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What Does the 2024 Supreme Court Chevron Decision Mean?

What Was the Chevron Doctrine?

In 1984, the Supreme Court ruled in Chevron U.S.A., Inc. v. NRDC that courts should defer to a federal agency’s interpretation of an ambiguous statute, as long as the agency’s reading was reasonable. “Chevron deference”, as it was termed, allowed agencies to decide how to apply laws when Congress had not provided clear instructions.

Under Chevron, courts followed a two-step process: first, they had to determine whether Congress had spoken clearly on an issue, and if not, they had to defer to the given agency’s interpretation, as long as it was reasonable.
The decision gave agencies like the Occupational Safety and Health Administration (OSHA), the Department of Labor (DOL), and the Environmental Protection Agency (EPA) broad discretion to define legal terms, establish compliance requirements, and create enforcement policies without needing further approval from Congress.

How Chevron Deference Shaped Business Regulations

For decades, Chevron deference gave federal agencies broad authority to regulate businesses without needing new legislation. Courts upheld agency rules as long as they were based on a reasonable reading of the law, which made it difficult for businesses to challenge regulations in court.

Agencies Used Chevron to Expand Regulations

The Occupational Safety and Health Administration (OSHA), the Department of Labor (DOL), and the Environmental Protection Agency (EPA) relied on Chevron to interpret workplace safety, wage laws, and environmental statutes in ways that increased employer obligations.
For example, under Chevron, OSHA was able to dictate what constituted a “serious” workplace hazard under the Occupational Safety and Health Act, and the DOL was able to set rules on overtime eligibility under the Fair Labor Standards Act.
Courts routinely deferred to agency interpretations, which allowed regulators to establish new compliance standards, even when laws were ambiguous.
Agencies revised their interpretations of existing laws based on the priorities of each administration, which caused regulatory requirements to fluctuate. Employers often had to adjust compliance practices as workplace safety, labor, and environmental policies changed with each shift in leadership.

Businesses Pushed Back Against Regulatory Overreach

Employers argued that Chevron let agencies impose costly requirements on businesses that Congress never intended or approved.
In particular, regulations defining “joint employment,” expanding independent contractor rules, and broadening environmental oversight faced legal challenges from business groups.
The U.S. Chamber of Commerce and other organizations pushed to overturn Chevron, arguing that courts—not agencies—should have the final say on statutory interpretation.

With Chevron in place, agencies had the upper hand in regulatory disputes. The Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo eliminated agency deference in regulatory disputes, which gave businesses stronger grounds to challenge federal rules.

The End of Chevron Deference: What Changed and Its Impact

For 40 years, Chevron deference allowed federal agencies to interpret unclear laws however they pleased with minimal judicial interference. In 2024, the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo overturned that precedent by shifting power away from agencies and giving courts the final authority to decide what statutes mean. Now,

Federal agencies can no longer rely on Chevron to justify regulatory decisions, which makes it easier for businesses to challenge rules they believe exceed an agency’s authority.
Courts no longer defer to agency interpretations when laws are ambiguous. Judges now interpret statutes independently instead of relying on an agency’s reading.
The decision affects regulations across industries, including workplace safety, labor laws, environmental policies, and financial oversight.
Businesses facing regulatory enforcement actions may have stronger arguments in court, particularly when a rule was based on an agency’s interpretation, rather than explicit statutory language.
With courts applying stricter scrutiny, agencies may hesitate to issue expansive regulations without clear congressional approval.

The Supreme Court’s Decision in Loper Bright Enterprises v. Raimondo

The case that led to the end of Chevron deference began as a dispute over fishing industry regulations. A group of commercial fishing companies sued the National Marine Fisheries Service (NMFS) over a rule requiring them to pay for onboard monitors. The Magnuson-Stevens Fishery Conservation and Management Act did not explicitly state whether businesses or the government should cover these costs.

The fishing companies argued that NMFS exceeded its authority by imposing costs on private businesses without clear approval from Congress.
Lower courts upheld the rule under Chevron and ruled that the law was ambiguous and the agency’s interpretation was reasonable.
The Supreme Court agreed to hear the case to reconsider whether courts should defer to agencies when statutes are unclear.

In a 6-3 decision, the Court ruled that courts can no longer defer to agencies when a law is ambiguous.

Judges now determine the best reading of a statute using traditional legal analysis, rather than defaulting to an agency’s interpretation.
The ruling eliminates Chevron deference across all federal agencies, which will make it easier to challenge regulations that do not have clear congressional authorization

With Chevron eliminated, courts have more control over statutory interpretation, businesses have stronger legal arguments against agency rules, and federal regulators face new limits on their authority.

Key Areas of Business Regulation That Could Be Reexamined

With Chevron deference eliminated, courts now have greater authority to scrutinize agency regulations. Businesses may challenge existing rules that were previously upheld under Chevron, and agencies may hesitate to issue new regulations that lack clear statutory backing. Several key areas of business regulation could be affected.

Wage and Hour Rules

The Department of Labor (DOL) relied on Chevron to interpret federal wage laws, including overtime pay and independent contractor classification.
Without Chevron, courts may strike down regulations that expand employer obligations beyond what Congress explicitly approved.
Pending legal challenges to DOL rules, such as those redefining employee status under the Fair Labor Standards Act, may now have a stronger chance of success.

Workplace Safety and Health Standards

The Occupational Safety and Health Administration (OSHA) used Chevron to justify safety regulations, including recordkeeping requirements and exposure limits for hazardous substances.
Courts will now review OSHA rules more strictly, which will make it harder for the agency to impose new mandates without clear statutory language.
Employers may challenge enforcement actions based on agency interpretations, rather than direct congressional authorization.

Labor and Union Policies

The National Labor Relations Board (NLRB) has frequently changed its interpretation of labor laws under Chevron – mainly, those altering union election rules and employer obligations.
Courts may now block NLRB decisions that lack a clear basis in the National Labor Relations Act.
Employers may have more success in challenging pro-union policies that expand agency authority without new legislation.

Environmental and Industry-Specific Regulations

The Environmental Protection Agency (EPA) used Chevron to extend its regulatory reach, including rules on emissions and waterway protections.
Businesses specializing in energy, manufacturing, and construction may challenge EPA regulations that impose costly compliance burdens without clear congressional approval.
Courts will apply stricter scrutiny to agency rules that interpret broad statutory language to justify new environmental mandates.

With judicial oversight replacing agency deference, employers should expect more litigation over federal regulations. Agencies may proceed cautiously with new rulemaking, while businesses explore legal avenues to challenge existing policies.

How This Decision Affects Employers

The Supreme Court’s ruling in Loper Bright changes how workplace regulations are enforced. Agencies no longer have automatic judicial support when defending their rules, and businesses now have stronger arguments when challenging regulations that go beyond what Congress explicitly authorized.

Federal Agencies Will Face Stricter Review

The Occupational Safety and Health Administration (OSHA), the Department of Labor (DOL), and the National Labor Relations Board (NLRB) can no longer rely on Chevron to justify broad regulatory actions.
Courts will now evaluate agency rules without deference, which increases the likelihood that regulations will be overturned if they lack clear support in federal law.
Agencies may narrow their enforcement strategies or slow new rulemaking to reduce the risk of legal challenges.

Employers Have More Leverage in Challenging Regulations

Businesses no longer have to prove that an agency’s interpretation was unreasonable—only that a better reading of the law exists.
Lawsuits contesting workplace rules, wage requirements, and labor policies may have a higher chance of success.
Industry groups are expected to challenge regulations that impose costly compliance burdens without clear statutory authorization.

Regulations That Relied on Chevron Could Be Reexamined

Courts may reconsider rules that were previously upheld under Chevron but lack direct congressional approval.
Agencies may need to revise existing policies if courts determine they exceed statutory limits.
Long-standing regulations could be challenged, which could create uncertainty for employers that have already adapted to them.

A More Cautious Approach to New Regulations

Agencies may hesitate to introduce sweeping policy changes without a clear directive from Congress.
Employers may see fewer new regulations issued, but more lawsuits challenging existing rules.
Businesses operating in multiple states could face inconsistent rulings as different courts interpret agency authority in new ways.

Courts will now review agency rules without deference and may overturn regulations that lack clear support in federal law. Without Chevron, courts will take a more active role in deciding the scope of federal agency power, which could reshape compliance obligations for businesses across industries.

How Conn Maciel Carey Can Help Employers

The elimination of Chevron deference changes how courts evaluate federal regulations, which gives businesses more opportunities to challenge agency rules. At the same time, agencies may need to adjust their enforcement strategies, which could create uncertainty for employers. Conn Maciel Carey helps businesses anticipate these changes and develop strategies to minimize risk.

Our team assists employers by:

Identifying regulations that may be vulnerable to legal challenges under the new judicial standard.
Advising on compliance strategies as courts reexamine agency authority.
Defending businesses in enforcement actions where agencies attempt to impose obligations beyond statutory limits.
Representing employer interests in litigation that could set new legal precedents affecting workplace policies.

As agencies respond to this ruling, employers should prepare for shifting regulatory requirements and increased litigation. Conn Maciel Carey’s national Labor & Employment Practice Group can help employers understand how these changes may impact their business and how to stay ahead of new legal developments. Call (202) 715-6244 or send us an email to learn more.

This article is for informational purposes only and does not constitute legal advice. While we strive to ensure accuracy, laws and regulations may change, and unintended errors may occur. This content may not address every aspect of the relevant legal requirements. For guidance on your specific situation, consult your attorney.