Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC office, Bloomberg BNA Daily Labor Report, in “Workplace Oversight May Be Dialed Back Under Supreme Court Case,” by Robert Iafolla. (Read the full version – subscription required).
Following is an excerpt:
A U.S. Supreme Court ruling on whether courts must defer to agencies’ interpretations of ambiguous rules could hit some labor and employment law enforcers harder than others.
As of now, the answer is yes as long as an agency’s take is reasonable. But a decision that gives workplace agencies less leeway to issue legally binding interpretations carries a range of potential consequences. Employers could face less aggressive oversight but also miss out on useful guidance.
The Labor Department’s Wage and Hour Division and Occupational Safety and Health Administration seem to have the most leeway to lose, followed by the Equal Employment Opportunity Commission, according to several lawyers and legal scholars. The National Labor Relations Board might not be affected, they say.
A case the justices agreed to hear last week could be a vehicle for striking down what’s generally known as Auer deference, named after a 1997 Supreme Court ruling. But the doctrine goes back to a 1945 decision by the court.
Auer deference has long come under fire from conservative legal critics, as has Chevron deference, which tells courts to submit to agency views on ambiguous statutes. Skidmore deference, an older principle saying agency interpretations merit deference in line with their persuasiveness, hasn’t generated the same level of disapproval.
Critics complain that Auer and Chevron deference allows agencies to invent rules without going through formal rulemaking. They also let new presidential administrations reverse prior regimes’ positions on laws and regulations with a stroke of the pen, critics say.
For example, Auer played a crucial role in a federal appeals court decision upholding an Obama administration interpretation of a wage rule for tipped workers. The Trump administration recently withdrew that interpretation and replaced it with essentially the opposite view.
Wage and Hour Division
Auer buttresses most of what the Wage and Hour Division does, said Paul DeCamp, who led the division during the George W. Bush administration.
“On dozens if not hundreds of issues, the controlling standard is an interpretation of an ambiguous regulation,” DeCamp, now an attorney with Epstein Becker & Green, told Bloomberg Law.
Those interpretations come in the form of agency opinion letters, fact sheets, field operations handbook sections, court briefs, and other statements that fall short of notice-and-comment rulemaking, DeCamp said.
The WHD and other Labor Department agencies have operated from a position of strength due to Auer, and “that level of power has also engendered a certain amount of arrogance because they are accustomed to having their own way,” he said.