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Federal Contractor Vaccine Mandate: Federal Appeals Court Says It's Unlawful But You Might Have to Comply Anyway

September 1, 2022

by Alex Hontos and Jillian Kornblatt

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Lately, litigation news related to public and private workplace COVID-19 vaccine mandates has quieted.  That changed last Friday, when the Eleventh Circuit Court of Appeals narrowed a nationwide injunction against the Biden Administration’s federal contractor vaccination mandate (the “GovCon Vax Mandate”).  Because the Court concluded that the GovCon Vax Mandate was likely an unlawful exercise of authority, it kept in place a lower court preliminary injunction against enforcement of the mandate.  But, the decision reversed the lower court’s nationwide injunction, substantially narrowing the injunction’s affect.  That means federal contractors that were not parties to the Eleventh Circuit litigation are potentially subject to the GovCon Vax Mandate.  For those contractors, the focus now turns back to the federal government—and whether the Biden Administration will start to enforce the mandate piecemeal.  The Safer Federal Workforce Task Force issued the GovCon Vax Mandate.  As of this eUpdate, the Task Force’s website still indicates that, in light of various court orders and preliminary injunctions, the Government will take no action to enforce the GovCon Vax Mandate.  Whether that will change in light of the Eleventh Circuit’s decision remains unknown, creating significant operational uncertainty for organizations with federal contracts or subcontracts.   

The GovCon Vax Mandate

By way of brief background, on September 9, 2021, the Biden Administration announced its COVID-19 Action Plan, which outlined a six-pronged approach to combat the pandemic.  Among other things, the Action Plan required all federal workers and certain employees of federal contractors and subcontractors to be fully vaccinated against COVID-19, with no weekly testing option as an alternative.  On September 30, 2021, the Federal Acquisition Regulation (“FAR”) Council issued a memorandum outlining the details of the GovCon Vax Mandate, and contracting agencies thereafter began (if unevenly) rolling out modifications to federal contracts to include new contract clauses requiring contractor compliance.  This included requiring compliance with the GovCon Vax Mandate.   See, e.g., FAR 52.223-99 and DFARS 252-223-7999. 

The Georgia Litigation

The mandate was swiftly met with legal challenges from both trade associations and attorneys general across the country, resulting in a piecemeal of legal arguments, legal rulings, and preliminary injunctions.  The case at issue in the Eleventh Circuit’s ruling last Friday is Georgia, et al. v. Biden, et al.  Given the Court’s ruling, the parties to the case are important.  The plaintiffs are:

  • The states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, West Virginia;
  • Georgia Governor Brian P. Kemp, Idaho Governor Brad Little, South Carolina Governor Henry McMaster;
  • The Board of Regents of the University System of Georgia;
  • Georgia Department of Agriculture Commissioner Gary W. Black;
  • The Alabama Department of Agriculture and Industries, Alabama Department of Public Health, Alabama Department of Rehabilitation Services, and Idaho State Board of Education; and
  • Associated Builders and Contractors, Inc. and one of its chapters, Associated Builders and Contractors of Georgia, Inc.

The plaintiffs initially asked a District Court in the Southern District of Georgia to issue a preliminary injunction.  On December 7, 2021, the Georgia District Court granted the motion for a preliminary injunction.  The preliminary injunction was not, however, limited to the plaintiffs listed above.  Rather, the Court prohibited the government defendants from enforcing the federal contractor and subcontractor vaccine mandate in any state in the country.

The federal government appealed the nationwide preliminary injunction, and the Eleventh Circuit’s most recent ruling significantly altered the District Court’s ruling.  The appeals court upheld the preliminary injunction “to the extent that it enjoins federal agencies from enforcing the mandate against the plaintiffs—the seven plaintiff States and their agencies and members of Associated Builders and Contractors—and to the extent that it bars the federal government from considering a bidder’s compliance with the mandate when deciding whether to grant a contract to a plaintiff or to a nonparty bidder.”  However, the appeals court reversed the nationwide preliminary injunction such that “the federal government is no longer enjoined from enforcing the mandate in new and existing procurement contracts between the federal government and nonparties, or in the selection process following solicitations in which no plaintiff participates as a bidder.”

That means that the federal government cannot currently enforce its vaccine mandate against the plaintiffs, which are the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, West Virginia; Georgia Governor Brian P. Kemp, Idaho Governor Brad Little, South Carolina Governor Henry McMaster; The Board of Regents of the University System of Georgia; Georgia Department of Agriculture Commissioner Gary W. Black; The Alabama Department of Agriculture and Industries, Alabama Department of Public Health, Alabama Department of Rehabilitation Services, and Idaho State Board of Education; and Associated Builders and Contractors, Inc. and Associated Builders and Contractors of Georgia, Inc. 

But that’s not the end of the analysis, and the Court’s holding makes things very complicated for federal contractors.

Certainty for the Parties—But Confusion for Everyone Else

While it may seem that the federal government can, therefore, enforce its vaccine mandate in contracts involving any non-plaintiff to the Georgia litigation, that is not necessarily true.  Other courts have enjoined enforcement of the GovCon Vax Mandate in specific states or for specific parties:

  • Missouri v. Biden, 576 F. Supp. 3d 622 (E.D. Mo. 2021) (enjoining enforcement against plaintiff States Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, and Wyoming; scheduled for oral argument before the Eighth Circuit Court of Appeals on September 21, 2022);
  • Louisiana v. Biden, 575 F. Supp. 3d 680 (W.D. La. 2021) (enjoining enforcement against plaintiff States Louisiana, Mississippi, and Indiana, and their agencies; scheduled for oral argument before the Fifth Circuit Court of Appeals on October 3, 2022);
  • Kentucky v. Biden, 571 F. Supp. 3d 715 (E.D. Ky. 2021) (enjoining enforcement in “all covered contracts in Kentucky, Ohio, and Tennessee;” argued before the Sixth Circuit Court of Appeals on July 21, 2022); and
  • Florida v. Nelson, 576 F. Supp. 3d 1017 (M.D. Fla. 2021) (currently pending on appeal in the Eleventh Circuit, in which the district court entered a preliminary injunction enjoining enforcement of the mandate in Florida).

Some of these courts have enjoined enforcement only when the contract is performed in certain states.  Where a federal contract is performed is not always a straightforward analysis.  Though traditionally the applicable state is the place in which the contracted work is performed, the possibility for inconsistent standards is high. 

For example, if the State of Georgia has a federal contract, the GovCon Vax Mandate would not apply to the State of Georgia employees working on the federal contract.  But if a private party was performing that federal contract (even in Georgia), then the federal government could direct the private party to comply with the GovCon Vax Mandate—at least until that private party sued and sought its own injunction.  Because there are any thousands of federal contractors in the United States, a significant amount of litigation and expense will result if each one must independently seek relief from the GovCon Vax Mandate in the judicial system. 

Looking Ahead

In light of the multiple federal court decisions striking down the vaccination mandate as beyond President’s Biden executive powers, a clear way to sort through what appears to be a legal mess is for the Safer Federal Workforce Task Force to update its guidance in light of the Eleventh Circuit’s ruling to express that it will not enforce the GovCon Vax Mandate against any federal contractor.  Given the Administration’s loosening of COVID-related restrictions and recent CDC guidance, it is certainly possible that the Safer Federal Workforce Taskforce will move away from a vaccine mandate altogether, thereby mooting contractor compliance concerns.  For example, after U.S. Supreme Court struck down OSHA’s Emergency Temporary Standard (ETS) that included a vaccinate-or-test requirement for large employers (also part of the Biden Administration’s COVID-19 Action Plan), OSHA withdrew the ETS, though left the door open by not withdrawing the ETS as a proposed rule.  OSHA’s last update on the issue was January 25, 2022.  As of the date of this eUpdate, it remains to be seen whether the Safer Federal Workforce Taskforce will take a similar path.

As a final note, we suspect that in light of the Eleventh Circuit’s partial lift of the nationwide injunction, the list of states in which the mandate is not preliminarily enjoined will shrink, and that other states, private organizations, or even individual contractors, will bring their own lawsuits to enjoin enforcement.  In other words, quiet time might be over when it comes to the federal contractor and subcontractor COVID-19 vaccine mandate, and federal contractors should re-assess their approach to this issue and compliance strategies based on the (ever) changing legal landscape.

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EPA Limits Title V Re-Litigation of NSR Permits

Overview On September 25, 2026, the U.S. Environmental Protection Agency (“EPA”) published a final rule that significantly limits the ability of third parties to use the Clean Air Act (“CAA”) Title V permitting process to revisit New Source Review (“NSR”) permitting decisions years after those decisions were made. The rule establishes that NSR permitting determinations generally must be challenged during the original permitting proceeding, thereby providing regulated sources with greater permitting certainty and finality for major capital projects. Published in the Federal Register titled Clarifying the Scope of “Applicable Requirements” Under State Operating Permit Programs and the Federal Operating Permit Program (Docket ID No. EPA-HQ-OAR-2023-0401), the rule amends 40 C.F.R. Parts 70 and 71 to codify EPA’s interpretation regarding when requirements established under other CAA programs may be reviewed, modified, or implemented through the Title V operating permit program. The rule becomes effective 30 days after publication. The rule addresses two principal issues: (1) the relationship between NSR preconstruction permitting and Title V operating permits, and (2) the treatment of the General Duty Clause under CAA section 112(r)(1). Most significantly, the rule provides greater certainty for sources navigating the NSR permitting process. EPA’s amendments are intended to ensure that NSR permitting decisions made through an approved public process are generally not revisited later through Title V permit proceedings. The rule responds to a circuit split between the U.S. Courts of Appeals for the Fifth and Tenth Circuits. In Environmental Integrity Project v. EPA, 969 F.3d 529 (5th Cir. 2020), the Fifth Circuit upheld EPA’s interpretation, concluding that it was consistent with the text, structure, and purpose of Title V. In contrast, the Tenth Circuit reached the opposite conclusion in Sierra Club v. EPA, 964 F.3d 882 (10th Cir. 2020), finding that the then-existing regulatory definition of “applicable requirement” did not support EPA’s position. By amending the regulatory language on which the Tenth Circuit relied and codifying the interpretation approved by the Fifth Circuit, EPA has established a nationwide framework governing the interaction between NSR and Title V. NSR and Title V: EPA Establishes a Uniform Nationwide Framework At the core of the rule is EPA’s effort to define the respective roles of NSR and Title V. The rule codifies the approach EPA has applied since 2017: once a source obtains an NSR permit under an EPA-approved permitting program, and that permit was issued following public notice with an opportunity for comment and judicial review, the permit establishes the NSR-related “applicable requirements” of the State Implementation Plan (“SIP”) or Federal Implementation Plan (“FIP”) for Title V purposes. Under this framework, Title V is not a vehicle for re-examining underlying NSR permitting decisions. EPA does not intend to use the Title V process to revisit applicability determinations, emissions calculations, control technology determinations, permit conditions, or other issues resolved through the NSR permitting process. This principle applies regardless of the stage of the Title V proceeding; whether the NSR permit was issued pursuant to a SIP or FIP; the type of NSR issue involved; or whether the NSR permit is incorporated into Title V sequentially or concurrently. Limited Exceptions EPA recognizes several circumstances in which NSR issues may still be reviewed through the Title V program: No NSR permit was issued at all; The permit was issued without public notice and an opportunity for comment and judicial review; or The issue involves substantive overlap between Title V and NSR requirements, such as the adequacy of monitoring provisions. As a result, the rule does not insulate unpermitted projects or foreclose review of matters that independently arise under Title V. Key Regulatory Amendments The rule revises the definition of “applicable requirement” in 40 C.F.R. §§ 70.2 and 71.2. Paragraph (1): Where an NSR permit is issued with public notice and an opportunity for comment and judicial review, the permit establishes and defines the applicable SIP or FIP requirements for Title V purposes. Paragraph (2): All NSR permit terms, including terms contained in minor NSR permits, constitute applicable requirements that must be incorporated into Title V permits. Paragraph (4): CAA section 112(r)(1) (the General Duty Clause) is expressly excluded from the definition of “applicable requirement,” while section 112(r)(7) Risk Management Program requirements remain included. EPA also amended 40 C.F.R. §§ 70.8 and 70.12 to clarify that alleged defects in requirements established outside the Title V process generally do not provide a basis for EPA objection to a Title V permit or for a Title V citizen petition. General Duty Clause Exclusion The rule also codifies EPA’s longstanding position that the General Duty Clause in CAA section 112(r)(1) is not an “applicable requirement” for Title V purposes. EPA points to several considerations supporting that conclusion, including the distinction between the General Duty Clause and Title V permit terms, the provision’s origins in the Occupational Safety and Health Act’s general duty clause, and the different enforcement structures applicable to the General Duty Clause and Title V permit requirements. Importantly, excluding section 112(r)(1) from the definition of “applicable requirement” does not eliminate EPA’s authority to enforce the General Duty Clause independently of the Title V program. The final rule instead clarifies that the General Duty Clause need not—and should not—be incorporated into Title V permits as an applicable requirement. Practical Implications for Regulated Sources Greater Finality for NSR Permits  For projects requiring PSD, nonattainment NSR, or minor NSR permits, the permitting process becomes the primary forum for resolving disputes regarding applicability determinations, emissions calculations, control technology requirements, offsets, and permit conditions. Once an NSR permit is issued through a qualifying public process, regulated sources should face substantially reduced risk that those same issues will be challenged years later through Title V permit proceedings. Reduced Risk of Collateral Permit Challenges Stakeholders have sometimes sought to use Title V permit issuance, renewal, revision, or citizen-petition proceedings to challenge underlying NSR determinations. The final rule makes clear that Title V is not the appropriate vehicle for challenging whether an applicable requirement was correctly established in the first instance. This should reduce the risk of permit delays and uncertainty associated with collateral challenges to previously issued NSR permits. The rule does not, however, eliminate all Title V challenges relating to an NSR permit. Challenges concerning the Title V permit itself—including whether it appropriately incorporates applicable requirements or contains adequate compliance provisions—remain possible. Increased Importance of the Initial NSR Proceeding Because Title V generally will not provide a second opportunity to challenge the substantive validity of an NSR determination, the administrative record developed during the NSR process becomes increasingly important. Permit applicants should ensure that applicability analyses, emissions calculations, control technology evaluations, modeling demonstrations, and supporting technical documentation are thoroughly developed during the original permitting proceeding. For significant projects, applicants may therefore have an additional incentive to identify and resolve potential permitting issues before the NSR permit is issued rather than assuming that unresolved issues can be addressed during a subsequent Title V proceeding. Potential Incentive for Broader Public Participation EPA also notes that permitting authorities may choose to provide public notice and an opportunity for comment for a broader range of NSR permits because permits issued through a qualifying public process receive the benefit of the finality framework established by the rule. Some permitting authorities may conclude that greater public participation at the NSR stage is preferable to uncertainty during subsequent Title V proceedings. Conclusion The final rule is principally a permitting-certainty measure. For sources that obtain NSR permits through a public process, EPA has substantially limited the ability of third parties to revisit underlying NSR determinations through the Title V program. As a result, regulated entities should benefit from greater finality regarding key permitting decisions, reduced risk of collateral permit challenges, and increased certainty when planning and implementing capital projects.

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A number of states have adopted exemptions modeled on the North American Securities Administrators Association (“NASAA”) private fund adviser exemption, which may condition relief for advisers to certain funds relying on Section 3(c)(1) on each beneficial owner satisfying the federal qualified client definition. However, state requirements vary, and any effect of the Proposal would depend on the text of the applicable state exemption and how it incorporates Rule 205-3. Many emerging private fund managers may have a larger network of accredited investor relationships than qualified client relationships during the early stages of their investment advisory business. Currently, under Rule 205-3, private fund managers may receive performance-based compensation from investors who do not satisfy the qualified client definition if those investors were admitted to their private funds prior to registration with the SEC. 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Energy Law: Month in Review - September 2026

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Department of Energy Approves Funds for Grid Improvement The U.S. Department of Energy (DOE) recently announced that it would fund 31 grid-improvement projects in 26 states. The funding initiative is part of the DOE’s “SPARK” initiative. The funding will include $1.9 billion in federal funding from DOE and $3.35 billion in recipient cost-sharing funding. The funds will go to projects designed to improve grid reliability and lower electricity costs. Recipients plan to reconductor over 1,500 miles of transmission lines and will deploy grid-enhancing technologies across approximately 21,000 miles. DOE stated that this initiative will make available over 23 additional gigawatts of electricity. Texas Moderates Rules Governing Data Center Interconnection The Texas Public Utility Commission adopted new regulations governing large-load interconnections. 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Specifically, the court determined that the state’s conclusion that “leakage from the project’s tunnels would be monitored and reported” was not supported by the evidence because the certification “does not explicitly require monitoring and reporting to determine whether there is any leakage.” Accordingly, the court remanded the matter to the state to impose monitoring and reporting requirements but otherwise affirmed the certification. Legislative Developments California Legislates Restrictions on Data Center Energy Use and Grid Costs On September 21, 2026, California Governor Gavin Newsom signed seven bills broadly regulating data centers in the state. SB 1168 directed the California Public Utilities Commission to assess the energy used by data centers. It also requires the PUC to pass costs of transmission and distribution upgrades and load increases on to data centers, rather than customers. 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