United States: Wisconsin Supreme Court Ends Required Deference To State Administrative Agencies' Interpretations, Allowing Employers To Push For Broader Review Of Agency Decisions

The Wisconsin Supreme Court recently reversed its nearly half-century practice of deferring to state administrative agencies' interpretations of the laws the agencies are responsible for enforcing. Based on the decision in Tetra Tech EC, Inc. v. DOR,1 Wisconsin courts need now only consider the agency interpretations' persuasive value, but give them no deference. This shift likely will permit affected parties to more substantively challenge agencies' interpretations of law in the state court system.

Historically, Wisconsin courts have afforded an agency's interpretation of law "great weight deference" if the following conditions were met: (1) the agency was charged by the legislature with the duty of administering the law being interpreted; (2) the interpretation of the agency is one of long-standing; (3) the agency employed its expertise or specialized knowledge in forming the interpretation; and (4) the agency's interpretation will provide uniformity and consistency in the application of the statute. If those conditions were met, great weight deference required that Wisconsin courts defer to the agency's interpretation so long as it was reasonable – a low burden for the agency. Because courts were required to adopt the agency's interpretation if it was merely reasonable, courts were precluded from adopting a different interpretation, even if an alternative interpretation was more reasonable. As a practical matter, this deference requirement made it very difficult for private litigants to prevail against agencies when challenging the agencies' interpretations of law on appeal in Wisconsin courts.

For years, some justices on the Wisconsin Supreme Court had expressed criticism of the agency deference framework, inviting review of this issue. In Tetra Tech, the Wisconsin Supreme Court got that opportunity and decided to end the practice of affording deference to agencies' interpretations of law. The court held that forcing courts to adopt agencies' interpretations of law violates the Wisconsin Constitution because it forces the courts to yield its constitutional power to interpret the law to the executive branch. Courts will now review agencies' conclusions of law de novo, just as an appellate court reviews a circuit court's conclusion of law. While the court no longer requires deference to agencies' interpretations of law, if the four historical great weight deference factors are met – to be determined on a case-by-case basis – courts will be required to give the agency's interpretation "due weight," which the court defined as respectful, appropriate consideration of the agency's views. The court cautioned, however, that due weight is now merely a matter of persuasion, not deference.

The court's decision will have profound effects for all Wisconsinites, including Wisconsin employers. Employers appealing an agency's decision in court claiming the agency has not correctly interpreted the relevant statute will now be on a level playing field with the agency. Courts will be able to decide whose interpretation of the law is more reasonable and therefore worthy of enforcement. As a result, Wisconsin employers will have a better opportunity when seeking review of unfavorable agency decisions based on interpretations of law.

The court's ruling immediately influenced its same-day holding in Wisconsin Bell, Inc. v. Labor and Industry Review Commission and Charles Carlson (Carlson),2 the subject of our June 29, 2018 article. As discussed in our review of that decision, the court gave no deference to and ultimately rejected the agency's long-standing interpretation of the disability discrimination provision in the Wisconsin Fair Employment Act, which lower courts had afforded great weight deference.

Footnotes

1 Tetra Tech EC, Inc. v. DOR, 2018 WI 75, 2018 WL 3122322 (Wis. June 26, 2018).

2 Wisconsin Bell, Inc. v. LIRC, 2018 WI 76, 2018 WL 3122231 (Wis. June 26, 2018).

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