In the recent US Supreme Court decision of Loper Bright Enterprises v. Raimondo, No. 22-451 (2024), the higher court overrules the decades long precedent in Chevron USA Inc. v. Natural Resources Defense Counsel, 467 U.S. 837 (1984). The Chevron decision had held that courts should allow deference to interpretations of statutes by expert agencies. To quote one precedent, prior to June 28, 2024, courts were required to “afford considerable weight and deference to an agency’s interpretation of a statute it administers if Congress has not spoken directly to the precise question at issue.” Fitzgerald v. Secretary US Dept. of Veteran Affairs, 121 F.3d 203, 207 (5th Cir. 1997).

Compensatory Damages

In Fitzgerald, the Fifth Circuit addressed the question whether compensatory damages were available in administrative proceedings under Title VII of the Civil Rights Act. Mr. Fitzgerald was employed by the Veterans Affairs department. He filed a complaint of discrimination. The VA found in his favor – something agencies rarely do – and offered him “full relief.” Mr. Fitzgerald declined the offer and filed suit. The district court dismissed his suit, saying he had been offered full relief.

(It is true that if an employer offers full relief, then calculation of past pay should stop from that point forward. The lower court found that the offer of full relief meant Mr. Fitzgerald had not exhausted his full administrative remedies. That strikes me as a stretch, but that was the court’s ruling).

Full Relief

So, the first issue on appeal was whether Fitzgerald had in fact been offered “full” relief at the administrative stage. The plaintiff argued that he had not been offered full relief, because compensatory damages were not available at the administrative stage. The Civil Rights Act of 1991 had just been passed a few years before. In 1997, it was not yet clear if the new statute also applied to administrative proceedings under Title VII. The Fitzgerald court held that it did. The Civil Rights Act of 1991 did apply to administrative proceedings. That meant the plaintiff Fitzgerald had in fact been offered “full relief” available to settle his claim. That “full relief” included compensatory damages.

In reaching this conclusion, the Fifth Circuit panel relied on its own interpretation of the 1991 amendment to Title VII. But, it also relied on the regulations issued by the Equal Employment Opportunity Commission. The Fifth Circuit implicitly relied on the expertise of the EEOC. The EEOC is the one federal agency that has as its sole mission enforcing Title VII.

Deference to Agency

Loper Bright asserts that Chevron required courts to apply “binding” deference to agency interpretations. Loper Bright, at 21. But, the word “binding” does not appear in Chevron. In fact the portion of Chevron cited by Loper Bright actually states the opposite: that agencies may change interpretations of a given law over time. The best interpretation, said the Chevron court, might be the one that would evolve over time. Chevron, at 863-864. The Loper Bright court claims that prior to June 28, 2024, a court must disregard a given agency interpretation if the statute was unambiguous. If so, that is not how the Fitzgerald panel applied Chevron. (In my own experience, appellate courts are rather loose with Chevron. They apply it, sometimes. Sometimes, they don’t).

Solution in Search of a Problem

The Loper Bight court then concludes that the fundamental flaw with Chevron was its belief that agencies possess some “special competence” in resolving statutory ambiguities. But, it is courts that have that special competence, said Justice Roberts. Loper Bright, at 23. That is just a silly assertion. Agencies may indeed possess imperfect competence regarding statutory interpretation. But, they possess remarkable expertise within the subject matter of their agency. The EEOC understands Title VII much more deeply than any court. In any event, as the Fitzgerald opinion suggests, there was simply no problem here. The Loper Bright court is a decision in search of a problem. The Fitzgerald court, like most courts who have cited Chevron, did not rely solely on the agency interpretation. The Fitzgerald court also applied its own interpretation of the newly amended Title VII statute. The EEOC regulation was more of an after-thought in Fitzgerald.

The court of appeals decision in Loper Bright also looked at both the Agency regulation and it also engaged in its own statutory interpretation. The court of appeals had the benefit of subject matter expertise from the National Marine Fisheries Service. That expertise avoided the need for a trial of competing experts.

For employment law, the Loper Bright decision is really an unnecessary decision addressing a problem that does not exist. EEOC regulations impose no visible burden on employers. Even if it did, most Title VII decisions do little more than pay lip service to Chevron. The majority opinion in Loper Bright recognizes as much when it says many courts simply ignore Chevron, saying it makes no difference. Loper Bright, at 28. The Supreme Court has essentially joined a national movement that disregards expertise. That movement started with popular sentiment opposed to medical science during the Covid pandemic in 2020.

See the Fitzgerald decision here. See the decision in Loper Bright here.