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Supreme Court Places a “Tombstone” on Chevron Deference: What are the Implications for the NLRB?

June 28, 2024

By: Benjamin J. Wilson

On June 28, 2024, the Supreme Court issued a highly-anticipated decision in the twin cases of Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Dep’t of Commerce, which will now make it more difficult for federal agencies to issue rules and regulations that aim to carry out statutory mandates of Congress. The 6-3 decision overrules the 1984 decision Chevron v. Natural Resources Defense Council, the 40-year precedent more commonly known as “Chevron deference.” This decision is the culmination of several years of building criticism that argued that Chevron allowed executive branch officials—not legislators—to exert quasi-legislative control over policy decisions. Chevron required courts to defer to administrative agency interpretations of a law when the statute itself was ambiguous, so long as the agency’s interpretation was “permissible.” Essentially, Chevron relied upon “agency expertise” in implementing everything from health and safety regulations to environmental and financial laws, to even labor and employment laws.

In overruling Chevron, Chief Justice John Roberts wrote that Chevron “is misguided” because it “requires a court to ignore, not follow, ‘the reading the court would have reached had it exercised its independent judgment as required by the [Administrative Procedures Act].” Moreover, the Chief Justice reasoned that federal agencies, while having expertise in the subject matter they administer, “have no special competence in resolving statutory ambiguities. Courts do.” Chevron “undermine[d] core rule-of-law values ranging from the promise of fair notice to the promise of a fair hearing.” Accordingly, the Court held that “Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.”

What does this ruling mean moving forward in the labor law field? Up until now, the National Labor Relations Board (“NLRB”) “often possess[ed] a degree of legal leeway” when interpreting the National Labor Relations Act (“NLRA”), especially where Congress seemingly intended an understanding of labor law to guide the application of the NLRA. With the proverbial “thumb off the scale” now, courts are now directed to use their own “independent judgment,” including the more traditional tools of statutory interpretation. This could potentially lead to a much narrower interpretation and application of the NLRA.

For example, Section 7 of the NLRA protects employees’ rights to join together to unionize and bargain collectively (or not), but the NLRB has interpreted “concerted activity” to extend much further than that. In some instances, the Board has held that the registering of individual complaints and even objecting to rules in an employee handbook has constituted “protected concerted activity,” even when there is no connection to an effort to unionize or engaging in action collectively. But, under the express terms of the NLRA, the rights that are protected are those dealing with association and self-organizing:

It is hereby declared to be the policy of the United States to . . . encourage[e] the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.

29 U.S.C. § 151. Without Chevron, it seems likely that a reviewing court will have a much narrower view of “concerted activity” than the Board.

Another example that may see challenges is the Board’s interpretation of the “duty to bargain.” Under Section 8(a)(5) of the NLRA, the Board has held that employers must give notice and an opportunity to bargain over material changes to mandatory subjects of bargaining, as well as refrain from implementing changes unilaterally. Under the NLRB’s current interpretation, employers can be blocked from implementing necessary changes by years of litigation and liability, even when they have engaged in bargaining. Yet, Section 8(a)(5) only states that it is an unfair labor practice for an employer “to refuse to bargain collectively with the representatives of his employees[.]” Will a reviewing court view the same language as broadly as the NLRB? It would seem unlikely under the more traditional statutory interpretation review.

One thing is certain: The administrative state just changed in a major way. Should you have any questions on this decision, or anything else in the labor and employment fields, please contact a member of the Jackson Kelly Labor and Employment Team today.


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