Smucker’s Vax Mandate Stands, Federal Court of Appeals Hands Broad Win to Federal Contractors

Private companies doing business with the federal government won a major COVID-19-related victory recently when the Sixth Circuit held in Ciraci v. J.M. Smucker’s Co.[1] that government contractors are not subject to constitutional limitations merely because they follow federal requirements for contracting. The Sixth Circuit—covering Michigan, Ohio, Kentucky, and Tennessee—rejected a claim by former employees of the J.M. Smucker Company (“Smucker’s”) alleging that Smucker’s violated their First Amendment free exercise rights when Smucker’s terminated them for failing to comply with the company’s vaccination policy.

The Court’s Decision

In 2021, President Joe Biden issued Executive Order 14042, directing all federal contractors to ensure that their employees are fully vaccinated for COVID-19, unless such employees are legally entitled to health or religious accommodations.[2] Smucker’s has contracted with the federal government to supply GI ration kits with peanut butter, jelly, and other food products since World War II, making it subject to the Executive Order. Smucker’s complied and required its employees to be vaccinated, but provided exemptions based on employees’ sincerely held religious beliefs; the plaintiffs sought such exemptions from the vaccine mandate, but Smucker’s denied their requests.

Constitutional limitations apply only to the government. Thus, when the federal government required Smucker’s to impose the vaccine mandate as a condition of contracting, the question was whether Smucker’s became a state actor exercising sovereign power. The court easily answered “no.”

The court first reasoned that Smucker’s did not perform a traditional, exclusive public function by supplying the federal government with food products. Second, Smucker’s did not partner, conspire, or enter into a joint venture with the government because federal officials did not assist in denying the plaintiffs’ requests; “federal contracts by themselves do not create the requisite entwinement.”[3] Finally, the government did not compel Smucker’s to deny any exemptions, rather, that was Smucker’s decision alone. The court stated that Smucker’s merely “acted in compliance with a federal law and that Smucker’s served as a federal contractor” which did not make it a government actor subject to constitutional limitations.[4]

A Warning to Contractors

The court’s analysis was highly fact-based, so the Sixth Circuit’s rule may not protect contractors in different circumstances or in different states. Furthermore, the Ciraci court stated that the plaintiffs may have succeeded had they brought a claim under Title VII of the Civil Rights Act, which bars private employers from discriminating against employees based on their religious beliefs.[5] Government contractors should also consider legal requirements found in the Fair Labor Standards Act, the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, and more rigorous state laws before taking any COVID-related employment actions. If you have additional questions about the application of the Sixth Circuit’s decision, contact Evan Yahng or your Dinsmore labor and employment attorney.