Last week was a busy one for the Biden administration. It issued a raft of major employment rules, including a new rule on noncompete agreements and one on the FLSA's "white collar" exemptions. The rules were controversial; they were fiercely debated and issued over the objections of many in Congress. Those objections, however, were basically irrelevant. Congress had no influence on the rules' substance and no hope of swaying the underlying policies. If anything, its protests showed only how far federal policymaking has strayed from the classical, Congress-driven model. They also confirmed that the only possible fix is stronger judicial review.
The legislative process is often derided for producing gridlock. But more charitably, we could say that it is designed to favor the status quo. The process is studded with veto gates: to become a law, a policy must pass the House, earn (at least) a majority in the Senate, and receive the president's signature. Each of these institutions acts as a gatekeeper. Each also has different constituencies and different preferences. So to become a law, a policy must fall within a narrow zone of consensus. All the gatekeepers must want the new policy more than they want the current one. If even one of them prefers to do nothing, the system defaults to the status quo.
But rulemaking breaks that model. When the president can change policy by regulation, he can effectively choose new gatekeepers. He no longer has to persuade the median House member and the median senator. He only needs to avoid triggering a veto-proof opposition (two-thirds of each house). So the congressional gatekeepers are no longer the 216th House member and the 51st senator; they are the 290th and the 67th.
It should be no surprise, then, that rulemaking produces bigger policy swings. Agencies don't need to moderate their proposals to attract a consensus. They can instead shift policy almost as far and as fast as the president wants to go. In other words, they can implement policies far more controversial than any that could ever have made it through Congress.
The noncompete rule illustrates this point well. In recent years, lawmakers have repeatedly tried to limit noncompete agreements. In 2021, Representative Claudia Tenney introduced the "Employment Freedom for All Act," a bill to ban noncompetes for workers laid off during COVID-19. And in 2023, Senator Marco Rubio sponsored the "Freedom to Compete Act," a bill to eliminate noncompetes for certain low-wage workers. Though both bills proposed only modest limits on noncompetes, each was dead on arrival in Congress. There just wasn't enough consensus in Congress about whether noncompetes were bad. Yet now, without any congressional action, noncompetes have been banned nationwide. A total ban is the law of the land—consensus or no.
The same could be said of the "white collar" rule. The rule raises the minimum salary to qualify for the FLSA's white-collar exemptions, which cover executive, administrative, and professional employees. The rule also creates a mechanism for updating the minimum-salary level every three years. These updates will happen more or less automatically, with no further rulemaking (let alone action from Congress). In other words, the rule adopts an approach sometimes called "indexing"—setting salary levels according to rising pay in the economy at large.
The only problem with this approach is that indexing has never been approved by Congress. Despite repeated proposals, Congress has consistently refused to peg minimum salaries to external metrics. In fact, Congress has never even given the administration authority to set minimum salaries at all. It instead directed the Department of Labor to define the white-collar exemptions according to a job's duties—a fact that led Justice Brett Kavanaugh last year to question the entire minimum-salary apparatus.
Yet now, salary indexing is official federal policy. Minimum salaries will rise automatically without Congress ever approving an increase. Through the alchemy of rulemaking, the administration has "found" a new law that could never have become law through legislation.
These rules are only the latest examples. Presidents have increasingly used rulemaking to expand the policymaking window. They have adopted rules that no one even pretends could have gotten through Congress. In fact, they often adopt rules in the teeth of congressional opposition. Congress's views have become effectively irrelevant. As long as the administration avoids triggering a veto-proof opposition, it can adopt whatever policy it wants
There is, however, one remaining check on the administration's discretion: judicial review. While courts don't make policy per se, they can help balance the policymaking process. They can pare back—or even block — rules that stray too far from Congress's preferences. In effect, courts can act as a reserve veto gate: they can tilt policymaking back toward the status quo.
For decades, courts have hesitated to play that role, deferring instead to agency policy choices. But that may soon change. In a pair of cases this term, the U.S. Supreme Court will decide whether to overrule the font of modern judicial deference, Chevron USA, Inc. v. National Resources Defense Council. The Court's ruling could instruct lower courts to scrutinize agency policies more closely. And that instruction could lead to stronger review, more judicial gatekeeping, and less expansive regulation. It might even lead to more policymaking in the consensus zone.
Originally published in The Federalist Society.
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