This week, the U.S. Supreme Court begins hearing two appeals – one concerns a 40-year-old precedent that favors federal regulatory agencies, and the other a seemingly narrow labor union dispute. Both cases will bring a measure of relief for employers once the decisions are announced by the end of June.
First the labor case: Starbucks is appealing a National Labor Review Board (NLRB) decision that the 6th Circuit Court of Appeals upheld last year. The coffee making corporation fired seven employees at a Memphis, Tennessee store who allegedly opened the shop without the company’s consent and invited reporters in so they could give interviews. The so-called Memphis Seven were vocal supporters of unionizing the Starbucks shop.
The NLRB determined that Starbucks retaliated against the employees because of their union leanings and ordered the company to rehire them. Starbucks complied but appealed to the 6th Circuit. Starbucks says it supports fair wages for its workers and respects union protections, but is embroiled in hundreds of NLRB disputes brought by employees. Workers say the company is firing pro-union members and working behind the scenes to weaken unionization efforts.
Prediction: The Supreme Court will almost certainly reverse the 6th Circuit’s decision. The NLRB under President Biden’s direction has forced other companies to retain or rehire unionized workers fired for cause.
Will the High Court kill the Chevron deference once and for all?
Forty years ago, the Supreme Court ruled that judges should defer to federal agencies’ rulemakings and interpretations of ambiguous statutes so long as they’re reasonable in a case involving Chevron. The Chevron deference or doctrine allowed agencies to create policy, often at great cost to industry sectors, without the input of Congress.
In cases where the Chevron deference is granted, regulatory agencies win more than 70% of cases. The feds’ winning percentage drops to well under 50% when judges determine an agency isn’t acting reasonably or fairly.
Some lower courts still defer to the Chevron doctrine. The conservative Supreme Court is no longer extending Chevron deference to agencies like the Environmental Protection Agency, but it declined to rule firmly against the doctrine in a case two years ago. This time around, a case involving small fishing companies that were forced to pay for the costs of observers who monitor compliance with National Marine Fisheries Service regulations is on the High Court’s docket.
Many of the individual and industry group lawsuits fighting federal regs center on violations of basic constitutional rights. This appeal takes aim at the feds demanding payment of businesses that must already pay to comply with federal (and state) rules.
Three justices – Clarence Thomas, Samuel Alito and Neil Gorsuch – have written and spoken publicly of their desire to overturn Chevron. Two or three of the other conservative justices are more than likely to join them and rein in government agencies’ powers.