November 3, 2021 - Labor/Employment

New Task Force Guidance Signals Some Flexibility for Contractors

On November 1, 2021, the Safer Federal Workforce Task Force (the “Task Force”) added new FAQs to its guidance on Executive Order 14042 (“EO 14042”), signaling that contractors have some flexibility to go beyond the rapidly-approaching December 8, 2021 deadline for covered employees to be fully vaccinated against COVID-19. The Task Force also encouraged federal agencies to work with contractors facing compliance challenges with EO 14042, as long as those contractors are working in “good faith” to comply with the Task Force guidance. Contractors that fail to make such good faith efforts towards compliance, however, might face “termination” of their covered contracts or other “significant actions.”

Background

As we previously reported, the Task Force’s September 24, 2021 guidance and FAQs mandate that all employees who work either on or in connection with covered contracts (even if working remotely) or in covered contractor locations must be vaccinated by December 8, 2021. Contractors must also implement strict masking and social distancing practices in their workplaces in accordance with CDC guidelines. These requirements are immediately binding on all contractors and subcontractors once the FAR Deviation Clause (FAR 52.223-99) or agency class deviation is inserted into their federal contract or subcontract. Contractors are also required to comply with any new guidance or FAQs issued by the Task Force, as FAR 52.223-99 and agency class deviations state that contractors must “comply with all guidance, including guidance conveyed through Frequently Asked Questions, as amended during the performance of this contract” (emphasis added).

Since EO 14042 became effective on October 15, 2021, many federal agencies have begun broadly rolling out EO 14042 by including FAR 52.223-99 or the relevant class deviation in bilateral modifications for existing contracts, even before those contracts are up for renewal, extension, or a modification for another purpose. Agencies have also incorporated these implementing clauses into contracts that are not expressly covered by the four corners of EO 14042, such as contracts for commercial item products. In turn, many prime contractors have been broadly flowing the relevant implementing clauses down to their subcontractors and, in some cases, have incorporated the requirements of EO 14042 into their standard terms and conditions.

The New FAQs

The Task Force released seven new FAQs on November 1, 2021 that address various compliance and enforcement issues.

The December 8, 2021 Deadline Is Not a Cliff

In apparent recognition of the significant challenges many contractors face to ensure all covered employees are fully vaccinated by December 8, the Task Force’s new FAQs signal that the December 8 deadline for vaccinations is flexible when a contractor is either processing requests for medical or religious accommodations or using its “usual processes for enforcement of workplace policies” for unvaccinated employees who have not requested or do not qualify for an accommodation. This new guidance follows statements on October 27, 2021 by the White House Coronavirus Response Coordinator that the December 8 vaccination deadline is not a “cliff” and that contractors can follow their “standard HR processes” that can “play out across weeks, not days.”

Importantly, these new FAQs state that contractors must determine the “appropriate means for enforcement” for covered employees who refuse to be vaccinated and do not have a pending accommodation request. The Task Force provides the following example of how federal agencies are permitted to enforce the vaccination requirement:

One model for enforcement among employees with respect to non-compliance with a vaccination requirement is that being followed by Federal agencies. Guidance for Federal agencies is to utilize 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. Guidance for Federal agencies is that employees should not be placed on administrative leave while the agency is pursuing an adverse action for refusal to be vaccinated but will be required to follow safety protocols for employees who are not fully vaccinated when reporting to agency worksites.

The Task Force also states that covered contractor employees who have a pending request for a medical or religious accommodation can continue working on a covered contract or at a covered workplace while the contractor is reviewing the accommodation request.

Although the Task Force signals some flexibility on the deadline for vaccinations, contractors are still required to ensure that covered employees at their workplaces are “following all workplace safety protocols for individuals who are not fully vaccinated” while accommodations or HR actions are being considered, which include masking and social distancing with limited exceptions. The Task Force also says that federal agencies can deny a contractor’s employee entry into federal facilities if that employee refuses to be vaccinated.

These new FAQs offer welcome news for contractors struggling to meet the December 8 deadline, but still leave a number of unanswered questions. Chief among those lingering questions is how long after December 8 contractors can process HR actions or accommodations and still be in compliance. Contractors likely have two to three weeks for those processes to play out, but going much beyond that timeframe may make it harder to show good faith compliance absent extenuating circumstances. The Task Force also encourages contractors to notify their contracting officers when their employees who work onsite at federal facilities have received an “exception to the requirement to be fully vaccinated,” so the agency can “assess appropriate safety measures” for those workers.

Agencies Are Encouraged to Work With Contractors Trying to Comply in Good Faith

Before the latest FAQs, the Task Force guidance and FAQs did not address enforcement or remedies for EO 14042, leaving those issues entirely to the discretion of federal agencies. According to a new FAQ, federal agencies are encouraged to “work with” contractors facing challenges with complying with EO 14042, as long as those contractors are “working in good faith” to comply with EO 14042. Although not binding on federal agencies or prime contractors, this FAQ could provide some helpful talking points for contractors and subcontractors to address their compliance challenges with their contracting officers or prime contractors.

Contractors must still be able to show that they are working in good faith to comply with EO 14042. Contractors who cannot show those good-faith efforts might face harsh consequences. In fact, a new FAQ directs federal agencies to take “significant actions” with regard to contractors who are not working in good faith to comply, including “termination” of the covered contract.

EO 14042 Can Apply to Affiliated Entities Without Covered Contracts

Many contractors have been wondering whether EO 14042 applies to employees or work locations of their parents, subsidiaries, or other affiliated entities that do not have federal contracts or subcontracts. Those affiliated entities can be covered according to new FAQs. The Task Force states that employees and work locations of “corporate affiliates” of a covered contractor that are not otherwise covered by EO 14042 can be subject to the COVID-19 safety protocols in the Task Force’s guidance and FAQs if the covered contractor and affiliate either “directly or indirectly . . . controls or has the power to control the other,” or when “a third party controls or has the power to control both.” “Indicia of control” can include, but are not limited to, the following: “interlocking management or ownership, identity of interests among family members, shared facilities and equipment, or common use of employees.” It is important to note that this standard is much broader than the typical tests for determining whether government contractor requirements can spread to affiliated entities, such as the standards under the single-entity test used to apply the affirmative action and discrimination laws enforced by the Office of Federal Contract Compliance Programs to affiliated entities.

Under this new guidance, assuming the indicia of control noted above is present, employees of a corporate affiliate will be subject to the COVID-19 safety protocols in EO 14042 if those employees perform any work at a covered workplace of an affiliated covered contractor. In addition, if a single covered contractor employee performs work at a corporate affiliate’s work location, then that covered employee spreads the COVID-19 safety requirements of EO 14042 to all employees at the affiliate’s work location, even if the affiliate’s employees do not work on or in connection with a covered federal contract.

Contractors May Have Other Means of Obtaining Vaccination Documentation

The Task Force says that covered contractors do not need to require employees to show or provide documentation of their COVID-19 vaccination status if the contractor can access that documentation directly through a state’s immunization database or has previously received documentation from the employee through the contractor’s vaccination program.

Next Steps

Although the new FAQs offer some needed breathing room for contractors struggling to comply with EO 14042, contractors should not relax their compliance efforts given the instruction to federal agencies to take “significant actions” for contractors not working in “good faith” to comply.  Contractors facing challenges meeting the December 8 vaccination deadline or other requirements of EO 14042 should implement processes for documenting their good-faith compliance efforts, including documenting accommodation or HR enforcement processes for unvaccinated employees who are allowed to continue work after December 8. That documentation could prove valuable for contractors that need to request flexibility from their customers on compliance challenges or to defend enforcement actions or audits of their compliance with EO 14042. Contractors should also be mindful that the Task Force FAQs still give agencies discretion to assist contractors with their compliance challenges. Not all agencies may be receptive to those challenges, and some may be more flexible than others.

The new FAQs also serve as a reminder that the Task Force guidance is a moving target.  Since covered contractors must comply with all new Task Force guidance and FAQs, as amended, it is important for contractors to continue to regularly monitor and review new Task Force guidance and be prepared to adapt their policies and practices accordingly. Contractors with 100 or more employees should also be mindful of the OSHA emergency rule for COVID-19 that is expected to be issued this week. Although contractors cannot substitute compliance with EO 14042 for compliance with the OSHA emergency rule, the OSHA emergency rule may have components that could place additional compliance obligations on contractors.

The updated Task Force guidance also comes on the heels of a slate of new lawsuits seeking to enjoin and overturn EO 14042. The lawsuits include claims filed on October 28, 2021 by the State of Florida; a suit filed in Missouri federal court on October 29, 2021 by ten state attorney generals (Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, and Wyoming); and a suit filed on October 29, 2021 in Texas federal court by the state of Texas. The lawsuits assert various constitutional and other claims against EO 14042, including violation of the Tenth Amendment, procedural and substantive issues under the Administrative Procedure Act, and exceeding Congress’s authorization under the Federal Property and Administrative Services Act. It remains to be seen whether any of the cases will result in temporary injunctive relief or if they will succeed on the merits.  Contractors may be acting at their own peril if they hold off compliance with the EO 14042 to see how the cases play out.

Stay tuned as we continue to monitor these developments closely. We also will be publishing guidance on some of the frequently asked questions received from contractors regarding EO 14042.