UPDATE: On November 4, Tennessee, Kentucky and Ohio filed a complaint in the Eastern District of Kentucky challenging the federal contractor mandate. The complaint is very similar to the ones filed by other states as described in the blog post below.
At the end of October 2021, four complaints were filed by almost 20 states challenging the government contractor vaccine mandate. While some have suggested that these states, led by Republican governors, filed the suits for political reasons, it would be a mistake to discount them. The complaints raise very significant procedural and substantive questions about the legality of the government contractor vaccine mandate.
On October 28, the State of Florida filed suit in the Middle District of Florida (the Florida Complaint). The following day, ten more states – Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, and Wyoming – filed a complaint in the Eastern District of Missouri (the Missouri Complaint); a further seven states – Alabama, Georgia, Idaho, Kansas, South Carolina, Utah, and West Virginia – filed suit in the Southern District of Georgia (the Georgia Complaint); Texas filed a complaint in the Southern District of Texas (the Texas Complaint).
While there are multiple differences between the complaints, there is a high likelihood that the states have established standing to challenge the government contractor mandate as they all have agencies or other entities that are party to federal contracts and contract-like instruments. In addition, each complaint seeks declaratory and injunctive relief but as of November 3 it appears that only Florida has filed a motion for a preliminary injunction. We expect the others to be filed soon. Also, they all make facially compelling procedural and substantive arguments that Executive Order 14042, the OMB Guidance, and the government contract provisions are unlawful.
How We Got Here
In considering the challenges, it is important to consider the unusual path from the Executive Order 14042 (EO) issued on September 9 to the contract provisions issued beginning on September 30. As we discussed in a previous blog post, rather than including the workplace safety requirements, the EO required that the Safer Federal Workforce Task Force (the Task Force), an ad hoc, multi-agency body with no regulatory authority, develop and publish the workplace safety measures. Those measures were to be published only if the director of the Task Force determined, under a delegation of the president’s authority under the Federal Property and Administrative Services Act that the safety measures would “promote economy and efficiency in Federal contracting if adhered to by Government contractor and subcontractors.”
The director made that determination, finding in a cursory statement lacking any supporting analysis that “[t]hese safeguards will decrease the spread of SARS-CoV-2, the virus that causes COVID-19, which will decrease worker absence, reduce labor costs, and improve the efficiency of contractors and subcontractors performing work for the Federal Government” and the Guidance was then issued on September 24. As directed, the Federal Acquisition Regulatory Council (FARC) then issued a new FAR provision well in advance of the October 8 deadline set forth in the EO. The FARC directed agencies to issue deviations to allow for immediate use of the new contract provision.
The FAR provision, which was not published for notice and comment, requires that government contractors comply with the Guidance, including information in the Frequently Asked Questions, as amended throughout the contract’s period of performance. This means that once a government contractor is subject to the contract clause, it cannot be certain what its obligations will be because the Task Force, at least thus far, issues regular updates. See our recent blog post for a discussion of the Task Force’s most recent round of new guidance.
The Most Significant Procedural and Statutory Challenges
Unsurprisingly given the strange and accelerated journey the COVID-19 vaccine mandate took from EO to contract clause, some of the most significant counts in the four complaints are focused on procedural violations in the way the FAR provision was adopted. The procedural counts that seem to present the most risk to the mandate, along with some of the statutory challenges, include the following:
- Violation of the Office of Federal Policy Act (OFPPA) – OFPPA requires that procurement policies be published for 60 days before taking effect here as required by 41 U.S.C. 1707(a)(1) because the vaccine mandate “relates to the expenditure of funds” and either “has a significant effect beyond the internal operating procedures of the agency issuing the policy” or “has a significant cost or administrative impact on contractors.” Florida also argues that this clearly did not occur despite the administration having more than sufficient time to comply, given that “the pandemic has existed for over 18 months, and the prospect of a vaccine has existed for at least a year.” While there is an exception that allows an agency to issue procurement policies with immediate effect where there are “urgent and compelling circumstances” that “make compliance with the requirements impracticable,” that exception was not invoked.
- Violation of the Administrative Procedure Act (APA)
- Significant revisions to the FAR must be made through notice-and-comment procedures. This requirement applied to the mandate. Therefore, the FAR Council violated the APA by failing to comply with the notice-and-comments requirements for rulemaking. Further, although the FAR Council claims that the contract provision, FAR 52.223-99, was issued as a deviation, the states argue that the contract clause does not meet the definition of a deviation at FAR 1.401 because it does not deviate from a contract clause, prescribed use of a contract clause, or a policy, procedure, solicitation provision, or agency acquisition practice in such a way as to be inconsistent with the FAR. In fact, it doesn’t deviate from anything.
- Further, the Guidance and the contract clause that impose the Guidance are arbitrary and capricious in violation of the APA because the government has provided no support for the determination the Guidance would improve efficiency and economy in federal contracting. There is no analysis, no study, no independent examination of contrary factors that should have, but were not, considered by the government. Those contrary factors include (1) the potential impact of large-scale resignations of unvaccinated employees, a vital factor given the “high levels of inflation, labor shortages, and a supply-chain crisis;” (2) the lack of consideration related to the impact the mandate would have on states; and (3) the lack of exemptions for people with natural immunity, which numerous studies have shown is at least as effective as vaccination, or for employees who work from home.
- Violation of the Federal Property and Administrative Services Act (FPASA) – The contract clause does not promote, but rather undermines, economy and efficiency in federal contracting. Therefore the mandate is inconsistent with FPASA. Further, the vaccine mandate’s application to employees who do not work on federal contracts or work remotely is unconnected with any rationale relating to economy and efficiency. Therefore, because the mandate undermines economy and efficiency and exceeds the president’s statutory authorization, it violates the FPASA.
In addition to the counts noted above, the states raise a number of constitutional questions about the legality of the mandate, including:
- Separation of Powers – Some states argue that EO 14042 unconstitutionally exercises a legislative power given exclusively to Congress by directing the Task Force to develop vaccine and mask mandates that the president does not himself have authority to mandate. And if it is the government’s position that the FPASA gives the president that authority, FPASA itself “lacks an intelligible principle and represents an unconstitutional delegation of legislative authority.”
- Tenth Amendment Violations – The Tenth Amendment provides that powers not delegated by the Constitution to the United States or prohibited by it to the states are reserved to the states.
- The complaints argue that the vaccine mandate goes far beyond what was delegated to the federal government by Constitutional mandate or congressional action and encroach on the police power left to the states under the Tenth Amendment. This is partially the reason the prior administration did not issue a nationwide vaccine mandate, instead leaving each state to decide whether to mandate the vaccine or issue lockdown orders.
- Some states also argue that the mandate unlawfully violates the anti-commandeering doctrine by requiring state entities to enforce the vaccine mandate against their employees, including those who have nothing to do with federal contracting and those who work remotely.
- Unconstitutional Exercise of the Spending Power
- Article I, Section 8, Clause 1 of the Constitution authorizes Congress to attach “appropriate conditions” to spending programs. It may not use that authority to “unreasonably constrain states’ autonomy.” The states argue the federal government is doing just that by attempting to impose a coercive contract term through its contracts, which account for considerable portions of their budgets for “essential research, education, and other necessary programs.”
- In addition, any condition must be unambiguous so that states can “exercise their choice willingly” with regard to whether or not to accept federal funding. As discussed above, the contract provision requires covered government contractors to comply with the Guidance, which can change at any time. That ambiguity, the states argue, is unconstitutional.
- Finally, conditions on federal funds must be related to the federal interest in national projects or programs. Some states argue that the vaccine mandate is neither necessary nor effective at preventing the spread of COVID-19. They also argue that it will lead to employees being fired or resigning, which is not rationally related to any federal interest in a particular project or program that is the subject of a federal contract. Likewise, they argue that the mandate covers employees who have no connection to a federal contract, which means the mandate is not rationally related to a federal interest.
Although these arguments may have validity, particularly regarding the alleged Spending Power violations, if a court is going to issue an injunction it seems more likely due to the procedural infirmities noted above.
Does the Government Believe the Mandate is Unlawful?
In light of the legal challenges, particularly on the procedural front, some have asked whether the administration knew that the mandate was unlikely to withstand legal scrutiny but imposed it anyway, knowing that given the short implementation timeline millions more Americans would get vaccinated prior to it being stopped by the courts. Indeed, the president took this same position on the CDC’s eviction moratorium.
Over the summer, President Biden conceded that extending the eviction moratorium past July 31, 2021, would require congressional action. But when Congress failed to act, the administration extended the moratorium anyway. Then, on August 3, President Biden stated that “[t]he bulk [of] the scholars say it is not likely to pass constitutional muster.” But he went on to say that “there are several key scholars who think it may – and it’s worth the effort.” The reason for taking an action that most agreed was illegal was that it would give the government time to distribute additional rental assistance funds to limit evictions in the time it took for the CDC’s action to wind its way through the legal process. Ultimately, the administration delayed the end of the moratorium for another two months, as it was not until the end of August that the Supreme Court shut it down.
It should be clear from the brief discussion above that there are serious concerns about the mandate’s legality. Ultimately, it is not possible to predict the outcome of these four suits. For that reason, contractors should continue moving toward compliance. And, as noted in other blog posts, that may not be a concern for larger federal contractors for two reasons.
First, if a contractor has employees working at federal worksites, they will need to comply with workplace safety requirements at that facility. Those may include requiring all people who come onto the facility to be vaccinated. Second, contractors with over 100 employees will likely soon be subject to the pending OSHA rule requiring employees to be vaccinated. That rule is undergoing final review by the Office of Information and Regulatory Affairs (OIRA), which received the draft rule on October 12, and is expected to be issued soon (that rule is also expected to face legal challenges). And even if, as expected, the OSHA rule includes a testing option, the cost for testing, whether borne by employees or companies, may be so high in the aggregate to push companies toward requiring all employees to be vaccinated unless entitled to an accommodation.
If you have any questions about the COVID-19 contractor mandate, please contact Richard Arnholt at firstname.lastname@example.org or 202-827-2971.