Recently, the U.S. Supreme Court delivered four landmark decisions that significantly curtailed the power of federal agencies. While these decisions did not directly involve labor and employment agencies, their repercussions will impact labor and employment law.
🗣️ 𝐓𝐡𝐞 𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧𝐬
1️⃣ 𝐉𝐮𝐝𝐢𝐜𝐢𝐚𝐥 𝐃𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞: In Loper Bright Enterprises v. Raimondo, the Court ruled that judges cannot defer to an agency’s interpretation of the law. This marks a departure from the previous practice where courts often deferred to agencies’ expertise in interpreting statutes. Now, judges must independently interpret statutes, though they can still consider agency guidance that is persuasive and consistent.
2️⃣ 𝐀𝐝𝐣𝐮𝐝𝐢𝐜𝐚𝐭𝐢𝐯𝐞 𝐏𝐞𝐧𝐚𝐥𝐭𝐢𝐞𝐬: Securities and Exchange Commission v. Jarkesy focused on the penalties agencies can impose through their adjudicative processes. The Court limited agencies’ ability to impose punitive remedies through internal administrative law judges, arguing that such penalties should be adjudicated in courts with constitutional protections, including the right to a jury trial.
3️⃣ 𝐑𝐮𝐥𝐞𝐦𝐚𝐤𝐢𝐧𝐠 𝐏𝐫𝐨𝐜𝐞𝐝𝐮𝐫𝐞𝐬: Ohio v. Environmental Protection Agency highlighted stricter requirements for agencies during the rulemaking process. Agencies must now address significant issues raised during public comment periods, as ignoring them could render final rules arbitrary and capricious, thus unenforceable.
4️⃣ 𝐒𝐭𝐚𝐭𝐮𝐭𝐞 𝐨𝐟 𝐋𝐢𝐦𝐢𝐭𝐚𝐭𝐢𝐨𝐧𝐬: Corner Post, Inc. v. Board of Governors of the Federal Reserve System expanded the window for challenging agency rules under the Administrative Procedure Act, allowing lawsuits within six years of the challenger’s injury from the rule.
‼️ I𝐦𝐩𝐚𝐜𝐭 𝐨𝐧 𝐋𝐚𝐛𝐨𝐫 𝐚𝐧𝐝 𝐄𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 𝐋𝐚𝐰
Despite these decisions not directly involving labor and employment law agencies, the implications are significant:
𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬 𝐭𝐨 𝐑𝐮𝐥𝐞𝐦𝐚𝐤𝐢𝐧𝐠: Agencies will face heightened scrutiny in justifying their rules. This means that major rules might not withstand legal challenges.
𝐄𝐧𝐟𝐨𝐫𝐜𝐞𝐦𝐞𝐧𝐭 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬: The ability of agencies like the DOL to enforce penalties through their internal processes has been restricted, potentially leading to a more litigious landscape as agencies may need to resort to other enforcement mechanisms.
𝐖𝐡𝐚𝐭’𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐇𝐨𝐫𝐢𝐳𝐨𝐧? 🌄
Labor and employment policies may undergo significant changes. Major rules recently issued by federal agencies, such as those concerning overtime, worker classification, and noncompete agreements, face legal challenges that could test the limits of the new judicial scrutiny. Additionally, agencies will likely need to adapt their policymaking strategies, potentially influencing how labor and employment law evolves in the coming years. As to employers, that could mean new ways in which agencies enforce existing laws and create regulations.
Employers need to keep an eye on this new landscape as changes are almost certainly coming!
#law #hr