The Chevron two-step sounds like a dance, but in reality, it stood for the long-standing doctrine of judicial deference to a federal agency’s interpretation of statutes. In Chevron USA, Inc. v. Natural Resources Defense Council, Inc., the United States Supreme Court held that courts can and should defer to an agency’s interpretation of a statute if the statute is ambiguous, silent on an issue, or if Congress has not spoken directly on the question posed. Courts, therefore, frequently deferred to an agency’s interpretation when the language of a statute was ambiguous and the agency’s interpretation was “reasonable.” As such, Chevron was one of the most consequential principles in administrative law for decades. However, the music stopped on the Chevron two-step this summer after the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, which overturned Chevron and did away with the federal judiciary’s forty-year practice of deferring to an agency’s interpretation of statutes.
In Loper Bright, the Supreme Court criticized Chevron as being “unworkable,” “inconsistent,” and “an impediment” to the duty of the judiciary to “say what the law is.” Although the Court noted that it gives “the most respectful consideration” to agency interpretations, it asserted that Chevron took that respect too far, supplanting the judgement of courts instead of informing it. Thus, the Court held that courts should not defer to an agency’s interpretation of a statute merely because the statute is ambiguous, and instead, courts must exercise independent judgment in interpreting the statute as well as reviewing agency interpretations of such.
Implications for Employers
Naturally, the abandonment of the Chevron framework may have broad implications for employers. Many federal agencies such as the Equal Employment Opportunity Commission (EEOC), National Labor Relations Board (NLRB), Department of Labor (DOL), and Occupational Safety and Health Administration (OSHA) interpret and refine federal statutes through agency rules and regulations. As employers know, these agency regulations affect the workplace each and every day. Now, following Loper Bright, agency interpretations will not be given such previous deference, making it more difficult to anticipate the results of challenges to agency interpretations and what weight, if any, such interpretations will carry with courts. Moreover, there is no guarantee that courts will reach the same conclusion when reviewing a federal statute and any correlating agency interpretation. As such, there may be a lack of consistency among different jurisdictions.
As of today, all current regulations and guidance from federal agencies continue to exist and be in effect. Accordingly, employers should continue to follow any such regulations and guidance unless and until a court rejects such agency interpretations. But, conversely, employers will need to be more cognizant of challenges to the interpretation of an employment statute. For example, with such bolstered judicial discretion, an agency’s regulation may be upheld by one court and invalidated by another. This will cause compliance difficulties for employers with employees and companies in multiple jurisdictions. Employers must stay aware of developing cases and be prepared to comply with conflicting decisions.
While Loper Bright leaves uncertainty in its wake, cases relying on Chevron are not overturned, meaning employers need not take immediate action. Employers will, however, want to be ever aware of developing cases and whether or not the interpretation of such employment statutes change in the future. Davenport Evans lawyers are here to guide employers through this new landscape, and stand by ready to help.
Davenport, Evans, Hurwitz & Smith, LLP, located in Sioux Falls, South Dakota, is one of the state’s largest law firms. The firm’s attorneys provide business and litigation counsel to individuals and corporate clients in a variety of practice areas. For more information about Davenport Evans, visit www.dehs.com