Federal government contractors face many uncertainties as they implement President Biden’s COVID-19 vaccine mandate. This includes the distinct possibility of civil lawsuits arising out of their implementation of the mandate, including potential allegations of invasion of privacy, wrongful termination, lost wages, discrimination, personal injury or other common law claims or statutory violations. At least one such lawsuit already has been filed. In that suit, dozens of aggrieved employees allege that the contractor’s vaccine mandate violates state law, and they seek an injunction and other relief. Other lawsuits are sure to follow.

But there is good news for contractors: Established legal doctrines should provide contractors some degree of protection—and perhaps complete immunity—against such lawsuits. In addition to the statutory protections afforded to contractors under the PREP Act, contractors may be protected from civil liability based on federal-law-based defenses that have been recognized and applied in analogous government contracting settings. In the coming weeks, as contractors navigate the many challenges associated with the vaccine mandate, they should carefully consider the risk of civil litigation, and, in order to minimize potential exposure in such lawsuits, proactively implement practices that maximize the likelihood that these doctrines and defenses will be applicable, as discussed below.

Immunity From Suit Under Yearsley

Among the possible defenses to any employee or third-party lawsuit based on the vaccine mandate, the doctrine perhaps best suited to shield contractors from suit is “Yearsley immunity.” Sometimes referred to as “derivative sovereign immunity,” the doctrine gets its name from a decades-old Supreme Court case, Yearsley v. W.A. Ross Construction Co., 309 U.S. 18, 20-21 (1940). In Yearsley, the Supreme Court established the basic principle that the government’s immunity may be extended to contractors in instances where: (1) the government authorized the challenged conduct; and (2) the government’s authorization was “validly conferred.” Yearsley v. W.A. Ross Construction Co., 309 U.S. 18, 20-21 (1940). More recently, the Supreme Court reiterated the continued vitality of Yearsley immunity, and explained that this immunity is sufficiently broad that it can shield a contractor against allegations that the contractor violated a federal statute. Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 672 (2016).

In the past several years, appellate courts have further clarified and broadened the scope of Yearsley immunity. In Cunningham v. GDIT, the Fourth Circuit held that a contractor was immune from suit and exempt from claims alleging violations of the Telecommunications Consumer Protection Act. And in Taylor Energy Co. v. Luttrell, the Fifth Circuit relied on Yearsley immunity to affirm the dismissal of claims that sought tort damages and alleged the contractor failed to adequately remediate an oil spill.

As Cunningham and Taylor Energy illustrate, suits involving Yearsley immunity have arisen in disparate settings and involved a broad range of state and federal-law-based allegations. At their core, however, these decisions recognized that contractors should not face suit as a result of the contractor’s implementation of, and compliance with, a valid federal government directive. In the current environment, the vaccine mandate is precisely that: a valid federal government directive. Thus, contractors facing suit for carrying out that directive may be able successfully to assert Yearsley immunity.

The Political Question Doctrine

Lawsuits arising out of the federal vaccine mandate may also run afoul of the political question doctrine. Numerous courts have recognized that suits against contractors implicate the political question doctrine, and are therefore barred by separation of powers principles, when the litigation would require courts to scrutinize and second guess decisions that are exclusively delegated to the political branches. Seee.g.In re: KBR, Inc., 893 F.3d 241, 264 (4th Cir. 2018) (holding claims against contractor barred when suit challenged “de facto military decisions”).

The hallmark of the political question doctrine in recent jurisprudence concerning contractor activities is the existence of some degree of government control over the challenged conduct. Seee.g.Carmichael v. Kellogg, Brown & Root Servs., Inc., 572 F.3d 1271, 1295 (11th Cir. 2009) (“it would be impossible to determine that [the contractor’s conduct] alone was the sole cause of the accident or to possibly apportion blame without ruling out the potential causal role played by pivotal military judgments”). Likewise, courts have emphasized that suits against contractors are barred when they seek a judicial pronouncement that would interfere with a policy matter committed to the Executive Branch. Seee.g.Spectrum Stores v. Citgo Petro. Corp., 632 F.3d 938, 956 (5th Cir. 2011) (“Any ruling on the merits of this case would, by its core essence, impermissibly interfere with the Executive Branch’s longstanding policy…”).

The rationale underlying this jurisprudence may well have application in the context of the vaccine mandate that was enacted by Executive Order (which was based on prior federal legislation), and that inherently involves sensitive policy-making decisions. Indeed, longstanding Supreme Court precedent recognizes that while there is a Constitutional question to whether the federal government has the power to mandate vaccines in any given instance, where that power does exist then decisions regarding the particular details of any given vaccine mandate are properly vested in the political branches. Jacobson v. Commonwealth of Massachusetts, 197 U.S. 11, 30, 25 S. Ct. 358, 363, 49 L. Ed. 643 (1905) (“It is no part of the function of a court or a jury to determine which one of two modes was likely to be the most effective for the protection of the public against disease. That was for the legislative department to determine in the light of all the information it had or could obtain.”).

The Government Contractor Defense

As first set forth in Boyle v. United Techs. Corp., 487 U.S. 500 (1988), the Government Contractor Defense is a common law defense that begins from the foundational point that state tort lawsuits are barred where there is a significant conflict between uniquely federal interests and the operation of state law. Under the three-part Boyle test, a lawsuit is barred if: (1) the government meaningfully reviewed and approved reasonably precise specifications for the product or service at issue; (2) the equipment or service conformed with the government’s requirement; and (3) the contractor warned the government of hazards actually known to the contractor but not the government.

Following Boyle, there has been extensive litigation concerning the contours and application of the Government Contractor Defense. Among the issues most litigated is what constitutes sufficient “approval” of a contractor’s product or service. In general, courts have held that mere “rubber stamping” by the government is insufficient to trigger the defense, whereas courts have applied the defense in situations in which the contractor engages in a substantive “back and forth” dialogue with the government. Seee.g., Trevino v. Gen. Dynamics Corp., 865 F.2d 1474, 1480 (5th Cir. 1989) (“A rubber stamp is not a discretionary function; therefore, a rubber stamp is not ‘approval’ under Boyle.”).

The Government Contractor Defense may apply to defeat lawsuits challenging a contractor’s implementation of the vaccine mandate. The defense seems especially well-suited to defeat claims that seek to impose a duty under state law that would conflict with the federal mandate and related federal requirements, which constitute reasonably precise specifications for performance under the contract. See Boyle, 487 U.S. at 507 (explaining state laws are displaced where “the application of state law would frustrate specific objectives of federal legislation”) (quotations and citations omitted); see also Gartrell Const. Inc. v. Aubry, 940 F.2d 437, 441 (9th Cir. 1991) (holding state licensing requirements could not apply to contractor’s federal contract work because “[t]o hold otherwise would…frustrate the federal policy”). Those types of claims may arise, for example, in states that have enacted vaccine mandate prohibitions. Notably, the recently-filed lawsuit cited above—which may be a preview of future lawsuits challenging vaccine mandate programs—alleges that the contractor violated state law and state public policy.

Other Potential Federal Defenses and Contractual Remedies

In addition to the defenses outlined above, contractors working under “rated order” contracts may also benefit from an independent immunity from suit and liability based on the Defense Production Act (“DPA”), 50 U.S.C.A. § 4557. In pertinent part, the DPA states: “No person shall be held liable for damages or penalties for any act…resulting directly or indirectly from compliance with…[an] order issued pursuant to this chapter.” Citing this language, the U.S. Supreme Court has explained the DPA “plainly provides immunity” to contractors by “expressly providing a defense to liability” for compliance with contract directives. See Hercules Inc. v. United States, 516 U.S. 417, 429-30 (1996); Martin v. Halliburton, 601 F.3d 381, 385 (5th Cir. 2010) (noting “immunity under…the DPA…provides a defense to liability” for contractors).

Finally, depending on the specific contract at issue, contractors may have other rights and remedies vis-à-vis the government in the event they are sued for implementing the vaccine mandate. In particular, contractors performing under cost-reimbursement contracts may be able to seek reimbursement and indemnification from the government, as most cost-type federal contract incorporate FAR 52.228-7, Insurance-Liability to Third Persons, under which the government must reimburse a contractor for liabilities, including litigation and settlement expenses, to the extent not covered by insurance.

Contractors Should Proactively “Build In” Practices to Mitigate the Risk of Civil Liability

The landscape surrounding the federal vaccine mandate is fast evolving, and contractors have plenty of challenges in front of them in the days ahead. As they navigate these challenges, contractors should be careful not to unnecessarily expose themselves to potential civil liability. The threat of lawsuits in the current environment is real, but there are a number of legal doctrines and defenses that may apply to protect contractors against such lawsuits. Rather than waiting to defend those suits after they are filed, contractors would be wise to think now about how best to position their activities to minimize risk.

In particular, contractors should evaluate the potential application of the defenses outlined above to their circumstances, and begin to build a record that could be used to support the elements of the defenses. For example, contractors may consider taking the following actions:

  • Establish record-keeping practices that memorialize key government directives and that capture, in real time, the government’s determinations that the contractor’s actions adhere to federal directives. This type of documentation could prove especially important for any aspects of the vaccine mandate that may allow for some degree of contractor discretion, such as the granting of waivers for religious or medical reasons.
  • Develop protocols that proactively trigger government review and approval, and thereby memorialize that the contractor’s actions were taken in adherence with government requirements. Such documentation can reduce or eliminate the potential argument that some action taken by the contractor in furtherance of the vaccine mandate was the product of the contractor’s sole discretion.
  • Consider whether there are any risks associated with the vaccine mandate that are known to the contractor and which, under Boyle and related precedents, contractors should document that they have warned the government.
  • Review the relevant contracts to determine whether there are potential rights or remedies to invoke against the government in the event of lawsuits, and ensure any notice or other related requirements are met.
Photo of Raymond Biagini Raymond Biagini

A distinguished counselor and litigator, Raymond Biagini has risen to national prominence in a number of high-profile tort cases, defending commercial and government contractors in:

  • “Contractor on the Battlefield” tort litigation;
  • the Exxon Valdez litigation;
  • the Cell Phone Radiation Hazards lawsuits;
  • the “Fen-Phen”

A distinguished counselor and litigator, Raymond Biagini has risen to national prominence in a number of high-profile tort cases, defending commercial and government contractors in:

  • “Contractor on the Battlefield” tort litigation;
  • the Exxon Valdez litigation;
  • the Cell Phone Radiation Hazards lawsuits;
  • the “Fen-Phen” litigation;
  • the nationwide Repetitive Stress Injury suits;
  • claims arising out of “friendly fire” accidents during Operation Desert Storm; and
  • “war crimes” allegations filed against manufacturers of military weapons systems sold to Israel.

Ray is widely recognized for his expertise in defending “contractors on the battlefield” in tort litigation, and he has established ground-breaking legal principles at the federal appellate level which immunize defense contractors from tort liability arising out of combatant scenarios.

Ray also has an extensive product liability prevention practice, counseling companies on mechanisms for reducing their tort exposure for products and services sold to government and commercial entities. He is significantly involved in counseling companies selling “homeland security” products and services, such as chemical/biological detection devices, perimeter security systems, biometric identity products, and airport security systems. Ray conceptualized and authored key provisions of the SAFETY Act, a new federal statute that is part of the Homeland Security Act of 2002. The SAFETY Act protects companies from tort lawsuits arising out of the sale of homeland security products and services. 

Ray has represented some of the world’s largest aerospace, defense and pharmaceutical companies, including Kellogg Brown & Root, Lockheed Martin, BAE SYSTEMS, Boeing, Textron, SAIC, Teledyne, Eon Labs, Unisys, and Philips Electronics. He is a frequent public speaker on risk mitigation techniques.

Photo of Frederic Levy Frederic Levy

Fred Levy is senior counsel in the firm’s Government Contracts and White Collar Defense and Investigations Practice Groups. He is a leading suspension and debarment lawyer, focusing his practice on the resolution of complex compliance and ethics issues. He has successfully represented numerous…

Fred Levy is senior counsel in the firm’s Government Contracts and White Collar Defense and Investigations Practice Groups. He is a leading suspension and debarment lawyer, focusing his practice on the resolution of complex compliance and ethics issues. He has successfully represented numerous high-profile corporations and individuals under investigation by the government in civil and criminal matters, including False Claims Act cases, and in suspension and debarment proceedings to ensure their continued eligibility to participate in federal programs. He has also conducted numerous internal investigations on behalf of corporate clients and advises corporations on voluntary or mandatory disclosures to federal agencies. Fred regularly counsels clients on government contract performance issues, claims and terminations, and litigates matters before the boards of contract appeals and in the Federal Circuit.

Related to his work involving program fraud, Fred counsels clients in the area of contractor “responsibility.” He is involved in the development and implementation of contractor ethics and compliance programs that meet the standards of the Federal Acquisition Regulation, Federal Sentencing Guidelines, and Sarbanes-Oxley, and he regularly conducts ethics and compliance training.

Fred is a principal editor of Guide to the Mandatory Disclosure Rule, and of The Practitioner’s Guide to Suspension and Debarment, 4th Edition. He is a vice-chair of the Debarment and Suspension Committee of the ABA Public Contract Law Section, and a former co-chair of that committee and of the Procurement Fraud Committee. He is a graduate of Columbia College and Columbia Law School.

Photo of Daniel Russell Jr. Daniel Russell Jr.

Dan Russell represents government contractors in complex, high-stakes litigation. Over the past two decades, Dan has served as lead counsel for some of the largest U.S. defense contractors in a broad range of contract disputes and tort claims, including cases valued well in…

Dan Russell represents government contractors in complex, high-stakes litigation. Over the past two decades, Dan has served as lead counsel for some of the largest U.S. defense contractors in a broad range of contract disputes and tort claims, including cases valued well in excess of $100 million.

Dan has experience litigating contract claims and disputes before federal judges and juries, the Boards of Contract Appeals, and the U.S. Court of Federal Claims, including matters arising out of terminations, cost-allowability disputes, defective pricing claims, prime-sub disputes, and claims under the Contract Disputes Act (CDA). Dan has also represented contractors in a myriad of tort suits arising out of work performed for the federal government. Dan has unparalleled experience defending “contractor on the battlefield” tort suits involving contracts performed during wartime or other high-risk, contingency environments. Dan has obtained complete dismissals of tort suits based on an array of federal-law-based defenses, including the government contractor defense, the political question doctrine, federal preemption, and derivative sovereign immunity.

Dan has litigated a variety of other matters involving government contracts and uniquely-federal issues, including: cases brought under the civil False Claims Act (FCA); insurance coverage matters for federal contractors; claims against federal agencies brought under the Administrative Procedure Act and the Federal Tort Claims Act; and regulatory enforcement actions.

At the appellate level, Dan has argued cases before the U.S. Courts of Appeals for the Fourth Circuit, the Fifth Circuit, and the Ninth Circuit. He has also represented clients in matters before numerous other appellate courts and the U.S. Supreme Court.

In addition to his litigation practice, Dan regularly provides risk-mitigation counseling for contractors, with a particular focus on strategies to reduce potential exposure to tort claims and other liabilities in connection with the performance of high-risk government contracts.