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December 21, 2022 - Coronavirus

Fifth Circuit Affirms Preliminary Injunction of Contractor Vaccine Mandate

Another Ticking Clock: Additional District Court Preliminarily Enjoins EO 14042 | Increasing Need for OMB Update on GA Court Clarification Order

A divided panel of the U.S. Court of Appeals for the Fifth Circuit on December 19, 2022, upheld a preliminary injunction of Executive Order 14042, halting the Biden administration’s effort to impose on federal contractors a variety of COVID-19 safety protocols. Over the dissent of Judge Graves, the Fifth Circuit concluded that the “Major Questions Doctrine”—the notion that “Congress [must] speak clearly when authorizing an agency to exercise powers of vast economic and political significance”—limited the president’s otherwise broad authority under the Federal Property and Administrative Services Act (commonly known as the Procurement Act), thus precluding enforcement of the contractor vaccine mandate here. The affirmed injunction prohibits “the national government from enforcing the Task Force Guidance and FAR Memo in any contract, grant, or any other like agreement by any other name, whether for services or product and whether existing or new, between [Louisiana, Indiana, and Mississippi] or their agencies and the national government.”

The Fifth Circuit’s decision follows a similar ruling by the Eleventh Circuit in August, which affirmed (while also narrowing) another district court preliminary injunction of the vaccine mandate. Additional court of appeals decisions are expected to address Executive Order 14042 in the coming months and may ultimately tee up Supreme Court review.

In a majority opinion by Judge Engelhardt, the Fifth Circuit held that because the vaccine mandate reflected “an ‘enormous and transformative expansion in’ the President’s power under the Procurement Act,” the Court “cannot permit such a mandate to remain in place absent a clear statement by Congress that it wishes to endow the presidency with such power.” The Court concluded that “the dramatic difference between this mandate and other exercises of Procurement Act authority” triggered the Major Questions Doctrine. And the Court expressed concern that the government’s view of presidential authority under the statute was “[e]ffectively [b]oundless.” For example, the Court said the government could not distinguish between the vaccine mandate and one requiring all federal contractors to forbid their employees from smoking or being in the presence of smoking. “The President’s use of procurement regulations to reach through an employing contractor to force obligations on individual employees is truly unprecedented, and “[a]s such, Executive Order 14042 is unlawful, and the Plaintiff States have consequently demonstrated a strong likelihood of success on the merits.”

The Court also found that other equitable factors supported injunctive relief. Plaintiffs were irreparably harmed because compliance costs—including diverted resources to identify covered employees and the prospect of firing employee holdouts—were unrecoverable, the Court said. And “[e]ven if the Government is right and only one percent of, for example, the state of Louisiana’s employees left their job because of this mandate, Louisiana alone would lose nearly 700 employees.” The balance of harms and public interest also favored plaintiffs, the Court reasoned, because President Biden remarked in an interview that [t]he pandemic is over” and “[t]here is generally no public interest in the perpetuation of unlawful agency action.”

Judge Graves dissented, expressing the view that Executive Order 14042 “is consistent with what is allowed under the Procurement Act.” The vaccine mandate is “almost indistinguishable” from an earlier order mandating use of the E-Verify employment eligibility system, Judge Graves reasoned, because both orders require employers to verify something about their employees. And courts have generally applied a “lenient standard” for evaluating presidential authority under the Procurement Act. According to Judge Graves, the majority’s primary reliance on the Major Questions Doctrine was “misplaced.” Agreeing with Judge Anderson’s concurrence in the Eleventh Circuit’s decision, Judge Graves reasoned that “the major questions doctrine is only invoked when there are potential anti-delegation issues to agencies,” which “is not the situation here.” And the vaccine mandate reflects nothing more than “a standard exercise of the federal government’s proprietary authority.” Indeed, as Judge Graves pointed out, the federal government has achieved overwhelming compliance with its vaccine mandate for its own workers, as have many major private employers. Judge Graves also thought plaintiffs failed to establish irreparable harm because “[t]he loss of an employee is typically not a nonrecoverable cost,” and that the balance of interests favored the government.

The Fifth Circuit is now the second federal appellate court to weigh in on Executive Order 14042, but it will not be the last. The Sixth and Eighth Circuits have both heard oral argument in similar challenges, but neither court has yet issued a decision. And a number of challenges to Executive Order 14042 are also proceeding in federal district courts. As always, we will continue to monitor and provide updates on these cases as they develop.