On Friday, the Supreme Court overruled this thing called the “Chevron Doctrine.” In short, it means that the court has significantly reduced the power of federal regulatory agencies and placed that power in the hands of judges. The “Chevron Doctrine” required courts to defer to a federal agency’s position on the law when a statute is open to interpretation. By way of example, if there was something in the Fair Labor Standards Act that required interpretation, under the “Chevron Doctrine,” courts would defer to the Department of Labor’s interpretation.
In a 6-3 decision SCOTUS overruled Chevron , holding that that courts may not defer to an agency’s interpretation of the law just because it is ambiguous but instead “must exercise their independent judgment when deciding whether an agency has acted within its statutory authority.” So, instead of deferring to an agency’s interpretation of a law, judges are free to interpret the law irrespective of an agency’s interpretation. This is a win for employers, especially when arguing against agency overreach. The Court wrote that Chevron “prevents judges from judging.”
🤨 Now What?
Instead of deferring to what an agency says about a law, courts reviewing agency action must exercise their own independent judgment. Courts will continue to respect the agency’s authority if it has been properly delegated by statute. However, if a law is ambiguous, courts will now get to decide whether an agency has acted within its statutory authority, as opposed to deferring to the agency.
🧐 How Does This Impact Employers?
In the short term, not much changes. The court made clear that prior cases relying on Chevron remain valid legal precedent. What this does mean is that there will almost certainly be new challenges to agency actions.
Below are some areas that may see future challenges:
1️⃣ Wage and Hour: Expect challenges to Department of Labor regulations addressing things like overtime and independent contractor classification to name a few.
2️⃣ Non-Competition: The court’s decision will likely have an impact on the Federal Trade Commission’s rule banning non-competition agreements.
3️⃣ Discrimination/Harassment: The Equal Employment Opportunity Commission (EEOC) is the agency charged with administering federal anti-discrimination laws. Look for challenges to regulations addressing age and disability discrimination to name a few.
Bottom Line
The above are just a few areas that may see impact. In the meantime, employers should work with counsel to pay close attention to future regulatory challenges.
#law #hr #scotus