9th Circuit vacates $15 federal contractor minimum wage, threatening EO 11246

The U.S. 9th Circuit Court of Appeals vacated President Joe Biden’s $15 federal contactor minimum wage, finding the president doesn’t have the authority under the Procurement Act to issue an Executive Order (EO) requiring federal contractors to pay a minimum wage. Rejecting its previous decision supporting the president’s authority to issue an EO mandating employees of federal contractors be vaccinated against COVID, the court cited the 6th Circuit’s decision in Kentucky v. Biden, which had rejected the president’s authority to require the vaccines. The court found the EO didn’t violate the major questions doctrine because it wasn’t a “transformative” expansion of its authority. The court also rejected the district court’s argument that the Administrative Procedures Act didn’t apply, saying in issuing its regulations in response to EO 14026, the Department of Labor (DOL) acted arbitrarily and capriciously when it overlooked alternatives to the $15 per hour minimum wage mandate.

There is now a split in the circuits as the 10th Circuit recently held the Procurement Act supports President Biden’s minimum wage increase because his mandate was intertwined with furthering the economy. Twenty conservative-led states have asked the Supreme Court to overturn the 10th Circuit decision in Bradford et al. v. DOL. Meanwhile, a federal district court in Texas ruled the minimum wage EO also violated the Procurement Act, blocking enforcement against the states of Texas, Louisiana, and Mississippi. The DOL has appealed the decision in Texas v. Biden to the 5th Circuit.