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Employers Face Potential Preemption Clash on Vaccine Rules

Nov. 30, 2021, 9:00 AM

A growing number of states restrict Covid-19 vaccine mandates by private sector employers. As of Nov. 29, the states include: Alabama, Arkansas, Arizona, Florida, Iowa, Montana, Tennessee, Texas, Utah, and West Virginia. I expect the list to grow.

How do these state laws affect the three federal “mandates” that apply to private sector employers? First a quick overview of the three federal “mandates.”

OSHA Emergency Temporary Standard (ETS)

The ETS applies to employers with 100 or more employees. Generally speaking, the ETS requires that every employee of a covered employer must be fully vaccinated OR tested at least weekly for Covid-19 and wear a mask. There are various options available to employers in the broad construct of this general requirement.

The ETS currently is stayed/enjoined by the U.S. Court of Appeals for the Fifth Circuit. In response, OSHA stated on its website that it is has suspended activities related to implementation. Because challenges to the ETS had been filed in all circuits, a lottery was held. As a result of the lottery, the case is now with the U.S. Court of Appeals for the Sixth Circuit.

On Nov. 23, the Biden administration filed a motion with the Sixth Circuit seeking to overturn the Fifth Circuit’s decision. Most legal pundits believe the Sixth Circuit will reject the government’s motion and strike down the ETS. Regardless of what the Sixth Circuit does, the fate of the ETS likely will be resolved by the U.S. Supreme Court.

Executive Order 14042 (EO)

Biden’s executive order applies to certain federal contractors and subcontractors that provide services to the federal government.

Generally speaking, every employee in a defined workplace of a covered federal contractor or subcontractor must be vaccinated, unless there is an exemption for religious or medical reasons; testing may be part of an accommodation where an exemption applies.

The executive order has been challenged, too. But the EO has not been stayed/enjoined by a court from going into effect.

CMS Services Vaccination Rules

The Centers for Medicare & Medicaid Services vaccination rules apply to designated health-care providers that participate in CMS programs. These rules cover most hospitals, ambulatory surgical centers, home health agencies, etc.

Generally speaking, every employee in a defined setting must be vaccinated, unless there is an exemption for religious or medical reasons. Testing may be part of an accommodation where an exemption applies.

There are legal challenges to the CMS vaccination rules, too. But the CMS vaccination rules have not been stayed/enjoined by a court from going into effect.

Preemption in General

Because it currently is not in effect, the OSHA ETS does not preempt any state laws that restrict or otherwise apply to vaccine mandates. This would change if the OSHA ETS goes into effect either as a result of a Sixth Circuit or Supreme Court ruling. OSHA states it intends to preempt state laws to the extent contrary to its vaccine, testing, or mask requirements.

But what about the executive order or the CMS rules which are in effect? Do they preempt state laws that affect vaccine mandates?

It does not appear that there is “field preemption” in the case of either the executive order or CMS. Stated otherwise, a state law likely is not preempted simply because it affects a vaccine mandate.

However, in both cases, under principles of federal supremacy as well as specific guidance with regard to the EO and the CMS rule, state laws that conflict with or are contrary to these federal mandates are/should be preempted. So the operative question becomes whether a specific state law is in conflict with or contrary to either vaccine mandate.

Preemption as to Specific Laws

The EO and CMS mandate vaccines unless the employee has an exemption for medical or religious reasons as defined by federal laws. To the extent a state law prohibits mandates (for example, Montana and Tennessee), the state law is preempted.

Similarly, to the extent a state law provides for exceptions to a mandate beyond the exemptions under the federal mandate (for example, Florida, Iowa, and Texas), the state law is preempted to the extent it provides for such additional exceptions.

What may not be preempted, for example, is a state law that requires employers to pay for testing as part of an accommodation. Such a state requirement may be part of a law aimed at vaccine mandates (such as in Florida) or be a law on the books prior to Covid-19 vaccines but may affect who pays for the testing (such as laws in California, Illinois, Pennsylvania, and Wisconsin).

But, even if the state laws that mandate employers pay for the cost of testing are preempted, and I could frame the argument that such laws interfere with an employer’s right to encourage vaccination, this would not end our analysis. The miasma on the cost of testing gets murkier when we consider federal law. Since testing is not an alternative to a vaccine but part of an accommodation where an exemption applies, the employer most probably must pay for the cost of testing, unless the cost is an undue hardship under federal law.

Under the case law, it is easier to meet the undue hardship defense under Title VII (religion) than under the ADA (medical). But what is the cultural message if you pay for testing in connection with medical and not religious accommodations? Further, the cultural message may result in a legal challenge.

What about state laws, such as in California and New York, that apply the same standards for religious and medical accommodations? To the extent that state law defines undue hardship for religion broader than federal law, the state law most probably is preempted to the extent applied to a federal mandate.

Here’s the bottom line: Employers should not make a snap judgment decision that preemption does or does not apply. Instead, an employer must evaluate the specific federal mandate in light of the specific restriction or requirement under state law and then, in the case of testing, revert back to federal law on accommodations.

Ultimately, the answer on any given issue may not be entirely clear. The key is to make a reasoned decision taking into account legal and practical considerations.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Jonathan A. Segal is a partner with Duane Morris LLP. A former litigator, his practice focuses on maximizing legal compliance and minimizing legal risk with an eye on culture. Areas of concentration include: Covid-19; diversity and inclusion; harassment and civility; wage and hour compliance; workplace investigations; pay equity; and employment, severance, and business protection agreements.