The Supreme Court has been in the news more recently, and more prominently, than in many years past. The perception among both the public and legal scholars of increasingly political, activist, and radical decisions has sparked a lot of debate among critics and proponents alike. These decisions probably don’t garner a whole lot of attention in the business community, although the end of Affirmative Action consequently upended diversity, inclusion, equity, and belonging (DEIB) efforts, which does impact the workforce and the staffing industry. On Wednesday, however, the Court heard arguments about overturning the landmark 1984 decision Chevron v. Natural Resources Defense Council, one of the most cited cases in American law. Striking down this precedent could severely weaken the authority of regulatory agencies. And that, putting it euphemistically, will complicate the staffing industry substantially.

Understanding Chevron’s Role in Administrative Law

“Chevron v. National Resources Defense Council (1984) is arguably as important to the development of federal administrative law — an often technical area of the law, but one that touches on literally every single aspect of American life — as Brown v. Board of Education (1954) was important to the development of the law of racial equality,” explained Ian Millhiser, a legal expert for Vox. “Chevron is a foundational decision, which places strict limits on unelected federal judges’ ability to make policy decisions for the entire nation.”

Under the law, judges must defer to an agency’s reasonable interpretations of ambiguous statutes. In close cases, and there are a shockingly large number of them, the views of the agency take priority even if courts might have ruled differently.

Consider the original case. The Reagan Administration had weakened a key Clean Air Act provision to benefit oil and gas giants like Chevron at the expense of clean air and public health. David Doniger was one of the attorneys representing the oil industry. 

“We asked the court to overrule the administration, arguing that the Environmental Protection Agency was contradicting the clear intent of Congress,” he wrote in an opinion piece for The Hill. “The court ruled, though, that, in voting to cut air pollution, Congress had given the EPA leeway to decide which industrial projects should have to meet the law’s toughest clean-up requirements, and which could be built without them.”

“In such cases, the court ruled, it wasn’t the role of unelected judges to substitute their personal policy preferences for agency expertise — even if groups like ours disagreed with the agency’s specific choices.”

Doniger admitted in his column that at the time it certainly wasn’t the outcome he’d wanted. But he came to respect the ruling and stands by it today. In fact, the title of his article is “The Supreme Court ruled against me to empower federal agencies. They got it right.” Why does he believe they got it right?

“That framework protects the essential role of federal agencies in writing the rules and standards required to administer laws passed by Congress.” It’s the role of judges to intervene when agencies subvert the clear intent of congressional lawmakers. It’s not their job, nor should it be, to legislate policy across areas in which they have no experience or institutional knowledge.

Judges Are Experts in Law, Not Everything Else

As the Court explained during the era of Chevron, there are compelling reasons to leave policymaking to government agencies rather than nine lawyers. Foremost, judges are not experts in the policy questions that come before specific agencies. They are not doctors, environmental scientists, labor economists, infectious disease specialists, housing analysts, traffic engineers, or any other kind of expert. 

Agencies, conversely, are staffed by scientists, economists, physicians, and other experts who are more capable of evaluating difficult policy questions than a handful of people with law degrees. So If judges could now become the sole arbiters of policy, it begs a big question: what qualifies someone to be a Supreme Court justice? Nothing. Well, nothing other than an appointment to the post by a sitting president. 

As the Supreme Court’s own website states, “The Constitution does not specify qualifications for Justices such as age, education, profession, or native-born citizenship. A Justice does not have to be a lawyer or a law school graduate, but all Justices have been trained in the law. Many of the 18th and 19th century Justices studied law under a mentor because there were few law schools in the country.”

So in theory, you don’t even have to be an expert in the law to become a Justice, let alone an expert in anything else. Yet, the Justices have signaled that Chevron might go extinct very soon, leaving important policy decisions to a group that has no required qualifications or expertise. According to Millhiser: “Four members of the Supreme Court — Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh — spent much of Wednesday’s arguments in Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce speaking of Chevron with the same contempt most judges reserve for cases like Plessy v. Ferguson (1896), the pro-segregation decision rejected by Brown.”

Those For and Against Chevron

Adam Liptak of the New York Times discussed why critics of Chevron want to see its end: “Its opponents, including business groups hostile to what they see as overregulation, counter that it is the role of courts, not executive branch officials, to determine the meanings of statutes. They also say that agencies’ interpretations can change with new administrations and put a thumb on the scale in favor of the government even when it is a party to the case.”

Although self-interest is a motivating factor for people who want fewer obstacles in their path so they can reap greater rewards without the interference of rules with which they disagree, they also ignore how overturning the law could threaten regulations in countless areas that could hurt them, including the environment, health care, and consumer safety.

Some Justices, as Liptak pointed out, “were also concerned about whether a decision overturning the decision would give rise to countless challenges to earlier rulings under the doctrine. ‘Isn’t the door then open for litigants to come back?’ Justice Barrett asked, adding, ‘Isn’t it inviting a flood of litigation?’”

It's true that a common argument in favor of overturning Chevron is that it would empower businesses by reducing regulatory overreach. Despite initially seeming beneficial for staffing agencies, the potential negative impacts could be significant.

• Reduced worker protections: While less stringent regulations might seem appealing, it could translate to weaker worker protections for temporary employees within the staffing industry. This could lead to issues like wage and hour violations, unfair labor practices, or lack of access to benefits, ultimately harming the reputation and stability of staffing agencies.
• Increased competition from unregulated players: Overturning Chevron could potentially open the door for less reputable businesses to enter the staffing market, operating under looser regulations and potentially engaging in unfair practices. This could put legitimate staffing agencies at a disadvantage, driving down industry standards and making it harder for them to compete.
• Loss of public trust: If overturning Chevron leads to more worker exploitation and unfair practices, public trust in the entire staffing industry could be damaged. This could make it more difficult for agencies to attract both qualified workers and clients, ultimately hurting their bottom line.
• Erosion of industry reputation: Even if individual agencies remain ethical, the perception of a less regulated industry could lead to negative associations with the entire sector. This could make it harder for staffing agencies to attract both talent and clients, hindering their ability to grow and flourish.
• Unforeseen consequences: Overturning Chevron is a complex and unpredictable move with potentially far-reaching consequences. While deregulation might seem attractive on the surface, the long-term impacts on the staffing industry could be unforeseen and ultimately detrimental.

New Challenges for the Staffing Industry

Overturning Chevron could have several negative effects for the staffing industry, primarily by increasing legal uncertainty and restricting regulatory flexibility. Here are some potential consequences.

Increased Legal Uncertainty

• Challenging interpretations: Overturning Chevron would mean courts are less likely to defer to the Department of Labor's interpretations of relevant laws like the Fair Labor Standards Act (FLSA), leading to more legal challenges and inconsistent rulings. This can make it difficult for staffing agencies to comply with regulations and avoid lawsuits.
• Unclear regulations: Agencies tasked with regulating the staffing industry, like the Department of Labor (DOL), may be more cautious in issuing interpretative guidance or regulations for fear of legal challenges. This lack of clear guidance could leave staffing agencies confused about their obligations and increase compliance costs.
• Lengthy litigation: With increased legal challenges, disputes could take longer to resolve through the courts, creating uncertainty and potential financial burdens for staffing agencies.

Reduced Regulatory Flexibility

• Less adaptable regulations: Without Chevron deference, agencies may struggle to adapt regulations to the evolving nature of the staffing industry. This could result in outdated rules that stifle innovation and hinder the industry's growth.
• Potentially stricter regulations: Some argue that overturning Chevron could lead to courts imposing stricter interpretations of laws, restricting the flexibility that staffing agencies currently enjoy in areas like worker classification and independent contractor agreements.

Additional Concerns

• Impacts on worker protections: Reduced agency flexibility could weaken worker protections within the staffing industry, potentially leading to wage and hour violations or unfair labor practices.
• Disruption to business operations: Increased legal uncertainty and potential changes in regulations could disrupt staffing agencies' business operations and hinder their ability to meet client needs efficiently.

Additional Burdens for Federal Contractors in Staffing

The federal contracting space is full of staffing providers who help the government procure essential services and experts. Doing away with Chevron could present a new and unique set of difficulties for them, as well.

• Increased compliance burden: Federal contracts come with their own set of regulations and compliance requirements, often overlapping with existing labor laws. If courts become less deferential to agency interpretations under Chevron, it could lead to inconsistent rulings and more frequent challenges to those regulations. This can increase the compliance burden for staffing agencies, requiring them to navigate a more complex legal landscape and spend more resources on legal advice and compliance measures.
• Loss of competitive advantage: Federal contracts can be lucrative and desirable for many staffing agencies. However, overturning Chevron could make it harder for smaller or less established agencies to compete with larger players. They might lack the resources to navigate the complex legal environment and adjust to fluctuating interpretations of regulations, putting them at a disadvantage in bidding for federal contracts.
• Loss of flexibility in worker classification: Federal contracts often involve specific rules around worker classification, which determines benefits, taxes, and other obligations. Overturning Chevron could lead to stricter judicial interpretations of these rules, potentially limiting the flexibility that staffing agencies currently have in classifying workers. This could restrict their ability to offer certain types of services or cater to specific client needs under federal contracts.
• Potential reputational damage: If overturning Chevron leads to more negative press and public scrutiny regarding worker protections or unfair practices within the staffing industry, it could tarnish the reputation of all staffing agencies, including those working with the government. This could potentially hurt their chances of securing future federal contracts, even if they are compliant with all regulations.
• Reduced innovation and adaptability: As with general staffing agencies, overturning Chevron could discourage federal contractor staffing agencies from taking risks and innovating, fearing potential legal challenges. This could stifle the development of new technologies and service models that could benefit both the government and temporary workers.

A Hazy and Unpredictable Horizon

The potential consequences of overturning Chevron are complex and uncertain. The actual impact on the staffing industry would depend on the specific rulings of the Court and the subsequent actions of regulatory agencies and Congress. Some argue that overturning Chevron could have positive effects, such as reducing regulatory burdens and increasing judicial oversight of agencies. However, these potential benefits are also uncertain and subject to debate.

Overall, overturning Chevron would likely create a more challenging legal and regulatory environment for the staffing industry. Increased uncertainty and potentially stricter regulations could hinder the industry's growth and make it more difficult for staffing agencies to comply with legal obligations.

Photo by Fine Photographics on Unsplash

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