Court Issues Nationwide Injunction Halting Federal Landlord Vaccine Mandate

U.S. District Court Judge R. Stan Baker of the Southern District of Georgia on Dec. 7, 2021, issued a preliminary injunction, halting the government's enforcement of the vaccine mandate on all federal landlords and their subcontractors throughout the nation.

As discussed in a previous Holland & Knight alert, the federal contractor vaccine mandate stems from Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, which mandated the creation of a Federal Acquisition Regulation (FAR) clause requiring federal contractors and subcontractors to follow guidance published by the Safer Federal Workforce Task Force. The Task Force's guidance, as amended, requires covered federal contractor and subcontractor employees to be "fully vaccinated" no later than Jan. 18, 2022 (meaning employees must receive either the single-dose Johnson & Johnson vaccine or the second dose of the Pfizer or Moderna vaccine by Jan. 4, 2022). This requirement is now "on hold" for all federal landlords.

The Opinion

The court issued the opinion in response to a lawsuit filed in late October by several the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah and West Virginia; various state agencies and several Georgia universities.

The plaintiffs argued, among other things, that the president's executive order exceeded his authority under the Federal Property and Administrative Services Act (FPASA), 40 U.S.C. §§ 101–126, a statute designed to promote economy and efficiency in the federal procurement process. The court concluded that the plaintiffs were likely to succeed on the merits of their claim.

Key to the court's decision were the following conclusions: 

• The president likely exceeded his authority under FPASA. Invoking concerns behind the "major questions" doctrine – the idea that Congress does not leave massive economic and social policies to executive regulation alone – the court acknowledged that FPASA bestowed "some authority" on the government, but held that EO 14042 "goes far beyond" FPASA's purpose of addressing administrative and management issues in order to promote efficiency and economy in public procurement. Like the U.S. District Court for the Eastern District of Kentucky, the court here noted that FPASA had never before been used to enact public health measures or created such a burden on contractors. The court found that under the government's reasoning – "that, [t]o anyone who has lived through the COVID-19 pandemic and its resulting economic turmoil, the nexus between reducing the spread of COVID-19 and economy and efficiency is self-evident" – FPASA would be construed to allow the president to "impose virtually any kind of requirement" on contractors.
• Complying with the mandate would impose an "extreme economic burden" on government contractors. The court credited witness testimony describing "the incredibly time-consuming processes" government contractors have undertaken to comply with the mandate and to track which employees have been fully vaccinated. The court also expressed concern about the economic disruption contractors would face as they weighed whether to compete for government contracts and determined what to do with employees who have not provided proof of vaccination.
• The court declined to address the plaintiffs' contentions that the mandate was unconstitutional and violated the nondelegation doctrine and Administrative Procedure Act, noting that resolving these issues were unnecessary given the court's holding that the president likely exceeded his authority under FPASA.

As with the Kentucky order, the Georgia order enjoining the mandate is only preliminary and the federal government is likely to appeal, as it has in response to the injunction granted by the U.S. District Court for the Eastern District of Kentucky.

What Does the Injunction Mean for Federal Landlords – Particularly Those That Have Already Accepted Lease Modifications Incorporating FAR 52.223-99?

The Georgia order enjoined the government "during the pendency of [the] action or until further order of [the] Court, from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in any state or territory of the United States of America." (Emphasis added.)

Curiously, the order simply states that the "vaccine mandate" is enjoined. But, as noted, the "vaccine mandate" is part of the Task Force's guidance, which is incorporated into covered contracts and lease agreements pursuant to FAR 52.223-99(c):

(c) Compliance. The Contractor shall comply with all guidance, including guidance conveyed through Frequently Asked Questions, as amended during the performance of this contract, for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force (Task Force Guidance) at https:/www.saferfederalworkforce.gov/contractors/ 

Thus, for lessors that have already accepted a lease modification incorporating FAR 52.223-99 – which the General Services Administration (GSA) previously claimed to be a "mandatory" modification and urged lessors to accept otherwise risk adverse action – compliance with the clause (and thus the vaccine mandate) would seem to be a contractual obligation, notwithstanding the preliminary injunction.

GSA, apparently acknowledging the ambiguities of the order, posted the following guidance:

Update: On December 7, 2021, the United States District Court for the Southern District of Georgia issued a preliminary injunction [PDF - 544 KB] which halts enforcement of the vaccine mandate for contractors and subcontractors nationwide.

What does this mean?
Effective immediately, the Federal Government is prohibited from enforcing a vaccine mandate for contractors and subcontractors in all states and territories of the United States. GSA contracting officers shall not take any action to enforce the vaccination requirements in FAR clause 52.223-99 Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors in any contract or contract-like instrument.

What does it mean to "not enforce" the clause?

1. Contractor and subcontractor employees do not have to meet the vaccination mandate in the Safer Federal Workforce Task Force Guidance

2. Contractors will continue to be eligible for new contracts, new orders, options, and extensions even if they have not agreed to follow FAR clause 52.223-99.

Conclusion and Takeaways

GSA's position appears to be that the government cannot enforce the vaccine requirement of FAR 52.223-99 – leaving open the possibility of enforcing the masking and physical distancing requirements of the Task Force's guidance (at least for those lease agreements that are already subject to the clause).

With regard to the second point – "Contractors will continue to be eligible for new contracts …" – this seems to be a reversal from GSA's earlier position, in which GSA told lessors that acceptance of a modification incorporating FAR 52.223-99 was "mandatory" and that their contracts/leases would not be eligible for options/extensions/renewals until the clause was accepted.

Based on GSA's guidance, and consistent with the Georgia order, GSA lessors have a reasonable basis for not meeting the Jan. 18, 2022, vaccination deadline imposed by the Task Force's guidance.

Lessors should also bear in mind:

• Several other lawsuits challenging the vaccine mandate continue to make their way through federal district courts across the country. With this order, contractors are not required, for now, to comply with the mandate. But contractors should still be prepared for the possibility of a successful appeal and a jurisdictional patchwork of enjoined and nonenjoined states.
• The Task Force has already issued updated guidance, pushing the vaccine deadline back from December until January. And the Office of Management and Budget (OMB) has issued a revised determination, revoking an earlier, less-robust determination and providing additional support for the mandate. While the U.S. Department of Justice litigates the mandate challenges in court, the Task Force and OMB may take more action in hopes of strengthening the mandate's viability.

Holland & Knight will continue to monitor and provide updates as they become available.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.