State of Louisiana v. Biden

Case: 22-30019 Document: 00516582132 Page: 1 Date Filed: 12/19/2022
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
December 19, 2022
No. 22-30019 Lyle W. Cayce
Clerk
State of Louisiana; State of Indiana; State of
Mississippi,
Plaintiffs—Appellees,
versus
Joseph R. Biden, Jr., in his official capacity as
President of the United States; United States of
America; Federal Acquisition Regulatory Council;
General Services Administration; Robin Carnahan, in
her official capacity as Administrator of General
Services, et al
Defendants—Appellants.
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 1:21-CV-3867
Before Graves, Willett, and Engelhardt, Circuit Judges.
Kurt D. Engelhardt, Circuit Judge:
The President asks this Court to ratify an exercise of proprietary au-
thority that would permit him to unilaterally impose a healthcare decision on
one-fifth of all employees in the United States. We decline to do so. Thus,
we AFFIRM the preliminary injunction issued by the district court.
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I. Background
As part of his efforts to combat the COVID-19 pandemic, President
Biden issued a series of sweeping vaccination mandates. This Court has had
occasion to consider at least two of them – namely, the OSHA-issued man-
date which covered private employers with more than 100 employees, heard
in BST Holdings, L.L.C. v. Occupational Safety & Health Admin., United States
Dep’t of Lab., 17 F.4th 604 (5th Cir. 2021), 1 and the President’s mandate cov-
ering government employees (which this Court recently heard en banc in Feds
for Medical Freedom v. Biden, Case No. 22-40043). This case concerns an-
other mandate that would, with limited exceptions, require the government
to include in its contracts a clause that would require federal contractors to
ensure that their entire workforce is fully vaccinated against COVID-19.
This challenge concerns four actions that together constitute the
“federal contractor mandate.” The first is an Executive Order issued by the
President on September 9, 2021. 2 President Biden ordered that “in order to
promote economy and efficiency in procurement by contracting with sources
that provide adequate COVID-19 safeguards for their workplace,” govern-
ment contracts must include a clause specifying “that the contractor and any
subcontractors … shall, for the duration of the contract, comply with all guid-
ance for contractor or subcontractor workplace locations published by the
Safer Federal Workforce Task Force [the “Task Force”] … , provided that
1
The Supreme Court considered this mandate in Nat’l Fed’n of Indep. Bus. v. Dep’t
of Lab., Occupational Safety & Health Admin. (hereinafter “NFIB”), 142 S. Ct. 661 (2022)
(per curiam).
2
Ensuring Adequate COVID Safety Protocols for Federal Contractors, 86 Fed.
Reg. 50985 (published Sept. 14, 2021).
2
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the Director of the Office of Management and Budget … approves the Task
Force Guidance.” 3
The second challenged action consists of guidance issued by the Task
Force on September 24, 2021, which required “[c]overed contractors [to]
ensure that all covered contractor employees are fully vaccinated for
COVID-19, unless the employee is legally entitled to an accommodation[,]
… no later than December 8, 2021.” 4 The Task Force guidance was not self-
executing; rather, it required ratification by the Office of Management and
Budget (“OMB”) to take effect.
As required by the Executive Order, the OMB Director issued a short
finding that the Task Force guidance “will improve economy and efficiency
by reducing absenteeism and decreasing labor costs for contractors and sub-
contractors working on or in connection with a Federal Government con-
tract.” 5 This finding was issued on September 28, 2021. Shortly after this
lawsuit was filed, OMB rescinded its initial finding and issued instead a
longer finding (the “OMB Determination”) which reached the same con-
clusion with far more support. 6 This latter OMB Determination constitutes
the third action herein challenged.
The fourth challenged action is a memorandum issued by members of
the Federal Acquisition Regulation (FAR) Council (the “FAR Memo”) in
which federal agencies were urged to “act expeditiously to issue …
3
Id.4
COVID-19 Workplace Safety: Guidance for Federal Contractors and
Subcontractors at 5 (Sept. 24, 2021), https://bit.ly/3jTHSHJ.
5
86 Fed. Reg. 53691-01 (Sept. 28, 2021).
6
See Determination of the Acting OMB Director Regarding the Revised Safer
Federal Workforce Task Force Guidance for Federal Contractors and the Revised
Economy & Efficiency Analysis, 86 Fed. Reg. 63418-01 (Nov. 16, 2021).
3
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deviations [to their prescribed contractual clauses] so that their contracting
officers may begin to apply the clause on or before October 15[, 2021].” 7 In
line with the President’s Executive Order, the example clause suggested in
the FAR Memo requires the signatory to “comply with all guidance, includ-
ing guidance conveyed through Frequently Asked Questions, as amended
during the performance of this contract, … published by the Safer Federal
Workforce Task Force.” 8
Together, these four actions require nearly all federal contractors, ei-
ther immediately (in the case of new contracts or by consented-to changes to
old contracts) or at the soonest opportunity, to consent to a contractual
clause obliging them to follow guidance from the Task Force. The primary
element of that guidance – at least for the moment, as the guidance is subject
to amendment – is a mandate that contractors ensure that their employees
become fully vaccinated against COVID-19.
The President’s Executive Order purports to exercise authority given
to the President under the Federal Property and Administrative Services Act
of 1949, known as the “Procurement Act.” 9 The Procurement Act states that
its purpose “is to provide the Federal Government with an economical and
efficient system” for procurement, contracting, and other related activities. 10
It also enables the President to “prescribe policies and directives that the
7
Issuance of Agency Deviations to Implement Executive Order 14042 at 3 (Sept.
30, 2021), https://bit.ly/3bvdizB.
8
Id. at 5.
9
40 U.S.C. § 101 et seq.
10
40 U.S.C. § 101.
4
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President considers necessary to carry out this subtitle,” provided that
“[t]he policies must be consistent with this subtitle.” 11
The Congressionally-created FAR Council, meanwhile, “assist[s] in
the direction and coordination of Government-wide procurement policy and
Government-wide procurement regulatory activities in the Federal Govern-
ment.” 12 Generally speaking, the FAR Council has exclusive authority to
“issue and maintain … a single Government-wide procurement regulation,
to be known as the Federal Acquisition Regulation.” 13 Finally, the Procure-
ment Policy Act generally requires that “a procurement policy, regulation,
procedure, or form … may not take effect until 60 days after it is published
for comment” unless “urgent and compelling circumstances make compli-
ance with the requirements impracticable.” 14
II. Procedural History
Three states – Louisiana, Indiana, and Mississippi (the “Plaintiff
States”) – brought suit in the Western District of Louisiana against President
Biden in his official capacity to seek invalidation of this mandate. These states
brought suit in their capacities as federal contractors themselves. They
sought and were granted a preliminary injunction and stay by the district
court.
In evaluating the request for a preliminary injunction, the district
court first found that the states had Article III standing as they faced a choice
11
40 U.S.C. § 121.
12
41 U.S.C. § 1302.
13
41 U.S.C. § 1303(a)(1).
14
41 U.S.C. § 1707.
5
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between complying with the mandate and potentially losing members of their
workforce or becoming ineligible to bid on or renew federal contracts.
Next, the district court reviewed the familiar four factors which gov-
ern grants of a preliminary injunction: “(1) a likelihood of success on the mer-
its; (2) a substantial threat of irreparable injury; (3) that the threatened injury
if the injunction is denied outweighs any harm that will result if the injunction
is granted; and (4) that the grant of an injunction will not disserve the public
interest.” Ladd v. Livingston, 777 F.3d 286, 288 (5th Cir. 2015) (quoting Trot-
tie v. Livingston, 766 F.3d 450, 451 (5th Cir. 2014)).
In finding that the states’ suit was likely to succeed, the district court
first expressed its concern “that EO 14042 conflicts with the Tenth Amend-
ment,” as “EO 14042, although supported upon a nexus of economy and ef-
ficiency, was clearly and unequivocally motivated by public health policy first
and foremost.” “Our Constitution principally entrusts ‘[t]he safety and the
health of the people’ to the politically accountable officials of the states.” S.
Bay United Pentecostal Church v. Newsom, 140 S. Ct. 1613 (2020) (mem.)
(Roberts, C.J., concurring) (quoting Jacobson v. Massachusetts, 197 U.S. 11, 38
(1905)). Thus, the district court explained, this mandate falls afoul of the
Tenth Amendment’s reservation of such power to the states.
The district court also found that the elements of the mandate are pro-
cedurally invalid. First, the district court found that there were no “urgent
and compelling circumstances” 15 to justify dispensing with the otherwise re-
quired notice-and-comment period. Even assuming, arguendo, that the no-
tice-and-comment requirement could be overruled, the district court held
that the FAR Memo “clearly and unequivocally appl[ied] beyond EO
14042’s authorized scope” and was thus unlawful. And while the OMB
15
41 U.S.C. § 1707.
6
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Determination included a shortened notice-and-comment period which ar-
guably “adhere[d] to the text” of the statute, the district court found that
since “[c]ompliance requires action by employees weeks before the effective
date to obtain a fully vaccinated status,” “the actions of the OMB circum-
vent the protections envisioned under the APA.”
The district court then held that the states had shown irreparable
harm in the form of “nonrecoverable compliance costs,” Texas v. United
States Env’t Prot. Agency, 829 F.3d 405, 433 (5th Cir. 2016) (quoting Thunder
Basin Coal Co. v. Reich, 510 U.S. 200, 221 (1994) (Scalia, J., concurring in part
and in the judgment)), such as “diversion of resources necessary to identify
covered employees and manage their vaccination status.” The district court
also identified as irreparable harm the choice the states would have to make
if an employee refused to get vaccinated: a choice between “releasing the em-
ployee and all accompanying efficiency, institutional memory, and opera-
tional know-how or foregoing federal contracts.” Moreover, employees
would have to undertake an irreversible decision – vaccination – in order to
be compliant with this mandate. Finally, the district court identified the
threat to the states’ sovereign interests as potentially irreparable harm.
In evaluating the balance of harms, the district court found simply:
“[w]ithout denying the existence of the pandemic or the potential risk it im-
poses, … EO 14042, the OMB determination[,] and the FAR Memo present
a greater risk to the rights of covered employees and contractors and to the
interests of the Plaintiff States to defend constitutionally reserved police
powers from federal overreach.” Finally, the district court found that this
Court’s analysis of the public interest factors in BST Holdings was applicable
to this case as well.
Having established that an injunction was warranted, the district court
set out that the injunction would only apply “to all contracts, grants, or any
7
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other like agreement by any other name between the Plaintiff States and the
national government.” It then stayed the case pending appellate review.
III. Standard of Review
“We review a preliminary injunction for abuse of discretion, review-
ing findings of fact for clear error and conclusions of law de novo.” Texans for
Free Enter. v. Tex. Ethics Comm’n, 732 F.3d 535, 537 (5th Cir. 2013). “Under
the clearly erroneous standard, this court upholds findings by the district
court that are plausible in light of the record as a whole.” Moore v. Brown, 868
F.3d 398, 403 (5th Cir. 2017). And as this Court has often said, “it is an ele-
mentary proposition, and the supporting cases too numerous to cite, that this
court may affirm the district court's judgment on any grounds supported by
the record.” Texas v. United States, 809 F.3d 134, 178 (5th Cir. 2015) (quoting
Palmer ex rel. Palmer v. Waxahachie Indep. Sch. Dist., 579 F.3d 502, 506 (5th
Cir. 2009)).
To obtain or uphold a preliminary injunction, a movant must show:
“(1) a likelihood of success on the merits; (2) a substantial threat of irrepara-
ble injury; (3) that the threatened injury if the injunction is denied outweighs
any harm that will result if the injunction is granted; and (4) that the grant of
an injunction will not disserve the public interest.” Ladd, 777 F.3d at 288(quoting Trottie, 766 F.3d at 451).
IV. Discussion
A. Validity of the Executive Order
The first issue presented in this appeal is whether or not the Executive
Order is within the bounds of the President’s authority under the
8
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Procurement Act. 16 Again, “to provide the Federal Government with an eco-
nomical and efficient system,” 17 the President may “prescribe policies and
directives that [he] considers necessary to carry out this subtitle,” provided
that “[t]he policies [are] consistent with this subtitle.” 18 The Government
contends that generally this “express grant of statutory authority permits the
President to issue, among others, orders that improve the economy and effi-
ciency of contractors’ operations.” The states suggest that under the Gov-
ernment’s interpretation of this act, “[t]here is simply no limiting principle
to the government’s authority.” To this, the Government replies that
“[p]residential authority under the Procurement Act is constrained by the
statute’s text, which requires that any executive order bear a close nexus to
the statutory goals of establishing ‘an economical and efficient system’ for
federal procurement and contracting.” This “close nexus” test, the Govern-
ment suggests, is amply demonstrated in the historical and jurisprudential
record surrounding the Procurement Act.
16
On appeal, neither side challenges the district court’s finding that the states have
Article III standing as federal contractors but likely no parens patriae standing as
representatives of their citizens.
17
40 U.S.C. § 101. The Plaintiff States contend that the Government impermissibly
relies upon this “prefatory purpose statement … [as] a grant of authority” in violation of
Supreme Court precedent. The brief quotes D.C. v. Heller, 554 U.S. 570, 578 (2008) for
the proposition that “apart from [a] clarifying function, a prefatory clause does not limit or
expand the scope of the operative clause.” To this, the Government retorts that a
statement of purpose, “[w]herever it resides, … is ‘an appropriate guide’ to the ‘meaning
of the [statute’s] operative provisions.’” Gundy v. United States, 139 S. Ct. 211, 2127 (2019)
(quoting Antonin Scalia & Brian Garner, Reading Law: The
Interpretation of Legal Texts 218 (2012)) (plurality opinion). To the extent
that 40 U.S.C. § 121 authorizes the President to prescribe policies and directives
concerning contracting, we agree that the statement of purpose acts as a set of guidelines
within which those policies must reside.
18
40 U.S.C. § 121.
9
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1. Historical Practice
In its relative infancy, the Procurement Act’s “most prominent use
… [was] a series of anti-discrimination requirements for Government con-
tractors.” Am. Fed’n of Lab. & Cong. of Indus. Organizations v. Kahn, 618 F.2d
784, 790 (D.C. Cir. 1979) (en banc). However, the executive orders promul-
gating these requirements did not themselves cite the Procurement Act as
the source of their authority. That reliance was instead a creature of case law.
In evaluating a later executive action that did claim Procurement Act author-
ity, the D.C. Circuit noted of the anti-discrimination requirements that “the
early anti-discrimination orders were issued under the President’s war pow-
ers and special wartime legislation, but for the period from 1953 to 1964 only
the [Procurement Act] could have provided statutory support for the Execu-
tive action.” Id. at 790-91 (footnotes omitted). None of these orders, it ap-
pears, were “tested in the courts until 1964,” id. at 791, at which point the
Third Circuit held without analysis that “we have no doubt that the applica-
ble executive order and regulations have the force of law.” Farmer v. Phila.
Elec. Co., 329 F.2d 3, 8 (3d Cir. 1964). 19 This Circuit was next to address this
question, although it did so without the benefit of a direct challenge to the
validity of the claimed authority under the statute. Farkas v. Texas Instrument,
Inc., 375 F.2d 629 (5th Cir. 1967). In Farkas, the Fifth Circuit noted that
“[w]e would be hesitant to say that the antidiscrimination provisions of Ex-
ecutive Order No. 10925 are so unrelated to the establishment of ‘an
19
Notably, the Farmer court recognized without much discussion that there is
“[a]n argument to the contrary” that since “Congress has … declined to enact anti-
discriminatory legislation[,] [f]or the executive to attempt to reach the result by indirection,
through the Government contract device, is an (invalid) attempt to legislate where
Congress has refused to do so.” Id. at 8 n.9. As neither party in Farmer appears to have
challenged the validity of the orders themselves, the Third Circuit left that note without
refutation.
10
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economical and efficient system for … the procurement and supply’ of prop-
erty and services that the order should be treated as issued without statutory
authority.” Id. at 632 n.2 (quoting 40 U.S.C. § 471 [now codified as 40 U.S.C.
§ 101]). “Indeed,” the Court continued, “appellees make no such challenge
to its validity.” Id. Both Farmer and Farkas involved an employee suing an
employer alleging violations of anti-discrimination contractual terms man-
dated by executive order in federal contracts. See Farmer, 329 F.2d at 4-5;
Farkas, 375 F.2d at 631. 20 Farmer was decided on jurisdictional grounds, see
Farmer, 329 F.2d at 10, 21 while Farkas held that the Plaintiff had failed to al-
lege “the essential allegations of state action” necessary to sustain his action.
Farkas, 329 F.2d at 634. Nonetheless, both courts found (although arguably
only in dicta) that the Procurement Act authorized the anti-discrimination
executive orders.
The first case to tackle this issue directly is Contractors Association of
Eastern Pennsylvania v. Secretary of Labor, 442 F.2d 159 (3d Cir. 1971), which
involved a challenge to an order by the Secretary of Labor purporting to im-
plement an executive order by “requir[ing] that bidders on any federal or fed-
erally assisted construction contracts for projects in a five-county area around
Philadelphia, the estimated total cost of which exceeds $500,000, shall sub-
mit an acceptable affirmative action program which includes specific goals
for the utilization of minority manpower.” Id. at 163 (footnote omitted). In
finding that the order could be upheld as an exercise of the President’s Pro-
curement Act authority, the court held: “[n]o less than in the case of defense
20
Farmer also notes that “[t]he case appears to be the first of its kind in the Federal
courts.” Farmer, 329 F.2d at 4.
21
The court explained: “[W]e know of no announced overriding federal common
law permitting a right of action by an employee against his employer for the latter’s failure
to comply with the nondiscrimination provision in a government contract.”
11
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procurement it is in the interest of the United States in all procurement to
see that its suppliers are not over the long run increasing its costs and delay-
ing its programs by excluding from the labor pool available minority work-
men.” Id. at 170. However, the court also impliedly found a significant limi-
tation on the President’s authority in this area:
While all federal procurement contracts must include an affirmative
action covenant, the coverage on federally assisted contracts has been
extended to construction contracts only. This … demonstrates that
the Presidents were not attempting by the Executive Order program
merely to impose their notions of desirable social legislation on the
states wholesale. Rather, they acted in the one area in which discrimi-
nation in employment was most likely to affect the cost and the pro-
gress of projects in which the federal government had both financial
and completion interests.
Id. at 171.
It was with this jurisprudential backdrop in mind that the D.C. Circuit
made its ruling in Kahn. That case concerned an order by President Carter
that, in effect, “den[ied] Government contracts above $5 million to compa-
nies that fail[ed] or refuse[d] to comply with … voluntary wage and price
standards.” 618 F.2d at 785. The court, “consider[ing] the procurement
compliance program in its real-world setting,” expected that “to the extent
compliance with the wage and price standards is widespread a corresponding
reduction (or more gentle increase) in Government expenses should take
place.” Id. at 792. The more subtle “real-world” influence on the court’s
decision, expressed almost in an offhanded fashion, was the idea that “the
inflation problem is too serious for businessmen and workers not to under-
stand the importance of compliance.” Id. The court thus found “no basis for
rejecting the President’s conclusion that any higher costs incurred … will be
more than offset by the advantages gained … in those cases where the lowest
bidder is in compliance with the voluntary standards and his bid is lower than
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… in the absence of standards.” Id. at 793. Nonetheless, the court concluded,
“our decision today does not write a blank check for the President to fill in at
his will.” Id. Instead, the court expressed its “wish to emphasize the im-
portance to our ruling today of the nexus between the wage and price stand-
ards and likely savings to the Government.” Id.The next major case to give serious consideration to the President’s
authority under the Procurement Act was also heard by the D.C. Circuit.22
In UAW-Labor Employment & Training Corp. v. Chao, 325 F.3d 360 (D.C. Cir.
2003), the court held that an executive order requiring contractors to “in-
clude a provision requiring contractors to post notices at all of their facilities
informing employees of what are commonly known as General Motors and
Beck rights” was lawfully promulgated as an exercise of Procurement Act
power. Id. at 362. The executive order in question claimed a nexus to econ-
omy and efficiency based on the notion that “[w]hen workers are better in-
formed of their rights, including their rights under the Federal labor laws,
their productivity is enhanced.” 23 While recognizing that “[t]he link may
22
Several other cases, including one in this Circuit that the Supreme Court
summarily vacated, discussed procurement power in general or in particular. See, e.g.,
United States v. New Orleans Pub. Serv., Inc., 553 F.2d 459, 466–67 (5th Cir. 1977) (“First,
the President has express authority over direct federal procurement practices, under [the
Procurement Act]. … [M]ore recent decisions involving Executive Order 11246 have
candidly acknowledged the validity of the use by the President or Congress of the
procurement process to achieve social and economic objectives. See Rossetti Contracting Co.
v. Brennan, 508 F.2d 1039, 1045 n.18 (7th Cir. 1975); Northeast Const. Co. v. Romney, 485
F.2d 752, 760 (D.C. Cir. 1973). Those cases stand for the proposition that equal
employment goals themselves, reflecting important national policies, validate the use of the
procurement power in the context of the Order.”) (footnote omitted and inline citations
cleaned up), vacated, 436 U.S. 942 (1978). But none of these contained a direct, full
examination of presidential authority under the Procurement Act.
23
Notification of Employee Rights Concerning Payment of Union Dues or Fees,
66 Fed. Reg. 11221 (Feb. 17, 2001).
13
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seem attenuated,” the D.C. Circuit held that “under Kahn’s lenient stand-
ards, there is enough of a nexus.” Chao, 325 F.3d at 367.
The Supreme Court has had little occasion to review presidential au-
thority under the Procurement Act, and even its most direct consideration is
not particularly direct. In Chrysler Corp. v. Brown, 441 U.S. 281 (1979), the
Supreme Court considered the validity of a regulation adjacent to an anti-
discrimination executive order; the latter “prohibit[ed] discrimination on the
basis of ‘race, creed, color, or national origin’ in federal employment or by
Government contractors.” Id. at 286 n.1. However, the Court held that,
“[f]or purposes of this case, it is not necessary to decide whether [the exec-
utive order] as amended is authorized by the [Procurement Act]” or another
statute. Id. at 304. Nonetheless, the Supreme Court noted in a footnote that
“[l]ower courts have suggested that [the Procurement Act] was the authority
for predecessors of [the executive order].” Id. at 304 n.34 (citing Farmer, 329
F.2d 3; Farkas, 375 F.2d 629; and Contractors Assn., 442 F.2d 159). The near-
est the Court came to evaluating the scope of the Procurement Act was as
follows: “The Act explicitly authorizes Executive Orders ‘necessary to effec-
tuate [its] provisions.’ However, nowhere in the Act is there a specific refer-
ence to employment discrimination.” 24 Id. (citation omitted).
In sum, while there is no direct, binding authority on the scope of pres-
idential authority under the Procurement Act, courts have generally landed
24
One could (and the Plaintiff States do, “Just as the Act contains no reference to
remedying employment discrimination, it never remotely refers to contractor vaccination
or public health more generally”) take this dicta from the Supreme Court as a narrowing
instruction for interpretation of the Procurement Act. However, this interpretation is not
supported by the rest of the footnote in question, let alone the rest of the opinion. See, e.g.,
Chrysler, 441 U.S. at 308 (“This is not to say that any grant of legislative authority to a
federal agency by Congress must be specific before regulations promulgated pursuant to it
can be binding … . What is important is that the reviewing court reasonably be able to
conclude that the grant of authority contemplates the regulations issued.”).
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on a “lenient” standard, Chao, 325 F.3d at 367, under which the President
must demonstrate a “sufficiently close nexus” between the requirements of
the executive order and “the values of ‘economy’ and ‘efficiency.’” Am.
Fed., 618 F.2d at 792. 25
2. Modern Practice
In the years between these cases and now, the Procurement Act has
been utilized by multiple presidents in a manner not dissimilar to that of Pres-
ident Biden. Two executive orders in particular merit discussion, one of
which a district court reviewed and another of which has not been squarely
presented for judicial review.
The first, Executive Order 13465, was issued by President George W.
Bush. 26 The Order mandated that all federal contractors “agree to use an
electronic employment eligibility verification system … to verify the employ-
ment eligibility of: (i) all persons hired during the contract term … to perform
employment duties within the United States; and (ii) all persons assigned by
the contractor to perform work within the United States on the Federal
25
See also Liberty Mut. Ins. Co. v. Friedman, 639 F.2d 164, 170 (4th Cir. 1981)
(“Assuming, without deciding, that the Procurement Act does provide constitutional
authorization for some applications of Executive Order 11,246, we conclude that, in any
event, the authorization could validly extend no farther than to those applications satisfying
the nexus test used in Contractors Association and Kahn. Applying that test here, we are
satisfied that it is not met.”).
However, this Court does not today determine whether or not the “close nexus”
test is the proper test for evaluating the lawfulness of executive orders under the
Procurement Act. The Eleventh Circuit has made a compelling case that the text and
structure of the Procurement Act are inconsistent with this test, see Georgia v. President of
the United States, No. 21-14269, 2022 WL 3703822 at *8-11 (11th Cir. 2022). In any case,
such a determination is not necessary for resolution of the case before us.
26
Amending Executive Order 12989, as Amended, 73 Fed. Reg. 33285 (June 6,
2008).
15
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contract.” 27 The Chamber of Commerce of the United States of America,
among others, brought suit in the District Court of Maryland to challenge the
legality of the executive order and its implementing documents. Chamber of
Com. of U.S. v. Napolitano, 648 F. Supp. 2d 726 (D. Md. 2009). Finding that
“President Bush explained how requiring contractors to use E–Verify would
promote efficiency and economy in procurement,” the court held that the
order was consistent with the Procurement Act and noted that “[t]he Presi-
dent and his Administration are in a better position than this Court to make
such determinations.” Id. at 738. 28
More recently, President Barack Obama issued Executive Order
13706, by which he sought “to increase efficiency and cost savings in the
work performed by parties that contract with the Federal Government by en-
suring that employees on those contracts can earn up to 7 days or more of
paid sick leave annually, including paid leave allowing for family care.” 29 The
President justified the order by stating: “[p]roviding access to paid sick leave
will improve the health and performance of employees of Federal contractors
and bring benefits packages at Federal contractors in line with model employ-
ers, ensuring that they remain competitive employers … . These savings and
quality improvements will lead to improved economy and efficiency in
27
Id. at 33286.
28
It appears that the parties stipulated to dismissal before the Fourth Circuit could
hear the case. See Chamber of Com. of U.S. v. Napolitano, No. 8-CV-3444 docket entry 60
(D. Md. 2009).
29
Establishing Paid Sick Leave for Federal Contractors, 80 Fed. Reg. 54697 (Sep.
7, 2015).
16
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No. 22-30019
Government procurement.” 30 However, it appears that the order was never
challenged in federal court, with only passing references present in the case
law. 31
3. Limitations
The “close nexus” test combined with appropriate deference to pres-
idential determinations leaves the President with nearly unlimited authority
to introduce requirements into federal contracts. Hypothetically, the Presi-
dent could mandate that all employees of federal contractors reduce their
BMI below a certain number on the theory that obesity is a primary contrib-
utor to unhealthiness and absenteeism. Under the Government’s theory of
the case, the only practical limit on presidential authority in this sphere is the
executive’s ability to tie policy priorities to a notion of economy or efficiency.
To an extent, this is borne out by the statutory text. The statute introduces
no serious limit on the President’s authority and, in fact, places discernment
explicitly in the President’s hands: “[t]he President may prescribe policies
and directives that the President considers necessary to carry out this subtitle.” 32
30
Id.31
See Hurst v. Wilkie, No. 19-CV-0540, 2021 WL 1534471, at *2 (D. N.M. Apr. 19,
2021) (“Under EO 13706, federal contractors must provide personnel with a specified
minimum amount of paid sick leave, vacation days, and holidays”), Glocoms, Inc. v. United
States, 149 Fed. Cl. 725, 734 (2020) (“Glocoms argues that Coastal’s quotation is not
technically acceptable, because the [terms] would violate … Executive Order 13706. …
But, even if true, the Court agrees with the government that such compliance issues are
matters of contract administration that fall beyond the Court’s bid protest jurisdiction.”),
and Ne. Illinois Reg’l Commuter Rail Corp. v. Int’l Ass’n of Sheet Metal, Air, Rail, &
Transportation Workers - Transportation Div., 578 F. Supp. 3d 985, 993 (N.D. Ill. 2022)
(“Under the circumstances, the Court cannot say that Metra’s noncompliance with
Executive Order 13706 amounts to evidence that it is not, or does not consider itself to be,
a federal contractor.”)
32
40 U.S.C. § 121 (emphasis added).
17
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No. 22-30019
It bears considering, therefore, whether there are other extra-statu-
tory limitations on the President’s authority under the Procurement Act. The
district court found one such limitation in the form of the Tenth Amend-
ment. The President’s authority is undoubtedly circumscribed by the bounds
of the Constitution. President Biden could not, for example, require that all
federal contractors be Catholic. 33 But given the Supreme Court’s general ad-
monition to avoid finding constitutional problems where unnecessary, see
Harmon v. Brucker, 355 U.S. 579, 581 (1958) (“[i]n keeping with our duty to
avoid deciding constitutional questions presented unless essential to proper
disposition of a case, we look first to petitioners’ nonconstitutional claim”),
and given the existence of another potential limitation by which this case may
be decided, this Court does not address the Tenth Amendment argument to-
day.
Another theoretical limitation suggested but not explored in the case
law is the notion that market forces will prevent overreach. If private corpo-
rations and individuals believe this mandate to be a bridge too far, they can
choose not to contract with the federal government. After all, “no one has a
right to a Government contract.” Kahn, 618 F.2d at 794. However, this ar-
gument does not withstand serious inquiry; the federal government is no or-
dinary market participant subject to the same whims of free enterprise as oth-
ers, if for no other reason than its aims are greater than profit. 34 To its credit,
the Government does not advance this argument.
33
See U.S. Const. amend. I.
34
See U.S. Const. pmbl. (“We the People of the United States, in Order to form
a more perfect Union, establish Justice, insure domestic Tranquility, provide for the
common defence, promote the general Welfare, and secure the Blessings of Liberty to
ourselves and our Posterity, do ordain and establish this Constitution for the United States
of America.”).
18
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No. 22-30019
When considering the related vaccination mandate imposed by the
Occupational Safety and Health Administration (“OSHA”), the Supreme
Court suggested that another limitation may apply. The Court ruled that the
OSHA mandate was “no ‘everyday exercise of federal power.’” NFIB, 142
S. Ct. at 665 (2022) (quoting In re MCP No. 165, 20 F.4th at 272 (Sutton, C.
J., dissenting)). More than that, the Court continued, “[i]t is instead a signif-
icant encroachment into the lives—and health—of a vast number of employ-
ees. ‘We expect Congress to speak clearly when authorizing an agency to ex-
ercise powers of vast economic and political significance.’ There can be little
doubt that OSHA’s mandate qualifies as an exercise of such authority.” Id.
(quoting Alabama Assn. of Realtors v. Department of Health and Human Servs.,
141 S. Ct. 2485, 2489, (2021) (per curiam)). OSHA’s mandate may have been
larger in scope than the mandate at issue in this case, but not perhaps by as
much as may be expected. The Department of Labor has suggested that
roughly “one-fifth of the entire U.S. Labor Force” is “employed by federal
contractors.” 35 The guidance document issued by the Safer Federal Work-
force Task Force suggests that the vaccination requirement applies to “any
full-time or part-time employee of a covered contractor working on or in con-
nection with a covered contract or working at a covered contractor work-
place. This includes employees of covered contractors who are not them-
selves working on or in connection with a covered contract.” 36
This so-called “Major Questions Doctrine” – that is, that “[w]e ex-
pect Congress to speak clearly when authorizing an agency to exercise powers
of vast economic and political significance,” id. – serves as a bound on Pres-
idential authority. The Government submits that the Major Questions
35
Dep’t of Labor, History of Executive Order 11246, perma.cc/6ZXJ-WGR.
36
COVID-19 Workplace Safety: Guidance for Federal Contractors and
Subcontractors at 3-4.
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Doctrine does not apply here as it applies only to interpretations of statutes
that result in “enormous and transformative expansion[s] in … regulatory
authority without clear congressional authorization.” Util. Air Regul. Grp. v.
E.P.A., 573 U.S. 302, 324, (2014). As this federal contractors mandate is nei-
ther an “enormous and transformative expansion” nor an exercise of “regu-
latory authority,” the Government suggests, the major questions doctrine is
inapplicable. Instead, the Government would have us say that as this is an
exercise of the President’s “proprietary authority, as purchaser of services,”
it is not subject to the major questions doctrine. The Government suggests
this is more akin to the vaccine mandate imposed on Medicare and Medicaid
facilities than the OSHA mandate. The Supreme Court upheld the former
in a per curiam decision that did not mention the major questions doctrine.
Biden v. Missouri, 142 S. Ct. 647 (2022) (per curiam). There, the Court held
that “a vaccination requirement under these circumstances is a straightfor-
ward and predictable example of the ‘health and safety’ regulations that Con-
gress has authorized the Secretary to impose.” Missouri, 142 S. Ct. at 653.
In stark contrast, this federal contractor mandate is neither a straight-
forward nor predictable example of procurement regulations authorized by
Congress to promote “economy and efficiency.” The Government notes
that “large numbers of private employers―including AT&T, Bank of Amer-
ica, Google, Johnson & Johnson, and Microsoft―have established vaccina-
tion requirements for their workforces.” At issue in this case, though, is not
whether the federal government may (analogously) force its employees to get
vaccinated against COVID-19, 37 but whether the federal government may
place such a requirement in its contracts with third parties, including the
37
That issue is being considered by our court en banc in Feds for Medical Freedom v.
Biden, Case No. 22-40043.
20
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No. 22-30019
Plaintiff States. The Government has provided no examples of such contracts
in the private sector.
Nor is the Government’s analogy to the mandate upheld as to employ-
ees of Medicare and Medicaid facilities apt. The decision in Missouri rested
in part on ordinary practices: “Vaccination requirements are a common fea-
ture of the provision of healthcare in America: Healthcare workers around
the country are ordinarily required to be vaccinated for diseases such as hep-
atitis B, influenza, and measles, mumps, and rubella.” Missouri, 142 S. Ct. at
653. The Supreme Court likewise emphasized “the longstanding practice of
Health and Human Services in implementing the relevant statutory authori-
ties.” Id. at 652. Indeed, as the D.C. Circuit recognized in Kahn, “the Presi-
dent’s view of his own authority under a statute is not controlling, but when
that view has been acted upon over a substantial period of time without elic-
iting congressional reversal, it is ‘entitled to great respect.’” Kahn, 618 F.2d
at 790 (quoting Bd. of Governors of Fed. Rsrv. Sys. v. First Lincolnwood Corp.,
439 U.S. 234, 248, (1978)). And as this Court has elsewhere noted, “where
there exists a longstanding judicial construction, ‘Congress is presumed to
be aware of the interpretation ... and to adopt that interpretation [if] it re-
enacts that statute without change.’” Silva-Trevino v. Holder, 742 F.3d 197,
202 (5th Cir. 2014) (alterations in original) (quoting Lorillard v. Pons, 434
U.S. 575, 580 (1978)).
At best, it is questionable, however, whether the historical record sup-
ports the Government’s contention that this mandate is within the
longstanding practice and construction of the President’s Procurement Act
authority. As the D.C. Circuit noted in the first major Procurement Act case,
“the early anti-discrimination orders were issued under the President’s war
powers and special wartime legislation.” Kahn, 618 F.2d at 790. It was not
until the 2001 executive order at issue in Chao that it appears Presidents rou-
tinely and explicitly relied upon Procurement Act authority to issue social-
21
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No. 22-30019
policy oriented procurement orders to contracting entities. See Chao, 325
F.3d at 367.
Even assuming, arguendo, that as a matter of historical practice and
judicial construction that the Procurement Act has been used to advance pol-
icy positions, this argument fails to account for the dramatic difference be-
tween this mandate and other exercises of Procurement Act authority. The
nearest analogue to this mandate is President Obama’s Paid Sick Leave exec-
utive order, which sought to impose a sick leave requirement on federal con-
tractors in order to “improve the health and performance of employees of
Federal contractors and bring benefits packages at Federal contractors in line
with model employers, ensuring that they remain competitive employers in
the search for dedicated and talented employees.” 38 Again, though, the Sick
Leave order was never considered by a federal court. More significantly, a
vaccine mandate is “strikingly unlike” the sick leave policy or any other Pro-
curement Act exercises for several reasons, not least of which is that “[a]
vaccination … ‘cannot be undone at the end of the workday.’” NFIB, 142 S.
Ct. at 665 (quoting In re MCP, 20 F.4th at 274) (Sutton, C. J., dissenting)).
Most significantly, unlike the non-discrimination, E-Verify, Beck rights, and
sick leave orders, which govern the conduct of employers, the vaccine mandate
purports to govern the conduct of employees – and more than their conduct,
purports to govern their individual healthcare decisions. 39
38
Establishing Paid Sick Leave for Federal Contractors, 80 Fed. Reg. 54697.
39
The dissent argues that there is no real distinction between this executive order
and, for example, the one relating to E-Verify: “Neither of these necessarily govern the
conduct of employees, or … they both [do.]” To be clear: unlike the E-Verify order, this
vaccine mandate requires employees to take an action not limited temporally or physically
to their place of employment and unrelated to any statutory scheme – that is, to get
vaccinated or lose their job. No such action is required by employees under the E-Verify
order. The E-Verify order also tracks with a statutory scheme – namely, the Illegal
22
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No. 22-30019
To allow this mandate to remain in place would be to ratify an “enor-
mous and transformative expansion in” the President’s power under the Pro-
curement Act. Util. Air Regul. Grp., 573 U.S. at 324. Under Supreme Court
precedent, this Court cannot permit such a mandate to remain in place absent
a clear statement by Congress that it wishes to endow the presidency with
such power. 40
4. Effectively Boundless Scope
Imagine that the President had issued an alternative but similar exec-
utive order. In this order, to “decrease worker absence, reduce labor costs,
and improve the efficiency of contractors and subcontractors at sites where
they are performing work for the Federal Government,” 41 the President in-
structed executive agencies to incorporate a clause into all contracts specify-
ing that all contractors and subcontractors “comply with all guidance for con-
tractor or subcontractor workplace locations published by the Safer Federal
Workforce Task Force.” 42 This hypothetical order, however, would instruct
the Task Force to issue guidance relating to the dangers of tobacco, and this
Task Force would issue guidance requiring that all covered contractors
Immigration Reform and Immigrant Responsibility Act of 1996 and related immigration
and work authorization laws. Pub. L. No. 104–208, 110 Stat. 545.
40
The dissent takes issue with our analysis of the major questions doctrine,
suggesting that it “is only invoked when there are potential anti-delegation issues to
agencies” rather than the President. However, the Supreme Court has never explicitly
limited the major questions doctrine to delegations to agencies rather than to the President.
As Article II of the Constitution “makes a single President responsible for the actions of
the Executive Branch,” Seila Law LLC v. Consumer Financial Protection Bureau, 140 S. Ct.
2183, 2203 (2020) (quoting Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 561
U.S. 477, 496-97 (2010)), delegations to the President and delegations to an agency should
be treated the same under the major questions doctrine.
41
86 Fed. Reg. at 50985.
42
Id.
23
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No. 22-30019
ensure that all covered contractor employees refrain from smoking or from
being in the presence of smoking. As we now know better than ever, smoking
and exposure to second-hand smoke contribute to significant and lasting
health issues. It is no stretch at all to say that contractual requirements that
all employees of federal contractors refrain from smoking or being in the pres-
ence of smoking at all times would result in a gain to economy and efficiency
in federal contracting. 43 Nor would it be much different than this mandate,
which likewise makes demands of individuals inside and outside the work-
place. This order could certainly pass the “close nexus” test already dis-
cussed, and yet it would undoubtedly strike reasonable minds as too great a
stretch under the Procurement Act.
At oral argument, the Government dismissed such hypotheticals as
outlandish and suggested that they would not be upheld in a court of law. We
agree that no court would uphold them, but the Government provided no di-
viding line by which a court might rule out the one and uphold the other.
Though the government suggests that the “close nexus” test provides such
a line, respectfully, that line is no line at all. The President would have little
difficulty, under the close nexus test, finding a close relationship between
economy and efficiency and a requirement that all federal contractors certify
that their employees take daily vitamins, live in smoke-free homes, exercise
three times a week, or even, at the extremity, take birth control in order to
reduce absenteeism relating to childbirth and care. 44
43
It is this element of the hypothetical order that makes it analogous to the case at
hand and which the dissent misses. Smoking may be prohibited at federal facilities, but what
about at the homes of federal employees? Likewise, this “contractor” mandate places
demands on individuals employed by federal contractors in and out of the workplace.
44
The Government suggested at oral argument that this last, hyperbolic
hypothetical may run into un-elaborated independent constitutional issues. Whether or not
this is so, the point remains that the close nexus test – the only non-constitutional limitation
24
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No. 22-30019
The difference here, the Government suggested, is at least in part that
we are facing a “once-in-a-century” pandemic. The Constitution is not ab-
rogated in a pandemic. Nor, as the Supreme Court’s COVID-related deci-
sions make clear, are our legal principles of statutory interpretation. See
NFIB, 142 S. Ct. at 665. And nor, for that matter, is Congress, who could
have drafted vaccination-related laws or even made clear its intent regarding
the President’s proprietary authority in federal contracting or employing.
Congress has also provided in certain laws for special and extraordinary pow-
ers to be placed in the hands of the President. 45 No such provision exists in
the Procurement Act to justify this intrusive command. The pandemic, chal-
lenging as it has been for the President, the legislature, the courts, and espe-
cially the populace, does not justify such an enormous and transformative ex-
pansion of presidential authority.
As to the distinction between regulatory and non-regulatory power,
on which the Government relied in its briefing to distinguish this action from
the OSHA mandate, it is here a distinction without a difference. Certainly,
“the Government has a much freer hand in dealing ‘with citizen employees
[and government contractors] than it does when it brings its sovereign power
to bear on citizens at large.’” NASA v. Nelson, 562 U.S. 134, 148 (2011)
(quoting Engquist v. Oregon Dept. of Agriculture, 553 U.S. 591, 598 (2008)).
And were this mandate to apply only to federal contractors on, for example,
federal job sites, this distinction may carry more weight. As it is, though, the
on Procurement Act authority that the Government recognized – would not in itself
prevent the President from issuing such an order.
45
See, e.g., 42 U.S.C. § 247d (“If the Secretary determines, after consultation with
such public health officials as may be necessary, that—(1) a disease or disorder presents a
public health emergency; or (2) a public health emergency, including significant outbreaks
of infectious diseases or bioterrorist attacks, otherwise exists, the Secretary may take such
action as may be appropriate to respond to the public health emergency”).
25
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No. 22-30019
mandate covers any and all employees – full-time or part-time – who work for
a contractor at any location “at which any employee of a covered contractor
working on or in connection with a covered contract is likely to be present
during the period of performance for a covered contract.” 46 “This includes
employees of covered contractors who are not themselves working on or in
connection with a covered contract.” 47 The Government seeks to paint this
mandate as “the Government act[ing], not as a regulator, but as the manager
of its internal affairs.” NASA, 562 U.S. at 153. The vast scope of its mandate
belies that contention. There is little internal about a mandate which encom-
passes even employees whose sole connection to a federal contract is a cubi-
cle in the same building as an employee working “in connection with” 48 a
federal contract – especially as the Supreme Court has called the phrase “in
connection with” “essentially ‘indeterminat[e]’ because connections, like
relations, ‘stop nowhere.’” Maracich v. Spears, 570 U.S. 48, 59 (2013) (quot-
ing N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514
U.S. 645, 655 (1995) (internal quotation marks omitted)).
This is not an exercise in determining what type of power is being used
by evaluating “practical effects” of the order, as the Government suggests.
Nor are we blind to the effect of political accountability on a president’s de-
cisions. By its own terms, this mandate and its implementing documents re-
quire immense action not just from internal contract employees but also from
an all-but-boundless number of employees whose employer has at least one
federal contract. No matter what else is or is not regulatory, this certainly is.
46
COVID-19 Workplace Safety: Guidance for Federal Contractors and
Subcontractors at 4.
47
Id.48
COVID-19 Workplace Safety: Guidance for Federal Contractors and
Subcontractors at 3.
26
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No. 22-30019
5. Conclusion
“When an agency claims to discover in a long-extant statute an unher-
alded power to regulate ‘a significant portion of the American economy,’ we
typically greet its announcement with a measure of skepticism. We expect
Congress to speak clearly if it wishes to assign to an agency decisions of vast
‘economic and political significance.’” 49 Util. Air Regul. Grp., 573 U.S. at 324
(quoting Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S.
120, 123 (2000)). As the Government’s brief makes clear, questions sur-
rounding the vaccine and the pandemic generally are undoubtedly of “vast
economic and political significance.” Id. Congress has not spoken clearly to
authorize such a dramatic shift in the exercise of the President’s power under
the Procurement Act. Nor are historical exercises of that power sufficient to
demonstrate a long-standing understanding that the Procurement Act could
be used in this way. The President’s use of procurement regulations to reach
through an employing contractor to force obligations on individual employees
is truly unprecedented. As such, Executive Order 14042 is unlawful, and the
Plaintiff States have consequently demonstrated a strong likelihood of suc-
cess on the merits. 50
B. Equitable Factors
1. Irreparable Harm
The district court found that the Plaintiff States had carried their bur-
den to show irreparable harm in the form of “nonrecoverable compliance
costs,” Texas v. EPA, 829 F.3d at 433 (quoting Thunder Basin Coal, 510 U.S.
49Id. (quoting Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529
U.S. 120, 123 (2000)).
50
As it need not do so, the Court takes no stance today on the procedural validity
of the implementing documents.
27
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No. 22-30019
at 221), such as “diversion of resources necessary to identify covered em-
ployees and manage their vaccination status.” The district court also identi-
fied as irreparable harm the choice the states would have to make if an em-
ployee refused to get vaccinated against COVID-19: a choice between “re-
leasing the employee and all accompanying efficiency, institutional memory,
and operational know-how or foregoing federal contracts.” A showing of ir-
reparable harm requires a demonstration of “harm for which there is no ade-
quate remedy at law.” Daniels Health Scis., L.L.C. v. Vascular Health Scis.,
L.L.C., 710 F.3d 579, 585 (5th Cir. 2013) (citing Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 20 (2008)). As the district court identified, “‘com-
plying with a regulation later held invalid almost always produces the irrepa-
rable harm of nonrecoverable compliance costs.’” Texas v. EPA, 829 F.3d at
433 (quoting Thunder Basin Coal, 510 U.S. at 220–21 (alteration in origi-
nal)). 51 Such harm, however, must be more than “speculative;” “there must
be more than an unfounded fear on the part of the applicant.” Texas v. EPA,
829 F.3d at 433 (quoting Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d
992, 997 (5th Cir. 1985)).
The Government suggests, first, that to hold compliance costs as ir-
reparable harm “would encompass every case in which a litigant complains
of a new contract requirement” and thereby impermissibly broaden the scope
of irreparable harm. But not all compliance costs are “nonrecoverable”; to
the extent that compliance costs are recoverable, they are not irreparable.
The loss of an employee and the associated costs – monetary and otherwise
51
In response to this statement, the Government cites two cases from other circuits
for the proposition that “ordinary compliance costs are typically insufficient to constitute
irreparable harm.” Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112, 115 (2d Cir. 2005) (citing
Am. Hosp. Ass’n v. Harris, 625 F.2d 1328, 1331 (7th Cir. 1980)). Although this quote appears
to apply only to recoverable compliance costs, we are bound regardless by Texas v. EPA and
not Freedom Holdings.
28
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No. 22-30019
– are nonrecoverable costs. Should an employee be fired and a new employee
hired due to this mandate, it is undisputed that the Plaintiff States would be
harmed and would have no recourse for this harm. The Government’s sec-
ond contention also serves as a sort of retort to their own argument: “Plain-
tiffs similarly failed to introduce evidence substantiating their claim that the
Executive Order will cause mass disruptions to their labor forces.” 52 The
Government points to a study which noted that “only ‘1% of all adults ... say
they left a job because an employer required them to get vaccinated.’” 53 The
district court appears to have credited the testimony of at least one Louisiana
employee that she expected the State to fire her alongside as many as 96 other
state employees in her department after each of them had a religious accom-
modation request denied. In any case, as this Circuit has previously noted,
“[w]hen determining whether injury is irreparable, ‘it is not so much the
magnitude but the irreparability that counts.’” Texas v. EPA, 829 F.3d at
433–34 (quoting Enter. Int’l, Inc. v. Corporacion Estatal Petrolera Ecuatoriana,
762 F.2d 464, 472 (5th Cir. 1985)). Even if the Government is right and only
one percent 54 of, for example, the state of Louisiana’s employees left their
job because of this mandate, Louisiana alone would lose nearly 700
52
Id. at 48.
53
Id. at 49 (quoting Kaiser Family Found., The KFF COVID-19 Vaccine Monitor
(Oct. 28, 2021), https://perma.cc/ENL7-E7HE).
54
To be clear, the report the Government cites only states that one percent of all
adults left their job due to a workplace vaccine mandate. This number does not account for
the figure elsewhere in the same study which noted that only 25% of all employers had a
vaccine mandate when the study was published. Nor does it account for the statistic also
compiled in the study that when faced with a choice between (a) getting vaccinated, (b)
undergoing weekly COVID-19 testing (an option not likely available under this mandate),
or (c) leaving their job, only 11% of unvaccinated employees said they would get vaccinated,
while a full 37% said they would leave their job. See Kaiser Family Found., The KFF COVID-
19 Vaccine Monitor (Oct. 28, 2021), https://perma.cc/ENL7-E7HE.
29
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employees. 55 Obviously, this Court cannot accurately predict how many em-
ployees would be fired were this injunction to be lifted. Under our precedent,
it is sufficient to show that even under the Government’s best theory of the
case, enough employees would likely leave as to constitute “more than de
minimis” harm, Enter. Int’l, 762 F.2d at 472 (quoting Canal Authority v.
Callaway, 489 F.2d 567, 574 (5th Cir. 1974)), at which point “‘it is not so
much the magnitude but the irreparability that counts,’” Texas v. EPA, 829
F.3d at 433–34 (quoting Enter. Int’l, 762 F.2d at 472).
2. Balance of Harms and the Public Interest
The Government summarily dismisses the district court’s analysis of
the balance of harms and the public interest, noting that “[d]elaying imple-
mentation of the Executive Order will lead to productivity losses in the per-
formance of federal contracts from schedule delays as well as leave and health
care costs for workers who are sick, isolating, or quarantined.” As “the virus
continues to pose complex and dynamic challenges to the delivery of services
to the American people,” the Government continued, “[h]ow to address the
evolving challenges the virus poses … is a question best left to the President
… not to unelected courts.” In the eyes of the President, however: “The
pandemic is over. If you notice, no one’s wearing masks. Everybody seems to
be in pretty good shape.” 56 Regardless, we have noted before that “‘[t]here
is generally no public interest in the perpetuation of unlawful agency
55
Byron P. Decoteau, Jr., State Civil Service Annual Report: Fiscal Year 2020-2021,
Louisiana State Civil Service Agency (November 3, 2021),
https://www.civilservice.louisiana.gov/files/publications/annual_reports/AnnualReport
20-21.pdf (noting that “[a]t the close of Fiscal Year 2020-2021, Louisiana state government
employed 69,906 employees.”).
56
President Joe Biden: The 2022 60 Minutes Interview, (Sep. 18, 2022),
https://www.cbsnews.com/news/president-joe-biden-60-minutes-interview-transcript-
2022-09-18/.
30
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action.’” State v. Biden, 10 F.4th 538, 560 (5th Cir. 2021) (quoting League of
Women Voters of U.S. v. Newby, 838 F.3d 1, 12 (D.C. Cir. 2016)). And, as with
the OSHA mandate, “any abstract ‘harm’ a stay might cause the Agency
pales in comparison and importance to the harms the absence of a stay threat-
ens to cause countless individuals and companies.” BST Holdings, 17 F.4th
at 618. The balance of harms and the public interest favors an injunction.
V. Conclusion
We do not, and cannot, rule on the efficacy of any vaccine, the wisdom
of the President’s action, or even whether or not this action would, in fact,
increase economy and efficiency in federal contracting. Today, we are asked,
where Congress has not authorized the issuance of this mandate, whether the
President may nonetheless exercise this power. We hold that he may not. Ac-
cordingly, we AFFIRM the district court’s grant of an injunction.
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James E. Graves, Jr., Circuit Judge, dissenting:
The majority conjures up the most extreme and unlikely scenarios to
deny the President his authority under the Procurement Act. But it is im-
portant to ask where the Procurement Act began. It began with anti-discrim-
ination requirements, See, e.g., Exec. Order No. 11,246, 30 Fed. Reg. 12,319,
12,319 (Sept. 24, 1965) (forbidding civilian contractors from discriminating
on the basis of race, creed, color, or national origin). It is also indisputable
that it allowed the President to require contractors to inform their employees
that they have a right to not pay union dues. Exec. Order No. 12,800, 57 Fed.
Reg. 12,985, 12,985 (Apr. 13, 1992). It allowed for a president to require fed-
eral contractors to use the E-Verify system to verify the lawful immigration
status of employees. Exec. Order No. 13,465, 73 Fed. Reg. 33,285, 33,285
(June 6, 2008). And it allowed a requirement that federal contractors provide
their employees with paid sick leave. Exec. Order No. 13,706, 80 Fed. Reg.
54,697, 54,697 (Sept. 7, 2015). All these executive orders were issued pursu-
ant to the president’s authority under the Procurement Act. And all were ei-
ther ruled constitutional, or not even challenged in court. See, e.g., Contrac-
tors Ass’n of Eastern Pennsylvania v. Secretary of Labor, 442 F.2d 159, 170 (3d
Cir. 1971) (upholding anti-discrimination orders); Farkas v. Texas Instrument,
Inc., 375 F.2d 629, 632 n.1 (5th Cir. 1967) (same); UAW-Labor Employment &
Training Corp. v. Chao, 325 F.3d 360, 366 (D.C. Cir. 2003) (upholding union
notices); Chamber of Commerce v. Napolitano, 648 F. Supp. 2d 726, 738 (D.
Md. 2009) (upholding the E-Verify System). 1 Because the executive order
here is consistent with what is allowed under the Procurement Act, I respect-
fully dissent.
1
See also Justin C. Van Orsdol, An Administrative Solution to the Student Loan Debt
Crisis, 80 Wash. & Lee L. Rev. Online 35, 51 & n.59 (2022) (discussing unsuccessful
challenges to executive orders on adopting affirmative action plans).
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I.
The Procurement Act states that “[t]he President may prescribe
policies and directives that the President considers necessary” to ensure the
“economical and efficient administration and completion of Federal
Government contracts.” 40 U.S.C. § 121. The Procurement Act gives the
President both “necessary flexibility and broad-ranging authority” in setting
procurement policies reasonably related to the statute’s aims, UAW-Labor
Emp’t & Training Corp. v. Chao, 325 F.3d 360, 366 (D.C. Cir. 2003) (citation
omitted), including policies that in the President’s judgment will improve the
economy and efficiency of federal contractors’ operations. Acting as Chief
Operating Officer of the Executive Branch, the President has the authority in
making judgments about how best to promote economy and efficiency in the
federal government’s contracting and procurement.
The majority tries to make a distinction between this use of the
Procurement Act and all the others (each upheld by federal courts). The
majority argues that “[m]ost significantly, unlike the non-discrimination, E-
Verify, Beck rights, and sick leave orders, which govern the conduct of
employers, the vaccine mandate purports to govern the conduct of employees –
and more than their conduct, purports to govern their individual healthcare
decisions.” But this is not quite true. For example, the E-Verify system
mandated that federal contractors use E-Verify to electronically verify the
employment eligibility of employees working under covered federal
contracts. Exec. Order No. 13,465, 73 Fed. Reg. 33,285, 33,285 (June 6,
2008). In turn, the COVID-19 Procurement Act Order directs federal
agencies to include in certain contracts a clause requiring covered contractor
employees to follow COVID-19 safety protocols, which include vaccination
requirements. Exec. Order No. 14,042. 86 Fed. Reg. 50,985 (Sept. 14, 2021).
Neither of these necessarily govern the conduct of employees, or, taking the
majority’s logic, they both govern the conduct of employees. Both Executive
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Orders require something of employers, namely that the employer use the E-
Verify system to verify the immigration eligibility of its workers, and that the
employer uses a system to verify the vaccine eligibility of its workers. Both
necessarily touch the employees, namely that employees working for federal
contractors must be verified under the E-Verify system or be subject to
termination, and that employees working for federal contractors must be
verified as being COVID-19 vaccine compliant or be subject to termination.
These two executive orders are almost indistinguishable regarding how they
affect federal contract workers. 2
II.
In Am. Fed’n of Lab. & Cong. of Indus. Organizations v. Kahn, 618 F.2d
784, 790 (D.C. Cir. 1979) (en banc), a case analyzing a challenge to an
executive order which was issued under the Procurement Act, the District of
Columbia Circuit Court held that Section 205(a)’s language “recognizes that
the Government generally must have some flexibility to seek the greatest
advantage in various situations.” Id. at 788–89. The court continued,
“‘[e]conomy’ and ‘efficiency’ are not narrow terms; they encompass those
factors like price, quality, suitability, and availability of goods or services that
are involved in all acquisition decisions.” Id. at 789. And in Kahn, the court
recognized that “there may be occasional instances where a low bidder will
not be awarded a contract.” Id. at 793. That was acceptable for the court
because there was “no basis for rejecting the President’s conclusion that any
higher costs incurred in those transactions will be more than offset by the
2
The majority distinguishes the contractor vaccine mandate, in part, because it is
“unrelated to any statutory scheme.” Setting aside the many public health statutory
schemes, a plain reading of the Procurement Act makes it clear that the action does not
have to be tied to any outside statutory scheme. If that were so, Congress would have
mandated that requirement.
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advantages gained in negotiated contracts and in those cases where the lowest
bidder is in compliance with the voluntary standards and his bid is lower than
it would have been in the absence of standards.” Id. This was permitted
because “it is important to consider the procurement compliance program in
its real-world setting.” Id. at 792.
Courts after Kahn consistently upheld the President’s broad authority
under the Procurement Act. In UAW-Labor Employment & Training Corp. v.
Chao, 325 F.3d 360 (D.C. Cir. 2003), President George H.W. Bush’s
executive order “sought to connect its requirements to economy and
efficiency as follows”
[w]hen workers are better informed of their
rights, including their rights under the Federal
labor laws, their productivity is enhanced. The
availability of such a workforce from which the
United States may draw facilitates the efficient
and economical completion of its procurement
contracts.
Id. at 366. The court was clearly skeptical of this reasoning; “[t]he link may
seem attenuated (especially since unions already have a duty to inform
employees of these rights), and indeed one can with a straight face advance
an argument claiming opposite effects or no effects at all.” Id. at 366–67. Yet
the court recognized Kahn’s “lenient standards” and found “enough of a
nexus.” Id. at 367.
The majority notes that some of “the executive orders promulgating
these [anti-discrimination] requirements did not themselves cite the
Procurement Act as the source of their authority.” Rather, they contend,
“[t]hat reliance was instead a creature of case law.” But Executive Orders
are not required to lay out the specific statute that the President’s authority
falls under. For example, Executive Order No. 11,246, 30 Fed. Reg. 12,319,
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12,319 (Sept. 24, 1965) bases its authority “[u]nder and by virtue of the
authority vested in me as President of the United States by the Constitution
and statutes of the United States. . . .” No court has ever held that the
President’s executive order lacks certain “magic words” which transforms
an otherwise legal executive order into an illegal one. Regardless, as the
majority concedes, both Farmer v. Phila. Elec. Co., 329 F.2d 3 (3d Cir. 1964)
and Farkas v. Texas Instrument, Inc., 375 F.2d 629 (5th Cir. 1967)—two cases
dealing with anti-discriminatory executive orders—“found (although
arguably in dicta) that the Procurement Act authorized the anti-
discrimination executive orders.” And as Kahn recognized, for the period
from 1953 to 1964, only the Procurement Act “could have provided statutory
support for the [anti-discrimination] Executive action[s].” 618 F.2d 784 at
790–91. The majority briefly discusses Executive Order No. 13,465, 73 Fed.
Reg. 33,285, 33,285 (June 6, 2008) (E-Verify) and Executive Order No.
13,706, 80 Fed. Reg. 54,697, 54,697 (Sept. 7, 2015) (paid sick leave), and
concludes that “courts have generally landed on a lenient standard, under
which the President must demonstrate a sufficiently close nexus between the
requirements of the executive order and the values of economy and
efficiency.” (internal citations and quotations omitted). I agree.
III.
The majority seems to anchor its decision on the major question’s
doctrine. This reliance, however, is misplaced. The major questions doctrine
provides that “[w]e expect Congress to speak clearly if it wishes to assign to
an agency decisions of vast ‘economic and political significance.’” Util. Air
Regul. Grp. v. EPA (UARG), 573 U.S. 302, 324 (2014) (quoting Food & Drug
Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160 (2000)). Ad-
ditionally, the major questions doctrine has been described as a skepticism of
agency interpretations that “would bring about an enormous and transform-
ative expansion in . . . regulatory authority without clear congressional
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authorization.” Id. The doctrine requires that an agency “must point to
‘clear congressional authorization’ for the power it claims.” West Virginia v.
EPA, 142 S. Ct. 2587, 2609 (2022) (quoting UARG, 573 U.S. at 324). As
Judge Anderson points out in his concurrence in Georgia v. President of the
United States,
[w]hile I agree this is a question of major eco-
nomic and political significance, we are not deal-
ing with delegation to an agency. Instead, the del-
egation is to the President who does not suffer
from the same lack of political accountability that
agencies may, particularly when the President
acts on a question of economic and political sig-
nificance. Cf. Free Enter. Fund v. Public Co. Ac-
counting Oversight Bd., 561 U.S. 477, 513–14, 130
S. Ct. 3138, 3164, 177 L.Ed.2d 706 (2010) (hold-
ing that the structure of an independent agency
violated the Constitution because the President,
“who is accountable to the people for executing
the laws,” did not have the ability to hold the in-
dependent agency accountable).
46 F.4th 1283, 1308-17 (Anderson, J. concurring/dissenting opinion). It is
important to note that the major questions doctrine is only invoked when
there are potential anti-delegation issues to agencies, and that is not the situ-
ation here. Free Enter. Fund v. Pub. Co. Acct. Oversight Bd., 561 U.S. 477, 513
(2010). Furthermore, as pointed out above, this is not an “enormous and
transformative expansion in” regulatory authority, but rather is a standard
exercise of the federal government’s proprietary authority. Therefore, the in-
junction cannot be grounded in reasoning under the major question’s doc-
trine.
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IV.
Regardless, the majority decides that this must be the first executive
order under the president’s Procurement Act authority to be struck down.
Even in doing so, it recognizes that analyzing the text of the statute could lend
the President the power to issue the Executive Order in question: “[t]he
statute introduces no serious limit on the President’s authority and, in fact,
places discernment explicitly in the President’s hands: ‘[t]he President may
prescribe policies and directives that the President considers necessary to carry
out this subtitle.’” But, according to the majority, “[i]t bears considering,
therefore, whether there are other extra-statutory limitations on the
President’s authority under the Procurement Act.”
It is true that there must be limiting principles to the President’s
authority under the Procurement Act. But it must be fact specific to the
precise issue before the court. When actions taken are in the mainstream of
American businesses, that points towards permitting the executive order.
Economic factors would prevent the President from handicapping the
contractor workforce with extreme contractual terms. If the President
attempted to insert into contracts forced abortions, BMI restrictions, or other
draconian measures outside the mainstream of American companies, he or
she would hear from the people or from Congress. The majority conjures up
an example where the President could
instruct the Task Force to issue guidance relating
to the dangers of tobacco, and this Task Force
would issue guidance requiring that all covered
contractors ensure that all covered contractor
employees refrain from smoking or from being in
the presence of smoking. As we now know better
than ever, smoking and exposure to second-hand
smoke contribute to significant and lasting health
issues. It is no stretch at all to say that contractual
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requirements that all employees of federal
contractors refrain from smoking or being in the
presence of smoking at all times would result in a
gain to economy and efficiency in federal
contracting.
The government can and certainly does have the authority to prohibit
smoking on federal facilities. See 41 C.F.R. § 102-74.315. 3 It is simply another
example of an Executive Order that curtails the employees actions. Just like
requiring vaccine mandates, the reason to prohibit smoking while at a federal
facility is to prevent dangerous disease from spreading, whether it be COVID
or harms from secondhand smoke, which hampers the economy and
efficiency of federal contractors’ operations. 4
The majority dismisses the argument that “market forces will prevent
overreach.” After all, “no one has a right to a Government contract.” Kahn,
618 F.2d at 794. To the majority, “this argument does not withstand serious
inquiry; the federal government is no ordinary market participant subject to
the same whims of free enterprise as others, if for no other reason than its
aims are greater than profit.” (footnote omitted). But it deserves further
inquiry. Again, no company has a right to a federal contract. If the company
does not want to abide by the clauses of the government contract, the
government is not forcing companies to contract with it. And there are
reasons to think that the government has greater control in designing their
contracts than private businesses. Unlike private contracts, the government
3
Note, this regulation was first enacted via Executive Order 13058.
4
The majority distinguishes the “smoking” hypothetical because it places
“demands on individuals employed by federal contractors in and out of the workplace.”
However, getting the vaccine does not require any lasting affirmative or prohibitive activity
of the employee outside the workplace like a demand that a worker quits smoking at home.
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has authority to unilaterally terminate a contract for no reason at all. See FAR
43.103(b).
Additionally, the largest workforce in the United States—the
employees of the federal government—achieved over 97% compliance with
the COVID-19 vaccine requirement, with every government agency having
at least a 95% compliance rate. 5 Roughly 40% of employers in the United
States have some type of vaccine mandate for their employees. 6 These
include American companies such as AT&T, Bank of America, Google,
Johnson & Johnson, and Microsoft. The largest airline in the United States,
American Airlines, achieved a 99.7% vaccination rate and fired only 232
employees out of its 67,000 U.S. based employees. 7 Some agencies also
require employees and contractors be vaccinated for diseases such as
influenza. 8 And other Department of Defense contractors are required to get
5
Update on Implementation of COVID-⁠19 Vaccination Requirement for Federal
Employees, The White House (Dec. 9, 2021),
https://www.whitehouse.gov/omb/briefing-room/2021/12/09/update-on-
implementation-of-covid-%E2%81%A019-vaccination-requirement-for-federal-
employees/.
6
Robert Iafolla, Vaccine Mandates at Work Part of ‘New Normal,’ Employers Say,
Bloomberg Law (May 3, 2022 at 11:01 PM),
https://www.bloomberglaw.com/bloomberglawnews/daily-labor-
report/X42AKRF4000000?bna_news_filter=daily-labor-report.
7
Jemima McEvoy, United Airlines Firing 232 Employees Who Refused Covid
Vaccine, CEO Says, Forbes (April 21, 2022 at 9:32 AM),
https://www.forbes.com/sites/jemimamcevoy/2021/10/13/united-airlines-firing-232-
employees-who-refused-covid-vaccine-ceo-says/?sh=5f1fbe8c4399).
8
James N. Stewart, DoD Immunization Program, Office of the Under Secretary of
Defense for Personnel and Readiness (July 23, 2019),
https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/620502p.pdf?ver
=2019-07-23-085404-617 (“For HCP working under contract to any DoD Component,
seasonal influenza immunizations may be provided by the DoD medical treatment facilities,
if stated in the contract agreement. Otherwise, contracting companies will provide
influenza vaccines to their employees.”)
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vaccines for overseas assignments. See, e.g., Griffin v. Sec’y of Health & Hum.
Servs., No. 13-280V, 2014 WL 1653427, at *2 (Fed. Cl. Apr. 4,
2014), aff’d, 602 F. App'x 528 (Fed. Cir. 2015). While the government does
not exist to make a profit, it does favor the “economical and efficient
administration and completion of Federal Government contracts.” 40
U.S.C. § 121. There is an “expressed federal policy of selecting the lowest
responsible bidder.” Student Loan Servicing All. v. D.C., 351 F. Supp. 3d 26,
62 (D.D.C. 2018) (quoting Leslie Miller, Inc. v. State of Ark., 352 U.S. 187, 190
(1956)). There is no compelling reason why federal government contractors
should be treated differently than private businesses in this situation.
V.
The Procurement Act authorizes the President’s action in issuing
Executive Order 14042. Therefore, the States fail to establish a substantial
likelihood of success on the merits. The district court abused its discretion in
granting the injunction.
Even if the States showed a likelihood of success on the merits, there
is no irreparable harm. A showing of irreparable harm requires a
demonstration of “harm for which there is no adequate remedy at law.”
Daniels Health Scis., L.L.C. v. Vascular Health Scis., L.L.C., 710 F.3d 579, 585
(5th Cir. 2013) (citing Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20
(2008)). The district court identified irreparable harm as the choice the states
would have to make if an employee refused to get vaccinated: a choice
between “releasing the employee and all accompanying efficiency,
institutional memory, and operational know-how or foregoing federal
contracts.” The loss of an employee is typically not a nonrecoverable cost,
save for certain types of contracts where institutional knowledge might be
necessary, such as large research and development contracts. More
importantly, the monetary cost would be recoverable. First, this Executive
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Order does not apply to any existing contracts. Any future contract
modification here would be a bilateral modification under FAR 43.103(a)(1),
which requires “negotiable equitable adjustments resulting from the issuance
of a change order.” To provide another example, in the various government
shutdowns in the last decade, the federal government had to suspend
countless contracts and was forced to negotiate different prices to recall
contractors back after the shutdown ended. 9 And similar actions occurred
when President Obama issued Executive Order 13658 to establish the
minimum wage increases; the federal government simply renegotiated the
contract prices. Therefore, the idea that the States show irreparable harm in
the form of “nonrecoverable compliance costs” is not availing. Accordingly,
there is no irreparable harm.
“[T]he irreparable harm and the public interest inquiries are
intertwined, and we consider them jointly.” Mississippi Power & Light Co. v.
United Gas Pipe Line Co., 760 F.2d 618, 623 (5th Cir. 1985). Delaying the
implementation of the Executive Order will lead to widespread economic
harm in the economical and efficient administration and completion of
federal government contracts. Absenteeism will affect the cost and progress
of all federal contracts, regardless of the type. Increased delays necessarily
equal increased costs to the government because it either delays a program
or delays other contractors. Absenteeism from contractors with COVID-19
causes delays or non-performance in government contracts, which will cost
the government—and therefore citizens and taxpayers—unnecessary time
9
David H. Carpenter, How a Government Shutdown Affects Government
Contracts, Congressional Research Service (Jan. 10, 2019)
https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=
8&ved=0CAQQw7AJahcKEwjQx5GntKT7AhUAAAAAHQAAAAAQAg&url=https%3
A%2F%2Ffas.org%2Fsgp%2Fcrs%2Fmisc%2FLSB10243.pdf&psig=AOvVaw0bbpShAyjkp
UV2qEIejsvY&ust=1668196910139790.
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and money. The balance of harms weighs against the States. The district
court abused its discretion in granting the injunction.
Respectfully, I dissent.
43