Supreme Court Stays Vax-or-Test ETS But Allows CMS Vaccine Mandate – What Employers Need to Know

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As predicted by most legal observers, a split U.S. Supreme Court has stayed the Occupational Safety and Health Administration’s Emergency Temporary Standard (ETS) requiring employers with 100+ employees to mandate vaccinations or weekly testing/face coverings for their workforce. However, it has lifted the partial stay of the Center for Medicare and Medicaid Services’ (CMS) Interim Final Rule mandating vaccination of workers of most Medicare- and Medicaid-certified healthcare entities.

The Vax-or-Test ETS

Background: The federal Occupational Safety and Health Administration’s ETS required employers with 100+ employees (1) to mandate vaccinations or weekly testing/face coverings for their workforce and (2) to provide paid time to get vaccinated and recover from any adverse effects. Immediately following the issuance of the ETS in November, the U.S. Court of Appeals for the Fifth Circuit issued a nationwide stay of the ETS. The many petitions challenging the ETS were then consolidated before the Sixth Circuit, which lifted the stay on December 17.

What the Supreme Court Held: The Supreme Court has now reinstated the stay, finding that the challengers are likely to prevail in their argument that the “vaccine mandate” is unlawful. The Supreme Court majority characterized the ETS as ordering “84 million Americans to either obtain a COVID–19 vaccine or undergo weekly medical testing at their own expense” which it deemed to be “no everyday exercise of federal power.” While OSHA has the authority to regulate workplace health and safety, COVID-19 extends well beyond the workplace. Thus, according to the Supreme Court majority,  “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 without clear congressional authorization.” The majority acknowledged that OSHA could regulate occupation-specific risks associated with a particular job or workplace, but it could not impose a “general public health measure” such as this broad mandate.

What This Means for Employers of 100+ Employees: This ruling means that OSHA will not enforce the ETS pending resolution of the merits of the challenges by the Sixth Circuit. At this point, covered employers need not comply with the ETS. Note, however, that the matter is not yet entirely resolved. The Sixth Circuit still must decide whether or not to uphold the ETS. However, given the clear direction from the Supreme Court, we would expect the Sixth Circuit to find it to exceed OSHA’s authority, meaning that it will never take effect.

The CMS Vaccination Mandate

Background: The Center for Medicare and Medicaid Services issued an interim final rule requiring Medicaid and Medicare-certified healthcare providers to mandate vaccination against COVID-19 for all applicable staff. Again, multiple lawsuits were filed, and various courts granted injunctions covering certain states. A nationwide injunction in one case was subsequently limited to the plaintiff states by a federal appellate court. CMS then announced that it would enforce the rule in the remaining states, but would delay compliance dates: employees must receive their first dose of a vaccine by January 27, 2022, and must complete their vaccination series by February 28, 2022.

What the Supreme Court Held: The Supreme Court majority has now lifted the partial stays, finding that “Congress has authorized the Secretary [of Health and Human Services] to impose conditions on the receipt of Medicaid and Medicare funds that ‘the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services.’” Such conditions routinely related to the qualifications and duties of healthcare workers, and the vaccine mandate falls squarely within that category. The majority further finds the rule not to be arbitrary or capricious, given the relevant data; rather CMS “has acted within a zone of reasonableness.” It also found that the Secretary had reason to forego the normal notice and comment process, nor was he required to consult with State agencies in advance of issuing the rule. And, finally, the majority found that “the rule does not run afoul of the directive in §1395 that federal officials may not ‘exercise any supervision or control over the . . . manner in which medical services are provided, or over the selection [or] tenure . . . of any officer or employee of’ any facility. That reading of section 1395 would mean that nearly every condition of participation the Secretary has long insisted upon is unlawful.”

What This Means for Covered Healthcare Employers: The Supreme Court’s ruling permits the rule to take effect in all states. And while some states have enacted laws or issued Executive Orders that would prohibit such mandates, those would be preempted by the federal requirements (even if the states assert otherwise, which may place healthcare employers in a difficult position).

We detailed the requirements of the CMS rule in our November 8, 2021 E-lert, but highlight certain significant points, as follows:

  • The rule applies only to facilities that are regulated under Conditions of Participation, Conditions for Coverage, and Requirements for Participation, which are CMS health and safety standards.
  • All staff working at a covered facility must be vaccinated. Staff includes employees, licensed practitioners, students, trainees, volunteers, and individuals who provide care, treatment, or other services for the facility and/or its patients under contract or other arrangements.  Staff need not engage in patient contact or have clinical responsibility in order to be covered.
  • Those staff who are 100% remote or who do not work in the covered facility and who have no contact with patients or other staff are not subject to the vaccination mandate.
  • Covered employers must provide legally required medical exemptions under the Americans with Disabilities Act and religious exemptions under Title VII. Notably, CMS directs employers to deny requests that are not legally required or that are designed solely to evade vaccination.
  • Employers must develop a process to implement additional precautions for unvaccinated staff, but the rule stops short of requiring regular testing.
  • Booster shots are not required, but employers must track any booster shots received.

This is obviously a fast-moving and complicated situation. We will continue to send out E-lerts on any significant developments.