Tag: COVID-19

SCOTUS’s HOUSE CALL on Healthcare Industry: The Economic Impact of Mandatory Vaccination

The Supreme Court of the United States in a per curiam opinion on Jan. 13 ruled that the Secretary of HHS (United States Department of Health and Human Services) did not exceed his statutory authority in requiring that, in order to remain eligible for Medicare and Medicaid reimbursement, all healthcare providers except for physician offices not regulated by CMS (Centers for Medicare & Medicaid Services), organ procurement organizations, portable X-Ray suppliers and certain healthcare professionals solely engaged in fully remote telehealth, must insure that their employees be vaccinated against Covid-19. The Court in a 5-4 decision maintained that the Secretary had adequately examined alternatives to mandatory vaccination even though the Final Interim Rule went into effect immediately with no sunset provision nor any revisions or assessment of public comment which is usually required under 5 U.S.C. Sections 553(b), 553(c). Interestingly, the Court, both in its decision and its dissent, failed to consider the scientific data on natural immunity, the incident of Covid infection and recovery among healthcare workers, or the significant easing of both hospitalizations and mortality data from the most recent Covid mutation, which is now considered the dominant strain of infection, Omicron.[1] Of even greater concern coming from its decision is a possible grave consequence (unintended or not) of having nearly 3 million healthcare workers fired between the end of January and end of March 2022.

The decision will spur many healthcare providers to either consider downsizing its healthcare platform (eliminating elective surgeries, closing maternity wards, diverting critical patients to other facilities, moving patients into home care more rapidly, etc.) or seeking protection under the bankruptcy code to obtain some breathing room. According to the American Hospital Association (“AHA”), post-pandemic, and even before the Mandate decision, the collective turnover across ICU’s, nursing units and emergency departments has risen from 18% to 30%.[2] There is no doubt that when a nurse leaves a healthcare organization, the vacancy affects the cost of operation many more times the amount of salary paid to the nurse. According to Nursing Solutions, Inc., the average period of time it takes to fill a nursing position is 85 days — and more than three months for a specialized nursing position. While a replacement nurse is located, the healthcare organization must rely on “travelers” and direct care staffing agencies charging super competitive rates. Just in the last year the use of costly employment agencies to cover gaps in staffing is up by 250% over the last year, according to the Florida Health Care Association, Oct. 25, 2021. A turnover of a single nurse whose salary ranges from $28,800 to $51,700 can translate to an average of $3.6-$6.5 million cost to the healthcare organization, given such factors as the cost of reduced productivity of an employee in the weeks leading up to their departure, time between the departure and employee’s replacement, paid overtime to cover the replacement, hi-cost outside staffing agency fees, advertising for open positions, conducting background checks and credential verifications, training onboard new employees and climbing the learning curve on the new clinical culture.[3]

None of the above costs take into account additional expense burdens for healthcare organizations coming from the mounting labor shortage at the nursing assistant and home health aides level, which are considering leaving the healthcare setting in droves and making more money and less aggravation in the retail field. Bloomberg reports that there will be a shortfall of 3.2 million lower-wage workers among all the healthcare organizations by 2026.[4] What is the economic effect of the mandate on healthcare organizations? Well, it’s obvious that by early Spring of this year, there will be fewer healthcare workers and the costs of providing healthcare will go up in spite of an injection of an additional $10 billion of Phase 4 Provider Relief Funds under the CARES ACT. Will the economic stress create more interest in turning to bankruptcy alternatives to allow these organizations time to adjust to the new normal? Even before the mandate was issued, the AHA projected that hospitals would lose over $54 billion dollars in net income during 2021. That loss comes after accounting for the infusion of $176 billion in CARES ACT funding, which didn’t directly address the current dilemma of loss of manpower. It would be likely that the losses for 2022 will be even more dramatic. Additionally, what is not taken into account in these figures is the deepening insolvency affecting the Long Term Care Industry, where 86% of nursing homes and 77% of assisted living facilities have indicated that their workforce situation has gotten worse over the last three months.[5]

Certainly, the upcoming additional economic stress among heath care organizations from potential depletion of manpower will present several challenges within a bankruptcy setting. For one, practitioners will need to navigate how best to utilize post-petition cash between important manpower related objectives such as retention bonuses, paid time off, overtime payments, staffing agencies’ fees, recruiting, advertising, credentialling, and new employee policies, and equally demanding needs such as rent and other critical healthcare vendors. Particular attention will be given to carefully tailored DIP financing to insure the viability of the organization while in bankruptcy and through its exit. While private equity has taken larger and larger roles in healthcare, and its desire to utilize roll-ups and consolidations, specialists in healthcare financial advising will have to be employed to assist the economic constituencies in understanding the mechanism for exiting the bankruptcy, given the balancing act between workforce equilibrium and quality of continued care. Ultimately, more healthcare organizations will require strong healthcare insolvency professional guidance to find an appropriate refuge and fresh start in the trying months to come.

FOOTNOTES

[1]  Of note concerning the timing of its decision and its rationale based on the science, one of the Justices in oral argument believed that in January 2022, there were over 100,000 children in the US currently in the ICUs when the actual total was far less.  Additionally, though the Wall Street Journal reported on January 26, 2022 that the Centers for Disease Control and Prevention (“CDC”) stated that Covid-19 deaths in the U.S. topped 2,100 a day, the highest in nearly a year, the article quotes Robert Anderson, chief of mortality statistics, who says, “You can have a disease that is for any particular person less deadly than another, like Omicron, but if it is more infectious and reaches more people, then you’re more likely to have a lot of deaths.”  As this article is going to print, see, also, Dr. Martin Makary, “The High Cost of Disparaging Natural Immunity to Covid,” Wall Street Journal, Jan. 26, 2022, concluding that “the superiority of natural immunity over vaccinated immunity is clear”.

[2]  Dave Muoio, Pandemic-Era overtime, agency staffing costs U.S. hospitals an extra $24B per year, Fierce Healthcare, Oct. 8, 2021.

[3] See 2021 NSI National Health Care Retention & RN Staffing Report, published by NSI Nursing Solutions, Inc., March 2021.

[4]  Lauren Coleman Lochner, US Hospitals Pushed to Financial Ruin as Nurses Quit During Pandemic, Bloomberg, Dec. 21, 2021.

[5] See FTI Healthcare Industry Sector Outlook, FTI Consulting, December 2021.

This article was written by Frank P. Terzo of Nelson Mullins law firm. For more information about vaccine mandates, please click here.

The OSHA Mandate — Supreme Court Oral Argument Preview

Tomorrow morning (Friday, January 7), the Supreme Court hears oral argument in the OSHA (10 a.m. EST) and CMS (11 a.m. EST) mandate cases.  (You can listen to the arguments live here.)  For the OSHA mandate, one group of petitioners consists of a coalition of twenty-seven States, led by Ohio, and the other consists of a coalition of business associations.  We’ve read the briefs, and here are our issues to look out for tomorrow:

Whether OSHA may only regulate occupational dangers.  The petitioners argue that because the OSH Act and OSHA regulations are all concerned with occupational hazards, OSHA cannot regulate against a virus presenting a risk to all Americans.  Meanwhile, OSHA argues that the OSH Act is not limited to dangers that are workplace-specific, especially given Congress’ previous endorsement of OSHA’s measures to encourage vaccination against bloodborne pathogens.

Whether COVID-19 is a “grave danger” that represents a “new hazard.”  The States argue that the OSH ACT limits “grave danger” to those “from exposure to substances are agents determined to be toxic or physically harmful,” connoting toxicity and poisonousness.  Thus, it cannot refer to airborne viruses that are “both widely present in society” and “non-life-threatening to a vast majority of employees.”  OSHA argues that the statute’s disjunctive phrasing allows for an ETS targeting viruses that are physically harmful, or a “new hazard, even if not technically “toxic” in nature.

Whether there is an “emergency” to justify the ETS.  The petitioners continue to argue that nothing significant has changed over the past year the country had been living with the virus to justify finding an emergency.  OSHA responds by pointing to problems presented by the return to work, the Delta variant, and COVID fatigue.

Whether the ETS is “necessary.”  The States argue that the OSH Act imposes a higher standard:  while other regulations may be merely “reasonably necessary or appropriate,” the Act requires emergency regulations to be “necessary”—which the States read as essential or indispensable.  According to the States, the delay between the issuance of the ETS and the time it was supposed to go into effect dooms any argument that it is necessary.  The business associations, for their part, stress that OSHA could have gone through notice and comment proceedings months ago.  In OSHA’s view, the statute is not nearly so narrow and it is enough that workplaces contribute substantially to the spread of the virus and that vaccines are the best way to fight COVID-19.

The scope of relief.  The petitioners obviously want to stay the entire mandate—both the vaccine and masking/testing requirements.  OSHA argues that any stay should be limited to the vaccine requirement.

Major-questions doctrine and federalism canon.  The petitioners argue that these canons of construction require Congress to speak clearly when delegating major economic and political questions to agencies that alter the balance between federal and state governments.  OSHA argues that neither of these canons apply and, in any event, Congress did speak clearly, as evidenced by the fact that it recently allocated $100 million to OSHA to carry out COVID-19 related worker protection activities.

Facts outside the administrative record.   While the OSHA and CMS mandates are supposed to be judged according to the record — which makes much of the factual discussion seem a little dated in this fast-moving pandemic — we’ll be interested to see whether the Omicron variant, the recent spike in cases, and other relatively recent developments show up at oral argument.

And, maybe, a few Constitutional issues.  While constitutional issues like the Commerce Clause and Non-Delegation Doctrine might appear tomorrow, we expect the statutory arguments to dominate the discussion—exactly as they did in the parties’ Supreme Court and Sixth Circuit briefing and in most Sixth Circuit opinions.

We’ll be interested to see how the opinions of Judge Stranch, Judge Larsen, Judge Sutton, and Judge Bush influence the Justices’ approach to the legal and factual questions.

© Copyright 2022 Squire Patton Boggs (US) LLP
For more about OSHA litigation, visit the NLR Coronavirus News section.

COVID-19 Update: The CDC Issues New Isolation Guidance

On December 27, 2021, the CDC shortened its recommended isolation and quarantine periods for those infected with, or exposed to, COVID-19. Because the CDC’s Isolation Guidance is incorporated by reference into OSHA’s vaccination or test rule, larger employers should revise their policies to reflect these new guidelines in advance of the January 10th deadline for compliance. Here is a summary of the new isolation/quarantine periods:

Employees Who Have Tested Positive and are Asymptomatic

  • Isolate at home for five days.
  • Mask for five days after isolation period.

Employees Who Have Tested Positive and Have Symptoms

  • Isolate at home for five days and, if symptoms resolve during that time, the employee can leave isolation.
  • If the employee has a fever, the employee must remain isolated until the fever resolves.
  • Mask for five days after isolation period.

Employees Who Are Exposed to COVID-19 and Have Received Booster

  • No required isolation or quarantine.
  • Wear mask for 10 days.
  • Best practice: Test, if possible, five days after exposure.

Employees Who Are Exposed to COVID-19 and Completed Vaccination (Pfizer or Moderna) Within the Last Six Months or Received J&J Vaccine Within the Last Two Months 

  • No required isolation or quarantine.
  • Wear mask for 10 days.
  • Best practice: Test, if possible, five days after exposure.

Employees Who Are Exposed To COVID-19 and Are Unvaccinated or Completed Vaccination (Pfizer or Moderna) More Than Six Months Ago or Received J&J Vaccine More Than Two Months Ago

  • Stay home for five days.
  • Mask for five days after quarantine
  • If employee cannot quarantine, mask for 10 days
  • Best practice: Test, if possible, five days after exposure.
©2021 Roetzel & Andress

Article By Morris L. Hawk of Roetzel & Andress LPA

For more articles on COVID-19, visit the NLR Coronavirus News section.

OSHA’s COVID-19 Vaccine, Testing Mandates Back On – Effective Jan. 10, 2022

On December 17, the U.S. Court of Appeals for the Sixth Circuit lifted the stay of OSHA’s Emergency Temporary Standard (ETS) that had been imposed by the Fifth Circuit, putting the ETS’ employer vaccination and testing requirements for COVID-19 back into effect. Following the decision, OSHA announced a Jan. 10, 2022, effective date, but added it will not cite employers for noncompliance with the testing requirements prior to Feb. 9, 2022.

Accordingly, employers can consider these dates as the new compliance deadlines: Jan. 10 for all ETS requirements except testing and Feb. 9 for testing requirements. Notably, OSHA will require employers to demonstrate good faith efforts to come into compliance. So employers covered by the ETS should begin taking steps to demonstrate compliance and documenting all such efforts.

Right now, employers should conduct vaccination inquiries, create a roster of employee vaccination status, and decide whether to require vaccinations for all employees or allow weekly testing as an alternative.

Employers should also consider reviewing options from payroll providers or HRIS software for the confidential storage and retrieval of vaccination and test information. Unionized employers need to consider their bargaining obligations over the discretionary aspects of the ETS, as well as over the effects of its nondiscretionary requirements.

This court decision adds another twist in the winding litigation challenging President Biden’s federal vaccine mandates. Following the Dec. 17 decision, the parties challenging the ETS immediately filed emergency applications with the U.S. Supreme Court to reimpose the stay. Justice Brett Kavanaugh will review and make a decision on the applications, as he is the justice assigned to hear such petitions arising from the Sixth Circuit. Justice Kavanaugh will have the option to grant the applications and stay the ETS pending review by the full Supreme Court, refer them to the full court for a decision, or take no action pending review.

It is possible the Supreme Court will weigh in on the emergency applications quickly, so employers can expect updates in the coming days and weeks.

© 2021 BARNES & THORNBURG LLP
For more about OSHA Mandates, visit the NLR Coronavirus News section.

Study Demonstrates Earlier Physician Retirement Overall and Increased Pay Equity Concerns for Female Doctors During the Pandemic

This month, Doximity issued its Fifth Annual 2021 Physician Compensation Report. With the continued strain of the pandemic spanning 2021, the self-reported physician data reflected widespread burnout and early retirement, especially by female physicians. With respect to physician compensation, Doximity findings demonstrated:

  • While average doctor pay increased 3.8 percent between 2020 and 2021, there was a decline of real income compared to 2020 given the CPI 6.2% rate of inflation in 2021.
  • The top five metro areas with the highest physician pay were Charlotte, NC; St. Louis, MO; Buffalo, NY; Jacksonville, Florida; and, Orlando, Florida.
  • The top five metro areas with the lowest physician pay were Baltimore, MD; Providence, RI; San Antonio, TX; Washington, D.C.; and Boston, MA.
  • A widening gender pay gap of 28.2% this year, with female physicians making $122,000 less than male physicians in 2021.
  • Based on 2014-2019 data, Doximity estimates that over the course of a career, female physicians will earn over $2 million less than male physicians.

Specialties with the largest pay equity gaps between men and women are oral & maxillofacial surgery; allergy and immunology; ENT; pediatric nephrology; and thoracic surgery. Significantly, there is no one medical specialty where women earned the same or more than men in 2021. All specialties had a pay gap over 10%, except Pediatric Rheumatology (which had a gap of 7.9%). To compound matters, a recent Jama Network Open research letter found that physician residents who were mothers – compared to physician residents who were fathers – were more likely to be responsible for childcare or schooling (24.6% v. .8%), household tasks (31.4% v. 7.2%), to work primarily from home (40.9% to 22%), and to reduce their work hours (19.4% to 9.4%). The study reflected the significant concern that these “short-term adjustments can have serious long-term repercussions as they may lead to lower earnings and negatively impact advancement.”

Doximity’s research also revealed that due to the pandemic, over 1% of physicians retired before expected, which is feared to strain an already tight labor market. The report also highlighted studies suggesting about half of doctors are considering an employment change due to the “COVID-related overwork.” The overwork also had a disproportionate impact on women physicians, with 25% of them reporting they are “considering early retirement” due to increased work during the pandemic.

This research reflects the importance of a physician/employer in any setting reflecting on the impact of the pandemic on its healthcare team. Moreover, the research shows continued pay equity deficits between female and male physicians, which may be exacerbated by the pandemic. Internal reflection on current pay practices to identify the factors contributing to it are critical to maintain top talent, improve morale amidst very difficult times and avoid wage and hour litigation.

Article By Dorothy Parson McDermott of Jackson Lewis P.C.

For more healthcare and health law legal news, click here to visit the National Law Review.

Jackson Lewis P.C. © 2021

Current Pandemic-Related Regulations for Business Travel to the United States, Germany, and the EU

Recently, due to the availability of COVID-19 vaccines, many countries decided to lift their entry restrictions or change them in such a way that travelers who had recovered from COVID-19 infections or been vaccinated were allowed entry. Here is an overview of some of the current entry requirements for international travel.

Entry Into the United States

Since November 8, 2021, individuals have been allowed to enter the United States again from Europe. For 20 months, an entry ban had been in place in the United States for travelers from Brazil, China, India, Iran, Ireland, the Schengen Area (26 countries), South Africa, and the United Kingdom. A proclamation issued by President Joe Biden on October 25, 2021—“A Proclamation on Advancing the Safe Resumption of Global Travel During the COVID-⁠19 Pandemic”—ended these entry restrictions and the need for national interest exceptions (NIE) to the restrictions. Travelers from most countries (a recent U.S. ban on travel from eight African countries took effect on November 29, 2021) may enter the United States if they are fully vaccinated and present negative coronavirus test results (via RT-PCR tests or antigen tests) that are no more than three days old at the time of departure.

Travelers must prove to their airlines that they have been fully vaccinated with internationally recognized vaccines prior to their departures. Currently, the United States recognizes vaccines the Pfizer-BioNTech, Oxford-AstraZeneca, Oxford-AstraZeneca/Covishield, Covaxin, Moderna, Johnson & Johnson/Janssen, BIBP/Sinopharm, and Sinovacvaccines. A traveler’s last vaccination must have taken place at least 14 days before the planned date of travel. The United States accepts the EU Digital COVID Certificate as proof of vaccination.

Exempt groups include persons on diplomatic or governmental foreign travel, children under 18 years of age, and persons who cannot be vaccinated with a COVID-19 vaccine for documented medical reasons. Persons exempt from the October 25, 2021, proclamation’s requirements may enter the United States without being fully vaccinated, but they must quarantine for seven days upon arrival and test for COVID-19 infection three to five days after entry.

Regardless of the COVID-19–related entry requirements, all travelers still need an Electronic System for Travel Authorization (ESTA) entry permit issued by U.S. Customs and Border Protection (CBP). CBP advises travelers to apply online for ESTA authorization at least 72 hours in advance of departure.

Requirements for Entry Into the European Union

The European Union (EU) has a common approach to travel from third countries to EU member states. Entry requirements are constantly being adapted to the pandemic situation as international travel gradually opens up. Currently, in principle, any person from a third country who has been fully vaccinated with a vaccine approved by the European Medicines Agency (EMA) (BioNTech-Pfizer, Moderna, AstraZeneca, and Janssen-Cilag) may enter the European Union. The last vaccination must have taken place at least 14 days before the planned entry.

EU citizens and residents as well as their family members are allowed to enter EU member states without being fully vaccinated. Further exceptions apply to persons for whom absolutely necessary reasons for entry exist. “Absolutely necessary reasons” may exist, among other things, for highly qualified employees from third countries if their labor is necessary from an economic point of view and their work cannot be postponed or carried out abroad.

The EU also maintains a list of countries where the epidemiological situation has improved sufficiently (the so-called “EU White List”), so that entry from these countries is possible regardless of an individual’s vaccination status. This list is constantly updated according to the epidemiological situation. The United States is not currently on the EU White List, so entry from the United States is only possible for fully vaccinated persons.

Each EU member state may set its own additional entry requirements. The EU’s “Re-open EU,” a clearinghouse of information regarding EU member states’ pandemic-related measures, offers an overview of the quarantine and testing requirements of the individual countries.

Requirements for Entry Into Germany

All travelers to Germany from third countries that are not on the EU White List and are not EU citizens or residents must be fully vaccinated. In exceptional cases, entry is possible if it is absolutely necessary.

In addition, all travelers aged 12 or older must provide proof of vaccination. Before crossing the border, proof of vaccination or convalescence, or a test result showing negative for infection (e.g., an antigen test that is no more than 48 hours old or an RT-PCR test that is no more than 72 hours old), must be presented for inspection by the carrier or at the request of the Federal Police.

For previous stays in high-risk or virus-variant areas, digital travel registration is also mandatory. The Robert Koch Institute provides a current list of all high-risk and virus-variant areas.

Nonvaccinated or recovered travelers entering from high-risk areas must also present a negative test upon entry and enter domestic quarantine for 10 days. The domestic quarantine can be ended prematurely if another negative test result is presented five days after entry.

At present, travel from a virus-variant area is not possible, as a travel ban is in force for countries where virus mutations are widespread. Entry is possible only in a few exceptional cases (for example, for German nationals and persons with residence and an existing right of abode in Germany, as well as their immediate family members). Irrespective of vaccination or convalescent status, these travelers are obliged to register their entries digitally, present negative test results upon entry, and go into quarantine for 14 days. Only vaccinated and recovered persons may shorten their quarantine periods by presenting further negative test results five days after entry.

Employer Inquiries Into Employees’ Vaccination and Recovery Status

These extensive regulations raise a question as to whether an employer may inquire into an employee’s vaccination status, or whether the employee has recovered from a COVID-19 infection in connection with an upcoming business trip.

The vaccination and/or convalescence status of an employee, under 9 (1) of the EU’s General Data Protection Regulation (GDPR), is considered health data and thus protected personal information according to Art. An employer may request and process this information only if there is a legal basis for doing so. If a business trip requires proof of an employee’s vaccination against COVID-19 (e.g., due to entry restrictions), an employer may request and process this information from the employee in individual cases. However, employers may only request the information in the context of specific business trips and are prohibited from retaining the information for any other purposes.”

The COVID-19–related entry regulations of many countries may largely determine the feasibility of a contemplated business trip, as the prospect for international business travel will likely depend on the vaccination status of the employees involved. This situation may result in a legitimate interest on the part of the employer to inquire into employee vaccination status because the employer would otherwise be unable to find out whether a particular employee met the entry requirements of the destination country. Only by inquiring into vaccination status can the employer ensure that the employee is not turned away at the border—i.e., that the employee can fulfill the duty to provide the contractually agreed upon work within the scope of the business trip.

Whether an employer’s query regarding an employee’s vaccination status is legitimate is therefore a case- and fact-specific inquiry, which depends above all on the entry regulations of the destination country. If the destination country requires complete vaccination for entry, it may be permissible from a data protection perspective to ask about an employee’s vaccination status.

Article By Cynthia Lange of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For more COVID-19 and travel-related legal news, click here to visit the National Law Review.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

What We Know And Don’t About The Federal Court Order Enjoining EO 14042

In news that will be of interest to every federal contractor, including large and small businesses, universities, banks, and the health care industry, Executive Order 14042 (along with the related Task Force Guidance and contract clauses) has been ENJOINED in the states of Kentucky, Ohio, and Tennessee. U.S. District Court Judge Gregory F. Van Tatenhove of the Eastern District of Kentucky issued an order on November 30, 2021 granting Plaintiffs’ (a group including the states of Tennessee, Kentucky, and Ohio) motion for a preliminary injunction.

The decision most certainly will be appealed. In the meantime, contractors with employees performing in Kentucky, Ohio, or Tennessee are not required to comply with the Executive Order or FAR/DFARS clauses. Obviously, this creates a conundrum for federal contractors and subcontractors looking for a uniform way to implement the EO rules.

Background

Plaintiffs Kentucky, Ohio, and Tennessee filed suit in the U.S. District Court for the Eastern District of Kentucky on November 4, 2021, and four days later filed for a Temporary Restraining Order and Preliminary Injunction (“TRO/PI”). The TRO/PI motion asked the Court to enjoin the Government’s enforcement of EO 14042. Plaintiffs challenged the EO on 10 separate grounds, including that it violated the Federal Property and Administrative Services Act (“FPASA”), the Competition in Contracting Act (“CICA”), the Administrative Procedures Act (“APA”), and the U.S. Constitution. The Court held a conference among the parties on November 9 and a hearing on November 18.

The District Court Decision

Regardless of whether one likes the outcome or not, Judge Van Tatenhove’s decision is thoughtfully reasoned and well written. It is methodical and well cited. In sum, Judge Van Tatenhove enjoined the EO not because of the process by which the Administration implemented the mandate (i.e. not due to the lack of a meaningful notice-and-comment period or the unprecedented dynamic nature of the FAR clause), but rather because he found the Administration never had the authority to implement a vaccine mandate in the first place. In other words, the Court issued the injunction because the President of the United States purportedly lacks the statutory or constitutional authority to regulate public health via a contract clause issued pursuant to a procurement statute.

The decision, however, readily concedes that the Court’s view is the beginning, not the end, of the story. “Once again,” the Judge explained, “the Court is asked to wrestle with important constitutional values implicated in the midst of a pandemic that lingers. These questions will not be finally resolved in the shadows. Instead, the consideration will continue with the benefit of full briefing and appellate review. But right now, the enforcement of the contract provisions in this case must be paused.”

The Practical Impact (and Scope) of Kentucky v. Biden

While the Court’s decision is significant, it does NOT apply to all federal contractors. It enjoins the Government “from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee.” Sadly, Judge Van Tatenhove does not explain this sentence. Does he mean to enjoin all federal contracts performed in those states, all federal contracts held by contractors operating in those states, or maybe even all federal contracts issued by agencies based in those states? It’s unclear. Adding to the confusion is his statement that the injunction “is properly limited to the parties before the Court” (i.e., the states of Kentucky, Tennessee, Ohio). Here again, we are left to guess what he means.

Subsequent to the Court’s decision, GSA took prompt steps to notify its contractors of the late breaking news. Here is GSA’s take on the scope of the injunction:

Update: On November 30, 2021, in response to a lawsuit filed in the United States District Court, Eastern District of Kentucky, a preliminary injunction was issued halting the Federal Government from enforcing the vaccine mandate for Federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee.

GSA implemented the vaccine mandate stemming from Executive Order 14042 through Class Deviation CD-2021-13. Pursuant to the preliminary injunction, GSA will not take any action to enforce FAR clause 52.223-99 Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors in all covered contracts or contract-like instruments being performed, in whole or in part, in Kentucky, Ohio and Tennessee.

While GSA’s formulation is a bit more useful than the Court’s in that it focuses on contracts “being performed . . . in” the three states, it still does not answer the key question regarding scope.

We think the most common sense interpretation of the scope of the injunction is that it applies to covered employees performing work in Kentucky, Tennessee, and Ohio. That being said, GSA’s interpretation seems to indicate the analysis should be performed at the contract level, rather than the employee level (i.e., if you have even one employee performing on a contract in one of those three states, then the entire contract is exempt from enforcement).

We hope to receive updated Guidance from the Task Force providing a definitive answer to this question in the near future. Until then, Federal contractors and subcontractors are stuck between the proverbial rock and a hard place – having to decide whether to continue marching ahead pursuant to the EO or navigate different rules in different states.

In reaching their own interpretive decision, contractors should keep in mind that the Court order does not prohibit compliance with the EO, it simply enjoins the Government from enforcing the EO. Before a contractor decides to continue rolling out its existing compliance approach as planned, however, it would be well advised to consider this: Now that the EO has been enjoined in Kentucky, Ohio, and Tennessee, one can make a credible (and likely correct) argument the EO requirements are no longer mandatory in those states (both vaccination and making/distancing). This transition from a mandatory to a voluntary rule creates at least two new hurdles for contractors.

  • First, continuing to comply with the FAR/DFARS clauses could create state liability where a state has a law against a vaccine mandate. For example, on November 12, 2021 Tennessee passed TN HB 9077/SB 9014, which prohibits private businesses, governmental entities, schools, and local education agencies from compelling an individual, or from taking adverse action against the individual to compel them, to provide proof of vaccination. Previously, the Executive Order, as a federal law, would have trumped the conflicting state law. Now, however, the unenforceable EO no longer reigns supreme. Accordingly, continuing to impose the EO on a Tennessee workforce creates state risk.
  • Second, continuing to comply with the FAR/DFARS clauses in Tennessee, Kentucky, or Ohio could create problems with a company’s collective bargaining obligations. When the vaccine requirement was a legal obligation, it probably was not required to be collectively bargained. Now that the requirement is no longer a legal obligation (at least in the three states covered by the Court order), imposing a vaccine mandate on union employees may have to be collectively bargained.

Accordingly, while marching ahead with an existing EO 14042 company-wide compliance plan may make great sense from an efficiency and consistency standpoint, it could create unintended risks in at least three states (and certainly in Tennessee).

What Should Contractors Do Now?

The EO 14042 COVID safety contracting landscape (like COVID itself) is changing every day. We are hopeful the Task Force will issue new Guidance soon to help contractors navigate the new hurdles created by the Kentucky decision. Until then, here are a few thoughts for consideration:

  • If you have no employees performing in Kentucky, Ohio, or Tennessee, the Order has no impact on you. The EO still applies to your contracts in other states just as it did prior to the Court’s decision.
  • If you have employees performing in Tennessee, take a close look at TN HB 9077/SB 9014 before making any decision regarding implementation of the EO.
  • If you have employees performing in Kentucky or Ohio and do not have collective bargaining agreements, you may want to continue enforcing the EO to avoid having different rules in different locations. But if you have collective bargaining agreements, make sure you connect with your L&E lawyer before charting a path forward.
  • Consider putting together a communication to your employees who no doubt soon will read a headline and have questions about the Order.
  • For contractors with employees performing in Kentucky, Tennessee, or Ohio, update your current compliance plan.
  • In the absence of further Task Force Guidance, consider staying in close communication with your contracting officer regarding your implementation approach, especially in the three states implicated by the Order.

Additionally, stay on the lookout for additional updates (including from us) on the other pending litigation challenging the EO.

What’s Next?

Speaking of the “other pending litigation,” the docket still is full of challenges to the EO. By our count, there are motions for preliminary injunction pending in cases with 24 additional states as plaintiffs:

 

 

 

 

 

 

 

The judges in these cases are not bound by the Kentucky decision – either on the merits or the scope of any resulting injunction. Meaning, should a judge in one of the remaining cases also strike the EO as contrary to law or the Constitution, that judge could choose to issue a nationwide injunction covering all contractors in all states (or, as the Kentucky judge chose, limit the application to the specific state(s) involved). Only time will tell. As of the publication of this Alert, three of those cases have hearings scheduled for December 3, 6, and 7. We expect decisions shortly thereafter.

Importantly, as the Kentucky decision explicitly recognizes, it’s unlikely any of these district courts will be the final arbiter of the legality of EO 14042. We think it’s only a matter of time until we get the rarely seen, yet always celebrated Supreme Court government contracts decision. Stay tuned.

For Those Wanting A Bit More Detail . . .

For those interested in the details of the Kentucky decision, here is a brief summary:

After analyzing and concluding that the plaintiffs had standing to pursue this matter on behalf of their agencies and businesses operating in their states (a contrary outcome to the U.S. District Court’s recent decision in Mississippi), Judge Van Tatenhove jumped right in to analyzing the myriad arguments raised by Plaintiff. Briefly, here is what he found:

  • FPASA. Plaintiffs argued that the President exceeded his authority under FPASA in issuing the EO. The Court agreed, reasoning that FPASA was intended to give the President procurement powers, not unlimited powers. “FPASA does not provide authority to ‘write a blank check for the President to fill in at his will. . . .” The Court found an insufficiently close nexus between the EO and the need for economy and efficiency in the procurement of goods and services, reasoning that similar logic could authorize a president to outlaw overweight contractor employees since the CDC has concluded that obesity worsens the outcomes of COVID-19. While recognizing the breadth of FPASA and how it historically has been used to promote far-reaching social labor policies (e.g., EO 11246), for this judge at least, the COVID-19 mandate was just a bridge too far.
  • CICA. CICA requires agencies to provide “full and open competition through the use of competitive procedures” in federal procurements. The Court found that the EO violates CICA. According to Judge Van Tatenhove, “contractors who ‘represent the best value to the government’ but choose not to follow the vaccine mandate would be precluded from effectively competing for government contracts.” It seems to us this reasoning does not hold up under close scrutiny. Couldn’t one say the same thing about contractors precluded from contracts where they “choose not to follow” the Trade Agreements Act, Section 889, Executive Order 11246, or any other number of gating procurement rules? In any event, the Court found the argument compelling at least “at this early stage in the litigation.”
  • Non-Delegation Doctrine. The non-delegation doctrine precludes Congress from transferring its legislative power to another branch. Plaintiffs argued that “mandating vaccination for millions of federal contractors and subcontractors is a decision that should be left to Congress (or, more appropriately, the States) and is a public health regulation as opposed to a measure aimed at providing an economical and efficient procurement system.” In evaluating Plaintiffs’ argument, the Court looked to the OSHA rule recently struck down by the Fifth Circuit. “It would be reasonable to assume that a vaccine mandate would be more appropriate in the context of an emergency standard promulgated by OSHA,” Judge Van Tatenhove noted, and then went on to note that even the OSHA ETS was struck down as a violation of the non-delegation doctrine. If the ETS couldn’t withstand a non-delegation challenge, “the Court has serious concerns about the FPASA, which is a procurement statute, being used to promulgate a vaccine mandate for all federal contractors and subcontractors.” The Court acknowledged “that only twice in American history, both in 1935, has the Supreme Court found Congressional delegation excessive.” Nonetheless, Judge Van Tatenhove seems to believe he has found the third. He mused, however, that “it may be useful for appellate courts to further develop the contours of the non-delegation doctrine, particularly in light of the pandemic.”
  • Tenth Amendment. As we all will remember from high school civics (if not from law school), the Tenth Amendment states that “powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The Court expressed a “serious concern that Defendants have stepped into an area traditionally reserved to the States,” and held the Tenth Amendment provides an additional reason to enjoin the EO.

In short, Judge Van Tatenhove clearly believes the Plaintiffs, in this case, are likely to prevail on multiple statutory and constitutional bases.

The decision then goes on to discuss whether the President (through his delegated officials) failed to follow applicable administrative procedures in issuing the EO and the subsequent FAR clause. Here, the President fared better than he did with Plaintiffs’ constitutional arguments. The Court concluded that the Administration, while perhaps “inartful and a bit clumsy” at times, “likely followed the procedures required by statute.” The Court also concluded that the Administration did not act arbitrarily or capriciously (as defined by the APA). “The Court finds, based on the limited record at this stage in the litigation, that Defendants have followed the appropriate procedural requirements in promulgating the vaccine mandate.” But this all is little solace to the Administration as it would have been much easier to overcome a procedural error than a constitutional one — let alone the “serious Constitutional concerns” identified by Judge Van Tatenhove.

*Sheppard Mullin partners Jonathan Aronie, Ryan Roberts, Anne Perry, and associates Nikki Snyder, Emily Theriault, and Dany Alvarado participated in drafting this Alert.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.

Article by the Government Contracts Practice Group with Sheppard, Mullin, Richter & Hampton LLP.

For more about federal court orders and federal contractors visit the NLR Government Contracts Maritime & Military Law type of law page.

Sixth Circuit Deals Blow to OSHA’s Proposed Expedited Briefing Schedule, Says it Will Keep ETS Case

In what is getting to be habit in the OSHA ETS litigation with courts issuing orders late Friday afternoons, the Sixth Circuit on December 3, 2021 tersely denied a petition to transfer the case back to the Fifth Circuit.  In the same order, the Sixth Circuit also denied, without explanation, the union petitioners’ bid to transfer the case to the D.C. Circuit where there is pending litigation of the OSHA Healthcare ETS issued in June 2020.

The order perfunctorily addressed several pending motions on the docket, including OSHA’s motion for an expedited briefing schedule, which would have set the close of briefing on the merits for December 29, 2021 with oral argument held as soon as practicable thereafter.  In denying the motion, the Sixth Circuit stated little more than it was reserving judgment on setting a merits briefing schedule.  Obviously, there are a tremendous number of parties with varied interests and a multitude of legal arguments both statutory and Constitutional, which the court clearly recognizes are at play and likely require a schedule that is not rushed.

The next big issue for the court to tackle will be OSHA’s motion to dissolve the stay with the close of briefing just a week away on December 10, 2021.  Whether the court will dole out more good news for employers, states, and other challengers to the ETS for the holiday season is anybody’s guess, but a decision before the holidays seems imminent.

Article By Melanie L. Paul of Jackson Lewis P.C.

For more coronavirus legal news, click here to visit the National Law Review.
Jackson Lewis P.C. © 2021

Omicron COVID-19 Variant Prompts US To Suspend Travel From Eight African Countries

The Republic of South Africa informed the World Health Organization (WHO) of a new B.1.1.529 (Omicron) variant of SARS-CoV-2, in late November. That notice led the Biden Administration to announce the suspension of travel and restricted entry into the United States, which went into effect on Nov. 29, 2021.

At the moment, these travel restrictions appear to apply to individuals who were physically present – during the 14-day period preceding their entry or attempted entry into the United States – within the Republic of Botswana, the Kingdom of Eswatini, the Kingdom of Lesotho, the Republic of Malawi, the Republic of Mozambique, the Republic of Namibia, the Republic of South Africa, and the Republic of Zimbabwe.

These travel restrictions do not apply to the following:

  • U.S. citizens and their spouses
  • Lawful permanent residents and their spouses
  • U.S. military personnel, their spouses and children
  • Parents or guardians of unmarried U.S. citizens, lawful permanent residents, and U.S. military personnel under the age of twenty-one
  • Siblings of U.S. citizens, lawful permanent residents, and U.S. military personnel under the age of 21, all of whom must be unmarried and under 21 years of age

The Centers for Disease Control and Prevention (CDC) provided clarification for international travelers, regardless of their vaccination status:

  • For fully vaccinated individuals, a viral test must be conducted no more than three days (72 hours) before the flight’s departure from the designated foreign country along with proof of being fully vaccinated against COVID-19. Individuals should bear in mind that the testing period may be reduced to 24 or 48 hours before boarding and should check with their respective airlines prior to departure.
  • For individuals who are not fully vaccinated, a viral test must be conducted no more than one day (24 hours) before the flight’s departure from the designated foreign country. A quarantine requirement is also under consideration.

Consideration should be taken for limiting international travel at present, since circumstances and requirements are changing rapidly.

This article was written by Tejas Shah, Sarah J. Hawk, Michael E. Durham, M. Mercedes Badida-Tavas and Mandira Sethi of Barnes and Thornburg law firm. For more information regarding COVID travel bans, please click here.

Just When I Thought I Was Out: Omicron Variant and the Return of Regional COVID-19 Travel Bans

Following its November 8, 2021 move to remove and replace all regional COVID-19 Travel bans with a blanket vaccination requirement, the Biden administration announced a new COVID-19 travel ban on those seeking to enter the U.S. from various African nations.  The new Proclamation bars most non-U.S. citizens who have been physically present in the following countries during the 14-day period prior to attempting to enter the United States:

  • Republic of Botswana

  • The Kingdom of Eswatini (formerly Swaziland)

  • The Kingdom of Lesotho

  • The Republic of Malawi

  • The Republic of Mozambique

  • The Republic of Namibia

  • The Republic of South Africa

  • The Republic of Zimbabwe

Who is covered?

The Proclamation includes several important qualifiers and exemptions. It only applies to “noncitizens” of the United States, but it includes both immigrants (those coming to stay indefinitely) and nonimmigrants (those coming temporarily).

The Proclamation bars entry for noncitizens who have been physically present in the listed countries during the 14 days prior to attempting to enter the U.S., not because of their citizenship. In other words, a South African coming to the U.S. directly from South Africa is barred, but a South African coming directly to the U.S. after 14+ days in Australia is free to enter. Importantly, the Proclamation applies in addition to the blanket vaccination requirement, so anyone seeking an exemption from the new Proclamation must also either be properly vaccinated or qualify under the extremely limited exceptions to the Vaccination requirement.

The new Proclamation does not apply to the following classes:

  • Lawful permanent residents (aka green card holders). The Proclamation does apply to immigrants, meaning it would bar those seeking to enter on immigrant visas to become lawful permanent residents.

  • The spouse of a U.S. citizen or lawful permanent resident.

  • The parent or legal guardian of a U.S. citizen or lawful permanent resident, as long as the U.S. citizen or lawful permanent resident is unmarried and under 21.

  • The sibling of a U.S. citizen or lawful permanent resident as long as both are unmarried and under 21.

  • Noncitizen nationals of the United States.

  • The children, foster children, or wards of a U.S. citizen or lawful permanent resident and certain prospective adoptees.

  • Those invited by the U.S. government to fight the Corona virus.

  • Those traveling on certain crewman and transit nonimmigrant visas.

  • Nonimmigrants in most diplomatic statuses.

  • U.S. Armed Forces members and their spouses and children.

  • Those whose entry would not pose a “significant risk” of spreading the virus as determined by HHS and CDC.

  • Those whose entry would “further important law enforcement objectives” as determined by named agencies.

  • Those whose entry would be in the U.S. national interest, as determined by named agencies. National interest exception (NIE) procedures are still unclear and should be addressed in the near future, including whether prior NIE approvals will be honored.

In addition, the new Proclamation should not affect any applicant for asylum and other related humanitarian relief such as Withholding of Removal or protections under the Convention Against Torture.

How Long Will it Last and are More Travel Bans Coming?

The Proclamation’s ban began on November 29, 2021 and will remain until terminated by the President. On-the-ground case numbers in each country will determine the White House’s willingness to lift travel restrictions, but an increase in numbers in other countries could see an expansion and return to regional travel bans.

The duration of the new Proclamation and its potential expansion to other countries will likely depend on the effectiveness of vaccines against the Omicron variant and any new variants that arise in the coming months. If existing or newly created vaccines are able to combat new variants, the White House will likely rely on its blanket vaccination requirement and not fall back to the Trump-era country-specific regional bans.

© Copyright 2021 Squire Patton Boggs (US) LLP
For more COVID-19 travel updates, visit the NLR Coronavirus News section.