The Supreme Court decided Monday that it will review whether to keep or scrap its standard for reviewing interpretations by federal agencies of their own regulations. The Court's decision could have significant implications for employers.

The case is Kiser v. Wilkie, involving a disabled Vietnam veteran who is challenging the denial of retroactive benefits by the Veterans Administration. 

In Auer v. Robbins (1997), the Court decided that if an agency was interpreting an ambiguous regulation, courts should accept the agency interpretation "if it reflects the agency's fair and considered judgment, is not a post hoc (after the fact) rationalization to justify a past agency action, and is not plainly erroneous and inconsistent with the regulation."

That quote is from the excellent explanation of this issue provided by my law partner Jill Stricklin back in 2016. 

Interpretations of federal regulations can take a number of forms, including enforcement guidance documents (often used by the Equal Employment Opportunity Commission) and opinion letters (used by the Wage and Hour Division of the Department of Labor, and soon to be used by the Office of Federal Contract Compliance Programs). 

More from Jill:

Courts typically apply one of three different legal standards when determining the degree of deference to afford an agency’s interpretation of a statute or regulation. These are commonly known as the Chevron, Auer, and Skidmore standards, named after the Supreme Court cases in which they originated.

Chevron: Highest degree of deference to the agency

The Chevron standard applies when a court is reviewing regulations that were issued through notice-and-comment rulemaking. Under Chevron, the court first determines whether the statutory language is ambiguous. If the language has an unambiguous meaning, then the statutory provisions will control and the analysis ends there. If, however, the language is ambiguous, the court considers whether the agency’s interpretation is permissible or reasonable. As long as the regulation does not obviously conflict with the language of the statute and is not “unreasonable” in some other way, the agency’s interpretation is binding on the court.

Auer: Intermediate level of deference to the agency

Auer governs the level of judicial deference given to an agency’s interpretation of its own regulations. Under Auer, if the language in the regulation is ambiguous, the agency’s interpretation controls as long as it reflects the agency’s fair and considered judgment, is not a post-hoc (after-the-fact) rationalization to justify a past agency action, and is not plainly erroneous or inconsistent with the regulation. . . .

(The Skidmore standard, involving the lowest level of deference to an agency, applies when an agency interprets a statute without having rulemaking authority from Congress.)

Critics of the Chevron and Auer standards say that the standards give too much power to federal agencies. Among those who have criticized the Auer standard are Supreme Court Justices Samuel Alito, Neil Gorsuch, and Clarence Thomas. Chief Justice John Roberts has suggested that Auer should be reviewed. Justice Brett Kavanaugh has reportedly not expressed an opinion on Auer in his prior decisions on the U.S. Court of Appeals for the District of Columbia Circuit but has criticized Chevron.

Politico's Morning Shift predicted this morning that Justices Alito, Gorsuch, Kavanaugh, and Thomas would vote to scrap Auer, with Chief Justice Roberts as a swing vote.

Should be interesting! We will keep you posted.