What is the Status of Texas Executive Order 40, Which Bans Vaccine Mandates by Private Employers?

On October 11, 2021, Texas Governor Greg Abbott made headlines by issuing Executive Order 40, which prohibits any “entity” from compelling receipt of the COVID-19 vaccine by any objecting individual, including “an employee,” for “any reason of personal conscience, based on a religious belief, or for medical reasons, including prior recovery from COVID-19.” Many commentators have interpreted EO 40 as prohibiting employers from mandating vaccination for employees who have objections to the vaccine, even if those objections are not on medical or religious grounds.

At the time, most commentators anticipated that EO 40 would be short-lived, either because it would be superseded by legislation or enjoined in court. Yet to date, neither has occurred. On October 19, 2021, the Third Special Legislative Session ended without passing a superseding bill, reportedly because medical and business groups opposed it. No court challenges to EO 40 have yet been reported.

So, contrary to expectations, EO 40 remains in effect. The Governor’s office has issued no clarification of EO 40’s terms or articulated any process for enforcement. We have seen no reports of attempted enforcement of EO 40. Anecdotally, it appears that many Texas employers are proceeding with mandatory vaccination rollouts, especially if they are federal contractors who are obligated to comply with President Biden’s recent Executive Order requiring vaccination of employee who work on federal contracts. It may also be that employers are waiting to gauge the effect of OSHA’s forthcoming Emergency Temporary Standard, which is expected to mandate that employers with at least 100 employees either require vaccination or weekly COVID testing.

Below are some of the significant open questions about EO 40:

1. Who does the EO 40 protect and what are the protected bases for objection?

EO 40 states that no entity can “compel” vaccination by any “individual, including an employee or a consumer,” who objects to vaccination for “any reason of personal conscience, based on a religious belief, or for medical reasons, including prior recovery from COVID-19.”

a. What does it mean to “compel” vaccination? It seems likely that this term is intended to encompass employers’ efforts to make vaccination a condition of employment. But would it include, for example, requiring independent contractors or visitors to be vaccinated as a condition of doing business with the company? The inclusion of “consumer[s]” as persons protected by the Order would create an argument that the answer to this question is yes, but the Order does not directly address this point.

b. Does EO 40 protect objections for any reason, or is it restricted to religious and medical objections? The Order protects objections for “any reason of personal conscience, based on a religious belief, or for medical reasons, including prior recovery from COVID-19.” While that language could conceivably be read to say that religious beliefs constitute the universe of “reason[s] of personal conscience” that are protected, that would be a narrow reading of the language. In fact, objections to vaccination based on religious beliefs and medical reasons are already protected under the Americans with Disabilities Act and Title VII, suggesting that the Order is likely intended to protect objections for reasons going beyond these two categories. Such a broad reading is supported by a recent statement by Governor Abbott’s spokesperson, who distinguished objections based on personal conscience from those based on religious beliefs or medical conditions and indicated that the Order encompasses all three types of objections. But again, the Order does not directly address this point.

c. Does EO 40 protect individuals outside of Texas if they are employed by or contract with a Texas-based employer? The Order does not purport to have extraterritorial application in this manner, and references in multiple places the need to protect “Texans,” further suggesting no intended extraterritorial effect. Less clear is whether EO protects non-Texas residents who periodically work in Texas.

2. To what extent does EO 40 conflict with federal laws?

Texas employers who are federal contractors and subcontractors will soon be required to vaccinate many (and in some cases all) of their employees under Executive Order 14042, which requires vaccination as early as December 8, 2021. Similar vaccination requirements are expected to be issued soon by the Centers for Medicare and Medicaid Services (CMS) for staff at a variety of Medicare- and Medicaid-certified facilities, including but not limited to nursing homes, hospitals, dialysis facilities ambulatory surgical settings, and home health agencies.

Assuming that EO 40 prohibits mandatory vaccination if an employee objects for reasons other than on medical or religious grounds, it would appear to conflict with EO 14042 and the forthcoming CMS standard. This would soon put employers who are federal contractors, federal subcontractors, or who are Medicare- or Medicaid-certified in the legal Catch-22 of either violating EO 40 or the forthcoming EO 14042 requirements (which take effect on December 8, 2021 for some contractors) or the forthcoming CMS rule, which does not currently have an effective date but is supposed to be issued in October.

EO 40 would not seem to wholly conflict with the forthcoming Emergency Temporary Standard (ETS) to be issued by OSHA applicable to employers with at least 100 employees, assuming that that the ETS offers those employers the option to conduct weekly COVID testing in lieu of a vaccine mandate. But certainly EO 40 entrenches upon the ETS and OSHA’s ability to regulate Texas workplaces. As discussed below, this may be one of the bases for legal challenge to EO 40.

3. Will compliance with EO 40 excuse employers from the obligation to comply with Executive Order 14042, which mandates vaccinations for many employees of federal contractors and subcontractors, or from the forthcoming rule for Medicare- and Medicaid-certified facilities?

We will have to wait and see whether the government attempts to provide Texas employers who are otherwise subject to EO 14042 and the forthcoming CMS rule with a safe harbor while EO 40 is litigated. As of now, the Guidance associated with EO 14042 states that it supersedes all conflicting state and local laws, leaving Texas employers in legal limbo.

4. What are the consequences for violating the Order?

The Order states that the “maximum fine allowed under Section 418.173 of the Texas Government Code and the State’s emergency management plan” shall apply to failure to comply with the Order. The maximum fine contemplated for an offense under Section 418.173 is $1,000. It is unclear at the moment how violations are reported, investigated, or enforced, and whether such a fine could be levied on a per-employer or per-employee basis. The Order expressly states that “[c]onfinement in jail” is not an available penalty. There does not appear to be a mechanism for employees to directly challenge adverse actions taken against them for refusal to get vaccinated.

5. Does the Order purport to preclude mandatory COVID testing?

EO 40 does not address COVID testing, suggesting that mandatory testing of employees remains permissible and may be an acceptable alternative to a vaccination requirement.

6. How long with the Order be in effect?

EO 40 has no expiration date. It does state that it is “subject to legislative action,” but no such legislation was passed in the recent special session of the Texas legislature.

7. Will the Order survive legal challenge?

EO 40 would seem to be ripe for legal challenge under multiple legal theories, including whether Governor Abbott has the constitutional or statutory power to issue the Order and whether it is preempted by the federal OSH Act (which regulates workplace health and safety), Executive Order 14042 (which requires federal contractors and subcontractors to vaccinate employees), the Center for Medicare & Medicaid Services’ forthcoming rule, or perhaps other federal laws. It is unclear when such challenges will be filed, whether and when the law will be enjoined, and whether any such injunction will be upheld on appeal. All of this means that some Texas employers will experience uncertainty while challenges work their way through the courts.

The Bottom Line for Employers

There are many critical open questions regarding the scope and effect of EO 40. We will hopefully get answers in the form of clarification by the Governor’s office, statements by the federal government, and court orders. Employers should continue to monitor these developments closely.