On Tuesday, November 30, 2021, the U.S. District Court for the Eastern District of Kentucky enjoined the federal government from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee.1 In granting a preliminary injunction against the President's Executive Order 14042, the court ruled that the President likely may not use congressionally delegated authority to manage the federal procurement of goods and services to impose vaccines on the employees of federal contractors and subcontractors.
This preliminary injunction is likely to further complicate and frustrate federal contractors' efforts to understand what they are required to do, particularly where contractors have employees in numerous states, each with different masking and other COVID-19-related requirements.
Biden Likely Exceeded His Federal Procurement Authority
The District Court found that Executive Order 14042 likely exceeded the authority Congress delegated to the President. The Federal Property and Administrative Services Act (FPASA) was designed to centralize federal government property management and to introduce flexibility into the public procurement process. Congress's goal in enacting FPASA was to create an "economical and efficient system for . . . procurement and supply."
Through FPASA, Congress granted the President a broad delegation of power that presidents have used to promulgate a host of executive orders. However, the District Court cautioned that "the President's authority is not absolute," and there must be a "close nexus between the Order and the objectives of the Procurement Act."
The federal government argued the nexus between the vaccine mandate and the economy and efficiency in federal contracting "is self-evident" because it would decrease worker absences, decrease labor costs, and improve efficiency at work sites. The court rejected that argument because FPASA is a procurement statute that likely cannot be the basis for promulgating a public health measure such as mandatory vaccination.
Injunction Applies Only to Three States—Kentucky, Ohio, and Tennessee
The District Court briefly discussed the scope of the injunction, noting that "individuals in every state in the country are affected." The court criticized the increasing frequency of district courts granting nationwide injunctions, which encourages forum shopping and eliminates the opportunity for careful review by multiple district and circuit courts.
Accordingly, the court limited its preliminary injunction in this case to the three states that were parties before the court—Kentucky, Ohio, and Tennessee.
Federal Agencies Likely Followed Proper Administrative Procedures
The court did find in the federal government's favor in one respect—that it likely followed proper administrative procedures in enacting the federal contractor vaccine mandate. In doing so, the court commented that "the procedural path taken by the [federal] agencies was, at times, inartful and a bit clumsy."
But ultimately the court denied the states' preliminary injunction arguments that the federal government failed to follow proper administrative procedures and that the vaccine mandate was arbitrary and capricious.
Employers Should Stay Tuned
As a result of the court's preliminary injunction, federal agencies contracting in Kentucky, Ohio, and Tennessee will likely pause the rollout of the federal contractor vaccine mandate until the 6th Circuit Court of Appeals can rule on this preliminary injunction. Contractors in those states would be well advised to contact their contracting officer to better understand the approach that the contracting agency will take with regard to bilateral modifications and execution of new contracts.
For multistate employers with employees in those states, contractors should consult with their attorneys to determine the best course of action in light of their specific federal contracts (including bilateral modifications) and the circumstances of their workforce. Contractors and subcontractors may decide to pause enforcement of the federal contractor vaccine mandate as applied to employees in those states.
Federal contractors and subcontractors around the country should stay tuned for additional court rulings. At least 11 other states have challenged the federal contractor vaccine mandate, and new rulings from federal district courts could further confuse the already complicated patchwork of laws and regulations affecting multistate employers.