The US Supreme Court issued two decisions on January 13, 2022 in cases challenging the Occupational Safety and Health Administration’s (OSHA’s) Emergency Temporary Standard (ETS) on Vaccination and Testing and the Centers for Medicare & Medicaid Services (CMS) Interim Final Rule (IFR) on COVID-19 Health Care Staff Vaccination. The Supreme Court decided to reimpose the stay on enforcement of the ETS while staying the preliminary injunctions against the CMS IFR pending further litigation.
The decisions in these cases were highly anticipated, particularly in relation to the ETS given that portions of the standard went into effect on January 10, 2022. Both opinions largely followed the patterns and themes that emerged during oral argument on January 7. The Court criticized the ETS as an overreach of agency authority, but found the CMS IFR to be within the agency’s statutory power.
The majority opinion in the ETS case, which was joined by six justices, held that the challengers’ case against the ETS was likely to succeed and that the balance of equities favored reimposing a stay as litigation proceeded. While the decision was not a formal finding invalidating the ETS, the majority strongly suggested it would reach that result if presented directly with the question. The decision will likely give OSHA pause as it considers pursuing a defense of the ETS.
The majority stressed that OSHA is a creature of its statute and the authority granted by Congress in that statute. It started from the premise that OSHA’s authorizing act empowers the agency to set workplace and occupational standards, not public health measures. The ETS crossed that line, in the majority’s view, because of its broad application and failure to distinguish between different workplace settings. Yet, the majority noted that OSHA is not entirely powerless in a pandemic. It acknowledged that OSHA continues to have authority to regulate COVID-19 risks when such risks are occupation-specific or where the virus imposes a special danger because of the particular features of a workplace. That recognition of flexibility may prove important as OSHA plans its next steps in this area.
Finally, in holding that the balance of equities favored a stay, the Supreme Court refused to make a determination as to whether the permanent nature of vaccination and the significant compliance costs imposed on employers by the ETS were more or less important than the potential lives saved by ETS implementation. The majority stated that those tradeoffs were for Congress to decide, and it took note of the fact that Congress had not acted to authorize a vaccine mandate and had not granted OSHA the authority to issue such a mandate in its original statute.
A majority of five justices held that CMS had the statutory authority to implement its COVID-19 vaccine mandate rule for healthcare workers and that the IFR was properly promulgated. Facing the government’s requests to stay injunctions issued by federal district courts in Louisiana and Missouri, the Supreme Court determined that the broad authority granted by Congress to CMS to ensure the health and safety of Medicare and Medicaid patients justified the reach of the rule. In particular, the Court noted that because most of the facilities subject to the vaccine mandate already have long-standing requirements to “maintain and enforce an ‘infection prevention and control program,’” requiring vaccinations was a rational outgrowth of a novel threat.
Further, and with potentially broader implications, the Court also held that CMS was justified in finding good cause to issue the IFR on an emergency basis. The Court quickly dismissed the argument that CMS did not identify a specific basis for which an emergency rule was appropriate, noting that CMS only needed to identify “something specific” to forgo notice and comment requirements, which it did by citing the impending winter flu season as reason for expedited action.
The implications for entities covered by the CMS IFR are relatively straightforward. The IFR is now in effect and covered health care facilities should continue to implement policies and procedures requiring “staff” (as that term is defined in the IFR) to be fully vaccinated against COVID-19. However, the CMS IFR was always intended to be read in conjunction with the OSHA ETS. Given the Court’s ruling against OSHA, it is not clear how CMS intends to gap fill those details of the ETS that the CMS IFR did not originally include.
As for the ETS, the current version is likely dead, although not officially. The case will return to the US Court of Appeals for the Sixth Circuit for a full hearing on the merits of the parties’ arguments. The majority’s analysis strongly suggests the government will lose that case, and it is possible the government will abandon the appeal. Even if the government decides to continue to pursue the case, the Sixth Circuit will be hard pressed to issue a decision before the expiration date of the current ETS, which is six months after its effective date of November 5, 2021 (i.e., May 5, 2022). In any event, the Supreme Court’s stay would last through any petition for certiorari from that decision. It is therefore unlikely that the stay could be lifted before the ETS expires.
OSHA retains the ability to issue a COVID-19 regulation in the future. It is possible that OSHA will try to issue a narrower version of the rule in line with the limits identified in the majority opinion. OSHA could do this either through a new ETS or, potentially, by issuing a permanent standard based on the notice and comment received for the prior ETS. We would expect legal challenges to result in either case.
Further, state OSHA programs may still seek to issue their own versions of a testing or vaccination rule. There are currently 22 states that operate their own OSHA plans governing private sector employees, and those state plans are permitted to exceed the safety requirements issued by OSHA. While we expect any efforts to impose similar requirements will be subject to legal challenge, given this decision, some of those states may feel compelled to explore the option of issuing their own vaccination or testing standard.
In addition, Secretary of Labor Marty Walsh issued a statement shortly after the Supreme Court ruling, which pledged that OSHA will continue to “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.” The “General Duty Clause” of the Occupational Safety and Health Act of 1970 requires employers to provide a workplace free from recognized hazards that are causing or are likely to cause death or serious injury. OSHA uses this clause to issue citations when no specific standard applies. The National COVID-19 Emphasis Program, issued on July 7, 2021 (NEP), empowers the agency to randomly select and target specific industries or activities where workers are at higher risk of exposure to COVID-19 for onsite inspections. While the ETS itself is likely null for good, employers should still take steps to protect their workplaces from COVID-19 as OSHA continues to have enforcement authority to address COVID-19 in the workplace.
To be clear, although there is no longer any vaccine or testing mandate standard, OSHA may be looking for creative ways to issue citations against employers who ignore recommended guidance. It is expected that OSHA will use previously issued guidance—which it may soon update again to focus on vaccination and testing programs in the workplace—as well as CDC guidance to support cases under the General Duty Clause, so employers should continue to pay attention to such guidance and determine what steps would be appropriate for their particular worksites.
Employers in industries listed in the OSHA COVID-19 NEP should pay particular attention to the risk of OSHA enforcement, including (1) the health care sector, such as physicians, dentist offices, ambulance services, general medical and surgical hospitals, nursing care facilities, mental health and psychiatric care facilities, and home health care operations (Table 1 in Appendix A to the NEP); and (2) non-health care, such as general warehousing, meat and poultry processing, supermarkets and other grocery stores, discount department stores, the postal service, full and limited service restaurants, and correctional facilities (Table 2 in Appendix A to the NEP).
Practically, the Supreme Court’s ruling does not limit an employer’s ability to impose mandatory COVID-19 vaccination programs. That said, because the ruling eliminates the preemptive protection of an OSHA standard, employers implementing COVID-19 vaccination programs will need to navigate state and local laws on the issue, including new vaccine mandates as well as those that limit their ability to mandate vaccination or expand the category of exemptions they need to require.
The ETS decision and the Supreme Court’s decision on the CMS vaccination rule do not affect the Federal Contractor Executive Order on mandatory COVID-19 vaccination. That Executive Order is currently subject to a nationwide preliminary injunction on enforcement and is being reviewed by the US Court of Appeals for the Fifth, Sixth, and Eleventh Circuits. It is possible that the government will petition the Supreme Court to review these injunctions in the near future.
As always, the COVID-19 regulatory and legal environment is fast-changing and is expected to continue. Therefore, employers should consider the following:
The torrent of developments in the COVID-19 space is not likely to abate any time soon. Employers of all sizes will need to continue to closely monitor events to ensure they are meeting their legal obligations and creating a safe working environment for employees.
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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Jason S. Mills
Daniel A. Kadish
Daryl S. Landy
Emily Cuneo DeSmedt