vaccine mandate, constitutional violations of the Tenth Amendment (by interfering with the states’ police power as reserved to them under the Constitution); federalism (by encroaching on rights traditionally reserved to states absent any authority to do so); and separation of powers (by delegating legislative power that Congress does not have to regulate the states under Constitution). 
  • On October 29, 10 states (Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, and Wyoming) also filed a lawsuit in the U.S. District Court for the Eastern District of Missouri. The states alleged the vaccine mandate is a constitutional violation of the Tenth Amendment, specifically a violation of the anti-commandeering doctrine. 
  • On October 29, Texas filed a lawsuit in the U.S. District Court for the Southern District of Texas challenging the federal contractor vaccine mandate. Texas asserted a direct claim against members of the FAR Council, alleging their actions exceeded the scope of their authority. 
  • On November 4, 2021, three states (Louisiana, Indiana and Mississippi) filed a lawsuit in the U.S. District Court for the Western District of Louisiana.
  • On November 4, Oklahoma filed a lawsuit in the U.S. District Court for the Western District of Oklahoma. The states alleged the federal contractor vaccine mandate includes violations of the Fourth Amendment (by coercively withholding benefits to seize bodily integrity), and the Fifth Amendment (by violating rights to due process, to bodily integrity, and to refuse medical treatment). 
  • On November 4, three states (Kentucky, Ohio, and Tennessee) filed a lawsuit in the U.S. District Court for the Eastern District of Kentucky.

Recent Ruling and Case Status

Previously, on November 30, 2021, the U.S. District Court for the Eastern District of Kentucky issued a preliminary injunction blocking the enforcement of the federal contractor vaccine mandate in Kentucky, Ohio, and Tennessee. In issuing the injunction, the court primarily relied on both procedural and constitutional grounds, finding that President Biden “exceeded his delegated authority” under the FPASA in promulgating the executive order because the mandate lacked sufficient nexus to the purpose of FPASA. 

The court further found that by exceeding his authority under FPASA, President Biden likely violated (1) the CICA by excluding a class of contractors who represent the best value to the government without considering their ability to perform the contract, (2) the nondelegation doctrine by using a procurement statute to propagate a vaccine mandate, and (3) the Tenth Amendment by infringing on rights traditionally reserved for the states. The court ultimately concluded that the states have a strong likelihood of success on the merits of their action. 

Both the Eastern District of Kentucky and the Southern District of Georgia both expressly enjoined enforcement of the vaccine mandate in federal contracts under Executive Order 14042. While masking and social distancing requirements may still apply, the vaccine mandate is presently unenforceable as a law or a contract term. Keep in mind, however, this is a preliminary injunction so the situation could change.

Practical Advice

For now, the mandate has been enjoined and cannot be enforced. However, should that change and should the stay be lifted, then contractors would again need to comply.

Contractors may have already been presented with a proposed contract modification incorporating the task force guidance and amended FAR provision. If you have not already executed a modification incorporating the FAR clause created under Executive Order 14042, you could now validly question whether you have any obligation to do so. If you have executed a modification containing that clause, you could validly argue that it is presently unenforceable as it rests upon an executive order that has been enjoined. Even so, you should be careful not to sign any document that would waive your right to seek an equitable adjustment to your contract time and cost to adjust for the any future impacts the mandate may eventually have on your project.

Given the uncertain legal landscape, the potentially growing or evolving task force FAQs, virus mutations, and uncertain impacts on projects due to illness, quarantines, absenteeism, time spent testing workers, work interruptions, supply chain impacts, testing costs and procedures, and other issues that may not become apparent for some time, contractors should do their best to stay informed about what is and is not presently required regarding workforce vaccinations on federal projects. Should the injunction be lifted and the mandate be in place again, in some form or another, contractors subject to it would want to be ready to take action and track the cost and time impacts of compliance in every possible way.

If the time should come when testing is again required, companies should be aware that presently the CDC Interim Guidance for SARS-CoV-2 Testing in Non-Healthcare Workplaces allows unvaccinated employees to self-administer COVID-19 tests for compliance with testing protocols. Companies wanting to be ready for any changes in the law could appoint a coordinator to track the testing and vaccination records should the injunction be lifted and work proactively working with higher-tier contractors or the government’s contracting officer. For now, though, the mandate has been enjoined and this eases the burden and complication of compliance so long as the injunction remains in place.

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Moye White