Government Contracts & Investigations

Mandatory COVID-19 Vaccination Rule for Government Contractors Continues to Develop

We have previously reported on implementation issues arising from President Biden’s Path out of the Pandemic plan, which included issuance of Executive Order 14042, Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors, the related Safer Workforce Task Force Guidance, and Federal Acquisition Regulation (FAR) Class Deviations.

Since our last report, several legal developments warrant attention:

  • Nineteen states filed lawsuits challenging the basis and processes for implementation of the executive order and regulatory scheme.
  • The U.S. Supreme Court denied the use of its Emergency Docket to enjoin the application of the Maine law mandating vaccination of health care workers. In a dissenting opinion, three justices provided guidance on the circumstances under which a regulatory scheme mandating vaccination during the COVID-19 pandemic, would impermissibly violate fundamental rights and justify injunctive relief.
  • The Task Force updated its guidance on October 21 and 29, and November 1, clarifying affiliation for purposes of determining employee coverage, flexibility in addressing and resolving accommodations, and the timeline for a contractor’s path of compliance. On October 27, one of the chairs of Task Force, Jeff Zients, stated: “You know, to be clear, the requirements for federal workers and contractors will not cause disruption. … The other piece of this is that vaccination requirements for federal workers and contractors—there are still weeks until we reach those deadlines. And it’s important to remember that those deadlines are not cliffs.”

It is important to remember, while legal challenges to the executive order play out, the order remains in effect. It has not yet been enjoined. Whether these developments auger for changes in the Biden plan, or at least a movement of the deadline for compliance, remains to be seen. However, it is likely that these changes will impact how contractors work to implement the mandatory vaccination requirement.

States File Lawsuits Challenging Executive Order 14042

On October 28, the state of Florida filed a lawsuit in federal court challenging the order and implementing guidance, Office of Management and Budget (OMB) approval of the guidance, and issuance of FAR Council guidance in lieu of proper procurement notice and comment rulemaking. Florida’s lawsuit is among the most recent of the nineteen suits reported to have been filed by states, followed by a 10-state coalition that filed suit in Missouri federal court on October 29. In addition, cases have been filed by military service members and federal employees obligated to receive the vaccine, and federal contractors obligated to ensure their employees are fully vaccinated. Some of these lawsuits have moved for injunctive relief and await decision. While the time by which contractors’ employees must be fully vaccinated is approaching, decisions in these cases may result in changes to the timeline and plan.

In their suits, the states argue, among other things, that the order and related actions impose unlawful obligations on federal contractors. The order and related guidance require covered federal contractors to implement workplace safety protocols related to COVID-19, including the mandatory vaccination of these contractors’ covered employees working on or in connection with a government contract or contract-like agreement. We have previously written about the FAR Class Deviations being issued to implement the order and vaccine requirements.

In the Florida suit, for example, the state asks the court to set aside the order, OMB rule and FAR Council guidance, arguing each are unlawful. The state also requests injunctive relief enjoining the president and federal agencies that contract with the state of Florida from enforcing the order, OMB rule, and FAR Council guidance. In this suit, the state claims that both the OMB rule and FAR Council guidance constitute federal agency actions that are in excess of permissible agency authority, and the state further claims the rule and guidance were not promulgated with the proper rulemaking procedure. Florida alleges, inter alia, that the OMB rule and FAR Council guidance violate the Administrative Procedure Act and requirements of 41 U.S.C. §§ 1303 and 1707 because: (1) they should have been issued by the FAR Council, and power was improperly delegated to the OMB Director, (2) the Federal Property and Administrative Services Act of 1949 (FPASA) does not otherwise grant the president the power to issue orders with the effect of law, (3) the FPASA does not authorize OMB approval of the Guidance, and (4) the rule and Guidance are inconsistent with the Competition in Contracting Act. Florida further alleges that the OMB rule and FAR council guidance amount to procurement policies with a significant effect, impact, or cost and are subject to notice and comment requirements and, therefore, are invalid because no opportunity for notice and comment was provided. In the other most recent lawsuit, filed by ten states in Missouri on October 29, the states challenge the administration’s “use of federal procurement statutes to create sweeping new power to issue decrees over large swaths of the U.S. economy and take over areas of traditional state power.”

Task Force Updates Federal Contractor & Federal Agency Guidance

Meanwhile, the Safer Federal Workforce Task Force issued new and updated FAQs relating to its Guidance on October 21 and 29, 2021 and November 1, 2021. Key takeaways include:

Guidance for Federal Contractors

  • Timeline for vaccination after accommodation denied. The Task Force is not setting a firm deadline for full vaccination of a covered contractor employee whose request for accommodation has been denied. Instead, the FAQ as updated now provides that covered contractors should establish a timeline for a covered contractor employee whose request for an accommodation is denied to promptly become fully vaccinated.”
  • Documented medical need can be the basis for extension of the vaccination deadline. The updated guidance clarifies flexibility for medical needs. Covered contractors are permitted to grant a covered contractor employee an extension to the deadline for vaccination due to a documented medical necessity even if the contractor employee’s condition does not meet the legal definition of “disability.” For example, the FAQ provides that where the CDC recommends delaying COVID-19 vaccination for at least 90 days after receiving monoclonal antibodies or convalescent plasma for COVID-19 treatment, a covered contractor employee may be granted more time to be vaccinated. The guidance, therefore, now explicitly states “an individual’s medical need should be considered on a case-by-case basis, including any medical evaluation that addresses the individual’s particular circumstance.”
  • Covered contractor employees may have their vaccination delayed for certain medical reasons. The updated FAQ now recognizes a basis for delay of the vaccination based on CDC recommendations, such as where the employee has a known current COVID-19 infection, multisystem inflammatory syndrome, or develops myocarditis or pericarditis after a dose of an mRNA COVID-19 vaccine. In such instances where vaccination should be delayed for an employee, the FAQ provides that the covered contractor employee should become fully vaccinated promptly after clinical considerations no longer recommend delay. During the period in which vaccination is delayed, a covered contractor employee must follow applicable masking and physical distancing protocols for not fully vaccinated adults.
  • Vaccination and pregnancy. The CDC recommends COVID-19 vaccination for people who are pregnant, breastfeeding, trying to become pregnant now, or trying to become pregnant in the future. However, a covered contractor may allow a covered contractor employee to delay vaccination based on the contractor employee’s particular medical circumstances, consistent with the covered contractor’s process for reviewing delay requests.
  • Timeline for requests for accommodation to be resolved. The Task Force has clarified that a covered contractor is not required to resolve all requests for accommodation at the time covered employees begin work on a covered contract, and employers may still be reviewing requests for accommodation at the time that employees begin work on a covered contract or at a covered workplace. While accommodation requests are pending, the covered contractor must require the employee with a pending accommodation request to follow workplace safety protocols for individuals who are not fully vaccinated.
  • Workplace safety protocols for unvaccinated employees. The applicable federal agency will set forth workplace safety protocols for covered contractor employees who are not fully vaccinated and spend time in a federal workplace. In most circumstances, covered contractor employees will need to follow applicable masking, physical distancing, and testing protocols, and federal workplaces may impose heightened safety protocols.
  • Guidance when a covered contractor employee refuses to be vaccinated. A covered contractor is permitted to determine the appropriate means of enforcement with respect to a covered employee who refuses to be vaccinated and has not provided, or does not have a pending request for, an accommodation. The covered contractor may use its usual processes for enforcement of workplace policies, such as those addressed in an employee handbook or collective bargaining agreement. The Task Force also sets forth the enforcement plan for federal agencies as one model for enforcement employers may use.

The guidance provided for federal agencies utilizes an enforcement policy that encourages compliance, including through a limited period of counseling and education, followed by additional disciplinary measures if necessary. Removal occurs only after continued noncompliance. The guidance for federal agencies provides that employees should not be placed on administrative leave while the agency is pursuing an adverse action for refusal to be vaccinated.

The guidance further provides that during the time period of enforcement, the covered contractor must ensure the covered contractor employee at a covered contractor workplace is following all workplace safety protocols for individuals who are not fully vaccinated.

  • Next steps if a covered contractor does not comply with the Task Force’s requirements. While covered contractors are expected to comply with the requirements set forth in their contract, where covered contractors are working in good faith and encounter challenges with compliance with COVID-19 workplace safety protocols, the agency contracting officer should work with them to address these challenges. If the covered contractor does not take steps to comply, significant actions, including termination of the contract, can be taken.

Guidance for Federal Agencies, Potential Guidance for Covered Contractors

  • Accommodation request forms. An updated FAQ for federal agencies provides that employees seeking a legally required exception to the vaccine requirement are to be provided a form to make that request. The updated FAQ includes links to template forms for federal employees seeking an exception based on medical condition or based on religious belief. The updated FAQ confirms that the agency may also ask for other information as needed to determine if the individual is legally entitled to accommodation. These forms may shed light on the types of information contractors might consider as well. We continue to advise contractors to work with legal counsel on the reasonable accommodation process for workers objecting to vaccination.
  • Administrative leave for vaccination. Federal agencies are required to grant administrative leave to cover the period of time it takes a federal employee to receive a COVID-19 vaccine booster shot or additional dose of the vaccine. Leave-eligible federal employees are entitled to up to four hours of administrative leave to receive a booster short or authorized additional dose of the vaccine. It is not mandated for covered contractor employees. Contractors considering how to obtain covered contractor employee compliance may consider this type of incentive. However, unless the contracting officer mandates this type of requirement, it is unclear whether and to what extent a contractor would be able to seek recovery for the costs of such leave incentive. This issue may be addressed in the emergency temporary standard that the Occupational Safety and Health Administration (OSHA) is expected to issue as early as this week.
  • GSA FAR Class Deviation Guidance. On November 1, 2021 the GSA also issued new guidance on contractor acceptance of the mandatory vaccination clause in GSA contracts, including its federal supply schedule and multiple award contracts and orders. Where contractors are still working toward compliance, the new GSA guidance provides that “GSA views acceptance of the modification as an agreement that the contractor intends to comply with the terms….As long as the covered contractor demonstrates progress in meeting the requirements of the clause, GSA will work with contractors to ensure they have the time and opportunity to achieve full compliance.” This type of guidance is likely to help move contractors towards acceptance of the clause in GSA contracts, but whether it will result in increased compliance or merely delay the timeline under which contractors must terminate employees that refuse vaccination and are not covered by a legal exception remains to be seen. It also is unclear whether other agencies will take the same position.

U.S. Supreme Court Declines Emergency Relief to Maine Healthcare Workers Objecting to Mandatory Vaccination

On October 29, the Supreme Court denied Maine health care employees’ request through the Court’s emergency docket for injunctive relief to prevent enforcement of Maine’s COVID-19 vaccination requirement on healthcare workers based on constitutional and Title VII claims. Maine’s law requires healthcare workers to receive the COVID-19 vaccine and does not specifically allow for religious exemptions. On October 19, the First Circuit Court of Appeals affirmed the District Court’s denial of injunctive relief, and the Supreme Court failed to take the case under its emergency docket on October 29.

In rejecting the emergency appeal, six justices (including the Chief Justice) agreed with the decision not to intervene. Justices Barrett and Kavanaugh stated that the court’s emergency docket is not the right place to resolve the merits of the workers’ claims. Justices Gorsuch, Thomas, and Alito dissented, contending that they would grant injunctive relief as Maine’s law on its face was not neutral and generally applicable, because the law allows for medical exemptions, but does not allow for religious exemptions.

Taken together, the concurring and dissenting opinions indicate that a potential path may be available through the normal appeals process to assess the constitutional merits of these types of laws. Given the number of cases on similar topics that are going through the trial and appeals court processes, there may be a future opportunity for the Supreme Court to address the underlying merits.

In the meantime, the executive order and corresponding actions remain in effect. COVID-19 cases continue in the U.S. and abroad. Both the federal government and states are engaging in a variety of actions to stem the spread of this virus, and also to address the rights of the various parties in these activities. We are watching developments closely.

Luke VanFleteren, who also assisted in drafting this article, is a law clerk at the firm.

 

 

Contact Brittany Barrientos, Amy Conway, Susan Ebner, Stephanie Scheck, Eric Whytsell for more information.