Nebraska v. Su,121 F.4^th 1 (9^th Cir. 2024)

Five states challenged President Biden’s 2021 Executive Order 14026, which directed federal agencies to include a clause in federal contracts requiring contractors to pay employees a $15 minimum wage. The states argued that the executive order and the implementing rule issued by the Department of Labor violate the Federal Property and Administrative Services Act (FPASA) and the major questions doctrine and that the implementing rule violates the Administrative Procedure Act. United States District Judge John Joseph Tuchi dismissed the complaint. In this opinion, the Ninth Circuit reversed the lower court’s dismissal and its denial of a preliminary injunction, holding that the minimum wage mandate exceeds the authority of the president and the DOL provided under the FPASA. The Court further held that the major questions doctrine does not apply because the Executive Branch’s reliance on the FPASA is not a “transformative expansion of its authority.” Finally, the Court held that the DOL acted arbitrarily or capriciously when it failed to consider alternatives to the $15 per hour minimum wage.