On December 6, 2021, the Southern District of Georgia Federal District Court issued a nationwide preliminary injunction blocking enforcement of the federal contractor vaccine mandate in Executive Order 14042 (the “EO”), finding that the President exceeded his authority under the Federal Property and Administrative Services Act, 40 U.S.C. § 101 et seq. (the “Procurement Act”). The case is State of Georgia, et al v. Biden, Civil Case No. 1:21-cv-163. The order granting the preliminary injunction (the “Georgia Court Order”) may be found here.
A notice of appeal and motion for emergency stay of the Georgia Court Order have been filed; however, as of now, a nationwide injunction is in effect. The Safer Federal Workforce Task Force and Office of Management and Budget (“OMB”) have issued updated guidance in light of the injunction, but the guidance seems to add only another layer of uncertainty for federal contractors and subcontractors. Many have already agreed to modifications of existing contracts and/or implemented mandatory vaccination policies as a result of the EO. While uncertainty about the future of the vaccine mandate remains, contractors should now consider taking certain steps in light of the injunction. In this article, we discuss the Georgia Court Order, the Task Force and OMB guidance, and their implications for contractors.
Background of the EO Vaccine Mandate
As previously reported here, here, and here, as part of President Biden’s six-pronged Path Out Of the Pandemic action plan, and the Guidance issued by the Taskforce, federal contractors and subcontractors were required to ensure that their “covered contractor employees” were fully vaccinated against COVID-19. The compliance date became a moving target but, until last week, federal contractors and subcontractors were required to ensure their covered workers were “fully vaccinated” by no later than January 18, 2022, unless a legal exception applied.
Numerous lawsuits were filed challenging the legality of the EO vaccine mandate. A week prior to the Georgia Court Order, a Kentucky federal district court issued an order prohibiting the government “from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee.” Like the Georgia Court Order, the Kentucky Court’s order was based on a finding the President exceeded his authority under the Procurement Act. The federal government has filed an appeal of the Kentucky district court’s order, and the district court has summarily denied an emergency motion to stay its order pending appeal.
The Georgia Court Order
In its Order, the Georgia Court found that plaintiffs have a likelihood of proving that the EO exceeds the President’s authority under the Procurement Act. In so ruling, the Georgia Court concluded that plaintiffs would likely prove that
Congress…did not clearly authorize the President to issue the kind of mandate contained in EO 14042, as EO 14042 goes far beyond addressing administrative and management issues in order to promote efficiency and economy in procurement and contracting, and instead, in application, works as a regulation of public health, which is not clearly authorized under the Procurement Act.
The Georgia Court further concluded that the EO vaccine mandate did not have a “sufficient nexus” to efficiency and economy in procurement to justify “the level of burdens implicated by EO 14042, which has already required and will continue to require extensive and costly administrative work by employers and will force at least some individuals to choose between getting medical treatment that they do not want or losing their job (and facing limited job replacement options due to the mandate).”
Critical to its analysis, the Georgia Court found that plaintiffs would suffer “irreparable harm” if a preliminary injunction was not issued. In so concluding, the Court found “that the time and effort spent on these measures in the past—and going forward—constitute compliance costs resulting from EO 14042 which appear to be irreparable.” (Emphasis added.) Citing the burdens of compliance and the possibility of employees who refuse vaccination having to be reassigned or terminated, the Court also rejected the government’s argument that “harm would result from…further delaying the vaccination of the thousands of currently-unvaccinated individuals working on federal contracts (thereby permitting the continued spread of COVID-19).”
As a result of the Georgia Court Order, unless and until there is further action from the courts, the federal government cannot enforce the EO vaccine mandate in any state or territory of the United States.
The Biden Administration’s Response to the Injunction: Task Force and OMB Updated Guidance
The Administration has ostensibly recognized its obligation to comply with the Georgia Court Order, and updated guidance has been issued by the Taskforce and OMB as to how it will proceed. See https://www.saferfederalworkforce.gov/contractors/. https://cdn.govexec.com/media/gbc/docs/pdfs_edit/120921cb1.pdf
However, precisely what the guidance means to contractors is far from clear.
The Task Force and OMB updated guidance provides that agencies must inform contractors, and/or include in solicitations or as a contractual provision, the following information about the impact of the Georgia Court’s injunction (“Injunction Notice”) (emphasis added):
The Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order (hereinafter, “Excluded State or Outlying Area”). In all other circumstances, the Government will enforce the clause, except for contractor employees who perform substantial work on or in connection with a covered contract in an Excluded State or Outlying Area, or in a covered contractor workplace located in an Excluded State or Outlying Area. A current list of such Excluded States and Outlying Areas is maintained at https://www.saferfederalworkforce.gov/contractors/.
According to the OMB, this Injunction Notice is to be disseminated as follows:
Both the Task Force and OMB updated guidance remind contractors that at federal buildings and federally controlled facilities, the Task Force Guidance for COVID-19 safety protocols are still in effect and must be followed. Thus, for those contractors working at federal workplaces, their employees will at a minimum either need to attest to be fully vaccinated or show proof of a recent negative COVID-19 test in order to gain entry.
What Should Contractors And Subcontractors Do Now?
The OMB and Task Force updated guidance in response to the Georgia and Kentucky Court Orders, coupled with the still in effect COVID-19 protocols for federal workplaces, creates layer upon layer of confusion for contractors, particularly those whose contracts include performance both inside and out of U.S. states or territories. What should contractors and subcontractors, especially those who have already taken concrete steps to comply with the EO vaccine mandate, do now? Below are some basic steps contractors should consider:
Determine the Status of the Vaccine Mandate in Your Covered and Potentially Covered Contracts and Subcontracts:
Federal agencies and departments have generally taken an expansive, but not entirely consistent, approach as to whether and how to impose the vaccine mandate for existing contracts. Federal contractors should thus determine which of their contracts already include the mandate (enforcement may be presently stayed), those in which negotiations to include the mandate were underway (but which now may or may not be paused depending upon the place of contract performance), and those for which the mandate may be imposed if the injunction is lifted. Contractors should also determine where their new, existing, or prospective contracts will be performed: Is performance exclusively in an “Excluded State or Outlying Area” or will some performance take place elsewhere? Does the contract involve work at a federal building or federally controlled facility? The answers to these questions will aid contractors in assessing the impact of the Georgia Court Order and how the agencies with which they deal will respond to the OMB and Task Force updated guidance.
Assess Your Existing Vaccination Policies and Employee Vaccination Status:
Contractors should assess their existing policies, and the extent to which their workforces and workplaces are already “fully vaccinated.” The Georgia Court Order does not prohibit contractors from choosing to impose the vaccine mandate, nor states or localities, or their regulatory agencies, from setting their own vaccination policies. As such, federal contractors and subcontractors should determine whether state or local laws, orders or ordinances, or collective bargaining obligations, impact their vaccination policy in the absence of a federal mandate.
While the EO was expressly intended to provide protection to federal contractors imposing a mandatory vaccination policy where contrary state or local laws existed (through federal preemption), that protection, at least while the Georgia Court Order is in effect, is no longer available. Notably, several states have vaccine mandate limitations: For example, Tennessee recently passed legislation prohibiting employers from discharging employees who refuse to provide proof of vaccination, and in Texas, the Governor has issued an executive order prohibiting any requirement to vaccinate if the employee objects, including for reasons of “personal conscience.”
In sum, once contractors understand their current obligations and/or prohibited actions and have assessed to what extent their workforce is vaccinated, they can then determine whether their existing vaccine policy should continue, be paused, or be revised.
Document Your Costs Complying With the EO:
As noted above, the Georgia Court Order described at length the costs associated with compliance with the EO vaccine mandate. Consequently, federal contractors who took action in anticipation of the government enforcing the EO vaccination mandate would be well served to gather information and documentation to quantify any costs and impacts, both in terms of lost or diverted resources, or impacted ability to timely undertake contract performance.
Examples of compliance costs mentioned in the Georgia Court Order include diverted “resources” to build a team of information technology, human resources, and legal department members to develop, implement, and manage a mandatory vaccination policy; expenditures in the development or purchase of data analytics and software programs or tracking systems to document compliance; administrative costs to process accommodation requests; and costs associated with lost or suspended employees. Additional costs and/or impacts to track could include those associated with flowing down the mandate to subcontractors or suppliers, or any administrative or legal actions associated with terminated or disciplined employees. Contractors should also track delays and other inefficiencies that may be experienced as a result of efforts to implement the vaccine mandate.
Engage with Agency and Department Contracting Officers:
While the federal government has announced its intent to comply with the Georgia Court Order, the OMB and Task Force updated guidance raise questions as to whether the vaccine mandate will be inserted into new and existing contracts and suggests that enforcement with the EO vaccine mandate may be required in the future. Indeed, the Biden Administration has already appealed the Georgia Court Order, is seeking an immediate stay of any order precluding enforcement of the EO, and is confident it will ultimately prevail such that the vaccine mandate will once again be in effect.
With this uncertainty surrounding if and when the EO mandate to vaccinate workers will be enforced, proactive engagement with agencies and departments with which contractors and subcontractors do business may be appropriate. Contractors should reach out to COs who inserted the EO mandate into their contracts and/or initiated negotiations for its incorporation to discuss the uncertainty as to contractors’ and subcontractors’ obligations to impose a vaccination mandate on their covered employees and in covered workplaces in light of the Georgia Court Order.
Moreover, the Georgia Court Order validated the significant costs that can be associated with complying with the vaccine mandate, in stark contrast to the Administration’s position that contractors would incur little, if any, costs, and in effect, would save time and money by implementing the EO vaccine mandate. Thus, now would be an appropriate time for contractors to notify COs of their vaccine mandate compliance costs incurred to date if they have not done so before, and ensure they reserve their rights to assert claims for equitable adjustment. Likewise, where the EO clause has been flowed down to subcontractors, the subcontractors should reserve their rights to recover compliance costs from the prime contractor. Contractors and subcontractors who choose to suspend or abandon any vaccination mandate policies while the injunction is in effect should also document the timing of their shift in policy, and any costs associated with the shift, and have plans in place to re-implement the mandate in the event the injunction is lifted.
Attorneys at RJO will continue to monitor and report on new developments and are here to help. If you have questions about the latest guidance, please contact one of the RJO attorneys with whom you regularly work, or the authors of this article.
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 The Court’s injunction of the vaccine mandate of the EO does not affect the Secretary of Health and Human Services’ interim rule requiring vaccination of staff in facilities that provide health care to Medicare and Medicaid beneficiaries which are the subject of separate litigation.
 The Court did not decide arguments relating to whether the Safer Federal Workforce Taskforce Guidance was adopted in compliance with the Administrative Procedure Act’s notice and comment period, or whether the EO is unconstitutional.
 To justify a nationwide injunction in this case initially brought only by parties associated with the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia, the Georgia Court granted a motion of Associated Building and Contractors, Inc., a trade organization with members nationwide, to intervene as a plaintiff.
 Note that Task Force Guidance protocols do not apply to covered contractor employees who only perform work outside the U.S. or its outlying areas, as those terms are defined in section 2.101 of the FAR. See, TaskForce Guidance FAQ. Therefore, it remains far from clear which employees might remain covered by the vaccination mandate while the injunction is in effect.
 The Task Force official website references the OMB guidance on implementing the EO while ensuring compliance with applicable court orders. However, the OMB guidance is not on the OMB official website and is unsigned. Agency Chief Acquisition Officers and senior procurement officers are directed to the OMB Office of General Counsel if they have questions or need further information about the guidance.