The U.S. Supreme Court's recent ruling on Loper Bright Enterprises v. Raimondo overturned a 40-year precedent will have wide-reaching effects on federal agencies and the businesses — including hotels — that have to follow their rules.
The ruling overturned the 1984 Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc. case in which the Supreme Court set up a legal test of when federal courts had to defer to a government agency's interpretation of a law, said Randy Coffey, partner at the law firm Fisher Phillips.
"Ultimately, what now has happened is the court says Chevron deference is just unworkable when it assumes the task that the Congress and the Constitution have granted to the court to say what the law is," he said.
The ruling in Loper Bright will have an effect on every agency that issues regulations, he said. That includes the U.S. Department of Labor, the Equal Employment Opportunity Commission, National Labor Relations Board and the Federal Trade Commission, among others.
"All of those things will be subject to challenge by people affected by them, and the question in each case will be, is the regulation consistent with and supported by statutory language?" Coffey said. "The court will then have to say, this is the law, and does this regulation comport with what the law and the statute is?"
Within the Labor Department specifically, there will likely be a number of challenges under the Loper Bright standard, he said. There are already some legal challenges to newer wage and hour regulations.
For example, the minimum salary basis test that applies to a number of exemptions, such as administrative, professional and executive, are not tethered to anything in the statute, he said. Some tip rules may be subject to challenges as well, though there is some language in the Fair Labor Standards Act related to tips.
Similarly, there may be challenges to the Occupational Safety and Health Administration's new nationwide heat regulations.
"There's nothing in the statute that specifically authorizes OSHA to do that," Coffey said. "There is the general duty clause in the [Occupational Safety and Health] Act, and I'm sure OSHA will try to rely on that as a delegation of authority to OSHA to implement those kinds of regulations. [The] Supreme Court, as you may recall, in regard to the COVID regulations, was already somewhat skeptical about OSHA's overreach, and I suspect that they may look at a number of OSHA areas in that same light on a going-forward basis."
For hotel companies, any reaction should be based on what's happening in the workplace, Coffey said. It could be an opportunity to challenge a regulation, or this could open a new defense strategy in a lawsuit that pertains to certain areas of regulatory guidance or rules.
For more from Coffey, listen to the podcast linked above.