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Supreme Court Affirms Ability of Administrative Agencies to Interpret Statutes

    Client Alerts
  • 7/08/2019

On June 27, the U.S. Supreme Court unanimously affirmed a benefits determination made by the Department of Veterans Affairs. Why should employers be interested in this decision? The Court’s opinion upheld the ability of federal administrative agencies to interpret ambiguous statutes, rejecting the appellant’s argument that courts should assume this role.

In Kisor v. Wilkie, the appellant asked the Court to overturn its Auer doctrine. This 1997 case directed federal courts to defer to the reasonable judgment of administrative agencies charged with implementing ambiguous portions of federal laws. The appellant contended that this deference violated the Constitution’s grant of authority to courts to interpret federal law.

In its decision, the Supreme Court noted that courts have an initial responsibility to construe the law to determine if it is truly ambiguous. If the court reaches this conclusion, it should defer to the substantive expertise of the administrative agency, as long as this interpretation reflects fair and considered judgment.

A decision in favor of the appellant could have resulted in landmark changes to how federal laws are implemented and interpreted. In the employment context, imagine if the Department of Labor was no longer able to make technical interpretations of the application of various pay practices under the Fair Labor Standards Act. That law was enacted over 80 years ago, and many of its provisions simply do not address our modern economy. Removing DOL’s ability to interpret the FLSA would result in federal courts being called upon to apply their judgment to these wage payment questions. The Supreme Court was clearly unwilling to place this burden on courts, leaving this power to the executive branch.