By: Law Clerk Elizabeth Ropp, Edited by Attorney J. Paul Porter

For the past 40 years, Federal Agencies have wielded growing power over the day-to-day lives of American citizens. This growth is partially attributable to the 1984 ruling in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. Under the Chevron doctrine, courts gave deference to administrative agencies’ interpretations of congressional statutes. In practice, this allowed agencies to define and enforce (and arguably create) the law.

On June 28, 2024, the Supreme Court reversed this precedent in its decision in Loper Bright Enterprises v. Raimondo.

Before this landmark decision, when faced with a question of agency interpretation, courts asked two questions under the Chevron doctrine: (1) whether the statute is ambiguous and, if so, (2) whether the agency’s interpretation is reasonable. If the answer was ‘yes’ to both of these questions, courts ruled in favor of the agency’s interpretation. Now, the Supreme Court has eliminated this two-step test and instead, has weakened agency power by vesting itself with the sole discretion to say what the law is in the face of congressional ambiguity.

So, what does this mean in the context of labor and employment law? Right now, there are pending lawsuits that challenge rules and regulations promulgated by the Department of Labor, Equal Employment Opportunity Commission, Federal Trade Commission, National Labor Relations Board, and the Occupational Safety and Health Administration. Without Chevron deference, these agencies’ rules and regulations are more vulnerable to legal challenges.

Examples of vulnerable rules and regulations include: (1) increases to the minimum salary threshold for overtime exemption; (2) An EEOC rule that says employers must provide reasonable accommodation for their employees to receive abortions; (3) employee-friendly joint employer rules under the NLRB; and (4) the Federal Trade Commission’s rule banning most noncompete agreements in employment.

These examples relate to hot-button issues that will have real effects on employers and employees alike.