Paul DeCamp Quoted in “Biden Wage Rules Meet a Suspicious Judiciary”

Recent U.S. Supreme Court rulings reining in federal agencies that overstep their mandate from Congress are likely to be the anchor of legal challenges to recent Wage and Hour Division rules, former agency officials told Law360.

Pending lawsuits targeting the WHD's new rules on workers who earn tips and minimum wage for federal contractors are asking courts to strike down U.S. Department of Labor actions on the grounds that they aren't supported by clear congressional authorization. A possible challenge to the agency's planned overtime rule, which is scheduled for release in May, is likely to make that argument as well.

One major effort the DOL has attempted under President Joe Biden that the justices rejected has provided a key precedent that critics may cite in future lawsuits: its plan to have employers require workers to get vaccinated against COVID-19 or get tested regularly.

The rule, which never took effect, relied on legislation empowering the Occupational Safety and Health Administration to develop standards for safe and healthy workplaces. But the rule's enormous impact and the fact that OSHA had never before issued one like it were indicators that it was an overreach, according to the January 2022 decision in National Federation of Independent Business v. Department of Labor, Occupational Health and Safety Administration.

"Administrative agencies are creatures of statute," the high court said. "They accordingly possess only the authority that Congress has provided."

Following the NFIB decision, the Supreme Court struck down an Environmental Protection Agency rule regulating greenhouse gasses under the Clean Air Act. The June 2022 decision in West Virginia v. EPA marked the first time the court adopted the major questions doctrine as a guidepost for scrutinizing agency actions, subjecting them to closer scrutiny than before.

"There are extraordinary cases that call for a different approach," the court said. The major questions analysis is needed when "the history and the breadth of the authority that the agency has asserted, and the economic and political significance of that assertion, provide a reason to hesitate before concluding that Congress meant to confer such authority."

Paul DeCamp, who was Wage and Hour Division administrator under former President George W. Bush, told Law360 the NFIB and West Virginia rulings are high-profile examples of the Supreme Court holding agencies to act how Congress intends.

"NFIB against OSHA, I think, was a nice precursor that provided a window into how the court was looking at these issues," he said. "Even though it didn't use the major questions language in NFIB against OSHA, it still showed that structurally the court had concerns about the way that the Department of Labor in that instance had exercised its authority."

DeCamp said he looks to those decisions and others in which the court addresses agency actions through two lenses. On one level, the ruling affects the issues and parties in that particular case. But DeCamp said he's more curious about what a ruling means for future litigation over agency actions.

"What I find more interesting is not what did the court say in this case alone, but what did what the court said in this case mean for future cases?" he said.

DeCamp is co-chair of Epstein Becker Green's wage and hour practice group and represents the National Restaurant Association in a lawsuit challenging the DOL's tipped worker rule, which restricts employers' right to pay a lower minimum wage to workers who earn tips. A few days after the Supreme Court's West Virginia decision, he filed briefs arguing that applying its major questions lens to the tipped worker rule bolsters his client's argument that the DOL overstepped its role.

"This regulation involves a major question," DeCamp wrote. "It lacks clear congressional authorization. Thus, it is unlawful."