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Proposed Law Providing For Bolstered Judicial Authority Might Benefit Employers

Peter J. Richter

Douglas C. Scriver

March 2, 2017

Employers may soon find more success when challenging Department of Labor, EEOC, and other Federal agency actions.  The U.S. House of Representatives recently passed the Regulatory Accountability Act of 2017, which is now awaiting the Senate’s approval.  The Act will allow courts reviewing agency actions to give much less deference to a Federal agency’s interpretation of the constitution, statutes, and its own regulations.  This represents a fairly significant departure from established standards, under which courts must often give agency positions “substantial deference” and “considerable” or even “controlling” weight.

By way of example, the EEOC might take the position that under Federal discrimination law, employers may not use the results of criminal background checks to make hiring decisions because such use  disproportionately affects certain classes of protected individuals.  Employers might counter the EEOC’s position on the grounds that background checks are crucial tools in determining whether to hire potential employees, and the use of the checks does not implicate Federal discrimination law.  In the event of litigation, the reviewing court might defer to the EEOC under current standards.  Therefore, it could be difficult for the employer to convince the court that it can and should disregard the EEOC’s interpretation of what is prohibited by Federal law.

Under the Act’s proposed standard of judicial review, courts may more easily disregard the EEOC’s interpretation of the law.  In other words, the Act would allow the court more authority to substitute its own conclusions in place of the agency’s guidelines.  As a result, employers might find more success challenging an employment claim that is based in part on a Federal agency’s legal interpretation.

Contesting Federal agency actions can be a steep uphill battle, especially under the current standards.  However, if the Regulatory Accountability Act of 2017 becomes law, employers might be more successful in defending their actions or inaction because a court will have increased flexibility to replace a Federal agency’s interpretation of the law with its own.


If you have any questions about how the information in this article may affect you or your business, please contact Peter Richter at prichter@stroudlaw.com or Doug Scriver at dscriver@stroudlaw.com or (608) 257-2281 or your Stroud attorney.

DISCLAIMER: The information in this article is provided for general informational purposes only, is not necessarily updated to account for changes in the law, and should not be considered tax or legal advice.  This article is not intended to create, nor does the receipt of it constitute, an attorney-client relationship.  You should consult with your own legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.