Supreme Court Blocks OSHA Vax-or-Test ETS for Large Employers, Allows CMS Health Care Vax Rule

As explained in greater detail by our colleague Stuart M. Gerson, the Supreme Court of the United States handed down two major, and quickly decided, rulings on January 13, 2022. After hearing oral arguments only six days earlier, the Court issued two unsigned decisions per curiam. A 5-4 decision in Biden v. Missouri dissolved a preliminary injunction against enforcement of an interim final rule (“Rule”) promulgated by the Centers for Medicare & Medicaid Services (CMS), requiring recipients of federal Medicare and Medicaid funding to ensure that their employees are vaccinated against COVID-19.

But the Biden administration’s effort to promote universal vaccination with a more sweeping rule—an Emergency Temporary Standard (ETS) issued by the Occupational Safety and Health Administration (OSHA) and directed at all U.S. employers with at least 100 employees—was blocked by the high court. A 6-3 decision reversed the action taken by U.S. Court of Appeals for the Sixth Circuit in December, and reimposed a stay of the ETS, meaning that OSHA may not enforce the mandate pending the outcome of further litigation.

Health Care Providers Must Comply with CMS Vaccine Mandate Across the United States

Following decisions by district courts in Missouri and Louisiana, since November 30, 2021, enforcement of the CMS Rule has been blocked in about half of the states. In Biden v. Missouri, the Supreme Court permitted the Biden administration to enforce the vaccine mandate nationwide, finding that the Secretary of Health and Human Services has the authority to promulgate health and safety rules for providers receiving Medicare and Medicaid funding. The Court found that CMS had acted reasonably to protect patient health and safety because “Covid-19 is a highly contagious, dangerous—and especially for Medicare and Medicaid patients—deadly disease”

With the CMS Rule once again in effect across the country, covered facilities should be prepared to comply with the vaccination and other requirements of the Rule. CMS previously announced that it will begin enforcing compliance at the end of this month. The deadline for Phase 1 is January 27, 2022, and the deadline for Phase 2 is February 28, 2022.

The Supreme Court has now remanded the companion cases to the District Courts for the Western District of Louisiana and the Eastern District of Missouri, respectively, for decisions on the merits.

With OSHA, the Uncertainty Continues

The Supreme Court’s decision to stay enforcement of the ETS means that covered employers need not immediately meet compliance deadlines. As a matter of legal process, however, the decision is not the final word on the merits of the combined lawsuits challenging the ETS. The Sixth Circuit was selected by lottery to hear the consolidated cases, but that litigation, which had been paused pending the outcome of emergency applications to the Supreme Court, will now proceed. As the Sixth Circuit has already indicated its inclination to support the ETS (by lifting the stay that had been previously imposed by the U.S. Court of Appeals for the Fifth Circuit), the case may soon return to the Supreme Court for a decision on the merits.

Though a change of heart by the justices is not impossible, the opinions (and the dissents) about both the OSHA ETS and the CMS Rule provide a clear signal that the Court is unlikely to uphold agency actions unless they are bolstered by an act of Congress or are narrowly tailored. As far as the ETS goes, the Biden administration will have to satisfy the Court’s view that, while OSHA is empowered to regulate occupational dangers, Congress has not granted OSHA specific authority to mitigate the greater scourges that encompass and emanate beyond the workplace.

What Should Employers Do Now?

Health care employers covered by the CMS Rule must now implement mandatory vaccination policies and related rules by the modified enforcement deadlines set by CMS. Good faith compliance efforts should be immediately undertaken.

Employers covered by the OSHA ETS are on less certain ground. It is not clear whether or when the OSHA rules will become enforceable. U.S. Secretary of Labor Marty Walsh issued a statement encouraging employers to, of their own accord, follow OSHA’s guidance on vaccination, and reminded employers of their existing obligation to keep employees safe. He further vowed that OSHA would “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.” Secretary Walsh also promised that “OSHA will be evaluating all options to ensure workers are protected from this deadly virus.”

However, employers in jurisdictions with local mandates, such as the Maine, New Jersey, and New York State vaccination rules for health care workers and the New York City vaccine mandate covering all city employers, continue to be bound by those laws. Given the Court’s position that public health and safety are the purview of the states and Congress, it appears likely that such measures will be upheld by courts if challenged. The Supreme Court had already refused to block vaccine mandates for health care workers in New York State and Maine.

Notably, private employer policies regarding workplace safety—including requirements regarding vaccination, testing, and mask wearing, similar to those proposed by the ETS—have been consistently upheld by courts when challenged by employees, at least in those jurisdictions that have not since imposed contrary state or local laws banning or limiting such rules (such as Texas and Florida). Employers must carefully evaluate applicable state laws to determine whether they prohibit or restrict vaccination mandates, and whether they are preempted by applicable federal laws or regulations, such as the CMS Rule. If in doubt, consult counsel, and stay tuned.