What Today's Chevron Ruling Means for Independent Contractors

I had questions about today's U.S. Supreme Court action, so I reached out to Luke Wake, an attorney with Pacific Legal Foundation.

Note: I’m currently one of four plaintiffs being represented pro bono by Pacific Legal Foundation in a case against the U.S. Department of Labor.

The exchange below is from a series of questions that I posed via email to attorney Luke Wake from Pacific Legal Foundation about today’s U.S. Supreme Court ruling in the Chevron case.

Today, the U.S. Supreme Court overturned the Chevron Doctrine. Would you please briefly explain what the Chevron Doctrine was?

Chevron v NRDC held that when a federal agency is interpreting ambiguous statutory text, courts should defer to that interpretation (if it is deemed “reasonable”), even if the Court believes that is not the best interpretation.

Is it correct to say that the Chevron Doctrine is what has allowed the U.S. Labor Department to create its own independent-contractor rules in recent years?

Chevron deference only ever applied where an agency has promulgated regulation interpreting supposedly ambiguous text. So it could have been invoked by DOL in interpreting the 2021 Rule, or the 2024 Rule—but was not implicated prior to 2021 because the DOL had historically only issued “guidance.”

There are now multiple lawsuits (including ours) pending against the U.S. Labor Department over its new independent-contractor rule. What, if anything, does the Chevron ruling mean for those pending cases?

It can only help our position because gutting Chevron takes away the advantage agencies had enjoyed since 1984 when facing lawsuits challenging their regulations. But in fact DOL has not invoked Chevron in our case, probably because it saw the writing on the wall. I do not believe DOL has invoked Chevron in the other cases. But if they have, those arguments are no longer viable.

What does the Chevron ruling mean overall, going forward, in the context of the ongoing battle over independent-contractor policy?

Chevron was policy agnostic. It was invoked by different administrations to justify both new regulations and deregulatory efforts alike. It enabled agencies to radically swing their regulatory approach with whoever came to power. All of this resulted in a politization of the regulatory rule making process.

But getting rid of Chevron just means we are reverting back to the proper understanding that judges decide the law—and therefore the best interpretation of the law. I don’t really think this is going to have great consequences to the IC issues we are dealing with under the FLSA [Fair Labor Standards Act] because ultimately we are dealing with a question of how best to interpret nebulous statutory language in light of the economic realities test that the Supreme Court essentially made up in the immediate wake of the FLSA’s enactment. If it means anything, it means DOL has more work to do to prove that its interpretation is right.