The U.S. Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo overturned the longstanding Chevron doctrine, which has been a cornerstone of administrative law for nearly 40 years.

The decision has far-reaching consequences for federal agencies and the regulated community, including implications for workplace law.

Understanding Chevron deference

The Chevron doctrine, established in 1984, required courts to defer to a federal agency’s reasonable interpretation of an ambiguous statute it administers. Chevron was based on the premise that federal agencies, given their specialized knowledge and experience in their particular domains, were in a better position to clarify and apply ambiguous statutory language.

The new ruling

In overruling Chevron, the Supreme Court declared that judges must exercise their own judgment in interpreting statutes. Previously, if a statute was silent or ambiguous, the courts deferred to the agency interpretation if it was based on a “permissible construction” of the statute. Essentially, if a law was unclear, the courts would side with the agency, as long as the agency’s interpretation was reasonable.

The Loper ruling alters the balance of interpretative power, placing the onus on judges to discern statutory meaning. Though the courts may still consider an agency’s specialized knowledge in its interpretations, they are no longer obligated to defer to these agency views. As Chief Justice John G. Roberts, Jr., stated plainly, “Chevron is overruled.”

Ideological split

The Court’s decision was split 6-3 along ideological lines, with the conservative majority overturning the longstanding doctrine. The court’s three liberal justices strongly advocated for maintaining the Chevron doctrine. Justice Elena Kagan contended that federal agencies possess specialized scientific and technical knowledge that makes them more capable than the courts in clarifying vague or complex statutory language.

Justice Ketanji Brown Jackson emphasized the doctrine’s important purpose, suggesting that under Chevron, Congress empowers federal agencies to make necessary policy choices, such as filling gaps or defining terms in statutes. She warned that overturning Chevron could force courts to make these kinds of policy decisions instead.

On the other hand, conservative justices such as Brett M. Kavanaugh viewed Chevron’s deference to agencies as problematic. Kavanaugh argued that Chevron “ushers in shocks to the system every four or eight years when a new administration comes in,” leading to “massive change” in areas such as securities law, communications law and environmental law.

Implications for workplace law

The ruling could significantly impact how federal labor and employment agencies formulate and defend their regulations going forward. Agencies such as the Department of Labor (DOL), Equal Employment Opportunity Commission (EEOC), Occupational Safety and Health Administration (OSHA), and National Labor Relations Board (NLRB) have often relied on Chevron deference to have their regulations upheld in court.

Agency rules will now likely face stricter scrutiny in court. That could affect recent and pending regulations, such as:

The DOL’s rules on minimum salary thresholds for FLSA exemptions
Rules defining independent contractors versus employees under the FLSA
The EEOC’s interpretation of the Pregnant Workers Fairness Act
The Federal Trade Commission’s proposed ban on non-compete agreements
OSHA’s new regulation allowing non-employee representatives (e.g., union organizers) to accompany safety inspectors
NLRB rules defining joint-employer status

Agencies, meanwhile, may adopt a more conservative approach, crafting regulations that will stand up against heightened judicial scrutiny.

There’s also the potential for inconsistent court rulings across different jurisdictions, which could complicate workplace compliance for employers operating in multiple states.

Note that existing regulations remain in effect unless explicitly overturned by a court. Employers should maintain compliance with existing agency regulations while monitoring developments. However, employers facing lawsuits based on agency interpretations of a law may now have additional legal arguments in their defense.