A decision released Friday by the US Supreme Court will “create a more predictable and stable regulatory environment” for businesses, according to the US Chamber of Commerce, an organization advocating for business interests. But that outcome remains to be seen, given the ruling’s ramifications.
As McKnight’s Senior Living reported, in Loper Bright Enterprises v. Raimondo, the court ruled 6-3 to overturn the Chevron doctrine, which held that US courts should give substantial deference to federal agency decisions in drafting regulations to implement laws passed by Congress.
“Going forward, if agency action is challenged in court, courts will continue to respect the agency’s authority if it has been properly delegated by statute. However, if a law is ambiguous, courts will now get to decide whether an agency has acted within its statutory authority — rather than yielding to the agency,” according to Fisher Phillips.
The labor and employment law firm said that it expects the Labor Department’s overtime and independent contractor rules; Equal Employment Opportunity Commission regulations stemming from the Age Discrimination in Employment Act and the Americans with Disabilities Act; the National Labor Relations Board’s joint employer rule and several rules related to union activity; the Federal Trade Commission’s ban on noncompete agreements; OSHA’s “walk-though” rule; and Department of Homeland Security immigration rules, among many others, to come under attack “in the coming months and years.” And nursing home industry advocates believe the ruling could provide an opening to challenge the Centers for Medicare & Medicaid Services’ minimum staffing mandate for such settings, which potentially indirectly affects assisted living providers recruiting workers from the same pool.
So it’s difficult to see how the court decision will create predictability or stability. Business leaders may have visions of fewer or more favorable regulations dancing in their heads, but along the way, much uncertainty will exist for companies trying to gain and maintain compliance with federal regulations so they don’t face negative consequences.
In fact, employment and labor law firm JacksonLewis states that “with greater judicial discretion, a rule may be upheld in one court and invalidated in another. This could lead to a spate of inconsistent rulings throughout the country, creating jurisdictional conflicts and compliance headaches for large employers in multiple states.”
So what’s a company to do? JacksonLewis says it’ll be crucial for employers to “stay on top of developing cases and know how to reconcile conflicting court decisions around the country, in addition to using the other compliance tools at their disposal — including agency guidance.”
It’s important to remember that existing federal regulations remain in effect. “Employers should continue to follow agency regulations and guidance unless and until a court rejects these interpretations,” JacksonLewis advises.
Fisher Phillips also provides some advice in the post on the law firm’s website. First, the firm advises, “expect instability” and keep up with legal challenges to various federal regulations and guidance.
Also, according to the firm, companies will want to “evaluate whether practices and policies you have developed at your workplace rely on administrative rules or guidance.” You might consider changing some corporate rules, or preparing to change them, after consulting with counsel.
Additionally, companies will want to work with their attorneys to determine whether the decision means that you should consider re-examining any ongoing legal issues. “You might have new areas of attack to raise that may have seemed untenable just a few days ago,” the law firm said.
Fisher Phillips also recommends that employers work with their industry and trade associations “to identify agency positions that affect your business,” which could lead to challenges to those positions.
And lastly, the firm says, remember that state and local laws may differ from federal ones. “In fact, you may see some state lawmakers and regulators push for increased regulation given the softening that will soon exist at the federal level,” the post warns.
Bottom line: buckle up.
Lois A. Bowers is the editor of McKnight’s Senior Living. Read her other columns here. Follow her on X (formerly Twitter) at Lois_Bowers.
