Supreme Court Will Hear Two Cases on Federal Agency Authority

​The U.S. Supreme Court has agreed to hear two cases that will impact the power of federal agencies to implement regulations on employers.

On Oct. 13, the court decided to hear Relentless v. Department of Commerce, in which the owners of three fishing companies in Rhode Island and Massachusetts sued to challenge the federal government's authority to require them to partially pay for federal monitors on their boats. The justices will consider that case in tandem with a similar case, Loper Bright Enterprises v. Raimondo, which involves the same requirement for fishing companies in New Jersey.

In both cases, the justices will decide whether to overturn the long-standing Chevron precedent, which holds that when Congress wrote a statute without a clear meaning, courts should defer to the federal agency applying the law, unless its directives were unreasonable. Federal departments and agencies that enforce employment laws could be impacted.

"If the court overturns Chevron, which many expect, federal agencies, such as the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board and the U.S. Department of Labor (DOL), may find it difficult to aggressively interpret employment law statutes, which many employers will welcome," said Joseph Beachboard, an employment lawyer at Beachboard Consulting Group in Los Angeles. "It could radically change how federal regulatory agencies operate."

For example, the court's final ruling could bolster future legal challenges against the DOL's proposed overtime rule, according to Leah Dempsey, an attorney with Brownstein Hyatt Farber Schreck in Washington, D.C.

"Several sitting Supreme Court justices have indicated a willingness to narrow or even strike down the Chevron doctrine. However, we have already been surprised by several of the oral arguments this term, where justices have not necessarily seemed to go in the direction many people assumed they would," Dempsey said.

In Relentless, the 1st U.S. Circuit Court of Appeals concluded that the U.S. Department of Commerce had the authority to require the fishing companies to partially pay for on-board monitors. The fishing companies appealed, claiming they are disproportionately burdened by carrying monitors because they make longer trips. They argued that the government exceeded its authority when it issued a rule mandating industry-funded monitoring in 2020.

Justice Ketanji Brown Jackson recused herself from Loper Bright because she participated in lower court proceedings on that case before she joined the Supreme Court, according to The New York Times. However, she is not recused from Relentless, allowing the full court to weigh the Chevron doctrine. The court has not yet scheduled oral arguments for Relentless and Loper Bright.

Case on Mandatory Arbitration

On Sept. 29, the court agreed to hear another case, which will examine the extent of the transportation exemption for mandatory arbitration agreements. In Neal Bissonnette v. LePage Bakeries, truck drivers for a large bakery company claimed they shouldn't be subject to mandatory arbitration. The Federal Arbitration Act holds that workers engaged in interstate commerce can't be forced to sign arbitration agreements as a condition of employment. The justices will weigh whether employees must work directly for a company in the transportation industry in order to qualify for the transportation exemption.

The court has not yet set a date for oral arguments for this case.