Blocked: Federal Court Enjoins Government From Enforcing Contractor Vaccine Mandate In 3 States - Government Contracts, Procurement & PPP

Highlights

A judge in the U.S. District Court for the Eastern District of Kentucky on Nov. 30, 2021, issued a preliminary injunction, halting the government's enforcement of the federal contractor vaccine mandate on federal contractors and subcontractors in Kentucky, Ohio and Tennessee.
The judge addressed the narrow question of whether President Joe Biden could use his congressionally delegated authority to manage federal procurement to impose vaccines on the employees of federal contractors and subcontractors.
This vaccine mandate requirement is now "on hold" for contractors and subcontractors in Kentucky, Ohio and Tennessee. It is expected that the government will appeal the judge's order to the U.S. Court of Appeals for the Sixth Circuit.

U.S. District Court Judge Gregory Van Tatenhove of the Eastern District of Kentucky on Nov. 30, 2021, issued a preliminary injunction, halting the government's enforcement of the federal contractor vaccine mandate on federal contractors and subcontractors in Kentucky, Ohio and Tennessee.

In deciding whether to issue the preliminary injunction, the judge addressed the narrow question of whether President Joe Biden could use his congressionally delegated authority to manage federal procurement to impose vaccines on the employees of federal contractors and subcontractors. "In all likelihood, the answer to that question is no," the judge said.

As discussed in a previous Holland & Knight alert, the federal contractor vaccine mandate stems from Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, which mandated the creation of a Federal Acquisition Regulation (FAR) clause requiring federal contractors and subcontractors to follow guidance published by the Safer Federal Workforce Task Force. The Task Force's guidance, as amended, requires covered federal contractor and subcontractor employees to be "fully vaccinated" no later than Jan. 18, 2022 (meaning employees must receive either the single-dose Johnson & Johnson vaccine or the second dose of the Pfizer or Moderna vaccine by Jan. 4, 2022). This requirement is now "on hold" for contractors and subcontractors in Kentucky, Ohio and Tennessee.

The District Court Opinion

The judge issued the opinion in a lawsuit filed in early November by the Commonwealth of Kentucky, State of Ohio, State of Tennessee and two sheriff plaintiffs, suing in their official capacities as sheriffs for local counties. He concluded that the plaintiffs were likely to succeed on the merits of their case for the following reasons:

The president exceeded his authority under the Federal Property and Administrative Services Act (FPASA), 40 U.S.C. §§ 101-126, a statute designed to provide the federal government with "an economical and efficient system" for procurement. While FPASA has been used (some would say stretched) to impose a variety of requirements of government contractors, the court concluded that the president likely exceeded his delegated authority under the statute, noting, "While the statute grants to the president great discretion, it strains credulity that Congress intended the FPASA, a procurement statute, to be the basis for promulgating a public health measure such as mandatory vaccination." The court also pointed out that FPASA had never before been used to enact "such a wide and sweeping public health regulation."
The Executive Order likely violates the Competition in Contracting Act (CICA), 41 U.S.C. §§ 3301-3312. The court determined that the Executive Order could preclude "full and open competition" - a requirement for federal procurement mandated by CICA - by effectively excluding an offeror that chooses not to follow the vaccine mandate, but otherwise represents the best value to the government, from award.
The Executive Order likely violates the nondelegation doctrine, a principle of constitutional law that bars Congress from delegating legislative power to the president "to exercise an unfettered discretion to make whatever laws he thinks may be needed or advisable." Kentucky et al. v. Biden et al., No. 3:21-cv-00055-GFVT (E.D. Ky. Nov. 30, 2021) (quoting A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 537-38 (1935)). The court, referencing FPASA, and its purpose of promoting economy and efficiency in procurement, found that the government could not "point to a single instance when the statute has been used to promulgate such a wide and sweeping public health regulation as mandatory vaccination for all federal contractors and subcontractors."
The Executive Order likely violates the Tenth Amendment of the U.S. Constitution because it intrudes on an area traditionally reserved to the states - the regulation of health and safety matters.

It bears emphasis that the order enjoining the mandate is preliminary - meaning, the case has not yet concluded; the judge concluded only that plaintiffs were likely to succeed on the merits of their case. Additionally, it is expected that the government will appeal the judge's order to the U.S. Court of Appeals for the Sixth Circuit - which, notably, is the same appellate court set to decide the validity of the Occupational Safety and Health Administration's (OSHA) Emergency Temporary Standard requiring all employers with 100 or more employees to enforce a mandatory COVID-19 vaccination policy.

Conclusion and Takeaways

Finally, the preliminary injunction applies only to federal contractors and subcontractors in Kentucky, Ohio and Tennessee (the three states that collectively challenged the Executive Order in the Eastern District of Kentucky). Presumably, the government cannot enforce the mandate with regard to "covered contractor workplaces" in these states; defined by the Task Force as locations "controlled by a covered contractor at which any employee of a covered contractor working on or in connection with a covered contract is likely to be present during the period of performance for a covered contract."

Contractors should also bear in mind:

This decision comes from a judge in the Sixth Circuit, the same circuit determining the fate of the OSHA vaccine mandate. The Sixth Circuit's ruling on the OSHA mandate could shed light on how Judge Van Tatenhove will ultimately rule on the federal contractor vaccine mandate, and how the Sixth Circuit may decide that issue if and when the government appeals the order.
The court declined to issue a nationwide injunction and limited his ruling to only Kentucky, Ohio and Tennessee. With several ongoing lawsuits making their way through federal district courts across the country, it is possible that a nationwide injunction could take hold if another, more aggressive federal court decides such a broad injunction is warranted. At the same time, contractors should also be prepared for the possibility of differing opinions and a jurisdictional patchwork of enjoined and nonenjoined states.
The Task Force has already issued updated/amended guidance, pushing the vaccine deadline back from December until January. And the Office of Management and Budget has issued a revised determination, revoking an earlier, less-robust determination and providing additional support for the mandate. It is possible that the government could again attempt to reinforce the requirement, using all tools available to move the matter as swiftly as possible through the courts and to a favorable resolution.

Holland & Knight will continue to monitor and provide updates as they become available.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.