In Conflict with Earlier Decisions from 5th, 6th, and 11th Circuits, 9th Circuit Upholds President’s Authority to Order Federal Contractor-Vaccine Mandate

Last week, the US Court of Appeals for the Ninth Circuit overturned an Arizona federal district court’s permanent injunction against President Biden’s September 9, 2021, Executive Order 14042 (the “Contractor Mandate”), which mandated COVID-19 vaccines for federal contractors.¹ The appeals court held that under the Procurement Act, the President has broad authority to issue such an order.² The Ninth Circuit’s decision conflicts with earlier decisions from the Fifth, Sixth, and Eleventh Circuits, all of which upheld injunctions restraining the Administration’s efforts to protect contractor personnel during the pandemic based on their determinations that President Biden had exceeded his authority under the Procurement Act.

Despite the Ninth Circuit’s favorable ruling, the government continues to refrain from enforcing the contractor-vaccine mandate. The Ninth Circuit’s decision is explained below, as well as what it means for federal contractors and future federal efforts to implement vaccine policy by means of a contractor mandate, in light of the enactment of H.J. Res. 7 ending the national emergency related to the COVID-19 pandemic.

Ninth Circuit Decision

On April 19, 2023, a panel of the Ninth Circuit reversed the lower court decision, which had enjoined the government from enforcing the contractor-vaccine mandate in any contract in which a contracting party was domiciled or headquartered in Arizona, or in which Arizona is the contract’s principal place of contract performance.

The Ninth Circuit held that when the administration issued the vaccine mandate, the president “appropriately relied on [the Procurement Act]³ that gave him the necessary flexibility and broad-ranging authority to ensure economy and efficiency in federal procurement and contracting.” The court also concluded that “[t]he president issued the contractor mandate following the required procedural measures, and the mandate became effective upon a reasoned determination of its benefits by the [Office of Management and Budget].” (Mayes v. Biden, at *49.)

The Ninth Circuit has never before “addressed the scope of the President’s authority under the Procurement Act,” but in its review here, found that “under either the D.C. or Fourth Circuit’s tests, the Contractor Mandate falls within the President’s Procurement Act authority.” (Id. at *37, *39.)Under the D.C. Circuit’s “close nexus” test, the president must demonstrate a “‘sufficiently close nexus’ between an order issued pursuant to the Procurement Act and the statutory goals of economy and efficiency.’” (Id. at *38.) The Fourth Circuit “requires a finding that the executive branch policies are ‘reasonably related to the Procurement Act’s purpose.’” (Id.)  

The Ninth Circuit also held that the Procurement Act “leaves room for the President’s discretion by directing the President to ‘prescribe policies and directives that the President considers necessary’ to carrying out the purposes of the Act. 40 U.S.C. § 121(a) (emphasis added).” (Id. at *39.)

Further, while the Fifth Circuit held that the vaccine mandate violated the major questions doctrine, which “requires that Congress speak clearly if it wishes to assign to an agency decisions of vast economic and political significance” through legislation, the Ninth Circuit ruled the doctrine is not applicable to the vaccine mandate. (Id. at *6.) The Ninth Circuit explained that the doctrine does not apply to presidential actions, but only to those by federal agencies. The court stated that “[t]here is no relevant agency action here, and the doctrine does not apply to actions by the President.” (Id.) The court went even further and found that, even if the major questions doctrine applied, “it would not bar the Contractor Mandate because the Mandate is not a transformative expansion of the President’s authority under the Procurement Act. The Contractor Mandate is not an exercise of regulatory authority at all, but of proprietary authority.” (Id.)

TAKEAWAYS

Although the declared national emergency related to the COVID-19 pandemic is over, the three-to-one circuit split creates uncertainty about the scope of the executive branch’s authority under the Procurement Act. It is only a matter of time until a President uses the Act to compel contractors to take an action under a future national emergency.

Given the complexity of enforcing the mandate with three injunctions still in effect from the Fifth, Sixth, and Eleventh Circuits, and because the national emergency is over, it appears likely that the government will continue its non-enforcement of EO 14042’s vaccine-mandate. Contractors should monitor the Safer Federal Workforce’s website for any potential changes to that policy.

 

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¹ Mayer Brown has issued multiple past updates regarding President Biden’s contractor-vaccine mandate available: Executive Orders Place US Federal Contractors and Employers at Forefront of New COVID Mandates; US Issues Federal Agency COVID Contract Clause and Policy Direction Along with Immediate DoD and GSA Implementation; Updates to the US Federal Contractor Vaccine Mandate—But Will They Matter?; US Federal Court Preliminarily Enjoins Vaccine Mandate for Federal Contractors in KY, OH and TN; US Federal Court Preliminarily Enjoins Vaccine Mandate for Federal Contractors Nationwide and the Government Responds; Another US Federal Court Preliminarily Enjoins Contractor COVID Vaccine Rule; US Sixth Circuit Denies Government’s Request to Stay Injunction Blocking Federal Contractor Vaccine Mandate, Fifth Circuit Decision to Follow; Arizona’s Federal District Court Preliminarily Enjoins Federal Contractor Vaccine Mandate; US Eleventh Circuit Affirms Injunction Against Federal Contractor Vaccine Mandates But Limits Previously Nationwide Scope;  OMB Guidance Potentially Resurrects US COVID-19 Vaccine Mandate for Government Contractors; and US Federal Contractor Vaccine Mandate Dealt Blows by 5th and 6th Circuits.

² Kristin Mayes, et al v. Biden, No. 22-15518, Doc. 12698270 (9th Cir. Apr. 19, 2023) (“Mayes v. Biden”).

³ The Procurement Act is also known as the Federal Property and Administrative Services Act or “FPASA” and is codified at 40 U.S.C. § 101 et seq.