For almost 40 years federal administrative agencies have experienced broad latitude in their interpretations of statutes passed by Congress. Due to “Chevron deference,” courts have routinely deferred to the agencies’ interpretation of an otherwise ambiguous statute.

Recently, however, the Supreme Court overruled its own opinion in Chevron (the case that gave rise to the principle of Chevron deference) in Loper Bright Enterprises v. Raimondo. The Supreme Court held that agencies have no special competence in resolving statutory ambiguities; courts do, and, therefore, the courts (not administrative agencies) must be the final authority when it comes to statutory construction.

By disavowing Chevron deference, the Supreme Court took power away from the executive branch in favor of the judiciary, thus exposing many agency regulations to a diverse range of potential legal challenges.

For employers, federal government regulations regarding COVID-19 leave, overtime pay, and non-compete agreements, are now at risk of reversal. Other regulations potentially implicated include those governing food and drugs, banking and finance, health care, environmental regulation, and taxes.

The new “Loper Bright Doctrine” does not automatically overrule any federal regulations. Potential attacks on the validity of different regulations will only arise if and when litigants interested in challenging their treatment by federal regulatory agencies take legal action.

If you or your business are subject to a federal regulatory interpretation of the law that you believe to be incorrect, discuss it with your business attorney. There may now be a window open to challenge the regulation in Federal Court.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.