Caption: On January 13, 2022, after hearing emergency oral arguments, the Supreme Court handed down decisions staying OSHA’s ETS and upholding the CMS Rule requiring healthcare workers to be fully vaccinated against COVID-19. We read the briefs, listened to the oral arguments, and studied the Court’s opinions – here is what employers need to know.
OSHA’s Shot-or-Test ETS
After another federal appeals court stayed the Occupational Safety and Health Administration’s (OSHA) Emergency Temporary Standard (ETS), the U.S. Court of Appeals for the Sixth Circuit reinstated it on December 17, 2021. Immediately following the Sixth Circuit’s ruling, two sets of challengers, a group of 27 states and a group of trade associations, filed emergency motions with the Supreme Court to block enforcement efforts and reimpose the stay.
On January 13, 2022, after two hours of oral arguments and seven days of deliberation, the Supreme Court again stayed OSHA’s ETS, holding that Applicants are likely to succeed on the merits of their claim that OSHA lacked the authority to impose the shot-or-test mandate.
In a 6-3 opinion, the Court held that OSHA exceeded its statutory authority to promulgate workplace rules—and instead attempted to regulate public health. The Court explained that all federal agencies are limited by congressional statute, and the Occupational Health and Safety Act (OSH Act) only enables OSHA to set “occupational safety and health rules.” The Court held that the ETS reaches beyond occupational hazard, because COVID-19 is a “universal risk” that can spread “at home, in schools, during sporting events, and everywhere else that people gather.”
The majority directly refuted the dissent’s claim that the ETS was not different from traditional OSHA rules—such as fire safety—by comparing COVID-19 to other day-to-day dangers such as crime and air pollution. Thus, the Court warned that “permitting OSHA to regulate the hazards of daily life—simply because most Americans have jobs and face those same risks while on the clock—would significantly expand OSHA’s regulatory authority.”
Despite ultimately granting the stay, the Court stopped short of completely barring OSHA from regulating COVID-19, emphasizing that OSHA has the authority to set rules for “occupational-specific risks.” The Court suggested that OSHA could enact targeted regulations where the virus poses a special work-related danger, such as employees working in “particularly crowded or cramped environments.”
Justice Gorsuch, joined by Justices Thomas and Alito, authored a separate concurrence emphasizing that OSHA was not the proper body to impose a nationwide COVID-19 mandate. Instead, Justice Gorsuch argued that it is Congress and the states that are constitutionally required to conduct this work, so as to protect against “intrusions into the private lives and freedoms of Americans by bare edict.”
Finally, Justices Breyer, Sotomayor, and Kagan issued a dissent focused on the danger COVID-19 poses to American workers and the need to defer to OSHA’s expertise. Writing for the minority, Justice Breyer argued, “When we are wise, we know to defer on matters like this one. When we are wise, we know not to displace the judgments of experts … Today, we are not wise.”
In the aftermath of the Court’s decision, it is important for employers to recognize that the Court’s ruling blocks only OSHA’s immediate enforcement of the ETS. Thus, while the likelihood of the rule surviving is highly doubtful given the Court’s reasoning, the Court’s decision did not rule the ETS unconstitutional, and litigation over its validity could continue.
The Court’s ruling does not mean employers are absolved of all compliance obligations or, alternatively, that employers can in all cases require vaccinations. First, OSHA may continue to enforce existing rules implicated by exposure to COVID. Second, employers should consider compliance obligations under state and local COVID-19 requirements. The federal OSH Act empowers states to assume responsibility for creating and enforcing occupational and health standards by developing “state plans.” There are currently 22 state plans covering both private sector and state and local government workers.
State plans vary widely, and employers must remain vigilant in ensuring compliance with their state’s approach. For example, prior to the Supreme Court’s ruling, Iowa announced it would not implement OSHA’s shot-or-test mandate, while Minnesota adopted OSHA’s ETS. However, following the Supreme Court’s ruling, Minnesota announced that it will suspend enforcement pending future developments. Other state plans, such as Virginia and California, have existing rules relating to COVID.
Finally, the absence of the ETS may affect an employer’s ability to require that employees get vaccinated in some states. For example, Florida and Texas, states without a state plan, would now appear to be able to enforce measures restricting the ability of employers to institute vaccine mandates for employees that would otherwise have been preempted by the ETS.
The CMS Healthcare Worker Vaccine Mandate
In November 2021, the Centers for Medicare & Medicaid Services (CMS) issued an interim final rule (the CMS Rule) requiring all facilities receiving Medicare and Medicaid funding to ensure that their employees—unless they are exempt for medical or religious reasons—are fully vaccinated against COVID-19. Two district courts enjoined enforcement of the rule, and the government petitioned the Supreme Court to stay the injunctions. On January 13, 2022 the Court sided with the government, thus allowing nationwide enforcement.
In a 5-4 unsigned opinion, the Court focused on the power of CMS to impose conditions on Medicaid and Medicare funds that CMS finds necessary to protect patients’ health and safety. Finding COVID-19 to be a deadly disease for Medicare and Medicaid patients, CMS determined that a vaccine mandate would substantially reduce the likelihood of healthcare worker-to-patient transmission and was thus necessary in the face of an ongoing pandemic. Unlike the situation with OSHA, the Court held that the vaccine mandate “fits neatly” within CMS’s statutory authority.
The Court’s decision to stay the injunctions effectively enables the CMS Rule to be enforced nationwide. Covered providers and suppliers should immediately begin taking steps to comply with the CMS Rule by implementing policies and procedures to require staff to become fully vaccinated. Failure to do so could result in civil penalties, the denial of Medicare and Medicaid funds, or complete termination from the Medicare and Medicaid programs.
Despite the Supreme Court’s recent decisions, litigation surrounding OSHA’s ETS and the CMS Rule is likely to continue into the foreseeable future. If your company or organization has any questions regarding compliance with federal or state and local COVID-19 requirements, please contact the authors of this article or any attorney in Venable’s Labor and Employment Group.