The Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, __ U.S. __ (2024), overturning the 40-year-old Chevron doctrine, drastically reshapes administrative law. Under Chevron, administrative agencies had latitude in interpreting ambiguities in the statutes they administer. So long as the ambiguity was genuine and the interpretation reasonable, courts would defer to the agency’s expertise. But in its Loper decision, the Supreme Court held that federal courts should not defer to administrative agencies’ interpretations of ambiguous statutes. Instead, it is the province of the courts to make these determinations.

Critics of Loper argue that Congress cannot possibly write statutes to cover every situation with no holes or ambiguities. It lacks expertise and time. In reality, critics say, disempowering regulatory agencies makes it impossible for the federal government to adequately regulate a modern society. Another criticism is that the ruling allows judges to cherry-pick regulations based on political preference. Loper’s proponents argue that critics overstate the ruling’s effect and that administrative agencies cannot be responsible for interpreting the limits of their own mandate.

The Loper holding could significantly impact employment law. Two areas this ruling could upset are (1) the Federal Trade Commission’s new rule banning noncompete agreements, and (2) judicial deference to the Equal Employment Opportunity Commission in discrimination cases.

In April, the FTC announced a new rule (the “Rule”) banning noncompete agreements for most employees. The Rule is already under attack in at least two lawsuits. Chevron’s overruling puts wind in the sails of plaintiffs in those lawsuits who argue the FTC lacked a legislative mandate for its noncompete Rule. The decision in Loper makes the Rule more vulnerable to judicial invalidation.

Before instituting an employment discrimination lawsuit, the EEOC investigates a complaint and determines whether there is reasonable cause to believe employment discrimination has occurred. During these procedures the EEOC makes findings of fact. When evaluating the EEOC’s actions, courts traditionally give great weight to these findings. Loper’s language restricts the Court’s holding to statutory interpretation. It says nothing about agency fact-finding. But it remains an open question whether federal courts will maintain the same level of deference to agency findings of fact in Loper’s wake.

Finally, Loper may lead state courts to grant less deference to state administrative agencies. Although Loper’s holding is limited to federal agencies, state courts may find the Supreme Court’s reasoning persuasive.