US President, Joe Biden’s plans for a vaccine mandate for businesses had been temporarily blocked by the appeals court.
The law would require workers at private companies with more than 100 employees to get fully vaccinated against Covid-19 or be tested weekly.
But the court found “grave statutory and constitutional” issues with the rule, set to be introduced in January.
Five Republican-led states – Texas, Louisiana, Mississippi, South Carolina and Utah – as well as private companies and religious groups, had filed legal challenges against the mandate.
They accused the president of overstepping his authority.
Mr Biden says the mandate, which would cover more than two-thirds of the nation’s workers, would set a national standard of safety at work.
On Thursday, the president said employees at large companies would have to be fully vaccinated by 4 January, calling vaccination “the single best pathway out of this pandemic”.
BBC