Mandated Vaccination under Executive Order 14042: Are Depository Institutions Covered?

On September 9, 2021, President Biden issued Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, which was part of his six-point Path Out of the Pandemic Action Plan released that same day.

Executive Order 14042 requires federal contractors and subcontractors to include COVID-19 clauses in contracts entered into after October 15, 2021 and to follow COVID-19 protocols. EO 14042 does not say what the protocols are. Rather, it simply set forth a process by which the protocols are to be developed, and deadlines for their development.

First, the Safer Federal Workforce Task Force (Task Force) is to provide guidance that includes explanations of COVID-19 protocols, with definitions of relevant terms, and any exceptions that may apply. The Task Force is to obtain the approval of its guidance from the Director of the Office of Management and Budget (OMB) by September 24, 2021. Finally, the Federal Acquisition Regulation Council (FARC) is to take initial action by October 8, 2021 to issue regulations consistent with the Task Force’s guidance.

Fulfilling its charge, the Task Force issued COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors (Guidance), on September 24. The Guidance requires employees of federal contractors and subcontractors to be vaccinated unless they are legally entitled to an accommodation, and it requires both employees and visitors of federal contractors and subcontractors to observe the masking and physical distancing requirements of the Centers for Disease Control and Prevention—which requirements are ever-changing. Federal contractors and subcontractors are also required to designate a COVID-19 workplace safety coordinator to implement and enforce the Guidance. Our blog post with more information on the Task Force’s Guidance will be coming out soon.
 

All of this raises a threshold question: Are depository institutions “federal contractors” subject to EO 14042, the Task Force’s Guidance, and the regulations to come from FARC?

The answer is: Probably not, but it depends.

Federal contractors and subcontractors are regulated by statutes and Presidential executive orders, as well as the regulations issued by the executive branch various agencies authorized to implement and enforce them. Each of these laws has its own definition of the federal contractors and subcontractors it covers, so each law must be individually analyzed. There’s no one-size-fits-all when it comes to determining who is a federal contractor or subcontractor and who is not.

Depository institutions (e.g., banks, credit unions) are federal contractors under some laws, but not others. For instance, E.O. 11246 mandates nondiscrimination and affirmative action for federal contractors and subcontractors. Under this law, federal contractors include entities that issue or pay U.S. savings bonds (a now-obsolete category), those with a bona fide contract for federal depository insurance (e.g., FDIC, NCUA), and those that are fund depositories (e.g., treasury tax and loan accounts). Virtually all depository institutions are federal contractors under E.O. 11246.

E.O. 14042, however, was issued pursuant to the Federal Property and Administrative Services Act. This law regulates procurement contracts for products, services, and leasehold interests in real property for the U.S. government. Most depository institutions do not have federal procurement contracts. If your depository institution does not, then you should not have to concern yourself with E.O. 14042. The American Bankers Association agrees with this position, per a Staff Analysis it issued on September 12, and updated on September 20.

That said, a depository institution would likely be subject to E.O. 14042 if it has a contract with a federal government agency to provide products or services, to lease real property to or from a federal government agency, or to offer services for federal employees or their dependents.

Depository institutions should consult competent legal counsel to determine whether they are federal contractors or subcontractors under various laws to avoid under-compliance as well as over-compliance.
 

P.S. Depository institutions may still be subject to other mandatory vaccination laws. For instance, those with 100 or more employees will be subject to the Emergency Temporary Standard (ETS) that we expect to see soon from the Occupational Safety and Health Administration. Per the President’s Action Plan, this ETS will mandate COVID-19 vaccination or weekly negative COVID-19 tests. Little else is known about this yet-to-be issued ETS and there are many questions about it that cannot be answered at this time. Stay tuned and Dickinson Law will provide information on the ETS after it is issued.

Attorney Sierra McConnell assists clients with a variety of business and litigation issues, including corporate governance, cybersecurity, data breach & privacy, employment & labor law, and banking regulatory compliance. 
 

Shareholder Attorney Jill Jensen-Welch practices primarily in employment law and civil litigation. She serves clients ranging from small start-ups to large national companies in a wide variety of industries.