Rafting companies ask court to block $15 min. wage for seasonal workers

REUTERS/Hannah Beier
  • Biden administration nixed wage-law exemption for seasonal contractors
  • Judge rejected rafting guides' bid to block rule
  • Appeals court seemed split over government's powers

(Reuters) - A lawyer for companies that provide guided raft trips on U.S. government land urged a federal appeals court on Wednesday to block a Biden administration rule requiring government contractors to pay seasonal recreational workers at least $15 an hour.

Caleb Kruckenberg of the conservative Pacific Legal Foundation told a 10th U.S. Circuit Court of Appeals panel in Denver that the government's power to create an "economic and efficient system" of procurement did not extend to dictating the wages of workers who do not provide government services.

"This is not economical," Kruckenberg said. "It raises prices and causes negative employment impacts for these companies."

Reuters listened to a livestream of the argument.

President Joe Biden, a Democrat, issued an executive order last year raising the minimum wage for workers on federal contracts to $15 an hour, and the U.S. Department of Labor then adopted a rule implementing the wage hike.

As part of the rule, the DOL eliminated a Trump-era exemption from federal contractor wage rules for seasonal recreational employers.

Arkansas Valley Adventure, a Colorado-based provider of guided raft trips, and the Colorado River Outfitters Association, a trade group, sued the DOL in Denver federal court last year to block the rule. Rafting companies purchase permits to use federal land for guided tours, and under the Trump-era rule were only required to pay the standard federal and applicable state minimum wage to seasonal workers.

A federal judge last December said the president had broad authority to regulate government contracting under the federal Procurement Act and rejected the plaintiffs' bid for a preliminary injunction, prompting their appeal.

On Wednesday, 10th Circuit Judge Jerome Holmes seemed skeptical of Kruckenberg's claim that the government's ability to define the scope of its powers under the Procurement Act to regulate federal contractors is limited.

"You're suggesting your clients make that judgment, but it's not a judgment that is vested in them to make," Holmes said.

But Circuit Judge David Ebel said he was unsure that the Procurement Act applied at all, because the government was not procuring or supplying services by contracting with rafting companies.

"When somebody wants to hire a guide, they're not going to the government and saying 'supply the guide please,'" Ebel said to Daniel Winik of the U.S. Department of Justice.

Winik responded that the government is indirectly supplying guides by farming that work out to private companies rather than using its own employees.

The panel also includes Circuit Judge Allison Eid. All three judges are appointees of Republican presidents.

The plaintiffs are backed by a dozen Republican-led states, while the Democratic attorney generals of 19 states and Washington, D.C., filed a brief supporting the wage hike. Worker advocacy groups and two major unions, the Communication Workers of America and the Service Employees International Union, also backed DOL.

The case is Bradford v. U.S. Department of Labor, 10th U.S. Circuit Court of Appeals, No. 22-1023.

For the plaintiffs: Caleb Kruckenberg of the Pacific Legal Foundation

For DOL: Daniel Winik of the U.S. Department of Justice

Read more:

DOL proposal details $15 minimum wage requirement for contractors

Biden raising minimum wage for federal contractors to $15/hr

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Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.