55 F.4th 1017
5th Cir.2022Background
- President Biden issued Executive Order 14042 (Sept. 2021) directing agencies to insert contract clauses requiring compliance with Safer Federal Workforce Task Force guidance; the Task Force guidance required covered contractor employees to be fully vaccinated (with limited accommodations).
- OMB issued a short finding (Sept. 28, 2021) and later a longer OMB Determination ratifying the Task Force guidance; the FAR Council issued a memo urging agencies to implement contract deviations promptly.
- The mandate would reach nearly all federal contractors and their workforces (the government estimates ~20% of U.S. workers are employed by federal contractors).
- Louisiana, Indiana, and Mississippi (as federal contractors) sued in W.D. La. seeking a preliminary injunction; the district court enjoined application of the mandate to those states and stayed the case pending appeal.
- The Fifth Circuit affirmed the district court’s preliminary injunction, holding the Executive Order exceeded the President’s authority under the Procurement Act (and implicating the major-questions principle); the court also found the States established irreparable harm and that the balance of equities and public interest favored an injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Validity of EO under the Procurement Act / scope of presidential authority | EO exceeds the Procurement Act and intrudes on state police powers; no clear congressional authorization for an expansive employee vaccination mandate | EO is a proper exercise of proprietary procurement authority; it bears a close nexus to economy and efficiency and is a routine contract term | Court held EO unlawful under the Procurement Act as an unprecedented, ‘‘enormous and transformative’’ use of authority; major-questions concerns limit the exercise of such power |
| 2) Procedural validity of implementing documents (OMB finding, FAR memo, notice-and-comment) | OMB/FAR actions bypass APA notice-and-comment and exceeded statutory procedural limits; FAR Memo went beyond EO scope | OMB determination supplied necessary support; implementation steps were lawful and appropriate | The court did not need to decide the procedural challenges; it resolved the case on the substantive exceedance of authority (declined to reach procedural validity) |
| 3) Irreparable harm for preliminary injunction | States would suffer nonrecoverable compliance costs, loss of employees, and sovereign injuries if forced to comply | Harm speculative; compliance costs are recoverable or minor; employee loss rates uncertain | Court agreed States showed likely irreparable harm (nonrecoverable compliance costs and likely workforce disruption) |
| 4) Balance of equities and public interest | Enjoining unlawful action serves the public interest and prevents greater harm to States and employees | Delaying EO harms contract performance and public health; pandemic response should be left to executive | Court held balance and public-interest factors favor injunction (no public interest in perpetuating unlawful action) |
Key Cases Cited
- Nat'l Fed'n of Indep. Bus. v. Dep't of Lab., Occupational Safety & Health Admin., 142 S. Ct. 661 (2022) (Supreme Court’s review of OSHA vaccine-or-test mandate and major-questions framing)
- Util. Air Regul. Grp. v. EPA, 573 U.S. 302 (2014) (major-questions doctrine requires clear congressional authorization for decisions of vast economic and political significance)
- Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (courts skeptical of agencies discovering expansive authority in long-extant statutes)
- Am. Fed'n of Labor & Cong. of Indus. Orgs. v. Kahn, 618 F.2d 784 (D.C. Cir. 1979) (Procurement Act cases applying a ‘‘nexus to economy and efficiency’’ standard)
- UAW-Labor Emp't & Training Corp. v. Chao, 325 F.3d 360 (D.C. Cir. 2003) (upholding an EO under a lenient nexus test linking procurement requirements to economy and efficiency)
- Contractors Ass'n of Eastern Pa. v. Sec'y of Labor, 442 F.2d 159 (3d Cir. 1971) (Procurement Act used to justify affirmative-action contract provisions)
- Farmer v. Phila. Elec. Co., 329 F.2d 3 (3d Cir. 1964) (early precedent recognizing executive contractual requirements)
- Farkas v. Texas Instrument, Inc., 375 F.2d 629 (5th Cir. 1967) (discussing executive-order contract terms in procurement context)
- Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994) (discussion of irrecoverable compliance costs as irreparable harm)
- BST Holdings, L.L.C. v. OSHA, 17 F.4th 604 (5th Cir. 2021) (Fifth Circuit analysis of a vaccine-related OSHA injunction and preliminary-injunction considerations)