Federal appeals court pauses $15 minimum wage mandate for outdoor recreation companies

A federal appeals court on Thursday halted a mandate from the Biden administration that required an hourly minimum wage of $15 for outdoor recreation companies operating on public land.

The U.S. Court of Appeals for the Tenth Circuit in Denver granted an injunction in a lawsuit filed by the Pacific Legal Foundation against the Biden administration on behalf of outdoor recreational groups that have contracts with the U.S. government or operate on federal land.

The “plaintiffs have demonstrated an entitlement to relief from the minimum wage order in their particular circumstances,” the court ruled, and enjoined the government from enforcing the $15-an-hour minimum wage mandate, which recreational companies said would force some of them out of business.

The court also granted the request because it found the plaintiffs were “likely to succeed on the merits” and "suffer irreparable harm in the absence of preliminary relief.”

The injunction remains in effect until further order of the court.

“This ruling helps more than 40,000 companies like Arkansas Valley Adventures who provide seasonal recreational services on federal lands,” Pacific Legal Foundation attorney Caleb Kruckenberg said. “The court recognized that this wage rule doesn’t make sense for the industry, would limit access to the outdoors, and would reduce employment opportunities for people in the industry. More importantly, the court also recognized that the President did not have the authority to issue the rule.”

The foundation sued last December on behalf of outdoor adventure guides Arkansas Valley Adventures (AVA), ​​a licensed river outfitter regulated by the Colorado Division of Parks and Wildlife, and the Colorado River Outfitters Association (CROA). The CROA, a nonprofit trade association, represents more than 150 independent operators who primarily conduct business on federal lands using special use permits through the U.S. Forest Service or Bureau of Land Management.

It argues the requirement amounts to “an executive power grab to force a social agenda through federal contractors.”

At issue is a U.S. Department of Labor final rule issued in November November in response to an executive order President Joe Biden issued last April. The order is similar to one issued by former President Barack Obama in 2014.

The DOL maintains that raising the minimum wage “enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.”

But AVA argues that it, and other companies like it, could go out of business, creating a rippling effect of direct and indirect loss of jobs, unless they receive an exemption from the rule.

AVA, which provides a full range of outdoor experiences year-round, including guided, multi-day river rafting wilderness trips in the summer, isn’t a federal contractor and never has been. But because it holds a special land use permit to operate on federal lands, it’s subject to the requirement. It argues it’s wrongly being included in a federal contractor category, forcing it “to adopt a wage model that is fundamentally incompatible with the way that the guiding industry operates.”

Additionally, PLF argues, only Congress has the constitutional authority to regulate minimum wage, not the president.

“Only Congress can make law setting minimum wages,” PLF attorney Caleb Kruckenberg said. “The president can’t establish a minimum wage through administrative fiat. The Constitution says that only Congress can make laws that bind the public.”

The ruling comes exactly one week after Texas, Louisiana and Mississippi sued over the mandate.

The state attorneys general in their complaint, argued, “President Biden has attempted to arrogate to himself the authority to impose sweeping changes on American society with little more than the stroke of a pen. In pursuit of partisan political objectives, Defendants are unilaterally attempting to impose a radical policy – a dramatic and rapid increase in the minimum wage for federal contractors – with little apparent regard for the widespread havoc on the economy that will result.”

Last year, the U.S. Department of Labor’s Wage and Hour Division began holding virtual compliance seminars and interactive webinars for agencies, contractors, unions, workers and other stakeholders to learn how to comply with the new rule. Now, such training won’t apply to contractors who provide seasonal recreational services or seasonal recreational equipment rentals for the general public on federal lands.

The court also granted in its order a motion filed by the National Employment Law Project, the Communications Workers of America, the Service Employees International Union, the National Women’s Law Center, and the Economic Policy Institute to submit an amicus brief in support of the government.