Yesterday afternoon, on January 13, 2022, the United States Supreme Court issued a decision staying the Biden Administration’s recently-enacted requirement that large employers require mandatory COVID–19 vaccinations or weekly testing of employees (the "mandate"). This new decision stands to save employers nationwide billions of dollars in unrecoverable compliance costs, and will also make it easier for understaffed retailers to continue employing unvaccinated workers.

Overview of the Mandate

On September 9, 2021, President Biden announced "a new plan to require more Americans to be vaccinated." As part of that plan, the Secretary of Labor, acting through the Occupational Safety and Health Administration (OSHA), published a mandate on November 5, 2021 requiring businesses with at least 100 employees to develop, implement, and enforce a mandatory COVID-19 vaccination policy. Specifically, the mandate would require these employers to ensure their workforces are fully vaccinated or show a negative test at least once a week. The mandate would impose hefty fines for employees who failed to comply: up to $13,653 for a standard violation, and up to $136,532 for a willful one.

Many states, businesses, trade groups, and nonprofit organizations challenged the mandate, with at least one petition arriving in each Court of Appeals. The Fifth Circuit initially stayed the mandate. However, when the cases were consolidated before the Sixth Circuit, that court lifted the stay and allowed the mandate to take effect on January 10, holding that OSHA's mandate was likely consistent with the agency's statutory and constitutional authority.

Various parties then sought emergency relief from the Supreme Court, arguing that the mandate exceeds OSHA's statutory authority and is otherwise unlawful. The Court consolidated two of those applications—one from the National Federation of Independent Business, and one from a coalition of states—and heard expedited argument on January 7, 2022.

In a per curium decision issued on January 13, 2022, the Supreme Court held that the applicants are likely to prevail on appeal, and granted their applications to stay the mandate. Justices Kagan, Sotomayor, and Breyer dissented.

The Supreme Court's Decision

In National Federation of Independent Businesses v. Department of Labor and Ohio v. Department of Labor, the Court held that the applicants are likely to succeed on the merits of their claim that the Secretary of Labor lacked authority to impose the mandate.

The Court explained that OSHA is charged with regulating "occupational" hazards and the safety and health of "employees"—not setting "broad health measures." The Court continued, "Permitting OSHA to regulate the hazards of daily life—simply because most Americans have jobs and face those same risks while on the clock—would significantly expand OSHA's regulatory authority without clear congressional authorization . . . imposing a vaccine mandate on 84 million Americans in response to a worldwide pandemic is simply not 'part of what the agency was built for.'"

The Court did note, however, that OSHA has authority to regulate occupation-specific risks related to COVID–19, such as where the virus poses a special danger because of the particular features of an employee's job or workplace. As examples, the Court mentioned scientists researching COVID, or employees working in particularly crowded or cramped environments. In these instances, the Court explained, "the danger present in such workplaces differs in both degree and kind from the everyday risk of contracting COVID–19 that all face." Additionally, in a separate, simultaneously released ruling on the administration’s vaccination rules for health-care workers, a 5-4 majority sided with the Biden administration.

What's Next?

Although the Court has not struck down the mandate, such a decision appears to be on the horizon. For the time being, the mandate is stayed, meaning that employers do not need to proceed with enforcing vaccination policies or testing unvaccinated employees.

The mandate will now go back to the Sixth Circuit, which will consider the law on the merits (as opposed to whether it should be stayed). After that, the Supreme Court will decide the applicants' petitions for writs of certiorari, assuming such writs are timely sought. Should these petitions be denied—which appears unlikely—the Court's order will terminate automatically. In the event the petitions for writs are granted, the order will terminate upon the sending down of the judgment of this Court.

In other words: even if the Sixth Circuit does not strike down the mandate, it will not take effect until the Supreme Court decides otherwise. This is a huge win for retailers, which had been scrambling to comply with the mandate's strict timeline, while at the same time dealing with supply chain issues, staffing issues, and the ongoing impact of COVID–19 more broadly.