For more than forty years, the United States Supreme Court’s decision in Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984) has formed the basis for upholding thousands of rules and regulations promulgated by federal agencies. Chevron required courts to defer to a federal agency’s reasonable interpretation of an ambiguous statute—the Chevron deference doctrine. Under Chevron, when a federal agency’s interpretation of a statute is questioned, courts undertake a three-step analysis:
- First, the court determines whether Congress delegated authority to the agency to make rules and whether the agency is exercising that authority when interpreting a statute.
- Second, the court determines whether the statute is silent or ambiguous with respect to the particular issue at hand.
- Third, if the statute is silent or ambiguous, the court analyzes whether the federal agency’s interpretation is reasonable. If the agency’s interpretation is reasonable, the court defers to the agency’s interpretation.
On June 28, 2024, in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al., 603 U.S. ___, No. 22-451 (June 28, 2024), the United States Supreme Court reversed its decision in Chevron. In throwing out the Chevron deference doctrine, the Court held that courts must “exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.” The Loper decision is all but guaranteed to prompt challenges to a wide range of federal agency rules.
The Federal Trade Commission’s recent rule prohibiting most noncompete agreements was under attack even before the Loper decision was issued. See The FTC Issues Final Rule Banning Non-Compete Agreements. Interestingly, just days after the Loper decision, the court in Ryan LLC v. Federal Trade Commission, a case challenging the FTC’s ban on non-competes, issued a temporary injunction barring the FTC from enforcing the ban.
We continue to watch the Ryan case as it moves towards a final resolution concerning whether the FTC exceeded its authority in issuing a rule essentially banning non-competes nationwide.
M. Jansen Voss has developed a diverse defense litigation and appellate practice in both state and federal courts in Alabama and Mississippi. He represents a wide range of businesses, governmental entities, and individuals in complex personal injury and wrongful death lawsuits, business disputes, and breach of contract matters.
About Christian & Small
Christian & Small LLP represents a diverse clientele throughout Alabama, the Southeast, and the nation with clients ranging from individuals and closely held businesses to Fortune 500 corporations. By matching highly experienced lawyers with specific client needs, Christian & Small develops innovative, effective, and efficient solutions for clients. With offices in Birmingham, metro-Jackson, Mississippi, and the Alabama Gulf Coast, Christian & Small focuses on the areas of litigation and business, is a member of the International Society of Primerus Law Firms, and is a Mansfield Rule™ Participating Law Firm. Our corporate social responsibility program is focused on education, and diversity is one of Christian & Small’s core values.
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