Supreme Court Kisor Decision Has Implications for Employers

By Mike Warner and Jackie Wernz - Franczek P.C.

June 27, 2019

On June 26, the United States Supreme Court issued a decision in Kisor v. Wilkie, a case seeking to overturn prior precedent requiring deference to federal agencies’ interpretations of their regulations. The case involved a challenge by a military veteran of the Department of Veterans Affairs interpretation of regulations regarding benefits, but has important implications for employers. Specifically, the Court’s upholding of so-called Auer deference means federal agencies, such as the Equal Employment Opportunity Commission (EEOC), Department of Labor (DOL), and the National Labor Relations Board (NLRB) can continue to issue informal guidance documents with the knowledge that courts will likely defer to them in interpreting the laws they discuss.

In Kisor, the Supreme Court grappled with whether to overrule a line of cases requiring courts to defer to an agency’s interpretation of its own regulations. This doctrine is often called the “Auer deference,” and is based on a 1997 Supreme Court decision, Auer v. Robbins. Supporters of the Auer doctrine claim that deference to an agency’s interpretation makes it easier for courts to review potential challenges because they are only required to determine whether the agency’s interpretation is reasonable. Furthermore, because courts are likely to uphold the agency’s interpretation, proponents argue that it ensures consistency in interpretation and implementation. Challengers of the deference doctrine say, however, that it allows federal agencies such the EEOC, DOL, and NLRB to use informal guidance to make new law, rather than going through the notice-and-comment process required for issuance of regulations. These informal interpretations, which are issued without public input or collaboration and can be easily changed, have the potential to cause significant confusion for employers. They also impose significant burdens on entities that attempt to implement the regulations. As a result of the Supreme Court’s decision, employers will need to continue to keep up to date on federal agency interpretations and promptly changes policies and procedures when interpretations change.

For more information on the decision and what it means for employers, contact Mike Warner, Jackie Wernz, or any other Franczek attorney.