Legal Ease January 2022

What You Need to Know: How the Vaccine Rulings Could Affect You

By Karalynn Cromeens

In December the courts ended the stay of the Occupational Safety and Health Administration (OSHA) mandate requiring employers with 100 employees to prove that all employees are vaccinated or are being tested weekly. Shortly after, the vaccine policy for large businesses went to the U.S. Supreme Court for further review and was rejected, so will not be put into effect. The federal order is currently under review. What hasn’t been in the news as much, and what I see affecting most of my construction clients, is the vaccine requirement for federal workers and contractors. This part of the vaccine mandate is also up-in-the-air, as a separate order was issued in December that prevents the enforcement of the mandate on all federal contractors and subcontractors in the U.S. We may not know the decision on this until late February, and potentially not until mid-April. It is important that you stay up to date and aware to protect your workforce and your company’s livelihood properly.

If the Requirement for Federal Workers and Contractors Takes Effect

Federal contracts awarded on November 14, 2021, and beyond include a provision that requires everyone employed or subcontracted by the party signing the contract to be vaccinated. Whether they have 2 or 200 employees, everyone must be vaccinated if signing a contract with the federal government. It does not matter if your employees work from home and never go to the federal project site; they all must be vaccinated. While the OSHA mandate offers weekly testing as an option to not being vaccinated, the requirement for federal workers and contractors does not.

As a contractor that signs a contract directly with the federal government (prime contractor), you must have proof that all your employees are vaccinated. The prime contractor must make sure the provision requiring all employees to be vaccinated is included in all their subcontracts. The prime contractor is also required to have proof that all their subcontractor’s employees are vaccinated. Companies only supplying materials do not currently fall under the vaccine mandate.

If You are Currently in a Contract with the Federal Government …

How this will affect you depends on the terms of your contract. If the federal government has reserved the right to change the terms of the contract without your approval unilaterally, they can add the vaccine requirement at any time. If they did not reserve the right to change the terms without your approval, the federal government would add the vaccine mandate to the contract when an option is exercised, or an extension is made.

If You are in a Federal Contract and Don’t Comply with the Mandate …

If the vaccine mandate for federal contractors goes into effect, and you fail to comply, you are in default under the terms of your contract, and all the contract remedies given to the federal government apply. In most contracts, that means non-payment and eventually being terminated by the federal government for breach of contract. This also means that the federal government potentially could sue you for any damages it may incur because of your termination.

This mandate requires all employees of a contractor or subcontractor working on a federal project to be vaccinated and able to prove all their employees, even the ones who’ll never set foot on the jobsite, have been vaccinated. If not, they are in default under the terms of their contract and risk non-payment and termination which could lead to expensive litigation and further risks down the road. As of January 14, 2022, we do not know what the vaccine mandate ruling will be for federal contractors and subcontractors. It’s important to partner with a construction attorney who can keep you up to date and make sure your construction company is properly defended.

Karalynn Cromeens is the owner of The Cromeens Law Firm and The Subcontractor Institute in Houston.

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