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SCOTUS Reverses Practice of Deferring to Federal Agency Rules Interpreting Law

Just last Friday the U.S. Supreme Court issued decisions in a pair of companion cases, overturning longstanding precedent that instructed federal courts to defer to agency interpretations of the laws they enforce. The precedent was established by the Court forty years ago, in Chevron v. Natural Resources Defense Counsel.  The holding of that case, which came to be known as  “Chevron deference” instructed federal courts to generally defer to federal regulations issued by agencies that were assumed to be better suited to interpret the laws they were entrusted to enforce. However, in a 6-3 decision overturning Chevron, Chief Justice John Roberts, writing for the majority, declared that the Chevron doctrine gave too much power to unelected federal bureaucrats and placed the administrative branch of government, above the judicial branch and its role in interpreting the law. As a result of these rulings, courts must now exercise independent judgment in deciding whether an agency has acted within the authority granted to it by Congress.  This is a highly controversial ruling not only because it is yet another decision of the current Court that overturns decades-old precedent (think Dobbs and Roe v. Wade), but because it unequivocally “clips the wings” of federal agencies and renders them less influential.  These rulings may have a profound impact on the agencies Wessels Sherman deals with on behalf of our clients (e.g. NLRB, EEOC, DOL) and be welcomed by employers everywhere as a sort of “deregulation.” The cases are Loper Bright Enterprises et al. v. Gina Raimondo; and Relentless Inc. et al. v. Dept of Commerce et al.

These decisions come at a time when federal administrative agencies have issued a landslide of new regulations that take significant liberties in interpreting federal statutes. As just one example, the EEOC’s final rule on the Pregnant Workers Fairness Act (PWFA) issued in April, interpreted that law so broadly that it included protections of the right not to be pregnant (i.e. abortion rights).  This sparked lawsuits challenging the EEOC’s authority to essentially re-write the PWFA. No doubt the plaintiffs in those lawsuits will be amending their arguments to include the new SCOTUS precedent directing the courts not to give deference to the EEOC’s interpretation of the law if it exceeded its authority.

Questions? Contact attorney Jim Sherman by email or at 952-746-1700

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