Labor Enforcers' Policy Strategies Will Get Post-Chevron Rewrite

Labor and employment attorney Timothy Taylor, a former Deputy Solicitor of Labor for the U.S. Department of Labor (DOL), was recently quoted in Bloomberg Law, Law360 and SHRM articles discussing the U.S. Supreme Court's decision striking down a legal doctrine that directed courts to accept how agencies interpret unclear laws. In a 6-3 ruling, the court overturned the precedent established in the 1984 case Chevron v. Natural Resources Defense Council, commonly known as the Chevron doctrine. This decision will cause federal agencies that enforce labor and employment laws, such as the DOL and Equal Employment Opportunity Commission (EEOC), to adjust their regulatory and litigation strategies.

Attorneys, including Mr. Taylor, interviewed by Bloomberg Law predicted the EEOC will have to expend more resources developing and defending regulations aimed at ensuring workers are properly paid, protected from on-the-job injuries or death, secure in their retirement savings and shielded from discrimination, among other areas. He commented this example shows the significance and scope of changes resulting from the Chevron ruling.

"The decision can't be underestimated," he said. "It's a sea change."

Mr. Taylor noted to Law360 that Chevron frequently came up in cases involving the DOL's wage and hour rules, so the effects of the court's will be felt in future rulemaking and litigation. However, he added, even though federal agencies will have to craft more well-defined regulations and be mindful of the new legal vulnerabilities, their basic functions will not change, and courts can still give credence to their interpretations of the law.

"Courts will still pay attention to what agencies have to say, but you're not going to see them affording them capital-D deference," he explained.

Speaking to SHRM, Mr. Taylor shared that the Chevron decision means employers won't have to assume federal labor and employment rules are written in stone, giving companies the power to push back when they think agency rulemakings are overly aggressive.

"The practical effect for employers may be that rulemaking activity is dampened — but by no means ended — and that rulemaking challenges are supercharged by the decision," he said.

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Holland & Knight announced the formation of its Chevron Deference Working Team in advance of the U.S. Supreme Court's June 28, 2024, Loper decision, which overturned the Chevron deference doctrine and will lead to a period of regulatory changes and potential legal challenges for some time.