The United States Supreme Court’s decision in Loper Bright Enterprises v. Raimondo last year marked a significant shift in administrative law by overturning the forty-year-old Chevron doctrine. This doctrine had granted judicial deference to agency decisions when interpreting ambiguous statutes. However, the Court’s decision did not clearly articulate a new test to replace Chevron, leaving a gap in statutory interpretation cases. This gap has prompted the National Agricultural Law Center to provide a series of articles exploring the implications of this decision and the future of administrative law.
The second article in this series delves into Auer deference, a judicial review process used to evaluate agency decisions that interpret their own regulations. The Auer doctrine originated from the 1997 case Auer v. Robbins, where the Supreme Court ruled that an agency’s interpretation of its own regulations is controlling unless it is “plainly erroneous or inconsistent with the regulation.” This doctrine granted agencies a high degree of judicial deference for over two decades.
In Auer v. Robbins, the Department of Labor (DOL) issued regulations under the Fair Labor Standards Act (FLSA), which exempts certain public employees from overtime pay requirements. The DOL’s regulations included a salary-basis test, requiring that an employee’s salary not be subject to reduction due to variations in work quality or quantity. The DOL further clarified that an employee’s pay is “subject to” disciplinary deductions if the employee is covered by a policy that permits such deductions “as a practical matter.”
The plaintiffs in the case, nearly two hundred current and former sergeants with the Saint Louis Police Department, argued that their pay structure failed the salary-basis test because their salaries were subject to deductions for disciplinary reasons. Although the sergeants’ salaries exceeded the minimum dollar threshold, they contended that the language in the city’s police department manual impacted their overtime-exempt status. The trial court and the Eighth Circuit ruled in favor of the sergeants, and the Supreme Court affirmed this decision, articulating the Auer doctrine.
However, the Auer doctrine has faced criticism and limitations over time. Justice Scalia, who authored the Auer opinion, later expressed concerns that Auer gave nonlegislative rules the force of law, violating statutory notice and comment requirements and the separation of powers. In 2019, the Court addressed these issues in Kisor v. Wilkie, limiting the degree of deference given to agencies interpreting their own regulations. The Court established a five-part test to determine whether an agency’s interpretation merited judicial deference, considering factors such as the ambiguity of the regulation, the reasonableness of the agency’s interpretation, and the agency’s expertise and fairness in its judgment.
The original Auer deference has been significantly limited by subsequent decisions, with some circuits applying it more strictly than others. Despite these limitations, Auer continues to be cited in federal circuit courts, resulting in varying levels of judicial deference. The future of Auer deference remains uncertain, as the Court has not provided a clear replacement for the Chevron doctrine. The National Agricultural Law Center’s series of articles aims to provide background and perspective on these issues, helping to navigate the evolving landscape of administrative law.