SCOTUS Blocks OSHA Vaccination Mandate for Small Employers but Upholds CMS Mandate for Healthcare Facilities

On November 4, 2021, the Occupational Safety and Health Administration (OSHA) issued an Emergency Temporary Standard (ETS) requiring employers of 100 or more to adopt COVID-19 policies, maintain rosters of vaccinated employees, and provide paid time off to employees to vaccinate or recover from its effect. These mandates were to go into effect on January 10, 2022. By February 9, 2022, employers were to require employees to show proof of COVID-19 vaccination or undergo weekly testing.

On that same date the Centers for Medicare & Medicaid Services (CMS) issued an interim rule mandating COVID-19 vaccination and other requirements for workers in most healthcare settings participating in Medicare and Medicaid programs by January 22, 2022.

Legal challenges quickly wound their way through the federal courts, leaving businesses in limbo about their obligations to implement these vaccination and testing mandates. On January 13, 2022 the Supreme Court of the United States (SCOTUS) issued decisions on both mandates, imposing a stay on the OSHA ETS vaccination and testing mandates, but upholding the vaccination mandate and other aspects of the CMS for healthcare facilities.

The OSHA ETS Ruling. By way of background, the multi-district challenges to the OSHA ETS were consolidated before the 6th Circuit, who ultimately lifted an earlier stay of the ETS, greenlighting its enforcement while the parties continued to litigate OSHA’s authority to promulgate the ETS. SCOTUS then took up the issue, and in its 6-3 ruling reimposed the stay, effectively shutting down the enforcement of the ETS, at least for now.

The Court reasoned that the challenges (still before the 6th Circuit) were unlikely to prevail because OSHA’s regulatory authority was limited to setting “workplace standards, not broad public health measures.” However, it reasoned that although the risk of contracting COVID-19 exists in many workplaces, “it is not an occupational hazard in most.” Noting that COVID-19 spreads anywhere that people gather, it is a “universal risk” of day-to-day living and permitting OSHA to regulate hazards of daily life would expand OSHA’s regulatory authority without congressional authorization. Recognizing OSHA’s authority to regulate special occupational risks associated with certain work environments (e.g., in healthcare settings), the Court faulted OSHA’s indiscriminate approach that failed to account for different work environments with varying degrees of COVID-19 risk.

The CMS Ruling: In the legal proceedings below, two district courts enjoined the CMS’ interim rule mandating vaccinations for healthcare providers with Medicare and Medicaid patients. Unlike its finding that OSHA overreached is delegated authority, here the Court observed that Congress expressly authorized CMS to impose conditions on the receipt of Medicaid and Medicare funds necessary to protect the health and safety of individuals receiving services. Moreover, vaccination requirements are common features in healthcare settings, and the Court saw no basis for limiting the agency’s exercise of delegated authority during the pandemic.

So Does This End the Debate? Not necessarily. In both the cases, there will be further litigation in the lower courts about the legality and scope of the mandates. As for the CMS, the Court paved the way for CMS to enforce its vaccination mandate while the challenges to the validity and the scope if its interim ruling continues.

As for the OSHA ETS challenge, the Court merely put enforcement of the ETS on hold while the litigation proceeds, and theoretically the 6th Circuit could determine that the ETS is valid, which would result in yet another review before SCOTUS. This is unlikely given the Court’s finding that the OSHA overstepped its delegated authority through an ETS aimed at regulating public health more broadly, not occupational hazards. Alternatively, OSHA could decide to back away from the ETS – an emergency measure that can only stay in place for 6 months – and proceed with more formal rulemaking that might incorporate many of the requirements of the ETS.

Also, Executive Order 14042 (Federal Government Contractors and Subcontractors) was not part of the docket before SCOTUS. At the moment that Executive Order, covering all Federal contracts performed in the U.S. and its territories, is enjoined from enforcement by the U.S. District Court of Georgia as affirmed by the 11th Circuit, unless the work is being done in or for a Federal building or facility, the Executive Order is then in effect.

Does This Mean Employers Cannot Proceed with Vaccination Mandates or COVID-19 Testing? No. Unless the employer is located in a jurisdiction that prohibits mandates under state or local laws, private sector employers are free to impose vaccination mandates, testing mandates, or a combination of both. The EEOC has made it clear that an employer can inquire about its employees’ vaccination status without violating antidiscrimination laws or HIPAA. Employers are also free to impose more stringent mask and other safety protocols in response to the pandemic than those imposed by OSHA or recommended by the CDC. But for those employers with collectively bargained employees, the NLRB has held that these safety protocols and their effects are a mandatory subject of bargaining, so the employer needs to revisit the collective bargaining agreement and contact the Union to work on mutually acceptable mandates and procedures. Likewise, be aware of rapidly changing local requirements such as the vaccine mandate in New York City for any employer conducting business there.

What Should an Employer Do? If they haven’t already done so, employers should decide among the following options:

  • a mandatory vaccination policy;
  • a hybrid vaccination or weekly testing option for the unvaccinated policy; or
  • no mandates or testing, but continued masking requirements and social distancing for the unvaccinated.

When selecting among these options, employers should take into account several factors, including the nature of the work environment, how staff or customers will respond to any requirements, the loss of manpower if mandates or testing are imposed or not imposed, the cost and availability of mandated testing, and the exposure to liability for workplace exposures.

Regardless of the approach, employers should develop and distribute COVID-19 policies that address the following:

  • clearly explaining any vaccination or testing mandates, including vaccination verification or testing-monitoring protocols;
  • reasonable accommodation for employees’ medical or religious requirements;
  • the removal and return to work protocols for individuals who test positive or have exposure to COVID-19;
  • face coverings and other safety protocols, especially for those not fully vaccinated; and
  • encouraging vaccination, with consideration for paid time off for vaccination or any ill effects from the vaccine.

Summing it Up. Despite these rulings, it is likely that we have not yet heard the last from OHSA or CMS as the pandemic continues. At least for now, large employers outside the public sector and New York City are no longer looking down the barrel of imminent vaccination and testing mandates. Nevertheless, employers should prepare for the potential of future regulations, or worse, legal liability if they do not undertake appropriate efforts to protect employee safety while the pandemic ensues.

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