Published
November 18, 2024
November 5 wasn’t just Election Day. It was also the day that the U.S. Court of Appeals for the Ninth Circuit jettisoned one of President Biden’s signature policies and may have signaled the end to a frequently abused presidential authority.
The issue involves a Biden Executive Order (EO) that mandated a $15 dollar minimum wage for employees of federal contractors. Like all EOs imposing requirements on federal contractors (e.g., minimum wage or paid sick leave), it relied on the Procurement Act, which gives the president broad authority in procurement matters based on the concept of “promoting economy and efficiency.” Various presidents have abused that language to force federal contractors to accept policies they have been unable to pass in Congress, arguing that the policy in question will somehow promote economy and efficiency.
In this instance, the court disagreed, stating: “We conclude that the minimum wage mandate exceeds the authority granted to the President and the Department of Labor in the [Procurement Act].” The court distinguished the “economy and efficiency” language as merely part of the “purpose” section of the act, and ruled that the president could only implement policies supported by the “operative” sections.
The language relied upon by President Biden here underpins many other executive orders relating to federal contractors. Thus, this decision could radically change the use of the president’s contracting authority as a backdoor to implement policies that cannot be passed by Congress. Other government programs established through executive orders could also be affected, such as the Office of Federal Contract Compliance Programs within DOL, which governs contractors’ adherence to affirmative action requirements.
While the Ninth Circuit has spoken, there are two other cases challenging the minimum wage EO. The Tenth Circuit upheld the president’s authority to issue the minimum wage EO, while the Fifth Circuit is still considering a challenge identical to the Ninth Circuit. Because of the circuit split, and the ramifications of this question, this case (and the others dealing with this executive order) may ultimately be taken up by the Supreme Court. The days when the Procurement Act can be used as a vehicle to bypass Congress may be coming to an end.
About the authors
Marc Freedman
Marc Freedman is vice president of workplace policy at the U.S. Chamber of Commerce. He develops and advocates the Chamber’s response to OSHA matters; FLSA issues such as overtime, minimum wage, and independent contractors; paid leave issues; EEOC, and other labor and workplace issues.
