A recent U.S. Supreme Court ruling overturned a decades-old decision and significantly limits federal agencies’ authority to regulate in a number of arenas, including the workplace.
On Friday, June 28, the Court ruled to overturn a 1984 decision in the case of Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., which required lower courts “to defer to federal agencies when laws passed by Congress are not crystal clear,” wrote AP News’ Matthew Daly, in a piece summing up this past Friday’s decision.
As Daly pointed out, the 40-year-old Chevron decision “has been the basis for upholding thousands of regulations by dozens of federal agencies, but has long been a target of conservatives and business groups who argue that it grants too much power to the executive branch, or what some critics call the administrative state.”
Meanwhile, the Biden administration has defended the Chevron decision, saying that to overturn it would send shockwaves throughout the American legal system.
The original 1984 case centered around a legal challenge to a change in the U.S. government’s interpretation of the word “source” in the Clean Air Act of 1963. In a unanimous 6-0 decision, the Supreme Court determined that judges should defer to the executive branch of the government when laws passed by Congress are unclear.
“In the decades following the ruling, Chevon has been a bedrock of modern administrative law,” Daly wrote, “requiring judges to defer to agencies’ reasonable interpretations of congressional statutes.”
Daly also noted, however, that current Supreme Court justices Brett Kavanaugh, Clarence Thomas, Samuel Alito and Neil Gorsuch have questioned what has become known as “the Chevron doctrine,” paving the way for last week’s decision.
With that ruling, several regulations issued in recent years—including workplace-related rules on overtime pay and student loan forgiveness, for example—could face legal challenges “if judges are allowed to discount or disregard the expertise of the executive-branch agencies that put them into place.”
Assessing the Impact
The working world’s reaction to Friday’s ruling has been swift.
The decision “has historic implications for federal administrative law, including federal regulations governing employee benefit plans,” ERIC Legal Center Executive Director Tom Christina said in a statement issued on the heels of the Supreme Court ruling. “This decision ends the deference to rules issued by executive agencies mandated by the Court’s 1984 Chevron decision. The new, less deferential standard marks a significant development in the law.”
Zachary B. Busey, labor and employment attorney in the Memphis office of Baker Donelson, offered employers some guidance on what the decision means to them now and in the future.
“The Supreme Court’s decision, although impactful, did not overrule or lessen any workplace statute, protection or requirement,” Busey wrote. “In terms of immediate impact on the workplace, there is none. Employers must continue to comply with applicable workplace laws and regulations.”
That said, employers should keep their eyes on the bigger picture, Busey cautioned.
“It will just take time for [the decision’s repercussions] to reach and impact the workplace,” he said. “[The June 28] decision marked a historic point in the balance between the branches of government, particularly the executive branch and the judicial branch. The decision makes clear that the judicial branch, judges and courts have the final word on what a law means, and no longer have to defer to the executive branch’s interpretation of laws or regulations.”
In terms of what agencies should be doing right now, “employers need to continue with business as usual,” Busey concluded, noting that state agencies and federal agencies such as the Department of Labor and the U.S. Equal Employment Commission will continue to regulate organizations and workplaces.
“Despite what might make headlines, there is no immediate workplace change for employers to make. If, however, your [organization] is actively involved in litigation regarding a federal regulation or a decision from an administrative agency, you will want to speak with your counsel regarding this decision. Any immediate effect from this decision will be felt in active litigation, not the day-to-day workplace.”
01 July 2024
Category
HR News Article