Tag Archive for: Chevron deference

CDLE proposes four sets of new rules

On September 29, 2022, the CDLE issued four sets of proposed Rules and accompanying explanatory Statements.

  1. Proposed revisions to 7 CCR 1103-14, which are the rules implementing the CDLE’s PAY CALC Order, which sets the minimum wage rates in Colorado. The new rules would increase
    • the minimum hourly rate to $13.65 from $12.56,
    • the minimum hourly rate with tip credit to $10.63 from $9.54,
    • the minimum guaranteed weekly salary for executive, administrative and professional exempt employees to $961.54 from $865.38, and
    • the minimum guaranteed annual salary for highly compensated exempt employees to $112,500 from $102,250.
  2. Proposed revisions to 7 CCR 1103-11 to implement this year’s new law SB 22-097, which expanded whistleblower protections to prohibit retaliation for the expression of any “reasonable concerns about workplace violations of governmental health or safety rules, or otherwise significant workplace health or safety threats,” without a requirement any longer to prove the concerns were “related to a public health emergency.”
  3. Proposed revisions to 7 CCR 1103-7, which implements increases including under this year’s new law SB 22-161 to penalties, attorney fees, claim and appeal processes, under the laws overseen by the CDLE in the Colorado Wage Act (CWA).
  4. Proposed revisions to 7 CCR 1103-6, which vest authority in the CDLE to issue, and oversee enforcement of, prevailing wage determinations on certain public projects under the Colorado Prevailing Wage Act (PWA) and the Keep Jobs in Colorado Act (KJICA).

The CDLE invites comments and has schedule rulemaking deadlines, including public hearings, on its website.

EEOC publishes final rule regarding its own ability to issue guidances

The EEOC, like some other administrative agencies, has historically issued what it calls informal guidances as a way of articulating the agency’s position on issues of law without having to go through the formal notice-and-comment rulemaking procedures required of regulations. The legal consequence, and even informal persuasive value, of these guidances is often litigated. On October 9, 2019, President Trump issued Executive Order 13891  to end the practice, requiring agencies to go through the rulemaking process instead. In implementation of that Executive Order, the EEOC published its final regulations 85 Fed.Reg. 69167, to be codified at 29 CFR 1695.

The EEOC’s new rules will require that all such guidances contain the following disclaimer:

The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or Commission policies.’

Additionally guidances will be subject to advance review by the Commissioners.

The EEOC’s new rules recognize a a category of guidances with particular “significance,” specifically those that may have an annual effect of $100-million or more  or otherwise “aversely affect in a material way the U.S. economy, a sector of the U.S. economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.” These “significant guidance documents” will have to be issued in accordance with formal rulemaking requirements. It is not clear how the EEOC will interpret this new regulation since, by definition, everything the EEOC does is intended to have an “affect” that is “material” on “jobs.”

Source: EEOC final rules, “Procedural Regulations for Issuing Guidance,” 85 Fed.Reg. 69167.

DOL issues proposed rule re tip-pooling

In a November 2019 opinion letter the DOL reversed position on tip-pooling. As explained there, the DOL lifted the Obama-era DOL’s 80-20 rule, making it easier for employers (like restaurants) to pool tips among tipped employees, including even those who perform some non-tipped work during their day (like waiters who vacuum, set up and clean up the restaurant as well as work tables). In this proposed rule the DOL is proposing to codify its new approach into a formal regulation. Codification of this approach into a regulation — rather than simply setting it forth in an opinion letter — will have at least two effects: It will generally require courts to defer to this interpretation and make it more difficult for future administrations to deviate.

President Trump limits informal agency guidances

Federal law requires administrative agencies to go through a rulemaking process before implementing regulations. To avoid that process, agencies have increasingly begun using informal “guidances,” often issued in the form of memorandums, letters and bulletins. By two Executive Orders, the President has ordered administrative agencies, among other things, to include in any such document a disclaimer that it does not carry the force of law and further to make all such documents available to the public via a searchable database on the Internet. It is not yet clear whether the Executive Orders reach opinion letters, such as the Department of Labor’s well known opinion letters.

Fifth Circuit affirms OSHA’s Controlling Employer doctrine

Applying Chevron deference, the Fifth Circuit has affirmed OSHA’s controversial Controlling Employer doctrine, which allows OSHA “to issue citations to controlling employers at multi-employer worksites for violations of the Act’s standards,” even if none of the controlling employer’s workers were exposed.

Source: Acosta v. Hensel Phelps Construction Company (5th Cir. 11/16/18). 

Supreme Court’s new expansive reading of FLSA is applied for first time by a Circuit Court

The Supreme Court held earlier this year in Encino Motorcars, LLC v. Navarro that the Fair Labor Standards Act (FLSA) should no longer be construed narrowly in favor of employees but should, instead, be given a “fair” reading based on its own language. The Supreme Court’s ruling has just seen its first application in a Circuit Court case, entitled Mosquera v. MTI Retreading Co., decided by the Sixth Circuit.

In Mosquera, the employee held an engineering degree but argued he spent less than 50% of his time doing work that required an engineering degree and should, therefore, not have been classified as a professional employee exempt from overtime. The Sixth Circuit disagreed. The Sixth Circuit noted the evidence that had been submitted in support of the employer’s summary judgment motion and dismissed the plaintiff’s own affidavit to the contrary, saying it was “unsubstantiated” and “self-serving.” The Sixth Circuit noted that, prior to Encino Motorcars, it would have looked on the plaintiff’s claim more favorably, interpreting the professional exemption “narrowly,” but under the Supreme Court’s new ruling, it was required to give the law a broader “fair” reading instead. Under the new approach to FLSA, the Sixth Circuit held the employer’s motion for summary judgment was “compelling” and as such, it held, the employee was properly characterized as a professional who was exempt from overtime.

Mosquera is no doubt the first in a long line of cases to come that will take a less “narrow” approach to interpreting FLSA.

Source:  Mosquera v. MTI Retreading Co. (6th Cir. 8/14/18).

To be a Dodd-Frank whistleblower, individual must complain to SEC

Dodd-Rank is the nation’s leading securities-related whistleblower law. What if an individual complains, not to the SEC, but to the company at-issue, is a mere internal complaint to the company sufficient to trigger Dodd-Frank’s protections? In a unanimous 9-0 decision, the Supreme Court, after reviewing the text of Dodd-Frank itself, held the answer was clear: Congress wrote Dodd-Frank to protect only complaints to the SEC. Therefore a complaint to the company at-issue, alone, is insufficient to trigger Dodd-Frank’s protections.

The case is also notable for the absence of analysis regarding Chevron deference. Chevron deference is the legal term used to refer to the practice of courts deferring to agency interpretations of statutes. Here, while Dodd-Frank itself clearly required a complaint to the SEC, the SEC had interpreted the language more broadly, saying that a complaint to a company alone should also be protected. The concept of Chevron deference has become quite controversial, and commentators anticipated this might be the case by which the Supreme Court revisited the topic. However, the Supreme Court, having decided the language of the statute itself was clear, had no opportunity to do so. The continuing viability of Chevron deference remains an issue for another case to resolve.

Source: Digital Realty v. Somers, case no. 16-01276 (Sup. Ct. 2/21/18).

Labor Secretary Acosta urges Executive Branch restraint

In a recent presentation for the Colorado Bar Association’s 2017 annual conference, I noted the relatively recent proliferation of Executive Branch guidances and other informal publications that have not gone through the formal rulemaking process required for the issuance of regulations. I predicted we will see (from a number of fronts including agencies themselves, the courts and Congress) a movement to swing the pendulum back and begin constraining such non-regulatory near-rulemaking. In other words, we will begin to see a push for agencies to return to the rulemaking process.

In a recent speech, Luis Acosta, Secretary of the U.S. Department of Labor, made a similar point and, indeed, took the point further.

I would like to begin with some basic observations, well understood by everyone here. Since the New Deal, we have sought solutions to govern an increasingly technical and complex economy. Congress has seen fit to rely on the Executive’s rulemaking discretion, and simultaneously, it has tried to limit that discretion.

Secretary Acosta emphasized that these informal guidances not only skip the rulemaking process but, as a result, do not enjoy scrutiny through the checks and balances that the rulemaking process provides, including opportunities to obtain “the public’s input” and Congressional oversight. He contends this is particularly troubling because informal guidance is nonetheless provided some deference by some courts (whether formal or simply practical deference).

Let me be clear: Agencies can, and must, interpret their regulations. And often, the regulated public is helped by knowing how an agency interprets its regulations. That is why I have resumed the policy of issuing opinion letters to companies that ask DOL whether their practices are lawful. These opinion letters do not enact substantive change to the law; they simply inform the requester how DOL will apply the law to a particular set of facts.

But so-called “interpretations” that go beyond providing clarity and become mechanisms to change the law are another matter entirely. The reason these interpretations matter, of course, is that the courts defer to them.

He concluded with direction to the agencies within the DOL and a call to the agencies outside his control to return to formal rulemaking.

The restraint I am advocating is hard, because the desire for results is real. Rulemaking is hard, and it is necessary. Congressional action may be hardest of all, but it is demanded by our Constitution.

In the end, taking the hard road connects us to the promise of our Founders and paves the future path that is right for our Republic.

This is an issue likely to come up in several Supreme Court cases this year. Even if not part of a case’s formal record, the courts, especially the Supreme Court, will be aware that  Secretary of one of the most powerful federal agencies spoke publicly on these issues.

Source: Acosta presentation to Federalist Society