Increased contractor discretion in COVID-19 Executive Order 14042
In September, we published a client alert addressing President Biden’s Path out of the Pandemic: COVID-19 Action Plan for covered federal contractors. As we noted in our prior alert, Executive Order 14042 (the Order) and the Safer Federal Workforce Task Force guidance (the Guidance) will require vaccination for all “covered contractor employees,” unless such employees are legally entitled to an accommodation. The deadline for compliance with this vaccination requirement is December 8, 2021 – however, as explained below, this will likely be extended to January 4, 2022.
The Order and Guidance have been implemented via federal contractual vehicles to achieve broad applicability. The Order’s vaccination requirements apply to employees working directly on a covered contract (including those working entirely from home and at outdoor sites) and to employees who perform duties essential to the performance of the covered contract – such as human resources, billing and legal. The Order also applies to employees working in the same workplace as an employee working on or in connection with a covered contract. This “facility nexus” could have far-reaching implications, depending on the circumstances and facilities of specific contractors. For example, even if a covered employee is likely to be confined to one floor of a single facility on a campus of several facilities belonging to a covered contractor, all contractor employees working at the same site, facility or even campus could be subject to the Order if they share common areas, including lobbies, security clearance areas, elevators, meeting rooms, kitchens, dining areas or parking garages.
Not surprisingly, covered contractors have encountered challenges requiring employees to comply with the COVID-19 vaccination mandate. As a result, covered contractors have grappled with the tough decision of how to handle employees who decline to receive the vaccine, including whether those individuals should be discharged or placed on unpaid leave until they become fully vaccinated. Both of these options exacerbate the short-staffing issues faced by contractors due to the current labor shortages and increased business-continuity risks.
In apparent recognition of these issues, on November 1, 2021, the Safer Federal Workforce Task Force released updated Guidance, via updated Frequently Asked Questions, giving covered contractors discretion in how to manage covered employees who have not been vaccinated and have not been provided, or do not have a pending request for, an accommodation by the effective date. Such discretion includes, for example, allowing time for employee counseling and education, followed by additional disciplinary measures, if necessary.
The recent Guidance states that, while it is ultimately up to the contractor to determine the appropriate means of enforcement of the vaccination mandate, the covered employees are not required to be placed on administrative leave while the contractor is pursuing disciplinary measures. The Guidance further explains that employee dismissal should only occur “after continued noncompliance,” but contains no specificity regarding the applicable timeframe for measuring the same. Although the updated Guidance does not materially change the requirements of the Order, it provides additional flexibility to contractors seeking to minimize disruptions to their workforces and operations. In other words, contractors now have a path to comply with the Order that does not require abrupt dismissal of covered employees.
In addition to the above, the Guidance also explains that, for covered employees requesting to be exempt from the vaccination requirements for religious or medical reasons, it is ultimately up to contractors to determine which covered employees are entitled to accommodations, and that these decisions do not need to be made by the time the employee begins work on a contract or at a covered workplace, as long as the employee’s request for an accommodation is submitted by such time.
The Biden Administration may continue to expand the options and discretion available to covered contractors to delay or waive vaccination requirements such as, for example, permitting contractors to implement COVID-19 testing in lieu of vaccination. On November 4, 2022, the Administration issued a Fact Sheet expressing its intent to extend the effective date to January 4, 2022 to align with requirements under the Occupational Safety and Health Administration’s Emergency Temporary Standard (ETS). For more information on the ETS, see our client alert. However, this extension to January 4 has yet to be formally effectuated, and we will continue to monitor such developments.
In the meantime, covered contractors must comply with applicable requirements of the Order, Guidance and implementing contract clauses. Employers subject to the Order should document all cases and courses of action with respect to non-compliant employees to memorialize their good-faith efforts to comply.
Finally, we note that approximately 20 states have filed or joined in lawsuits to block the vaccine mandate. The states are contesting the extent of the Biden administration’s authority to address public health considerations through an executive order pursuant to the Federal Property and Administrative Services Act of 1949 (FPASA). While the ultimate outcome of the cases is unknown, this litigation may affect the timing for implementation of the mandate, as well as whether it will ultimately be permitted to take full effect.