Insight | December 8, 2021
The following summary is an update to last week’s GrayRobinson communication, Vaccination Mandates: Employer Options for Mandating Vaccination Restricted.
What Happened?
On December 7, 2021, the Federal District Court for the Southern District of Georgia (Augusta Division) entered a preliminary injunction enjoining the enforcement of the federal vaccine mandate for federal contractors and subcontractors in any state or territory of the United States.
The plaintiffs included the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia, as well as their governors and various state agencies, including the Board of Regents of the University System of Georgia. In its order, the court also allowed Associated Builders and Contractors (ABC), a trade organization representing tens of thousands of contractors and subcontractors across the nation who regularly work on federal contracts, to intervene as a plaintiff.
The court held that to be entitled to a preliminary injunction, the plaintiffs must show (1) a likelihood of ultimate success on the merits of the case; (2) an injunction is necessary to prevent irreparable injury to the plaintiffs; (3) the threatened injury outweighs the harm the injunction would inflict on the defendants; and (4) the injunction would not be adverse to the public interest.
As to the first factor, which is typically the most important factor, the court analyzed the federal statute authorizing the President to issue Executive Order 14042 (the EO), mandating vaccination for federal contractors. Congress passed the Federal Property and Administrative Act (the Procurement Act) to centralize government property management and introduce the flexibility found in the private sector into the public procurement process. While the court acknowledged the Procurement Act granted broad authority to the President to promote efficiency and economy in procurement and contracting, it was not convinced there was a sufficient nexus between the purposes of the Procurement Act and the regulation of public health. The court noted the defendants were unable to cite a case upholding the use of the Procurement Act "to promulgate such a wide and sweeping public health regulation as mandatory vaccination for all federal contractors and subcontractors."
As to the second prong, the defendants argued that losing contracts for refusing to agree to a vaccine mandate clause in their contracts would not cause irreparable harm to the plaintiffs due to administrative processes through which the plaintiffs can challenge the contractual provision and recover any losses. Likewise, they argued the plaintiffs did not demonstrate they incurred any costs related to the mandate.
The court disagreed, finding the plaintiffs would be irreparably harmed due to losing employees who refused to be vaccinated and as a result of incurring the costs of complying with the mandate. The court also found the plaintiffs had already incurred costs in preparing for future compliance with the mandate.
As to the third factor, balancing of harms, the court held that entering an injunction would not cause harm as it simply maintained the status quo. Employers would still be free to encourage vaccination among their employees. On the other hand, not granting an injunction could negatively impact the financial viability of the private sector plaintiffs represented by the ABC.
Finally, the court held that an injunction was firmly in the public interest, noting the upheaval the vaccine mandate has already caused in the workplace - which cannot be quantified in dollars and cents.
What now?
For now, federal agencies are prohibited from requiring federal contractors and subcontractors to mandate vaccinations for employees working under a federal contract. This decision follows an earlier nationwide injunction enjoining the implementation of a vaccine requirement for private businesses with 100 or more employees and suspension of the vaccine mandate for health care workers. So, for now, there is no federal vaccine mandate in effect. This could change, but we anticipate it will take some time for these issues to be permanently resolved by the federal courts. GrayRobinson will be monitoring developments in the federal courts and provide updates as needed.
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