Next month, the United States Supreme Court will be hearing a pair of cases (Relentless, Inc. v. Department of Commerce and Looper Bright Enterprises v. Riamondo) that could fundamentally change whether a federal court must defer to a federal administrative agency in interpreting federal laws and rules. These cases are factually not terribly relevant to employers; they deal with a federal rule requiring the fishing industry to pay the costs associated with observers who monitor the fishers’ compliance with federal rules. The import of their decision, however, is that they give the Supreme Court the option to overturn a landmark decision that has been in place for 40 years, called Chevron v. Natural Resources Defense Council.
This long-standing legal doctrine, known as Chevron-deference, compels federal courts to defer to a federal agency’s interpretation of an ambiguous or unclear statute. In practice, this has meant courts are generally bound by an agency’s interpretation and cannot create their own.
If Relentless and Riamondo overturn Chevron, finding against the federal administrative agencies, it may usher in a new legal standard, which will have an impact on employers who are subject to the oversight of a variety of federal agencies in a labor and employment context, including the Equal Employment Opportunity Commission, the Department of Labor, the Occupational Safety and Health Administration, and the National Labor Relations Board, among others. Depending on the ultimate decision in Relentless and Riamondo, the Supreme Court may transfer significant discretion from federal agencies to federal courts, which could complicate business that operates across multiple jurisdictions, as hundreds of federal judges may become free to use their own interpretations, instead of deferring to a single federal agency interpretation.
We plan to monitor the status of the cases and will report the Supreme Court’s ultimate holding later in 2024.
