What A Recent Supreme Court Decision Ending Chevron Deference Means for Your Small Business?

On June 28, 2024, the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo overturned its 1984 long standing precedent, Chevron v. Natural Resources Defense Council, also known as Chevron deference. The landmark Chevron deference required courts to defer to a regulatory agency’s, such as the Department of Labor and Small Business Administration, reasonable interpretation of statutes when such statutes were deemed ambiguous. The Court came to its decision after stating that Chevron undermined courts’ statutory authority to interpret the law and that agencies do not possess any special competence in resolving statutory ambiguities. Now, instead, courts will have to exercise their independent judgment but carefully consider an agency’s judgment when interpreting ambiguous statutes. The overturned decision has been met with mixed reactions as it creates uncertainty for regulated industries. 

How does the End of Chevron Affect Small Businesses?

1. Uncertainty: The current regulatory scheme of notice-and-comment rulemaking ensures that both small businesses and big corporations alike are heard by federal agencies when they make rules pursuant to congressional legislation. Generally, this process fosters transparency and provides businesses with peace of mind in making business decisions based on set regulatory standards. However, now with the overturn of Chevron, the courts’ independent decision-making adds a layer of uncertainty that can prove burdensome for businesses in regulated industries. Not only this, the new decision puts small businesses at a disadvantage who may not be able to afford legal representation to challenge interpretations. 
2. Legal challenges: While the overturn of Chevron does not apply retroactively to past court decisions under the Chevron framework, this new decision opens the door for legal challenges to agency regulations across industries. For example, following the Supreme Court’s decision, a federal judge in Texas blocked the Department of Labor’s recent increase in the minimum salary threshold for some exempt employees because of concerns about the definition of exemptions and the constitutionality of the rule. Other regulations like the Federal Trade Commission’s ban on non-compete clauses are sure to come under judicial scrutiny. 

Conclusion

The decision to overturn Chevron deference will undoubtedly have a major impact in the business field. However, until lower courts further interpret and apply the Supreme Court’s decision, the full impact is yet to be felt. 

The S.J.S. Law Firm can help your small business navigate these new regulatory changes. For a complimentary consultation, please contact us at (202) 505-5309.