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On June 28, 2024, the U.S. Supreme Court issued a decision in Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce. The Court overruled its 1984 decision in Chevron, U.S.A. Inc. v. Natural Resources Defense Council Inc., which held that courts should defer to federal agencies to interpret ambiguities and gaps in the workplace laws that the agencies implement (known as Chevron deference).
Congress has the authority to pass laws that govern employers, and federal agencies have the authority to enforce those laws. To fill in any gaps or to remedy ambiguities, federal agencies may issue more detailed guidance on how the laws should be interpreted and applied. For example, agencies may publish informal guidance, opinions, or formal regulations. Under the doctrine of Chevron deference, courts are directed to defer to such agency guidance where the statute is ambiguous, and the agency’s interpretation is reasonable.
Federal employment agencies, including the U.S. Equal Employment Opportunity Commission, OSHA, the U.S. Department of Labor (DOL), and the National Labor Relations Board, have relied on Chevron deference in issuing and defending agency interpretations.
The Supreme Court overruled Chevron deference in a 6-3 decision. In its opinion, the Supreme Court held that the Administrative Procedure Act requires courts to exercise their independent judgment in interpreting the law, and consequently, “courts may not defer to an agency interpretation of the law simply because the statute is ambiguous.” However, the Supreme Court noted that the holdings of prior cases that relied on Chevron deference remain lawful and may not be overturned solely because they relied on Chevron.
Chevron Deference Decision Impact on the Workplace
Chevron deference is a landmark administrative law decision that has meaningfully influenced the interpretation and enforcement of employment laws.
In light of the Supreme Court’s ruling, federal agencies will not be able to rely on Chevron deference in existing litigation, including lawsuits filed to challenge the DOL’s independent contractor and overtime rules. They may also be subject to additional legal challenges regarding existing rules. Federal agencies may also issue fewer regulations and take more moderate positions in the regulations they issue, and they may face greater difficulty in addressing policy issues.
From an employee perspective, this decision signals a possible major change in regulatory power. It has the potential to impact agencies that regulate the workplace and protect employees against influences like discrimination. At this point, it’s too early to determine the full impact, so employees and employers alike will have to wait and see.
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