What’s Next for Employers After the Supreme Court’s Vaccine Rulings?

January 14, 2022

Update (Aug. 28, 2022): Eleventh Circuit Narrows Scope of Contractor Vaccine Mandate Injunction

Update (Jan. 15, 2022): After the Jan. 14, 2022, publication of this alert, the Centers for Medicare & Medicaid Services issued updated guidance to State Survey Agency directors providing 30 days (by Feb. 13) for facilities to demonstrate that staff had their first vaccine doses and 60 days (by March 15) for facilities to demonstrate that staff are fully vaccinated in the 24 states subject to the injunctions lifted in the Supreme Court opinion. This extension applies only to surveyors in the following states: Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, West Virginia and Wyoming. Texas remains subject to an injunction, while all other U.S. states retain their current timelines (including fully vaccinated staff by Feb. 28, 2022).

On Jan. 13, 2022, the U.S. Supreme Court granted an emergency request for relief, staying the federal Occupational Safety and Health Administration’s (OSHA) emergency temporary standard (ETS), which requires employers with 100 or more employees to mandate COVID-19 vaccines or weekly testing for covered employees.

On the same day, the Court allowed the federal Centers for Medicare & Medicaid Services’ (CMS) interim final rule to be enforced, which requires mandatory COVID-19 vaccines for healthcare workers at certain CMS-covered facilities (i.e., with no testing option, except for approved medical or religious accommodations).

What Do the Court’s Decisions Say?

The Supreme Court’s decisions turn on whether the scope of OSHA’s and CMS’ authority is broad enough to allow them to issue their respective rules.

OSHA ETS Decision

The Court’s OSHA opinion in National Federation of Independent Business v. Department of Labor relies in large part on the so-called major-questions doctrine. The Court explains that it expects Congress to “speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” Because there “can be little doubt” that the ETS involves the exercise of such power, the Court states that the question at issue is whether the Occupational Safety and Health (OSH) Act “plainly authorizes” the vaccine-or-test mandate. According to the Court, “It does not. The Act empowers the Secretary [of Labor] to set workplace safety standards, not broad public health measures.”

  • The Court notes that the text of OSHA’s organic statute makes clear that OSHA is charged with regulating “occupational” hazards and the safety and health of “employees.” The Court reasons that although COVID-19 is a risk that occurs in many workplaces, “it is not an occupational hazard in most.” Instead, COVID-19 “can and does spread at home, in schools, during sporting events, and everywhere else that people gather. That kind of universal risk is no different from the day-to-day dangers that all face from crime, air pollution, or any number of communicable diseases.” The Court further explains that allowing OSHA to regulate “the hazards of daily life — simply because most Americans have jobs and face those same risks while on the clock” would significantly expand OSHA’s regulatory authority.
  • The Court explains that “a vaccine mandate is strikingly unlike the workplace regulations that OSHA has typically imposed. A vaccination, after all, cannot be undone at the end of the workday.”
  • The Court further finds “[i]t is telling that OSHA, in its half century of existence, has never before adopted a broad public health regulation of this kind — addressing a threat that is untethered, in any causal sense, from the workplace. This ‘lack of historical precedent,’ coupled with the breadth of authority that the Secretary now claims, is a ‘telling indication’ that the mandate extends beyond the agency’s legitimate reach.”
  • The issue of congressional authorization was likewise stressed by concurring Justices Gorsuch, Thomas and Alito, noting:

“As the agency itself explained to a federal court less than two years ago, the statute does ‘not authorize OSHA to issue sweeping health standards’ that affect workers’ lives outside the workplace . . . . Yet that is precisely what the agency seeks to do now — regulate not just what happens inside the workplace but induce individuals to undertake a medical procedure that affects their lives outside the workplace. Historically, such matters have been regulated at the state level by authorities who enjoy broader and more general governmental powers. Meanwhile, at the federal level, OSHA arguably is not even the agency most associated with public health regulation. And in the rare instances when Congress has sought to mandate vaccinations, it has done so expressly. . . . We have nothing like that here.”

CMS Interim Final Rule Decision

By contrast, in allowing the CMS interim final rule to be enforced, the Supreme Court’s CMS opinion in Biden v. Missouri states that “[t]he [CMS] rule . . . fits neatly within the language of the statute[,]” which “authorized the Secretary [of Health and Human Services] to impose conditions on the receipt of Medicaid and Medicare funds that ‘the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services.’” Per the Court, “[a]fter all, ensuring that providers take steps to avoid transmitting a dangerous virus to their patients is consistent with the fundamental principle of the medical profession: first, do no harm.”

The Court further notes:

  • “[H]ealthcare facilities that wish to participate in Medicare and Medicaid have always been obligated to satisfy a host of conditions that address the safe and effective provision of healthcare, not simply sound accounting.”
  • In contrast to the lack of historical precedent for the OSHA ETS, CMS conditions of participation and payment “have long included a requirement that certain providers maintain and enforce an ‘infection prevention and control program designed . . . to help prevent the development and transmission of communicable diseases and infections.’ . . . Moreover, the Secretary routinely imposes conditions of participation that relate to the qualifications and duties of healthcare workers themselves.”
  • “The challenges posed by a global pandemic do not allow a federal agency to exercise power that Congress has not conferred upon it.” “At the same time,” however, the Court explained that the “unprecedented circumstances” presented by the pandemic also “provide no grounds for limiting the exercise of authorities the agency has long been recognized to have.”

Practical Considerations Going Forward

  1. This Isn’t Necessarily the Last Word From the Courts on the ETS. The Supreme Court’s decision will not necessarily end the litigation of the validity of the ETS. As a formal matter, it only preliminarily stays its implementation while litigation proceeds. While the Supreme Court’s opinion suggests the OSHA rule (at least in its current form) is unlikely to survive final judicial review, the case is now back before the U.S. Court of Appeals for the Sixth Circuit for a ruling on the merits. However, given that the ETS only has a six-month regulatory shelf life through May 5, 2022, it is unlikely the Sixth Circuit and Supreme Court will rule before the ETS sunsets.

Further, employers should continue to monitor other federal COVID-19 workplace requirements as well, including the federal contractor vaccine rule under Executive Order 14042 (which has been paused for now and has yet to reach the Supreme Court).

  1. This Isn’t Necessarily the Last Word From OSHA on COVID-19. Separate from the ETS, OSHA is moving forward with its proposal for a permanent standard under regular, non-emergency rulemaking. The written comment period for that standard runs through Jan. 19, 2022 (Docket No. OSHA-2021-0007). Further, the Supreme Court’s decision suggests that a narrower vaccine mandate may survive judicial scrutiny, noting: “Where the virus poses a special danger because of the particular features of an employee’s job or workplace, targeted regulations are plainly permissible. We do not doubt, for example, that OSHA could regulate researchers who work with the COVID–19 virus. So too could OSHA regulate risks associated with working in particularly crowded or cramped environments.”

Thus, the Biden administration could decide to push ahead with litigation over the current ETS, put down its sword, or develop a new, more targeted rule or set of rules – or some combination thereof. Indeed, U.S. Secretary of Labor Marty Walsh issued a press statement on Jan. 13, 2022, admonishing employers:

“We urge all employers to require workers to get vaccinated or tested weekly to most effectively fight this deadly virus in the workplace. Employers are responsible for the safety of their workers on the job, and OSHA has comprehensive COVID-19 guidance to help them uphold their obligation. Regardless of the ultimate outcome of these proceedings, 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.”

  1. State and Local Vaccination Laws Remain in Play. The Supreme Court’s opinion only paused the federal ETS. It did not affect any state or local workplace executive orders, laws or rules that are already in place. Employers should assess whether the jurisdiction(s) in which they operate have their own workplace COVID-19 rules, including vaccine or testing requirements, occupational safety requirements, or other laws and regulations. Those mandates are likely unaffected by the Supreme Court’s decision — and the opposite is also true (that is, anti-vaccination rules that have been adopted in some jurisdictions are unaffected as well). And in the absence of a unifying federal rule, additional state and local rules may be adopted over the coming months to fill the void.

Indeed, in states with anti-vaccination limits, the federal “preemption” legal cover provided by the ETS no longer applies. The same is true with respect to whether adoption of the ETS requirements is a “mandatory subject of bargaining” under collective bargaining agreements. Thus, employers should evaluate any workplace policies that they have adopted in anticipation of the ETS and determine whether to continue, modify or withdraw them.

  1. Although Resurrected, Don’t Assume the CMS Rule Applies. The CMS interim final rule only applies to 15 specific provider and supplier categories with health and safety conditions of participation (or similar requirements), as discussed in the Nov. 5, 2021 McGuireWoods alert. Healthcare employers should not assume this mandate applies to them — as it focuses on only certain facilities.

Further, if the CMS rule applies, each covered healthcare employer needs to determine what employees and other “staff” are required to have vaccinations. CMS does not limit vaccination to common-law employees. Instead, the rule includes those who provide care to patients on a regular basis through various arrangements — e.g., students, trainees, volunteers and contractors. CMS also requires vaccines for certain remote staff members, as they may occasionally encounter fellow staff who enter a covered facility to provide patient care.

  1. Don’t Assume You’ll Have Added Time to Get Your CMS Policy in Place. Employers need to move fast if covered by the CMS interim final rule. CMS currently plans to begin enforcement Jan. 27, 2022 — necessitating policies ensuring all eligible staff have received the first dose of a two-dose COVID-19 vaccine (or a single dose of a one-dose COVID-19 vaccine) prior to providing any care, treatment or other services as of such date. Eligible staff will then need to be “fully vaccinated” by Feb. 28, 2022.

As to how that enforcement will be applied across the 50 U.S. states and territories (some of whom were covered by a legal stay, and others of whom were not), CMS Administrator Chiquita Brooks-LaSure stated in a press statement issued Jan. 13, 2022:

“As a result of today’s decision, health care providers subject to the Omnibus Health Care Staff Vaccination rule in the 24 states (Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, West Virginia, and Wyoming) covered by this decision will now need to establish plans and procedures to ensure their staff are vaccinated and to have their employees receive at least the first dose of a COVID-19 vaccine.

Today’s decision does not affect compliance timelines for providers in the District of Columbia, the territories, and the 25 states where the preliminary injunction was previously lifted.”

Thus, for the 24 states for which the CMS interim rule was just reinstated by the Supreme Court, there appears a possibility that CMS will issue further guidance, allowing more time for policy implementation. But that remains, for now, unclear.

For questions about the OSHA ETS, CMS interim rule, the import of the Supreme Court’s decisions or the requirements of other COVID-19 mandates, or for assistance in developing and tailoring policies for the patchwork of federal and state vaccination rules that may apply, please contact the authors of this article, your McGuireWoods contact, or a member of the firm’s  labor and employmenthealthcare, affirmative actionfederal contracting, appeals and issues or COVID-19 response teams.