The recent Supreme Court decisions in Loper Bright, Jarkesy, Corner Post and Muldrow will continue to impact employers and the landscape in which they operate. These rulings — and the way agencies and employers seek to comply with them — may reshape agency authority, regulatory enforcement and the workplace.
Takeaways
- Based on Loper Bright, courts must independently interpret statutes and not simply defer and adopt agency regulations.
- Jarkesy essentially ended the SEC’s long running use of in-house tribunals led by ALJs and is reshaping the landscape of administrative enforcement actions, requiring more cases to be heard in federal courts with jury trials.
- Expect more conflicting court decisions interpreting federal regulations in the short term. Keep an eye on federal courts in Texas as more challenges to agency authority are likely to be filed there in the short term.
- Trend of limiting agency authority will continue; next up: nondelegation doctrine.
- Post-Muldrow, plaintiffs still need to show harm, but courts may have widely differing views on what harm is sufficient.
Loper Bright Ripple Effects
Challenges are not a slam dunk.
While Restaurant Law Center v. DOL (5th Cir. Aug. 23, 2024) vacated DOL’s 2021 tip rule as “contrary to the statutory scheme enacted by Congress” by applying Loper Bright standard, Mayfield v. DOL (5th Cir. Sept. 11, 2024) upheld DOL’s right to set minimum salary rule for EAP exemptions under Loper Bright, noting express grant of authority by Congress and that the DOL rule was within the bounds of that authority.
Recent rules (or rules that routinely flip-flop) are most vulnerable.
Tennessee v. EEOC (8th Cir.): On appeal of a decision upholding EEOC’s 2024 Pregnant Workers Fairness Act (PWFA) regs, plaintiffs contend that “the PWFA does not authorize the Final Rule’s abortion-accommodation mandate — especially now that the district court’s reliance on Chevron is off the table.”
Longstanding regulations are less vulnerable.
Perez v. Owl Inc. (11th Cir. Aug. 6, 2024): Cites Loper Bright but finds DOL’s longstanding interpretation of “regular rate” under FLSA, Davis-Bacon persuasive because the agency’s position has been consistent for 80 years.
It’s too soon to tell the overall impact.
- Loper Bright did not overturn precedential decisions that relied on Chevron deference.
- Circuit courts are inclined to remand, give district courts a first go.
- Numerous hot-button regulatory challenges in 2024 did not implicate Loper Bright (e.g., non-compete rule, EEOC harassment guidance).
- Demise of Chevron deference may deter the Trump Administration’s deregulatory efforts.
Muldrow in Motion: The Fallout
Despite concern among justices that this Title VII discrimination case involving a transfer would open the floodgates of litigation by re-setting the standard for adverse action, the U.S. Supreme Court held plaintiff Muldrow was not required to show that the harm experienced was “significant,” “serious,” “substantial” or “any similar adjective suggesting that the disadvantage to the employee must exceed a heightened bar.” Since Muldrow was decided in April 2024, 200+ cases have dealt with the decision in some fashion:
- Consensus of the decisions is that an adverse employment action need not cause significant, material or serious injury to be actionable, but there must be some disadvantageous change in a term or condition of employment. See e.g., Harris v. Sec'y of VA (D Kan., June 14, 2024).
- Courts still require the plaintiff to identify an objective, non-speculative harm they have suffered as a result of the alleged conduct. See Bonaffini v. City Univ. of New York (EDNY, Sept. 25, 2024).
- Analysis of adverse actions now frequently involves examination of the alleged adverse action in terms of the causal connection to the alleged discrimination and/or the damage allegedly incurred by the plaintiff.
Workplace Law After ‘Loper’: What’s Next?
Hosts: Stephanie L. Adler-Paindiris, Principal and Litigation National Practice Head, and Patricia Anderson Pryor, Principal and Emerging and Cross-Disciplinary Issues National Head
“Of course, there’s still going to be so many appeals still to be had. We’re literally at the tip of the iceberg. So much more to uncover in terms of where any of these cases are taking us in the future — and where the future of administrative agencies is under the new administration. I just think there’s so much more to uncover here as we go forward.”
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