Court Enjoins President Biden’s Vaccine Mandate for Federal Contractors

Takeaway:

• On December 7, 2021, the United States District Court for the District of Georgia issued a nationwide injunction enjoining the President’s Executive Order requiring federal contractors and subcontractors to be fully vaccinated on covered new contracts and renewals by January 22, 2022.  The Court ruled that the President exceeded the authority granted to him by the Procurement Act. 

• Contractors should bear in mind that this injunction is merely temporary until a full trial and that the government may appeal this ruling and/or issue revised guidance.

• This injunction comes after the 5th Circuit’s stay of OSHA’s Emergency Temporary Standard mandating vaccinations (or testing and mask wearing) for employers with 100 or more employees.

Update: On December 16, 2021, the District Court for the Western District of Louisiana issued a more limited injunction enjoining application of the vaccine mandate for federal contractors. The Louisiana injunction only applies to contracts, grants and other like agreements between the Federal government and Louisiana, Mississippi, and/or Indiana. It does not apply to contracts between the Federal government and private contractors.

The Executive Order

On September 9, 2021, President Biden issued Executive Order 14042, which requires “that contractors and subcontractors performing work on certain federal contracts ensure that their employees and others working in connection with the federal contracts are fully vaccinated against COVID-19.”  The administration issued the EO pursuant to the Federal Property and Administrative Services Act (40 U.S.C. § 101 et seq.).

The President delegated to the Safer Federal Workforce Task Force the responsibility to promulgate guidance regarding COVID-19 safeguards that would apply to federal contractors and subcontractors.  On September 24, the Task Force issued guidance, which was then implemented through the Federal Acquisition Regulation for all new and renewed contracts and subcontracts.

Several states and the Associated Builders and Contractors, Inc., along with one of its chapters, filed for a preliminary injunction, arguing that the President exceeded the authority granted to him by the Procurement Act.  On December 7, 2021, the United States District Court for the District of Georgia issued a nationwide injunction enjoining the application of the EO. The 5th Circuit likewise enjoined enforcement of OSHA’s vaccination mandate for employers with 100 or more employees.

Likelihood of Success

In examining whether the Procurement Act granted the President the authority to issue the EO, the Court noted that pursuant to Supreme Court precedent, Congress must “speak clearly” when authorizing actions “of vast economic and political significance.”  Weighing this against the President’s right to promote the efficiency and economy in federal contracting, the Court ruled that the EO went too far and that its adoption would essentially allow the President to issue “virtually any kind of requirement on businesses that wish to contract with the Government (and, thereby, on those businesses' employees) so long as he determines it could lead to a healthier and thus more efficient workforce or it could reduce absenteeism.”

Irreparable Injury & Balance of Harms

The Court heard testimony concerning the time and resources necessary to comply with the EO, as well as anticipated lost contracts and employees who may resign as a result of the EO.  Balancing these concerns, and noting that compliance with an invalid regulation almost always leads to some irreparable harm, the Court spent little time ruling that the petitioners would likely incur irreparable compliance costs and that the balance of harm works in favor of issuing the injunction and maintaining the status quo.

Scope of Injunction

Given that many of the Associated Builders and Contractors’ members work on a significant number of federal contracts outside of Georgia and its federal Circuit, and that the EO applies not only to contractors themselves but also to subcontractors, the Court issued the injunction nationwide.

Federal contractors should take solace in this ruling, but also should continue to monitor contracting guidelines going forward. It is likely that the government will issued revised guidance and/or appeal this decision.