Potential Traps for Federal Contractors with the COVID-19 Vaccine Mandate

On September 9 President Biden issued an executive order that required federal contractors to be vaccinated against COVID-19. He also asked the Labor Department to issue an emergency rule requiring all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any unvaccinated workers to produce a negative COVID-19 test at least once a week. There are many lingering questions about the details of the mandates and more guidance on the executive order is expected on Friday, but one thing is clear: implementation will be far from simple and contractors should take steps to prepare.

Contractors subject to either the executive order or the Labor Department’s upcoming emergency rule will have to comply not just with the mandate, but also be mindful of exemptions and accommodations for employees based on the 1990 Americans with Disabilities Act and be aware of Title VII of the 1964 Civil Rights Act’s requirement for religious accommodations.

Under the Americans with Disabilities Act, if an employee has a verified disability that prevents him or her from being vaccinated, then the employer must provide the employee with a reasonable accommodation. Currently, telework, wearing a mask and maintaining social distance while in the office have been the go-to accommodations for employers facing these kinds of requests. Whether that might change in light of the new mandates is hard to say; for example, if federal contractors are not given the option of weekly testing as an alternative to vaccination (which we expect will be the case), would testing be back on the table in the event of an accommodation request? Or, alternatively, will an employee be required to undergo weekly testing if he or she is unable to be vaccinated due to a disability? Testing is expensive over time and depending on who is forced to bear that cost may become a challenge based on the expense alone.

Religious accommodations present another potential challenge for employers. Under Title VII, a “sincerely held religious belief” may entitle an employee to religious accommodation, although personal and ethical anti-vaccination positions will not. Will it be incumbent on the employer to make this determination? And, if so, how will they do it? As noted, to be entitled to an accommodation, the employee must first demonstrate that they have a “sincerely held religious belief” that prevents them from receiving the vaccine. If an employee can meet that burden, his or her employer must engage in the interactive process to determine a suitable accommodation.

What is or is not a “sincerely held” religious belief has become a complicated issue. A number of websites have popped up offering free form letters for employees that do not want to be vaccinated based on dubious religious reasoning. Similarly, for every religious leader that urges their followers to get vaccinated, there is another leader urging their congregation to avoid the vaccine for any number of reasons. To add to the confusion, not all religious leaders of the same denomination agree. The pope has urged Catholics to get vaccinated while a number of cardinals and bishops have strongly opposed vaccination.

It is expected that businesses will see an uptick in religious and ethical accommodation requests in light of the vaccination mandates. Determining which are legitimate and which fall short of the “sincerely held” belief standard will require delicate handling.

Constitutionality of Vaccine Mandates

On hearing Biden’s announcement regarding the vaccine mandate for contractors and a similar requirement for federal employees, the first question in many people’s minds is whether they are even constitutional. It is highly likely that both Executive Order 14042 requiring contractors to get vaccinated and the upcoming Labor Department emergency rule will be challenged on constitutional or other grounds, but it is not at all clear what the outcome of those challenges may be or how long it would take to fully litigate these cases. These are unprecedented times.

That said, there is some legal precedent from the Supreme Court that may shed light on the issue. In 1905 the Supreme Court issued a decision in a case involving a man fighting to be exempt from a state-mandated smallpox vaccine. In a 7-2 decision, the high court upheld the lower court decision forcing the man to be vaccinated during the ongoing epidemic. While this case may support a finding of constitutionality for the current vaccine mandates, that case is different from the current situation in a key aspect; the mandating authority was the state, while in the present case, the authority is the federal government. This may prove to be a critical distinction. The powers of the federal government are much more limited than those of the states when it comes to such mandates, and much has changed since the date of this decision so that this decision may be of limited value. And even if these federal mandates are challenged in court, the inevitable passage of months and perhaps years during litigation may allow the federal government to reach its goal of enhancing vaccinations regardless of the ultimate outcome of any litigation.

The Labor Department rule being issued through the Occupational Safety and Health Administration as an emergency temporary standard may be a different story if litigated. OSHA has to stay within the parameters of the 1970 Occupational Health and Safety Act, which allows the Labor Department to put in place standards for workplace health and safety that companies operating in the United States must follow. The act also allows OSHA to publish an emergency temporary standard to push through urgent rules when “employees are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful” and when the standard is “necessary to protect employees from such danger.”

Does this standard include a danger from a virus such as COVID-19? And, if so, does the risk here rise to the level of a “grave” danger? That is largely unknown; emergency temporary standards are rarely used. In the 50-year history of OSHA, they have been issued only 10 times. Of these 10, four were invalidated or halted by a court and one was partially blocked. Unfortunately, this is not much history from which to glean any insight. But it does suggest that courts will strictly scrutinize OSHA’s use of an emergency temporary standard and we would expect the same here when the forthcoming standard is challenged in court. Given the politics behind the mandate, whether it is ultimately upheld is difficult to say.

The Takeaway

Constitutional or not, the contractor executive order is going into effect and will impact a significant segment of the federal contractor community, as the exemptions are fairly limited. The Labor Department rule will affect an even larger segment of the overall U.S. workforce. Every federal contractor will have to become familiar with the process for granting accommodations, as well as the privacy requirements of the Americans with Disabilities Act.

Federal contractors will also need to be prepared for incorporation of a new vaccine mandate contract clause into new contract awards as well as inclusion of the same requirements in modifications to contracts entered into prior to the executive order’s effective date, particularly through exercising options. Contractors should be prepared to identify any cost increases as a result of any such modifications and, if so, collect records to support any requests for equitable adjustment or claims.

Likewise, contractors should be attuned to contractual modifications that implement these requirements. It is not uncommon for modifications to be “bilateral,” or agreed to by the contractor, or include release of claims language. Contractors will need to ensure that they reserve and do not waive any rights they may have to recover for increased costs.

While we await additional guidance and possible legal challenges, employers are encouraged to take actions now such as:

• Determining whether they are covered by Executive Order 14042 or the upcoming Labor Department rule;
• Reviewing and updating existing vaccination policies or working with counsel to create a policy;
• Reviewing and understanding privacy requirements under the Americans with Disabilities Act; and,
• Developing a clear process for accommodations requests that comply with the ADA and the provisions of the executive order.

The edict from the White House is clear: the government expects everyone who can get vaccinated to get vaccinated. Pushing the responsibility from the individual to the employer may cause significant headaches, but it is also likely to assist with achieving the desired outcome. The impact of these mandates on federal contractors and employers with over 100 employees will be significant.