So Long, Chevron: Supreme Court Opens Door for Judicial Questioning of Administrative Agency Expertise

An administrative agency is a governmental body that creates and enforces rules and regulations for specific areas of law.  The National Labor Relations Board (NLRB), Environmental Protection Agency (EPA), Food and Drug Administration (FDA), Department of Homeland Security (DHS) and Occupational Safety and Health Administration (OSHA) are all examples of federal administrative agencies.  For over forty years, federal courts have deferred to administrative agency interpretations of the laws these agencies enforce.  This deference recognized that there can be multiple interpretations of the same statutory language and that the agencies are the experts in enforcing the laws within their jurisdictions.  This was called “Chevron deference” after the 1984 Supreme Court case Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.

Under Chevron, federal courts looked at the language of the particular statute (i.e., law) at issue to determine whether the language was clear on its face or ambiguous.  If the language was clear on its face, that interpretation governs.  If the language was ambiguous or there was a gap, the federal court would then evaluate whether the agency’s interpretation of the ambiguous language was permissible.  If the interpretation was permissible, then the court was bound by that interpretation, even if the court would have interpreted the statute differently.  If the agency’s interpretation was found unreasonable, then the court would replace the agency’s interpretation with its own.

Despite the use of Chevron deference since 1984, the Supreme Court overruled Chevron in 2024 in a case called Loper Bright, and instructed federal courts to exercise their independent judgment in interpreting statutes.  Instead of relying on agency interpretations as binding, courts can instead look to agency interpretations of statutes within their jurisdiction as mere “guidance.”

The Loper Bright decision will have the greatest impact on agency rulemaking.  Such rulemaking includes:

• NLRB election rules

• ERISA’s regulatory regime, for example:

• Regulations recently promulgated for the No Surprises Act

• Regulations pending regarding withdrawal liability calculations for pension funds

• Department of Labor regulations that set wage and hour standards under the Fair Labor Standards Act

• U.S. Equal Employment Opportunity Commission regulations that provide specific guidance on:

• Title VII

• Age Discrimination in Employment Act (ADEA)

• Americans with Disabilities Act (ADA)

• Pregnant Workers Fairness Act

• Equal Pay Act

• Genetic Information Nondiscrimination Act

Courts will now have free reign to overturn regulations promulgated by federal agencies if the courts disagree with the agency’s interpretation, even if the agency interpretation is reasonable and long-standing.

The factual findings in NLRB decisions are not likely to be substantially impacted by this decision.  Those cases remain subject to review by appellate courts, but appellate courts are only permitted to determine whether the agency’s decision is supported by “substantial evidence.”  The Supreme Court applied that standard to NLRB decisions long before it decided Chevron in 1984. [DR5]  The courts will have some more leeway to scrutinize purely legal decisions and interpretations of law as opposed to factual findings.

If you have questions about how federal courts review the actions of administrative agencies, contact your labor law counsel.