Christopher v. SmithKline Beecham Corp.
Citation and Court
567 U.S. 142 (2012), Supreme Court of the United States
Facts
Pharmaceutical sales representatives sued their employer, SmithKline Beecham (GlaxoSmithKline), for unpaid overtime under the Fair Labor Standards Act. The Department of Labor, in amicus briefs, took the position that pharmaceutical reps were not exempt “outside salesmen” under DOL regulations. SmithKline argued that the reps fell within the exemption and that the DOL’s new litigation position was entitled to no deference.
Issue
Whether the Department of Labor’s interpretation of its own “outside salesman” exemption regulation is entitled to Auer deference when the agency’s interpretation appears for the first time in litigation and would impose significant retroactive liability.
Holding
The DOL’s interpretation was not entitled to Auer deference because it was a post hoc rationalization adopted in litigation rather than the agency’s considered interpretation of its own regulation, and applying it retroactively would create unfair surprise for employers who had relied on a different understanding.
Rule / Doctrine
Auer deference (courts defer to agencies’ reasonable interpretations of their own ambiguous regulations) does not apply when the agency’s interpretation: (1) is a post hoc rationalization advanced first in litigation rather than a considered administrative position, or (2) would create unfair surprise by imposing retroactive obligations on parties who reasonably relied on a different understanding.
Significance
Christopher is a significant limitation on Auer deference, anticipating the Court’s later partial overruling of Auer in Kisor v. Wilkie (2019). It signals judicial skepticism toward agencies that take new interpretive positions in litigation to gain litigation advantage rather than through transparent rulemaking.