December 01, 2021

Courts Suspend Federal Contractor Vaccine Mandate in Three States and Healthcare Worker Vaccine Mandate Nationwide

This week, federal district courts issued multiple preliminary injunctions temporarily halting the enforcement of two federal vaccine mandates: Executive Order 14042 (EO 14042), which requires certain federal contractors to ensure that their employees are vaccinated, and the interim final rule issued by the Centers for Medicare & Medicaid Services (CMS), which requires staff at health care facilities that participate in Medicare and Medicaid programs to be vaccinated (CMS rule). The current preliminary injunction halting the enforcement of EO 14042 applies only to Kentucky, Ohio and Tennessee. The combination of the preliminary injunctions preventing the enforcement of the CMS rule, however, applies nationwide.

EO 14042 – Federal Contractors

On November 30, 2021, a federal district court in the Eastern District of Kentucky issued a preliminary injunction halting the implementation of the requirements and obligations of EO 14042 and its associated guidance in Kentucky, Ohio, and Tennessee until the case before the court can be fully litigated. Despite many attempts in other courts across the country, this is the first case where the plaintiffs have been successful in obtaining a temporary stay of the federal contractor vaccine mandate. 

When considering a party’s motion for a preliminary injunction, courts generally consider (1) the likelihood of the party’s success on the merits, (2) the likelihood that the party will suffer irreparable harm if the court does not issue the preliminary injunction, (3) the balance between the harm to the party and the injury granting the injunction will inflict on the other parties, and (4) the public interest. Ultimately, the court found: “Can the president use congressionally delegated authority to manage the federal procurement of goods and services to impose vaccines on the employees of federal contractors and subcontractors? In all likelihood, the answer to that question is no.” 

The court’s opinion focused on two distinct issues: first, that President Biden exceeded his delegated authority under the Federal Property and Administrative Services Act (FPASA) when he promulgated EO 14042; and second, that EO 14042 intrudes on the 10th Amendment’s requirement that powers not delegated to the federal government by the Constitution be traditionally reserved for the states. 

Under FPASA, the court found that the government failed to show that excluding unvaccinated contractors and subcontractors from government contracts allowed for full and open competition. In addition, the court expressed serious concerns regarding a procurement statute being leveraged for the first time to promulgate such a wide and sweeping public health regulation as mandatory vaccination for all covered federal contractors and subcontractors. 

In support of its injunction, the court also found that the federal contractor vaccine mandate may infringe upon the rights afforded to the states by the 10th Amendment of the Constitution, noting that the regulation of health and safety matters has always been left to the states and local governments. Here, the court cited the recent Fifth Circuit opinion in BST Holdings, LLC which issued a preliminary injunction halting the Emergency Temporary Standard (ETS) issued by the Occupational Safety and Health Administration (OSHA) that requires employers with 100 or more employees to implement mandatory vaccination or testing policies. 

The court’s injunction allows, at least temporarily, federal contractors in Kentucky, Ohio and Tennessee to pause their implementation of vaccination efforts required under EO 14042. Challenges to this preliminary injunction are likely, though none have been filed at this time.  An interlocutory appeal of this preliminary injunction would be heard by the U.S. Court of Appeals for the Sixth Circuit, which coincidentally was also selected at random to review the U.S. Court of Appeals for the Fifth Circuit’s stay of the OSHA ETS. There are also several pending motions for preliminary injunction filed in similar suits across the country, requesting that the courts halt the implementation and enforcement of EO 14042.  

In the current absence of applicable federal vaccine mandates, employers should be mindful of the potential applicability of state laws. Tennessee employers should remain particularly aware of HB 9077/SB 9014 which prohibits private employers from requiring their employees to provide proof of vaccination. The law also prohibits the employer from taking adverse action against an employee who fails to provide proof of vaccination. This law exempts employers subject to federal funding requirements but, given the Court’s injunction, that exemption is not currently applicable. 

Additionally, both the Kentucky and Ohio legislatures are considering proposed legislation which would expand exemptions to vaccination requirements imposed by employers. 

CMS Rule – Health Care Workers

This week, two federal courts issued preliminary injunctions which combined, have halted implementation and enforcement of the CMS rule nationally. In the first decision issued on November 29, 2021, Missouri v. Biden, the U.S. District Court for the Eastern District of Missouri limited the injunction to the ten states that had filed the lawsuit — Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota and Wyoming. In the second decision issued the following day, Louisiana v. Becerra, the U.S. District Court for the Western District of Louisiana enjoined CMS from implementing the vaccination mandate nationwide. The court explained that, although it had “considered limiting the injunction to the fourteen Plaintiff States, there are unvaccinated healthcare workers in other states who also need protection.” Accordingly, the injunction issued by the Western District of Louisiana applies to all states except for the ten states subject to the preliminary injunction issued by the Eastern District of Missouri. Notably, the courts issued these injunctions shortly after the U.S. District Court for the Northern District of Florida denied the State of Florida’s emergency motion for an injunction pending appeal in a similar challenge. 

Although the scope of the injunctions differed, the decisions of the Missouri court and Louisiana court were based on similar reasoning. Both courts determined that the plaintiff states are likely to succeed on the merits of most of their claims, including that CMS unlawfully bypassed notice and comment requirements. The courts also questioned whether CMS has the authority to issue a vaccine mandate. 

The courts further concluded that the plaintiff states were likely to suffer irreparable harm if the courts did not issue preliminary injunctions because the states would not be able to enforce their own laws, would incur significant costs in implementing the CMS rule, and that the record evidence showed that the CMS rule would exacerbate staffing shortages in healthcare facilities within the states. 

Moreover, the courts determined that the balance of competing claims of injury and the public interest weighed in favor of granting the preliminary injunction. The Louisiana court explained that “[t]he public interest is served by maintaining the constitutional structure and maintaining the liberty of individuals who do not want to take the COVID-19 vaccine,” which outweighs the government’s interests. The Missouri court noted that while the public has an interest in stopping the spread of COVID-19, “the public would suffer little, if any, harm from maintaining the ‘status quo’ through the litigation of this case.” The court further explained that the parties agreed that the CMS rule would cause a “certain and imminent” disruption within the healthcare industry.

The federal government has already appealed the Missouri court’s decision to the U.S. Court of Appeals for the Eighth Circuit, and the Louisiana court’s decision to the U.S. Court of Appeals for the Fifth Circuit. The federal government also filed motions requesting the district courts to stay their preliminary injunctions pending appeal, which the Eastern District of Missouri already denied. We will provide information on further developments in future alerts.

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