Government contractors are familiar with the “government contractor defense” that can limit liability for work performed under a federal contract. The defense is often discussed through two classic Supreme Court cases: (1) Yearsley, sometimes described as “derivative sovereign immunity,” and (2) Boyle, which recognized federal preemption of certain state-law tort claims. While powerful, neither is a blank check.
The Supreme Court has now clarified how these doctrines apply, while signaling a narrower focus in general. Merely having a federal contract, even in a combat zone, may not be enough to shield you from liability. Clear contractual instruction and compliance with those instructions will be critical to contractors going forward.
The case is Hencely v. Fluor Corp., decided April 22, 2026. Let’s get into it.
A grisly case.
By the time a case hits the Supreme Court, it has concentrated down to one or a few very high-level legal issues. Yet, the facts matter, and the case outcomes affect real people and companies.
The case deserves a recap of the facts.
In 2016, an Afghan national working for a subcontractor of Fluor Corporation at Bagram Airfield in Afghanistan detonated a suicide vest at a 5k race, killing five and injuring 17 others. The Army had approved the attacker’s access to the base under the “Afghan First” initiative. Subsequent investigations concluded that Fluor failed to comply with contractual and base security requirements governing supervision, escort duties, and access controls. The attacker had constructed the bomb on base using work tools.
Former Army Specialist Winston Hencely suffered severe injuries while attempting to stop the attacker. He brought claims against Fluor for negligent supervision, negligent entrustment, and negligent retention in U.S. District Court in South Carolina. The district court and the Fourth Circuit held the claims preempted under the combatant activities exception to the Federal Tort Claims Act (“FTCA”).
A reset of the government contractor defense.
The Supreme Court vacated the Fourth Circuit’s decision and refocused the analysis on a simple, practical question: Was the contractor sued for doing what the Government actually authorized and directed? If yes, Yearsley may protect the contractor from liability. If no (particularly if the claim is premised on the contractor’s alleged departure from contract requirements, base policies, or military instructions), there is no categorical federal rule defeating the state-law case at the outset.
The Court also emphasized what this case is not about. The FTCA’s combatant activities exception preserves the Government’s immunity. It does not itself bar suits against contractors. And while federal interests can preempt state tort duties in narrow circumstances (like in Boyle), the Court declined to treat the wartime setting, standing alone, as enough. Instead, the decision re-centers familiar doctrine around Boyle and Yearsley.
Key takeaways for contractors.
Here are the practical takeaways from Hencely for companies performing work for the Government, especially overseas and in support of military operations:
- No blanket protection based on combatant activities. The FTCA’s combatant activities exception preserves the Government’s immunity. It does not, by itself, bar state law claims against contractors. If you are working in a combat zone, make sure you are following your contracts, local security protocols, and other government direction.
- Expect a fact-specific focus on government direction. Courts will look hard at what the Government actually required, what discretion the contractor had, if any, and whether the contractor stayed within those instructions. Do not expect to name an exception and walk away.
- Boyle preemption remains narrow. A contractor is on stronger ground where the claim involves conduct the Government required and state tort duties would significantly conflict with federal interests.
- Compliance and supervision matter more than ever. Expect cases to be framed as a failure to follow contract requirements, base policies, or military instructions, and make sure you have good documentation supporting your defenses.
- Courts will separate military choices from contractor execution. Claims targeting contractor supervision, security protocols, or other operational lapses are less likely to be treated as challenges to military decision-making.
- Yearsley protection depends on staying within authority. The best cases are those where the Government validly authorized the work and the contractor did what it was directed to do. Allegations of deviations from requirements will matter.
- Plan for the procedural reality. Under Menocal, Yearsley is generally treated as a defense to liability. That can make early appellate review harder, even when a contractor believes the Government authorized the challenged conduct.
Bottom line: Hencely reinforces that contractor defenses are strongest when the Government clearly directed the work and the contractor can show it followed those directions. If the contractor fell short on supervision or compliance, courts are more likely to let state-law claims proceed at least into early fact development.
