A New Orleans-based appeals court upheld the Biden administration’s $15 minimum wage for federal contractors, adding to a growing circuit split over whether the president had the power to issue that executive order.
The order was a permissible exercise of former President Joe Biden’s authority under the Federal Property and Administrative Services Act, a three-judge panel of the US Court of Appeals for the Fifth Circuit ruled Tuesday.
“Given the statute’s plain language on this account, nearly all courts around the country have recognized the breadth of the President’s authority under § 121(a),” Judge Irma Carrillo Ramirez, a Biden appointee, wrote in the case brought by three Republican-led states.
The decision comes roughly three months after the Ninth Circuit found that Biden lacked that power and vacated a US Labor Department rule implementing the contractor wage order. A third challenge to the $15 minimum wage was thrown out by the Tenth Circuit last year—and the US Supreme Court declined to review that ruling a week before President Donald Trump took office.
Texas, Louisiana, and Mississippi, which challenged Biden’s order and the DOL’s regulation in 2022, will now have to comply with the higher wage when entering into federal contracts, which has since gone up to $17.75. The wage policy allows for annual increases at an amount “determined by the Secretary of Labor.”
It’s yet to be seen whether the Trump administration will uphold the $15 wage order or the subsequent annual increases built into it. Despite canceling a slew of Biden-era executive orders on his first day in office, President Donald Trump left the $15 wage order in tact.
President’s Power
The three states argued, among other things, that the government’s reading of federal procurement law was “overbroad.” They convinced Judge Drew B. Tipton of the US District Court for the Southern District of Texas in 2023 to block the wage requirement for only the trio’s state government employees.
The appeals court panel disagreed, finding that the FPASA clearly and unambiguously granted the president the power to set policies and directives necessary to carry out the act’s purposes, so long as it is consistent with those purposes.
The court also addressed what test should be applied to determine whether the EO is “harmonious, compatible, or otherwise not inconsistent” with the act’s stated purpose of promoting “economy and efficiency” in federal procurement, an issue of first impression for the Fifth Circuit.
The appeals panel noted that its sister courts usually consider whether the policy has a “sufficiently close nexus” or “reasonably related” to the act’s purpose, but declined to set a “definitive” standard because those tests generally yield the same result.
Judges Edith Brown Clement, a George H. W. Bush appointee, and James Earl Graves Jr., a Barack Obama appointee, joined in the ruling.
The states were represented by their respective attorneys general. The Justice Department represents the federal government.
The case is Texas v. Trump, 5th Cir., No. 23-4067, 2/4/25.
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