At the end of its latest term last month, the U.S. Supreme Court issued a major decision regarding the ability of federal district courts to issue nationwide injunctions blocking executive branch regulations and executive orders. The court majority concluded that federal law does not give district courts the power to enter injunctions that go beyond the parties to the litigation. The decision in Trump v. CASA Inc. involved President Donald Trump’s executive order on birthright citizenship. However, the broad reach of the decision will have significant impacts on employers and other parties impacted by executive branch actions.

In recent years, employers have relied on the ability of district courts to issue nationwide injunctions to block or at least slow down regulations implementing COVID-19 safety rules, increases in the minimum salary required to claim overtime exemptions, federal rules blocking the use of noncompetition agreements, and numerous other regulatory efforts. Without the availability to seek such injunctive relief, individual employers will be forced to file suit or seek class action certification, a process that requires considerable time before any decision is made by the court.

Even if the rule or order is eventually voided, employers will be faced with interim compliance requirements that could last years. The Supreme Court’s decision significantly strengthens the ability of the executive branch and its administrative agencies to take an aggressive view of their regulatory powers in the absence of any efficient and quick ability to challenge and block such measures. While the current administration may exercise such powers in an employer-friendly manner, there is no guarantee that future administrations will not use this decision to expand regulation of employment and labor practices.

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