On June 28, 2024, the U.S. Supreme Court overturned the Chevron, USA Inc. v. Natural Resources Defense Council decision, ending nearly four decades of judicial deference to federal agencies’ interpretations of ambiguous statutes. The new ruling, from the Loper Bright Enterprises v. Raimondo case, mandates that courts now use their own judgment in interpreting statutes without automatically deferring to agency interpretations.
Previously, under Chevron deference, courts sided with reasonable agency interpretations of ambiguous laws, assuming agencies had greater expertise. Now, judges must exercise independent judgment, though they can still consider an agency’s expertise and consistency.
This shift will likely impact regulations from federal labor and employment agencies like the Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC), and the National Labor Relations Board (NLRB), as their rules will face stricter judicial scrutiny. For example, the Federal Trade Commission’s (FTC) ban on noncompete clauses and the EEOC’s interpretation of the Pregnant Workers Fairness Act may now be more vulnerable to legal challenges.
Going forward, agency rules may be contested more often in court, leading agencies to draft narrower rules closely aligned with statutory language. This could benefit employers but also result in inconsistent court rulings across jurisdictions, complicating compliance. Employers should continue to follow existing regulations until explicitly overturned and stay updated on legal developments, consulting with legal counsel as needed.