This Littler Lightbulb highlights some of the more significant employment law developments in federal courts of appeal in the last month.
Ninth Circuit Shoots Down $15 Per Hour Contractor Minimum Wage Rule
In Nebraska v. Su, 121 F.4th 1 (9th Cir. 2024), four states—Nebraska, Idaho, Indiana, and South Carolina—successfully appealed a district court decision denying their motion for an injunction prohibiting enforcement of Executive Order 14026 and a DOL implementing rule, which required federal agencies to include a $15 per hour minimum wage clause in all federal contracts.
In support of their challenge to the minimum wage requirement, the states argued that that the executive order and implementing rule violated the Federal Property and Administrative Services Act (FPASA), and that the implementing rule violated the Administrative Procedure Act (APA).
The Ninth Circuit agreed with the states that the “the minimum wage mandate exceeds the authority granted to the President and DOL in the FPASA.” The language of the Act, the court found, makes it clear that “the President can only issue a policy that carries out an operative provision of the FPASA,” which does not include a minimum wage mandate. The appellate court also found the DOL rule violated the APA, which “requires courts to ‘hold unlawful and set aside agency action . . . found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,’” and concluded that the “DOL acted...
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