Fifth Circuit Blocks COVID Vaccine Mandate for Federal Contractors

On December 19, 2022, the Fifth Circuit Court of Appeals upheld a Louisiana District Court’s preliminary injunction blocking the Biden Administration’s vaccine mandate for federal contractors.
What does that mean for businesses that would have been affected by the mandate? Below, we will discuss the Fifth Circuit’s Opinion in State of Louisiana v. Biden, including:

• What the injunction means for businesses in Texas and across the country,
• What federal actions were blocked by the injunction,
• The Court’s reasoning for blocking the vaccine mandate, and
• Other court cases challenging the Biden Administration’s federal vaccine mandates.

Fifth Circuit Blocks COVID Vaccine Mandate for Federal ContractorsIn State of Louisiana v. Biden, the states of Louisiana, Mississippi, and Indiana filed suit in the Western District of Louisiana asking for a preliminary injunction blocking the Biden administration’s “federal contractor mandate” that requires federal contractors to ensure that their employees are vaccinated against COVID-19.
The grant of an injunction doesn’t mean that the states have won their case, but it does 1) prevent enforcement of the mandate and 2) signal that the district court and the Fifth Circuit Court of Appeals are likely to agree with the plaintiff States that the federal contractor mandate is an overreach of presidential authority and should be invalidated.
What is the immediate effect of this court opinion?
For now, the vaccine mandate is unenforceable per the preliminary injunction, but all affected parties should continue to monitor this and similar cases until the US Supreme Court decides the issue.
Four Actions that Make Up the “Federal Contractor Mandate”What is the federal contractor mandate?
The lawsuit challenged four executive actions the Biden Administration took in response to the COVID-19 pandemic that would require all federal contractors to include in their contracts a clause requiring all employees to be fully vaccinated against COVID-19.
These include:

1. President Biden’s September 9, 2021, Executive Order requiring government contractors to include a clause in all contracts requiring all contractors and subcontractors to comply with guidance for workplace safety published by the Safer Federal Workforce Task Force,
2. The guidance issued by the Task Force on September 24, 2021, that requires all covered contractors to ensure that all covered contractor employees are vaccinated for COVID-19 unless they are entitled to an accommodation,
3. The Office of Management and Budget (OMB)’s determination that the Task Force guidance “will improve economy and efficiency by reducing absenteeism and decreasing labor costs for contractors and sub-contractors working on or in connection with a Federal Government contract,” and
4. A memorandum issued by the Federal Acquisition Regulation (FAR) Council urging federal agencies to act quickly to amend their contractual clauses to comply with the Task Force’s guidance.

What is the Court’s Reasoning for Blocking the Vaccine Mandate?The Fifth Circuit’s majority opinion found that the President’s Executive Order imposing the federal contractor mandate exceeds the President’s authority under the Procurement Act.
The Procurement Act provides broad authority to the executive to “prescribe policies and directives that [he] considers necessary to carry out this subtitle” to “provide the Federal Government with an economical and efficient system,” provided that “[t]he policies [are] consistent with this subtitle.”
The Plaintiff States’ complaint is that this is too broad a grant of authority and that requiring federal contractors to require their employees to be vaccinated against COVID-19 was an abuse of power that negatively affects contractors within their states.
The Fifth Circuit agreed, finding that “[t]he pandemic, challenging as it has been for the president, the legislature, the courts, and especially the populace, does not justify such an enormous and transformative expansion of presidential authority.”
The Court holds that 1) the Procurement Act does not give the President the power to require vaccination of federal employees and 2) if the Procurement Act does give the President the power to require vaccinations, that power is limited by the “Major Questions Doctrine.”
What is the Major Questions Doctrine?The Fifth Circuit held that the Major Questions Doctrine prohibits the President’s Executive actions in imposing the federal contractor mandate because it would be an “enormous and transformative expansion” of the President’s power under the Procurement Act.
The Fifth Circuit says that “[u]nder Supreme Court precedent, this 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,” although the Supreme Court has never held that the Major Questions Doctrine applies to presidential authority. Rather, it has only been invoked by the Supreme Court to strike down actions by government agencies.
​
When has the Supreme Court Struck Down Presidential Actions Under the Procurement Act?
Never…
The Fifth Circuit’s opinion may leave some confusion, as the Court systematically lists cases where executive actions taken pursuant to the Procurement Act have repeatedly been affirmed by the courts or have gone unchallenged, including:

• Wage and price requirements in the D.C. Circuit in Fed’n of Lab. & Cong. of Indus. Organizations v. Kahn (the D.C. Circuit also noted that “the early anti-discrimination orders were issued under the President’s war powers and special wartime legislation, but for the period from 1953 to 1964 only the [Procurement Act] could have provided statutory support for the Executive action”),
• Anti-discrimination requirements were upheld by the Third Circuit in Farmer v. Phila. Elec. Co. (“we have no doubt that the applicable executive order and regulations have the force of law’),
• Anti-discrimination requirements that were upheld by the Fifth Circuit in Farkas v. Texas Instrument, Inc. (“[w]e would be hesitant to say that the anti-discrimination provisions of Executive Order No. 10925 are so unrelated to the establishment of ‘an economical and efficient system for… the procurement and supply’ of property and services that the order should be treated as issued without statutory authority”),
• Affirmative action requirements that were upheld by the Third Circuit in Contractor’s Association of Eastern Pennsylvania v. Secretary of Labor,
• A requirement that contractors post notices informing employees that they do not have to pay union dues was upheld by the DC Circuit in UAW-Labor Employment & Training Corp. v. Chao,
• Anti-discrimination requirements were upheld by the US Supreme Court in Chrysler Corp. v. Brown,
• A requirement that contractors use an electronic employment eligibility verification system to identify illegal immigrants was upheld by the DC Circuit in Chamber of Commerce of US v. Napolitano, and
• A requirement that federal contractors provide paid sick leave was never challenged in the courts.

Despite the Fifth Circuit’s conclusion that they “cannot permit such a mandate to remain in place… under Supreme Court precedent,” there is no such precedent.
The Fifth Circuit also notes that “there is no direct, binding authority on the scope of presidential authority under the Procurement Act” and that “courts have generally landed on a ‘lenient’ standard’” where executive actions under the Procurement Act are affirmed when the President demonstrates a “sufficiently close nexus” between the requirements of the executive order and “the values of economy and efficiency.”
What the Fifth Circuit decided is that, although an executive order issued pursuant to Procurement Act powers has never been invalidated, this time was a bridge too far and the vaccine mandate exceeded the scope of the President’s authority.
Other Cases Challenging the Biden Administration’s Vaccine MandatesOther cases have been filed challenging the Biden Administration’s federal contractor mandate and other vaccine mandates.
Notably, the Eleventh Circuit also upheld a preliminary injunction prohibiting enforcement of the federal contractor mandate in August 2022, although the injunction is limited to the states of Georgia, Alabama, Idaho, Kansas, and South Carolina.
In January 2022, the Supreme Court upheld a preliminary injunction prohibiting the enforcement of a vaccine mandate issued by the Occupational Safety and Health Administration that would have covered nearly all employers in the US with at least 100 employees, finding that the mandate exceeded OSHA’s statutory authority.
Although there has never been a case in any circuit striking down an executive order issued pursuant to the Procurement Act, the recent trend in courts nationwide has been to limit the government’s ability to impose vaccination requirements on employers.
The federal contractor mandate may be the first case where the Supreme Court finds that a president has exceeded his or her authority under the Procurement Act.
Please feel free to contact one of our Murray Lobb attorneys to obtain our legal advice regarding your business’ COVID-19 vaccination policy or compliance with federal vaccine mandates. We also remain available to help you with all your general business, corporate, and estate planning needs.