Judiciary vs. Bureaucracy - The Death of the Chevron Doctrine
In the recent case of Loper Bright Enterprises vs. Raimondo, the U.S. Supreme Court overruled the so-called Chevron doctrine. After lower federal courts upheld an agency regulation based on the Chevron framework, the plaintiffs asked the Supreme Court to overrule, or at least limit, Chevron. In a 6-3 decision issued on June 28, 2024, the Supreme Court elected to do away with the Chevron doctrine. This holding meant that courts need not defer to a bureaucratic agency’s interpretation of the law just because the law is ambiguous. Instead, the Supreme Court stated that courts “must exercise their independent judgment when deciding whether an agency has acted within its statutory authority.” The Court held that the Chevron doctrine is at odds with the requirements of the Administrative Procedures Act because it allows agencies to change positions as they please without being authorized by Congress to do so. Notably, Chief Justice Roberts, writing for the majority, stated that Chevron “prevents judges from judging.”
Previously, when an agency issued rules or regulations not specifically addressed in the subject legislation, the courts were encouraged under the Chevron doctrine to defer to the “expertise” of the agency in statutory interpretation. Since the Supreme Court’s 1984 decision in Chevron U.S.A., Inc. vs. Natural Resources Defense Council, Inc., the law has been relatively stable, favoring agencies wielding tremendous power over businesses. The Chevron doctrine provided a two step framework for courts to interpret federal statutes:
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if the text of the statute directly speaks to the precise question at issue, the agency and a court must give effect to the unambiguously expressed language in the statute; and
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if the court determines that the statute has not directly addressed the precise question at issue, but is instead silent or ambiguous with respect to the specific issue, the court should defer to an agency’s interpretation of the statute so long as that determination is permissible.
Now, given this most recent Supreme Court decision, if the law is ambiguous, courts may elect to decide whether an agency is acting within its statutory authority rather than simply yielding to the agency.
Why does the Supreme Court decision curtailing the Chevron doctrine make any difference to contractors? Consider the following:
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Mandatory PLAs
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Davis-Bacon reforms
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FTC ban on non-compete agreements
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NLRB Joint Employer Rule
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NLRB quickie elections
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Department of Labor overtime salary threshold
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COVID mandates
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OSHA’s recordkeeping rule
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OSHA’s walk-through rule
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Affirmative Action
Under the direction of the Biden administration and its bureaucratic surrogates, adverse business regulation has reached a new high. Because of its inability to obtain legislative approval of its pro-union, anti-business agenda, the current administration has utilized executive orders and bureaucratic rulemaking from its administrative agencies to effect its desired ends. Recent decisions of federal courts around the country have struck down at least portions of such regulations. For instance, the NLRB joint employer rule was recently enjoined, as were certain provisions of the latest Davis-Bacon reforms. Likewise curtailed were the Department of Labor regulations changing the salary thresholds for the overtime exemption and the FTC ban on non-compete agreements. Also on the chopping block is the PLA mandate resulting from a Biden executive order and fine-tuned by Department of Labor regulations. This overreach, as well, is likely to meet its demise in a federal court in Jacksonville, Florida in the next month or so. The reversal of Chevron may, in part, support such action.
All of the above is good news for contractors. It is good news because the Biden administration’s over regulation and pro-union agenda has made it more difficult to do business. Rejection of the Chevron doctrine will mean that Congress will have to be more precise in its legislation and that bureaucratic interpretation of ambiguous provisions will be given less sway in rulemaking, subjecting many of their administrative edicts to court review without the benefit of a presumption or deference. The end of the Chevron doctrine era is good news for business and good news for contractors.
