January 13, 2022

U.S. Supreme Court Stays OSHA Vaccine Mandate, But Allows Enforcement of CMS Vaccine Mandate

Holland & Knight Alert
Nathan A. Adams IV | Timothy James Taylor | Frederick D. Braid | Meghan McCaig | Howard Sokol | Gina A. Fonte | Amit Agarwal

Highlights

  • The U.S. Supreme Court today reached split decisions on the so-called mandates issued, respectively, by the Occupational Safety and Health Administration (OSHA) and the Centers for Medicare & Medicaid Services (CMS).
  • The Court allowed the CMS vaccination mandate for healthcare workers to go into effect by staying injunctions preventing its enforcement pending disposition of the government's appeals or any petitions for writ of certiorari. However, the Court stayed enforcement of the OSHA mandate for large private employers pending similar conditions.
  • The Court did not review the federal contractor vaccination mandate, but its OSHA and CMS decisions do have several important repercussions for some federal contractors.

The U.S. Supreme Court today reached split decisions on the so-called vaccination mandates issued, respectively, by the Occupational Safety and Health Administration (OSHA) and the Centers for Medicare & Medicaid Services (CMS). The Court allowed the CMS vaccination mandate to go into effect by staying injunctions preventing its enforcement pending disposition of the government's appeals or any petitions for writ of certiorari. However, the Court stayed enforcement of the OSHA (vaccination or testing) mandate pending similar legal proceedings. Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented from the ruling on the OSHA mandate, whereas Justices Samuel Alito, Clarence Thomas, Neil Gorsuch and Amy Coney Barrett dissented from the ruling on the CMS mandate.

The federal contractor vaccination mandate, which is currently subject to a nationwide stay by lower courts, was not before the Supreme Court. Also not before the Court was the question of federal preemption of inconsistent state laws, but the reasoning in the decisions issued by the Court today could potentially impact consideration of both federal preemption and the federal contractor mandate.

OSHA Mandate

Agency Issuance and Procedural Background

The OSHA vaccination-or-testing mandate is an emergency temporary standard (ETS) issued by the Secretary of Labor that requires covered employers with 100 or more employees to "establish, implement and enforce a written mandatory vaccination policy." 29 C.F.R. § 1910.501(b)(1) and (d)(1). The employer must verify the vaccination status of each employee and maintain proof of it unless, in the employers' discretion, the employers require unvaccinated workers to undergo weekly COVID-19 testing and wear a face covering at work. The U.S. Court of Appeals for the Fifth Circuit stayed the OSHA mandate, but a split panel of the Sixth Circuit, before which all OSHA mandate cases were consolidated, set aside the stay. The Sixth Circuit denied en banc review, whereupon certain applicants asked the Supreme Court to stay the Secretary's ETS.

The Court's Decision

The Court, in a 6-3 decision, ruled that those challenging the ETS are likely to succeed on the merits of their claim that the Secretary of Labor lacked authority under the Occupational Safety and Health Act (OSH Act) to impose the mandate.1 29 U.S.C. § 651 et seq. The Court focused on the "significant encroachment into the lives – and health – of a vast number of employees." Reaffirming the major questions doctrine, the Court wrote, "We expect Congress to speak clearly when authorizing an agency to exercise powers of vast economic and political significance."2 The Court disagreed that COVID-19 is a "work-related danger" or "occupational hazard," as opposed to an infection that "can and does spread at home, in schools, during sporting events, and everywhere else that people gather." As such it is more like "day-to-day dangers that all face from crime, air pollution or any number of communicable diseases."

The dissent disagreed and compared the COVID-19 mandate to the already existing and well-worn fire or sanitation regulations imposed by OSHA. The dissent insisted the grave harms incident to COVID-19 exposure are exactly those OSHA was created to prevent, just as with other OSHA regulations. According to the majority, "[a] vaccine mandate is strikingly unlike the workplace regulations that OSHA has typically imposed" because it "cannot be undone at the end of the workday." The majority was quick to add that OSHA probably could regulate special dangers because of particular features of an employee's workplace such as researchers who work with the COVID-19 virus or risks associated with "particularly crowded or cramped environments" as the dangers of these workplaces would be different in degree and kind from everyday risks.

CMS Mandate

Legislative and Procedural Background

The CMS mandate is, in reality, an interim final rule with Comment Period (IFC) amending the conditions of participation (COPs) in Medicare and Medicaid to add a new requirement that healthcare facilities ensure their covered staff are vaccinated against COVID-19. 85 Fed. Reg. 61,555 (Nov. 5, 2021). Congress has authorized the Secretary of Health and Human Services to promulgate COPs such as conditions pertaining to infection prevention and control. Shortly after issuance of the IFC, two groups of states filed separate actions challenging it. The district courts enjoined the IFC, whereupon CMS sought a stay of the injunction from the relevant courts of appeal. When neither court of appeal granted the stay, CMS asked the Supreme Court to step in.

The Court's Decision

The Court, in a 5-4 decision, ruled that this is "perhaps the most basic" function of the CMS "to ensure that the health care providers who care for Medicare and Medicaid patients protect their patients' health and safety."3 However, the dissent did not see in the "agglomeration of statutes" including definitions of healthcare facilities relied on by the CMS the same authorization as the majority. The dissent objected that "health and safety" language was not contained in all of the relevant statutes specific to the covered healthcare facilities and that the infection control language pertains only to long-term care facilities focused on the facilities' environment, not personnel. But the majority considered the health and safety language more broadly applicable. Moreover, the majority concluded that the Secretary "routinely imposes" COPs "that relate to the qualifications and duties of healthcare workers themselves." The Court hypothesized that because vaccination requirements are common in the provision of healthcare, "this is perhaps why healthcare workers and public-health organizations overwhelmingly support the Secretary's rule." Their support made a difference in the majority's view and the opinion of the Court.

Federal Contractor Mandate

The Supreme Court did not review the federal contractor vaccination mandate. It derives from Executive Order 14042, mandating the Safer Federal Workforce Task Force to provide guidance regarding "adequate COVID-19 safeguards." The Task Force issued guidance requiring all "covered contractors" to ensure their employees are vaccinated and that "all individuals, including covered contractor employees and visitors, comply with published CDC guidance for masking and physical distancing at a covered contractor workplace" unless they are "legally entitled to an accommodation." The definition of a "covered contractor workplace" requires employees who do not work on federal contracts to be vaccinated unless a federal contractor can affirmatively determine that none of its employees on another floor or in separate areas of the building will come into contact with an employee who works on federal contracts.

The federal contractor vaccination mandate has been challenged in at least eight lawsuits, with five resulting in preliminary injunctions against enforcement and three others yet to be decided. Most importantly, one of the granted preliminary injunctions, issued by a federal court in Georgia, has, by design, nationwide effects, and was already upheld on appeal. Consequently, the federal government has advised that it is not enforcing Executive Order 14042 for any contract performed within the scope of the court's injunction, which covers the 50 states, the District of Columbia, and U.S. territories such as Puerto Rico and Guam. U.S. contractors performing work internationally, such as airlines, should consult with counsel about the potential nuances of international coverage under Executive Order 14042.

Although the federal contractor mandate was not before the Supreme Court in the decisions issued today, those decisions do have several important repercussions for some federal contractors. First, matters are simpler for contractors concerned about overlapping coverage under the contractor mandate and OSHA's mandate. With both stayed, they are covered by neither.

Second, subject to any conflicting state legal considerations, contractors that are also Medicare healthcare providers need to move quickly to come into compliance if they had delayed due to an injunction previously in effect in part of the country. Any organization covered by the healthcare mandate remains covered by the healthcare mandate, regardless of any other mandates.

Last, the Supreme Court's decisions suggest the court may greet the federal contractor mandate with skepticism. It did not find authority for a vaccine mandate in the OSH Act, which at least has emergency provisions and a central purpose of protecting employee health and safety. And although the Court found authority for the CMS mandate in various statutory provisions permitting requirements "in the interest of the health and safety of individuals," it gave little attention to the government's originally proffered source of authority, a general grant of authority to issue regulations "as may be necessary to the efficient administration of the functions" of the program.

The source of authority for the federal contractor vaccination mandate is the Federal Property and Administrative Services Act of 1949, and specifically its command to the president to issue rules to ensure "economy and efficiency" in government procurement. That sounds much like "efficient administration" and seems even further removed from worker safety than the provisions of the OSH Act.

State Law Preemption

The Supreme Court also did not directly consider the impact of any federal vaccination mandate on conflicting state law in places such as Florida and Montana, although in briefs or oral argument before the Court some states went so far as to concede that the CMS rule preempts state law. Conflict preemption is in view when it is literally impossible to comply with both federal and state law. This preemption analysis also requires a court to consider whether the federal agency issuing the rules exceeded its statutory authority or acted arbitrarily. The Court has now spoken to this issue as relates to the OSHA and CMS mandates in a manner that is likely to aid lower courts that begin to address preemption questions.

The next round of rulings on the OSHA and CMS mandates will be on the merits guided by the Court's decisions today. They will also influence decisions involving the federal contractor mandate and state law preemption, but we will have to wait to see the manner in which courts finally resolve these issues.

Notes

1 Nat'l Fed'n of Indep. Bus. v. Dep't of Labor, Case No. 21A244 (Jan. 13, 2022); Ohio v. Dep't of Labor, Case No. 21A247 (Jan. 13, 2022).

2 Ala. Ass'n of Realtors v. Dep't of Health & Human Servs., 594 U.S. __ (2021).

3 Biden v. Missouri, Case No. 21A240 (Jan. 13, 2022); Becerra v. Louisiana, Case No. 21A241 (Jan. 13, 2022).


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