Kentucky Judge Blocks Federal Contractor Vaccine Order for Employers in Kentucky, Ohio and Tennessee

Labor & Employment
 

On November 30, Judge Gregory F. Van Tatenhove of the United States District Court for the Eastern District of Kentucky granted a preliminary injunction halting an Order issued by the Biden Administration requiring employees of federal contractors and subcontractors in Kentucky, Ohio and Tennessee to become fully vaccinated. Thus, Executive Order 14042, discussed in Calfee's September 27 First Alert, is at least temporarily on hold for companies doing business in these three states.

The Order requires substantially all employees of federal contractors and subcontractors to be fully vaccinated by January 18, 2022. Judge Van Tatenhove began his decision by stating that vaccines are effective and that the federal government "at some level and in some circumstances" can require citizens to obtain vaccines. He described the question before him as narrow: "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 addressing this question, he first rejected the government’s arguments that the three states lack standing to challenge the Order. Because federal contracts bring billions of dollars to Kentucky, Ohio and Tennessee annually, and "there is every indication that federal contractors and subcontractors" in these states "will continue bidding for new contracting opportunities," the Judge ruled that the plaintiffs had standing to challenge the Order. The Court also cited the fact that governmental agencies already are requesting that current contractors comply with the Order in support of his finding of standing.

Judge Van Tatenhove then addressed whether President Biden exceeded his delegated authority under the Federal Property and Administrative Services Act (FPASA) under which Congress delegated the authority to manage federal procurement to the President. Referencing that the Sixth Circuit Court of Appeals has never addressed the issue of the exact scope of FPASA, the judge indicated that other courts that have addressed this issue have found that there has to be a "close nexus" between a President’s order and the goals of achieving "economy and efficiency" in federal contracting. Citing a 1979 D.C. court ruling, the judge indicated that "economy" and "efficiency" are not narrow terms – "they encompass those factors like price, quality, suitability, and availability of goods or services that are involved in all acquisition decisions." The judge rejected the government’s argument that it was "self-evident" that E.O. 14042 satisfies these goals in that avoiding COVID-19 will decrease absenteeism, cut labor costs, and improve efficiency at work sites. He found that "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.

In dismissing the government’s argument here, the judge mentioned that the vaccine mandate applies to employees of federal contractors and subcontractors even if they are working entirely from home and are not at a risk of spreading COVID-19 to others. He also questioned, under the same logic employed by the government, "what would stop FPASA from being used to permit federal agencies to refuse to contract with contractors and subcontractors who employ individuals over a certain BMI for the sake of economy and efficiency during the pandemic? After all, the CDC has declared that 'obesity worsens the outcomes from COVID-19.'" The judge concluded that, if the FPASA could be utilized as the government claims, "then the statute could be used to enact virtually any measure at the President’s whim under the guise of economy and efficiency."

Judge Van Tatenhove also held that the states had shown, at the early stage in the litigation, that President Biden exceeded his authority under the Competition in Contracting Act, which requires federal agencies to provide "full and open competition through the use of competitive procedures" in procurement. The judge held that "by excluding unvaccinated contractors and subcontractors from government contracts, the mandate would limit full and open competition required by the Act." He also indicated that the vaccine mandate raises concerns under the constitutional nondelegation doctrine, which prohibits Congress from delegating legislative power to the President to make whatever laws he thinks may be appropriate. Acknowledging that there is "scarce" precedent as to this doctrine, the judge suggested that the issue could use more guidance from appellate courts.

Finally, the judge indicated that the Court was concerned that the vaccine mandate intrudes on an area that is traditionally reserved to the states. The Tenth Amendment states that the "powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Historically, the regulation of health and safety measures is primarily and historically a matter of local concern. Because of a "serious concern that Defendants have stepped into an area traditionally reserved to the states," the judge found that there is "an additional reason" to temporarily enjoin the vaccine mandate.

The Court considered the possibility of applying its preliminary injunction nationwide but concluded that the proper scope of the injunction for the time being was limited to the three states that filed the action. This preliminary injunction will remain in place indefinitely while the case continues, and the ultimate ruling here likely will be appealed to the Sixth Circuit Court of Appeals and possibly later to the U.S. Supreme Court, which will likely have to address circuit court disagreement on this issue. On Monday, November 29, the Eastern District of Missouri issued a preliminary injunction blocking the Centers for Medicare & Medicaid Services (CMS) from enforcing its vaccine mandate for healthcare workers in 10 states, ruling that a federal agency has no power to act unless Congress confers such power upon the agency. The next day, the Western District of Louisiana issued an injunction as to the CMS mandate covering the remaining states, creating a nationwide injunction temporarily prohibiting the CMS rule from taking effect. With the Fifth Circuit’s recent ruling freezing OSHA’s rule, which will now be addressed by the Sixth Circuit appointed to address consolidated actions challenging that rule, the various federal mandates to which employers may be subjected are facing difficult and protracted battles threatening their ultimate enforceabilities.

Importantly, employers in Ohio and those outside of the few states to date that have prohibited or limited vaccine mandates may nonetheless proceed with implementing policies requiring full vaccination of all employees (the goal of E.O. 14042 and the CMS rule) or "vax or test" options (consistent with OSHA’s rule). Employers do not have to rely on these federal orders currently in limbo to move forward with vaccination policies that they believe will best serve their business interests and the well-being of their employees. Our Labor and Employment practice group attorneys are available to assist with such policies and as to those issues arising in your workplaces relating to COVID-19 as the pandemic and the litigation relating to same marches on.

For additional information about federal mandates regarding COVID vaccination of employees, please see our prior First Alerts on these matters:


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