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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No. 22-30019

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.

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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.

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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.

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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).

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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).

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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).

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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.

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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-

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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

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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.

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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

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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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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.

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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.

49

Id. (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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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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– 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.

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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/.

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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