Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—Fifth Circuit panel vacates prior opinion in suit over Biden’s federal contractor wage order, (Mar 31, 2025)

By Brandi O. Brown, J.D.

Previously, the same panel upheld the EO, which required a $15 wage.

At the end of last week, a Fifth Circuit panel vacated its prior opinion in an appeal stemming from a suit by Texas and several other states against the federal contractor minimum wage order issued by President Biden, citing a new executive order by President Trump that rescinded the earlier order.

On April 27, 2021, President Biden issued Executive Order 14,026 requiring various federal agencies to “ensure that their contracts” contain “a clause requiring that contractors and any covered subcontractors agree to” pay specified workers a $15 minimum wage. The order stated that the President was issuing the order under the authority vested in him by the Constitution and the laws of the country, including the Federal Property and Administrative Services Act (FPASA).

Lawsuit. Subsequently, Texas, Louisiana, and Mississippi filed suit challenging the EO. The district court determined that the FPASA does not provide the President “broad policy-making authority to set the minimum wage of certain employees of federal contractors and subcontractors,” and instead “limit[s] the President to a supervisory role in policy implementation.” It found the Executive Order to be a “major question,” and as such the FPASA did not grant the President the authority to raise the minimum wage paid to federal contractors and subcontractors. The court permanently enjoined the federal government from enforcing the Executive Order against the states and their agencies.

First opinion. On appeal, a Fifth Circuit panel in early February determined that the Executive Order was a permissible exercise of the President’s authority under the FPASA. Finding the language of the statute to be clear and unambiguous, the court explained that Congress thus intended the courts to give the language its ordinary meaning, and in this instance the Executive Order satisfied the necessary statutory requirements.

New order. However, on March 14, 2025, after that opinion was released but before the mandate was issued, President Trump, in Executive Order 14,236, rescinded Biden’s order. Explaining that both parties had agreed the appeal is now moot and that it is appropriate for the court to vacate its panel opinion in the case, and citing a 2020 decision regarding disposing of appeal when events occur while the case is still pending on appeal that make it impossible for the court to grant effectual relief to the prevailing party, the court agreed that the appeal was moot. “Because President Trump revoked Executive Order 14,026, there remains no live case or controversy about the lawfulness of the district court’s injunction.”

Vacated. Thus, the panel vacated its prior opinion and judgment, as well as the district court’s opinion and judgment, and remanded with instructions to dismiss the case with prejudice.

The case is No. 23-40671.

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