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Supreme Court Stays OSHA’s Vaccination and Testing ETS But Permits Enforcement of the CMS Healthcare Vaccine Mandate

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In an unsigned opinion issued yesterday, the U.S. Supreme Court stayed the implementation of OSHA’s COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS), agreeing with numerous challengers that the ETS exceeded OSHA’s authority. The decision likely means that the ETS will never be implemented in its current scope. The court, however, signaled a general acceptance to a vaccine mandate for high risk workers, such as healthcare providers.

Procedural Background

OSHA issued the ETS on November 5, 2021. Under the ETS, which applies to most employers with 100 or more employees, employers must require employees either to provide acceptable proof of vaccination status or provide evidence of a negative COVID-19 test every seven days.

Numerous parties challenged the ETS in every federal circuit. The Fifth Circuit stayed the ETS and enjoined OSHA from taking any steps to enforce or implement it. The Judicial Panel on Multidistrict Litigation selected the Sixth Circuit to hear all pending challenges. In the Sixth Circuit, OSHA moved to dissolve the Fifth Circuit’s stay. Challengers opposed that request, and many asked the Sixth Circuit to consider both the stay and the merits of the challenges en banc from the outset rather than through a three-judge panel.

The Sixth Circuit denied the requests for initial en banc consideration. Chief Judge Sutton, joined by seven other active duty Sixth Circuit judges, dissented from that decision and argued at length that OSHA had exceeded its statutory authority in issuing the ETS.

A few days later, a three-judge panel of the Sixth Circuit issued an order dissolving the Fifth Circuit’s stay, with one judge on the panel dissenting. Several challengers immediately asked the Supreme Court to reinstate a stay while the merits of the dispute are litigated.

The Decision

The Supreme Court began its analysis with the text of the Occupational Safety and Health Act (the OSH Act). The court emphasized that, as the agency’s name suggests, “OSHA is tasked with ensuring occupational safety—that is, ‘safe and healthful employment.’” OSHA usually must develop its standards through a process that provides adequate notice and opportunity to comment.

The OSH Act does allow for emergency temporary standards, but only upon a showing that (1) “employees are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful or from new hazards,” and (2) that the “emergency standard is necessary to protect employees from such danger.”

Echoing Sixth Circuit Chief Judge Sutton’s dissent, the court noted that the ETS was no “everyday exercise of federal power.” As a result, such “a significant encroachment into the lives—and health—of a vast number of employees” requires clear congressional authorization.

But the court determined that OSHA lacked such clear authorization for the ETS. Rather, the OSH Act empowers OSHA “to set workplace safety standards, not broad public health measures.” The court rejected the government’s argument that the risk of contracting COVID-19 always qualifies as a work-related danger: “Although COVID-19 is a risk that occurs in many workplaces, it is not an occupational hazard in most.” Permitting OSHA to regulate “the hazards of daily life” would significantly expand the agency’s authority without clear congressional authorization.

The court did not question OSHA’s authority to regulate specific occupational risks associated with COVID-19, such as in crowded or cramped workplaces. But the court faulted OSHA for adopting an “indiscriminate” approach that failed to account for the distinction between occupational risk and risk more generally. The fact that OSHA had never before adopted such a broad public-health regulation was a “telling indication” to the court that the ETS exceeded the agency’s legitimate reach.

Having concluded that OSHA exceeded its authority, the court stayed the ETS until the outcome of the challenges pending in the Sixth Circuit MDL and any future petitions for writs of certiorari.

Justice Gorsuch’s Concurrence

Justice Gorsuch wrote a concurrence in which Justices Thomas and Alito joined. For Justice Gorsuch, the question was “not how to respond to the pandemic, but who holds the power to do so.” In his opinion, a federal agency like OSHA clearly lacked the authority to issue a national public-health regulation like the ETS.

As he had at oral argument, Justice Gorsuch focused on the “major questions” doctrine. Under that doctrine, the court “’expect[s] Congress to speak clearly’ if it wishes to assign to an executive agency decisions ‘of vast economic and political significance.’” The OSH Act’s provision allowing for emergency temporary standards, wrote Justice Gorsuch, “does not clearly authorize OSHA’s mandate.” Justice Gorsuch noted that the nondelegation doctrine similarly “ensures democratic accountability by preventing Congress from intentionally delegating its legislative powers to unelected officials.” Both doctrines are designed “to protect the separation of powers and ensure that any new laws governing the lives of Americans are subject to the robust democratic processes the Constitution demands,” and serve to prevent “government by bureaucracy supplanting government by the people.”

As applied to the ETS, wrote Justice Gorsuch, OSHA’s ETS failed the “major questions” doctrine by lacking a clear congressional mandate; if such statutory authority existed, he concluded that it would likely “constitute an unconstitutional delegation of legislative authority.”

The Dissent

Justice Breyer dissented, joined by Justices Sotomayor and Kagan. Justice Breyer believed that the OSH Act provides clear congressional authority for the ETS and that the court was both misinterpreting applicable legal standards and “[a]cting outside of its competence” in staying the ETS’s implementation.

Justice Breyer focused on the requirements for a stay, which require an applicant to show that “(1) that their ‘claims are likely to prevail,’ (2) ‘that denying them relief would lead to irreparable injury,’ and (3) ‘that granting relief would not harm the public interest.’” Justice Breyer concluded that the ETS challengers had not met any of these requirements.

Justice Breyer concluded that the challengers are unlikely to prevail because the ETS “perfectly fits the language of the applicable statutory provision.” Referring to the OSH Act’s requirements for an emergency temporary standard, COVID-19 is a “new hazard” and a “physically harmful” agent that poses a “grave danger” to millions of employees, and the ETS is “necessary” to address it.

Justice Breyer complained that the court imposed on OSHA a limit “found no place in the governing statute” and that “OSHA has long regulated risks that arise both inside and outside of the workplace.” Instead, wrote Justice Breyer, the court ignored OSHA’s findings that COVID-19 poses special risks in most workplaces, across the country and across industries. By overturning the ETS, the court “substitutes judicial diktat for reasoned policymaking.”

Even if the merits questions were close, said Justice Breyer, the court still “badly erred” in granting a stay. For Justice Breyer, the balance of equities heavily favored the government. The public interest in protecting workers from disease and death “overwhelms the employers’ alleged costs” in complying with the ETS.

Justice Breyer did agree with Justice Gorsuch that the fundamental question presented was who decides what protections American workers need from COVID-19. But for Justice Breyer, the answer was clearly the “agency with expertise in workplace health and safety, acting as Congress and the President authorized,” and not “a court, lacking any knowledge of how to safeguard workplaces, and insulated from responsibility for any damage it causes.”

The Decision’s Implications

The Supreme Court’s decision, although nominally limited to whether the ETS should be temporarily stayed, likely means that the ETS will never be implemented. The decision left little room for the Sixth Circuit to conclude that OSHA had the authority to issue the ETS. The ETS may thus suffer the same fate as many other OSHA emergency temporary standards. Not counting the COVID-19 rule, OSHA had issued ten other ETSs. Six were challenged in court; only one survived.

That does not mean that OSHA has no options going forward. Shortly after the decision came out, U.S. Secretary of Labor Marty Walsh said that, despite the stay, “OSHA will be evaluating all options to ensure workers are protected” from COVID-19 and that “OSHA will do everything in its existing authority to hold businesses accountable for protecting workers, including under the COVID-19 National Emphasis Program and General Duty Clause.”

Next Steps for Employers with 100+ Employees

Employers should continue evaluating whether they are taking reasonable precautions to protect their employees from COVID-19 hazards under current OSHA and CDC guidance. OSHA may also issue new guidance or consider more tailored COVID-19 regulations following a notice-and-comment procedure.

In addition, employers who have not completed their roster of employees’ vaccine status information or developed a draft policy implementing the ETS may want to finish these tasks in case portions of the ETS becomes enforceable again, or if OSHA issues new guidance or regulations requiring employers to do so. Given that the ETS is not enforceable, employers that have implemented a vaccine mandate must consider whether the mandate complies with any state or local restrictions on such mandates.

State OSHA Impacts

Since the Supreme Court’s stay of the Vaccination and Testing ETS was based on Congressional delegation of rulemaking authority to OSHA, the decision is only applicable to federal OSHA and the federal OSH Act. The decision does not apply to State OSH agencies with regulatory authority stemming from state statutes. Thus, although State OSH agencies are no longer obligated to issue standards equivalent to the ETS, they may still do so on their own accord, so long as they do not violate applicable state laws that limit vaccine mandates. Some states, including California, Virginia, Washington, and Oregon, have already adopted COVID-19 standards similar to the ETS. However, others, such as Iowa, have expressly declined to do so.

CMS Healthcare Vaccine Mandate Remains Effective

Despite staying the Vaccination and Testing ETS, in Biden v. Missouri, the Supreme Court granted the government’s request for a stay of the injunctions preventing enforcement of the rule requiring that facilities that receive Medicare/Medicaid funding ensure that their staff are vaccinated.

The opinions draw a distinction between the Secretary of Labor/OSHA, who is responsible for workplace safety, and the Secretary of Health and Human Services, whose responsibilities include ensuring that healthcare providers who care for Medicare/Medicaid patients protect their patients’ health and safety. One such protection is to have an infection prevention program to prevent the transmission of communicable diseases. The court held that the rule requiring COVID-19 vaccinations “fits neatly within the language of the statute.”

Further, the majority opinion recognized that the mandate was overwhelmingly supported by healthcare workers and public care organizations, stating, “Indeed, their support suggests that a vaccination requirement under these circumstances is a straightforward and predictable example of the ‘health and safety’ regulations that Congress has authorized the Secretary to impose.”

Justice Thomas dissented, joined by Justices Alito, Gorsuch, and Barrett, arguing that the government had not made the “strong showing” required to issue a stay or that the Department of Health and Human Services has the statutory authority to require vaccinations. As stated in the majority opinion regarding the Vaccination and Testing ETS, the dissent argued that Congress is expected to “speak clearly when authorizing an agency to exercise powers of vast economic and political significance.”

Where Government Contractors Currently Stand

Federal contractors and subcontractors are left wondering how these opinions will affect the federal contractor vaccine mandate. Executive Order 14042, as implemented through guidance issued by the Safer Federal Workforce Task Force, requires the employees of federal contractors and subcontractors to become fully vaccinated. This mandate is expansive, requiring vaccination not only of workers who perform a covered federal contract, but workers who work “in connection with” such contracts, or at a “covered workplace.”

As litigation proceeded to successfully stay the Vaccination and Testing ETS, states and other parties filed similar lawsuits seeking to enjoin the federal contractor vaccine mandate in Kentucky, Georgia, Florida, Louisiana, Texas, and Missouri. Federal trial courts issued injunctions staying the mandate in Kentucky, Florida, Missouri, and Louisiana, and a nationwide injunction on enforcement was issued in Georgia v. Biden. All of these cases have been appealed, and so far the government requested a stay of the trial court’s injunctions in Georgia and Kentucky. Both the Eleventh Circuit and the Sixth Circuit declined the stay. The Sixth Circuit issued a lengthy opinion holding that the government is unlikely to succeed in its argument that the Property Act authorizes the vaccine mandate, finding that the government was not only unable to show that it would be irreparably injured absent a stay but also unlikely to succeed on the merits. The Safer Federal Workforce Task Force has posted a statement on its website that the government is not enforcing the Executive Order in the United States or surrounding areas.

No matter how the courts of appeals decide the federal contractor mandate question, it seems likely that the government will continue to argue that the mandate is lawful. Even though the Supreme Court’s stay of the injunction preventing enforcement of the CMS Healthcare Vaccine Mandate may give the government hope that the federal contractor mandate will be treated the same way, it seems more likely that this mandate is comparable to the Vaccination and Testing ETS. The Supreme Court is likely to ask how the Property Act empowers the President and the Safer Federal Workforce Task Force to set “broad public health measures,” like mandatory vaccinations, which the court held that OSHA was not authorized to implement, in contrast to the health and safety regulations that “fit neatly” into the authority of Secretary of Health and Human Services over Medicare/Medicaid funded facilities.

 

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