On June 28, 2024, the U.S. Supreme Court issued a landmark decision in Loper Bright Enterprises v. Raimondo[1]. The Loper decision overturns the Chevron doctrine. In the case, Loper Bright Enterprises, a family-owned fishing company, challenged the National Marine Fisheries Service’s (NMFS) interpretation of a statute that required fishing vessels to pay for the costs of onboard monitors. The Supreme Court had to decide whether to uphold the Chevron doctrine, which allows courts to defer to a federal agency’s interpretation of an ambiguous statute. While this case doesn’t address the National Labor Relations Board (NLRB), it may have a significant impact on the Board’s rules and regulations.
What is the Chevron Doctrine?
Under the Administrative Procedure Act (APA), individuals can challenge actions taken by federal agencies, like challenging rules and regulations issued by federal agencies. But courts have granted a good amount of deference to the federal agencies when reviewing the actions that the agencies take.
This deference was memorialized in a 1984 decision by the Supreme Court called Chevron USA v. National Resources Defense Council.[2] In Chevron, the Supreme Court created a “two-part framework” for addressing challenges to an agency’s interpretation of the statutes it administers. Under the framework, the first question was whether Congress has “directly spoken to the precise question at issue.” However, as one can imagine, there are hundreds of situations where a statute is silent or ambiguous on a legal issue or question. And where congressional intent is not clear, the Chevron doctrine required the court to uphold the agency’s action so long as it was based on a “reasonable interpretation” of the statute at issue, and not whether the court believed it was the correct interpretation.
What is the New Standard?
In Loper, the Supreme Court overturned the Chevron doctrine. Most importantly, it rejected the principle from Chevron that “statutory ambiguities are implicit delegations to agencies.” Now, instead, courts must exercise their “independent judgment” in reviewing agency regulations. This means the court must decide whether the agency’s action was correct under the statute at issue, not just reasonable.
However, the Court left so-called Skidmore[3] deference in place. Under that doctrine, courts may still defer to an agency’s interpretation of a statute depending on its persuasiveness. Factors that the courts will look at in considering the “persuasiveness” of an agency’s interpretation include: (1) the thoroughness of the agency’s reasoning, (2) the consistency of its interpretation over time, and (3) the agency’s overall expertise in the subject matter.
Now that it is overturned, what does it mean for the National Labor Relations Board?
The last few years of the Board’s jurisprudence has been marked by frequent reversals and erratic changes in policy direction, often depending on the prevailing political administration. This instability has created uncertainty for employers in how to manage their workforces. The Loper decision may mean fewer shifting legal changes that turn with political tides – which would be welcome news for employers.
This new legal framework might also make the National Labor Relations Board rethink the kinds of rulemaking it engages in to begin with as its regulations are now entitled to far less judicial deference.
But only time will tell what the true impact of the Loper decision will be – and we’ll keep you posted!
Questions?
Contact the author Saniya Khare.
[1] Loper Bright Enterprises v. Raimondo, 603 U.S. ___ (2024)
[2] Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
[3] Skidmore v. Swift & Co., 323 U.S. 134 (1944)
