Court of Appeals Says "No" to OSHA's "Vaccine or Test" Emergency Mandate for Employers with 100 or more employees

After imposing a temporary stay on November 6 and expediting briefing of the parties, on Friday, November 12, the U.S. Court of Appeals for the Fifth Circuit issued a permanent order staying enforcement and implementation of the federal Occupational Safety and Health Administration’s (OSHA) COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS), which was scheduled to begin requiring compliance on December 5, 2021, with employees having until January 4, 2022, to be vaccinated or begin regular testing for employers with 100 or more employees. For more information about the particulars of the requirements for the “vaccine or test” ETS, see Brian Koegle’s Sidebar article from November 4, 2022, which can be found here: https://www.pooleshaffery.com/articles/?Article=1807.

The petition for the stay of enforcement was filed by more than two dozen companies, individuals and the states of Texas, Louisiana, Utah and South Carolina. In reaching its 22-page ruling, the Fifth Circuit Panel in a unanimous decision reasoned that OSHA failed to satisfy the two legal standards necessary to issue the ETS: first, that the emergency regulation is necessary to protect employees, and second, that the protection is against “grave danger” due to exposure to “substances or agents determined to be toxic or physically harmful.”

What the Court Said

In ruling on the necessity prong, the Court noted that the ETS was “the rare government pronouncement” that is both overinclusive and underinclusive. It is overinclusive because broadly encompasses all workplaces based on the numbers of employees alone without any direct relationship to the actual threat of COVID-19 transmission posed by a specific workplace. The Court found it to be underinclusive because it fails to protect vulnerable workers that are exposed to the identical alleged “grave danger” simply because a given employer has less than 100 employees.

Citing prior statements by OSHA earlier in the pandemic that COVID-19 does not pose the kind of emergency that allows OSHA to take the extreme measure of an ETS, the Court stated that COVID-19 does not fall into the category of “grave danger” required under the Occupational Safety and Health Act (the “Act”) because the virus is widely present, not particular to any workplace, and “non-life threatening to a vast majority of employees” so that it does not constitute a toxic or physically harmful “substance” or “agent” as required under the Act.

While not expressly ruling on the ETS’s constitutionality, the Court stated that the Act “was not – and likely could not be, under the Commerce Clause and nondelegation doctrine – intended to authorize a workplace safety administration in the deep recesses of the federal bureaucracy to make sweeping pronouncements on matters of public health affecting every member of society in the profoundest of ways.” Further, “its promulgation grossly exceeds OSHA’s statutory authority.” The Court raised additional concerns about the ETS’s likely violation of the separation of powers principles.

The Court explained that the ETS is “an ‘unusual response’ to ‘exceptional circumstances’” that “is an ‘extraordinary power’ that is to be ‘delicately exercised’ in only certain ‘limited situations.’” The Court found that the “vaccine or test” ETS “is anything but a “delicate exercise” of this ‘extraordinary power.’”

The Court also found that the petitioners would be irreparably harmed if the stay were not granted. Noting that the ETS would apply to 2 out of every 3 employees in the United States, The ETS “threatens to substantially burden the liberty interests of reluctant individual recipients put to a choice between their job(s) and the jab(s). For the individual petitioners, the loss of constitutional freedoms ‘for even minimal periods of time . . . unquestionably constitutes irreparable injury.” The Court found the companies would be irreparably harmed in the absence of a stay “whether by the business and financial effects of a lost or suspended employee, compliance and monitoring costs associated with the [ETS], the diversion of resources necessitated by the [ETS], or by OSHA’s plan to impose stiff financial penalties on companies that refuse to punish or test unwilling employees.” The states in the litigation “have an interest in seeing their constitutionally reserved police power over public health policy defended from federal overreach.” Conversely, the Court found that a stay would “do OSHA no harm whatsoever.”

Do companies with 100+ employees still need to comply with the January 4 deadline?

For now, the answer is likely no, but the fight on this issue is far from over. The Fifth Circuit is one of the 13 circuits that sit below the United States Supreme Court. In addition to the challenge in the Fifth Circuit, on the date the ETS was published, challenges to the ETS were filed in three other circuits by separate coalition of states. In addition to the Fifth Circuit, challenges to the ETS were filed in the Sixth, Eighth, and Eleventh Circuits. The Fifth was the first to issue a stay. The rules of the Judicial Panel on Multidistrict Litigation provide for a lottery to determine which circuit hears the merits of a challenge to a federal agency decision when challenges are filed in multiple circuits. Any challenged filed within 10 days of OSHA’s ETS publication are included in the lottery. All challenges will be consolidated and heard in the circuit selected by the lottery. If the lottery ends up being a circuit other than the Fifth, the circuit selected could lift the stay. But ultimately, it is likely that whatever the decision is at the circuit court level, it will be appealed to the U.S. Supreme Court.