Loper Bright Ends Chevron Deference, Raises ERISA Rule Uncertainty

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Summary

• The Employee Retirement Income Security Act of 1974 protects Americans’ retirement assets and has grown increasingly important amid modern financial and benefit plan changes.
• Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. was overturned by Loper Bright Enterprises v. Raimondo, eliminating deference to agency interpretive authority.
• ERISA’s reliance on the United States Department of Labor heightens uncertainty amid rising litigation, potentially harming Americans retirement funds.
• Skidmore v. Swift & Co., Firestone Tire & Rubber Co. v. Bruch, and Black & Decker Disability Plan v. Nord offer frameworks to preserve DOL deference under ERISA.

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Introduction

Millions of Americans with a 401(k) plan, an Individual Retirement Account (IRA), a pension, or simply a dream of one day retiring to Florida, benefit from but may have never heard of the Employee Retirement Income Security Act of 1974 (ERISA). Enacted in the wake of a massive independent automaker’s collapse and a fraud conviction for the notorious labor leader, Jimmy Hoffa, ERISA promised to safeguard the retirement security of millions of American workers by ensuring the proper management of benefit plan assets. Over fifty years after ERISA’s passage, the landscape for benefit plans in the U.S. has changed dramatically and the administrative agencies responsible for overseeing these plans are facing new challenges in keeping up with rapid developments in the financial sector and trends in benefit plan offerings. A growing number of individuals find themselves responsible for managing their own retirement savings, and many are unable to set aside enough money for their future needs. Many others are forced to sacrifice tax advantages by withdrawing early, or find themselves struggling to determine how much to withdraw during retirement. As high-risk, high-return investment classes, such as crypto, become more mainstream, sponsors of such investments place increased emphasis on tapping into the well of benefit plan assets. Consequently, the importance of ERISA’s protections has never been more pronounced.

Despite its noble ambitions, ERISA has drawn criticism for both failing to fully deliver on its promise and, in some ways, creating more procedural barriers for the very plan participants Congress intended to protect. Several judges have struggled to interpret the statute, even ridiculing it in their opinions. Others, like the Honorable William M. Acker Jr.—who declared a willingness to believe that within ERISA lurked “a redeeming feature,”—resisted the cynicism. Despite conflicting sentiments, it is clear today, over half a century since its passage, that ERISA has withstood the test of time.

The uncertain future of administrative law creates additional obstacles for plan participants, administrators, and plan asset managers, all of whom are now faced with less clear guidance on their rights and responsibilities under ERISA. In 2024, the U.S. Supreme Court overturned Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., thus requiring courts to review agency interpretations of law de novo under Section 706 of the Administrative Procedure Act (APA). This means that agencies like the Department of Labor (DOL or the Department) (through the Employee Benefits Security Administration (EBSA)) now bear the burden of persuading courts of the veracity of their views without the benefit of interpretive supremacy.

This shift comes at a time when the rules governing ERISA plans face significant litigation challenges. Among the DOL rules currently being challenged in court are the 2022 Environmental, Social, and Governance (ESG) Rule, the 2024 Fiduciary Rule, tobacco surcharge rules, and procedural rules. Instead of trying to decipher fiduciary responsibilities amidst a chorus of conflicting lower court rulings, benefit plan administrators may exercise their allotted discretion to limit benefits, shift offerings from defined benefit plans to defined contribution plans, or opt to simply not sponsor the voluntary plans at all. Without clarity on their rights, plan beneficiaries may miss out on the very protections ERISA is intended to ensure.

Even in the wake of Loper Bright Enterprises v. Raimondo, ** there are still proactive steps that the DOL can take to provide stability and guidance to avoid costly litigation for plans and their participants. While the DOL now faces a higher bar to defend its rules, plan administrators may still benefit from some form of judicial deference under a combination of alternate standards such as those proposed in Skidmore v. Swift, Firestone Tire & Rubber Co. v. Bruch, and Black & Decker Disability Plan v. Nord. The asymmetry in judicial deference between regulations and plan language suggests an opportunity for administrative recalibration. The depth of ambiguous language in ERISA, combined with courts’ struggles to apply a consistent standard of review in litigation, places the DOL in a unique position to successfully guide courts’ review of ERISA claims in the future.

This Comment begins with an overview of the origins of ERISA and its development over the last fifty years. Next, this Comment examines current challenges to the ERISA rules promulgated by the DOL. This Comment ultimately provides recommendations for how the DOL may take action in order to retain stability and provide more consistent outcomes across lower courts that would otherwise be strained under differing circuit precedents. Faced with the demise of Chevron deference, the DOL should utilize the ERISA-specific deference standard set forth in Firestone by reinforcing plan administrator discretion through interpretive guidance and model plan language. Simultaneously, the DOL should strengthen its reliance on Skidmore by issuing more persuasive rules. The combination of these administrative strategies will provide courts with workable deference standards that promote consistency, reduce litigation risk for plan fiduciaries, and safeguard ERISA stewardship by the DOL.

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I. ERISA’s History and Purpose

A. The Origin of ERISA

With the rise of collective bargaining following World War II the U.S. saw a massive spike in demand for employer-provided benefit plans, which would supplement insufficient public welfare programs such as Social Security. Defined benefit (DB) plans, such as private pensions, became a primary target of collective bargaining by many different unions. Driven by the economic boom following the war and massive demand for automobiles, unions such as the United Auto Workers (UAW) were successful in negotiating for DB plans that promised to provide stable income to former employees in their retirement. However, many independent automakers that had agreed to provide these costly benefits began to default on their underfunded promises as the postwar demand for automobiles dwindled and larger competitors were able to capture greater market share.

The immediate political catalyst for ERISA was the collapse of the Studebaker-Packard Corporation’s pension plan in the early 1960s. The company, following a merger of two seemingly successful independent automakers, closed its South Bend, Indiana plant in 1963 and defaulted on its pension obligations. While retirees over the age of sixty received their full benefits, thousands of younger employees received only “a fraction . . . [or] nothing at all.” This failure exposed the volatility of private pension plans and a lack of enforceable protections for workers. Retirement plans were not viewed merely as “fringe benefits,” but deferred compensation negotiated in lieu of higher wages during an employee’s working years. The Studebaker plan, like most UAW plans, was underfunded for years; however, no remedy had been imposed before a downturn in demand forced the carmaker into default. The result was not only an economic dislocation, but a political reckoning that made pension reform a congressional mandate.

The Studebaker collapse also coincided with broader concerns about pension mismanagement, including allegations of corruption and organized crime involvement in the administration of union pension funds. Congressional hearings throughout the 1950s and 1960s uncovered alarming abuses in some plans affiliated with the Teamsters and other unions, some of which were under the influence of allegedly mob-connected trustees. These revelations stoked fears that the private retirement system was not just fragile but structurally compromised. Policymakers came to see pension reform not only as an economic necessity, but also as a moral imperative to restore public trust.

In response, Congress in 1974 passed ERISA to establish a set of structural safeguards for employee retirement funds. These included minimum funding standards, reporting and disclosure requirements, fiduciary duties, and a private right of action for plan participants. ERISA also created the Pension Benefit Guaranty Corporation (PBGC) to insure certain defined benefit plans, an institutional response to the Studebaker failure and others like it. Through these reforms, Congress sought to restore worker confidence in the private retirement system by ensuring that the promises made by employers would not vanish at the moment they were most needed.

B. Regulatory Agency Oversight of ERISA Plans

The regulation of ERISA-covered plans is distributed across three primary federal entities, each of which is responsible for distinct aspects of the law. These agencies issue interpretive guidance and formal rules to clarify ERISA’s ambiguous terms, such as “fiduciary,” “investment advice,” and “plan assets.” Title I of ERISA, which governs fiduciary duties, reporting and disclosure obligations, participation requirements, and civil enforcement provisions, is administered by the DOL through its subagency EBSA. The DOL is also tasked with promulgating regulations and issuing subregulatory guidance, including, among others, Field Assistance Bulletins, Advisory Opinions, and Interpretive Bulletins, to clarify statutory terms and establish compliance standards for fiduciaries.

Title II of ERISA, which amended the Internal Revenue Code to provide tax advantages for qualifying benefit plans, falls under the jurisdiction of the Internal Revenue Service (IRS). The IRS ensures that plans comply with tax qualification rules, such as nondiscrimination testing, contribution limits, and minimum participation requirements. Failure to comply with these provisions can result in adverse tax consequences for both employers and plan participants.

Title IV of ERISA, which establishes the framework for terminating defined benefit pension plans and insures certain benefits, is administered by the PBGC. The PBGC is a federally chartered corporation that collects premiums from covered plans and steps in to pay benefits when a plan sponsor becomes insolvent. This function was a direct response to the mass fallout from the Studebaker and similar plan collapses, designed to serve as a financial backstop for DB plans.

Title III of ERISA provides the framework for interagency coordination, jurisdiction, and enforcement of the Act, dividing responsibility among the DOL, the IRS, and the PBGC. This tripartite structure reflects ERISA’s complexity and its attempt to balance competing policy objectives: encouraging employers to offer plans voluntarily, protecting participants’ rights, and maintaining regulatory oversight over plan assets and fiduciaries. However, it also introduces overlapping jurisdictional questions and interpretive inconsistencies that can be exploited in litigation or undermine regulatory clarity. In this environment, guidance from any one agency, particularly the DOL as the administrator of Title I, plays an important role in shaping expectations across the benefit plan ecosystem.

C. Frameworks of Judicial Review in ERISA Litigation

Although ERISA creates causes of action for a variety of claims, the available remedies vary based on the specific type of claim. ERISA litigation involving denials of benefits are unique from most lawsuits because they generally must be appealed through internal plan administrative processes before reaching Article III courts. Only after the administrative process is exhausted will district courts review these claims. The internal appeals process creates a record including administrator interpretations of plan provisions that courts receive and review. After the internal plan appeals process concludes, federal courts reviewing ERISA cases must then determine which standard of judicial review applies to a benefit determination.

Although ERISA itself is silent on this issue, three competing approaches have historically shaped judicial interpretation: the trust law approach, the labor law approach, and the contract law approach. The first framework, borrowed from the common law of trusts, emphasized fiduciary principles and led courts to adopt an abuse of discretion standard where discretion is expressly granted to the internal plan administrator. The utilization of trusts and insurance vehicles as funding mechanisms for plans tethered ERISA review to longstanding trust doctrines. Trust law principles, however, were not a perfect fit for ERISA. Early DOL interpretations of ERISA, which also aligned with congressional intent to impose fiduciary duties similar to those of traditional trustees, expanded the meaning of discretionary authority beyond traditional trust law doctrines to include anyone who exercises sufficient administrative powers as a fiduciary.

The labor law approach, by contrast, views ERISA claims through the lens of § 301 of the Labor Management Relations Act (LMRA). Under this view, benefit claims resemble breach-of-contract suits under collective bargaining agreements, with courts playing an active role in resolving factual and legal disputes. Courts sympathetic to this approach favored less deference to plan administrators and broader access to discovery and procedural protections for claimants.

The contract law approach framed ERISA plans as unilateral contracts between employers and employees. This lens emphasized traditional doctrines of contract construction and enforcement but risked treating benefit plans like commercial agreements rather than fiduciary arrangements. Though this approach surfaced in early litigation, courts largely rejected it in favor of the trust paradigm adopted in Firestone.

These competing interpretive roots have left a legacy of inconsistent judicial standards. After Firestone, the deferential abuse of discretion standard has become dominant in cases involving plans that explicitly delegate authority. Yet, courts still scrutinize potential conflicts of interest. In Metropolitan Life Insurance Co. v. Glenn, ** the Court held that a dual-role administrator (one who both decides claims and pays benefits) faces a structural conflict that must be considered through the abuse of discretion analysis.

This deference to private fiduciaries now stands in contrast to the post- Loper framework for reviewing agency interpretations of law. While Chevron once granted strong deference to administrative agencies, Loper requires courts to apply de novo review under the APA. Thus, courts may now defer less to the DOL interpretation of ERISA than to a private insurance company’s administration of an ERISA plan.

The resulting asymmetry creates tension in ERISA jurisprudence. Plan participants challenging DOL rules receive heightened judicial scrutiny, while those contesting plan administrator decisions face a far more deferential standard. This doctrinal imbalance has real consequences: participants may be left with fewer legal avenues for relief, and courts may develop conflicting precedents regarding the same statutory language.

Federal courts reviewing ERISA cases must determine which standard of judicial review applies to a benefit determination. This dual-track review regime has become a defining feature of ERISA litigation. The deferential abuse of discretion standard has been widely adopted in cases involving employer-sponsored plans that explicitly delegate authority. However, courts often scrutinize potential conflicts of interest, especially where the plan administrator is also the payer of benefits. In Metropolitan Life Insurance, the Court held that such dual roles should be considered as a factor in determining whether the administrator abused its discretion.

These standards differ from the framework courts historically applied to agency action under Chevron. While Chevron granted strong deference to agency interpretations of ambiguous statutes, Firestone introduced a context-specific inquiry rooted in trust law. Notably, even after Loper eliminated Chevron deference, courts may still defer to plan administrators under Firestone and its progeny, creating an asymmetry in administrative law: courts are now less likely to defer to public agencies than to private fiduciaries administering ERISA plans.

This doctrinal divide has significant implications for ERISA enforcement. Plan participants challenging DOL rules may benefit from de novo review under Loper, while facing deferential review when challenging plan administrator determinations. The resulting inconsistency raises concerns about fairness and predictability and underscores the importance of thoughtful administrative action.

II. Judicial Review of ERISA Claims Under Chevron

A. The Role of Chevron Deference

Before Loper, the DOL’s interpretations of ambiguous ERISA provisions were routinely upheld under Chevron deference. Under this two-step framework, courts first asked whether the statute was ambiguous. If so, they proceeded to the second step, which asked whether the agency’s interpretation was reasonable. This enabled the DOL to promulgate rules and guidance documents with the expectation that courts would uphold the interpretations if reasonably connected to the statutory text.

ERISA’s statutory structure both invites agency interpretation and requires it. While Congress explicitly mandated the DOL to issue certain procedural regulations, it was silent on other matters relating to agency authority in statutory interpretation. Congress deliberately left core terms such as “fiduciary,” “investment advice,” “plan assets,” and “prudence” undefined or context-sensitive. The DOL and EBSA filled these gaps through formal notice-and-comment rulemaking and informal guidance such as Field Assistance Bulletins and Advisory Opinions. Courts, in turn, often deferred to these interpretations. For example, in litigation surrounding the 2016 Fiduciary Rule, the DOL argued that its reinterpretation of “investment advice” was a permissible construction of 29 C.F.R. § 2510.3-21. Although the Fifth Circuit ultimately vacated the rule in Chamber of Commerce of the United States v. U.S. Department of Labor, the case was still adjudicated under Chevron.

The pre- Loper regime gave the DOL regulatory flexibility while providing plan sponsors, fiduciaries, and asset managers with a relatively predictable compliance environment based on deference. Subregulatory guidance often functioned as de facto safe harbors because of the deference courts were likely to extend under Chevron. This was particularly important in areas of interpretive volatility such as ESG investing, IRA rollovers, and surcharge qualifications, where regulated entities often relied on EBSA interpretations to align their practices with ERISA’s fiduciary requirements.

However, this judicial deference was not unlimited. Even under Chevron, courts occasionally rejected DOL rules deemed to exceed the agency’s delegated authority or to lack reasoned explanation. Still, the regime placed a heavy thumb on the scale in favor of agency expertise.

At the same time, courts reviewed many plan-level benefit denial claims de novo under separate judicial doctrines. Notably, Firestone held that courts should review benefit denials under a de novo standard unless the plan explicitly grants discretionary authority, in which case abuse of discretion review applies. This framework was reaffirmed in Black & Decker, ** where the Court held that plan administrators were not required to defer to treating physicians. These plan-level deference doctrines allow for agency interpretations to be bypassed through contractual structure, and allow for discretionary authority to be granted through plan terms. As a result, public agency rules were reviewed under Chevron, but could be ignored if private plan administrator decisions were reviewed under Firestone -style deference.

B. Firestone as an ERISA-Specific Framework for Deference

In Firestone, the Supreme Court established the foundational standard for judicial review of benefit denials under ERISA, creating a distinct framework rooted in the common law of trusts. The case involved former Firestone employees who were denied severance benefits after a corporate restructuring. The plan did not expressly grant the administrator discretion to interpret the plan’s terms, and the plaintiffs challenged the denial under 29 U.S.C. § 1132(a)(1)(B). The Court, resolving a circuit split, held that denials of ERISA benefits are to be reviewed de novo unless the plan grants the administrator discretionary authority. Where such discretion exists, courts apply a more deferential abuse of discretion standard. This doctrinal framework has since become the governing law for ERISA benefit claims and has major implications for how courts review fiduciary decisions under the statute.

Firestone ’s embrace of trust law principles was no accident. The Court noted that ERISA was enacted against the backdrop of traditional trust doctrine, and Congress specifically incorporated fiduciary standards derived from the law of trusts into the statute. By defaulting to de novo review, but permitting deference where the plan expressly provides for it, Firestone established a dual-track system that balances participant protection with respect for plan sponsor discretion. The decision aligned with ERISA’s remedial goals by affording beneficiaries a meaningful opportunity to contest denials, while allowing employers to structure plans that would receive judicial deference when properly drafted.

The deference afforded under Firestone was further clarified in Metropolitan Life Insurance, where the Court held that a structural conflict of interest, such as when the entity administering claims also funds the benefits, must be weighed as a factor in determining abuse of discretion. This refinement added nuance to the standard by emphasizing that deference is not absolute and may be diminished where conflicts exist. Similarly, in Black & Decker, the Court held that plan administrators are not required to defer to the opinions of treating physicians, reinforcing their interpretive latitude under discretionary plans.

The Supreme Court further limited deference to plan terms in Fifth Third Bancorp v. Dudenhoeffer. The Court held that plan terms would be discarded if they contradicted public policy. This recalibrated Firestone ’s ** deference standard to require a statutory foothold for plan terms that may defy agency interpretations. ** The Fifth Third Bancorp Court unanimously overruled fragmented lower court decisions that created a “presumption of prudence” for administrators of Employee Stock Ownership Plans (ESOPs). The failure of lower courts to react to nuanced investment vehicles with reliable rulings underscored the need for clear guidance on ERISA interpretation that does not undercut Congress. While the Court qualified the amount of discretion that can be given through plan language, its ruling focused on statutory limits, rather than administrative, suggesting that the Firestone plan language may still trump administrative guidance. Together, these decisions affirm a strong, but not absolute, deference to private fiduciaries, provided that statutory fidelity, procedural fairness, and structural integrity are maintained.

This framework now stands in stark contrast to the post- Loper regime, where agency interpretations of law no longer receive Chevron deference and must withstand de novo judicial scrutiny under the APA. The result is a doctrinal asymmetry: federal courts give less deference to public agencies like the DOL interpreting ERISA than to private insurance companies administering benefit plans. While the DOL must now persuade courts through reasoned explanation alone, plan administrators may continue to rely on abuse of discretion ** review to defend their decisions.

This divergence raises critical questions about consistency and fairness in ERISA litigation. A plan participant may be subject to strict procedural limits and deferential review when challenging a denial by a private administrator but receive broader judicial engagement when contesting a DOL rule intended to protect their rights. The DOL’s regulatory authority is thus weakened at the very moment when clarity and national uniformity are most needed.

Nonetheless, Firestone could be transformed into a powerful administrative tool. In a recent letter to the Assistant Secretary of EBSA, the American Benefits Council encouraged the expansion and codification of Firestone deference through EBSA’s notice-and-comment process in order to curb litigation in the wake of Loper. Ironically, it is possible that the weakening of regulatory authority may conversely strengthen the role of subregulatory guidance. The DOL can, outside of its regular notice-and-comment process, issue subregulatory guidance that encourages plan sponsors to include clear grants of discretionary authority and EBSA’s own model plan language directly into plan documents, thereby securing deferential review under existing law. This language, along with posted guidance in field assistance bulletins and advisory opinions, can also clarify the interaction between plan-level discretion and agency interpretations, reducing the risk of judicial override. While the deference standards in Firestone and Loper have had different applications in the past, both mandatory and discretionary model plan language issued by the IRS are tested practices that EBSA could utilize in order to bridge the two deference frameworks into a lasting and judicially viable standard. By reinforcing Firestone ’s framework, the DOL can promote predictable litigation outcomes and help stabilize the regulatory environment in the absence of Chevron.

III. Judicial Review of ERISA Claims Under Loper

A. Loper and the End of Chevron Deference

The Supreme Court’s decision in Loper marked a fundamental turning point in administrative law, ending a forty-year era of judicial deference to agency interpretations under the Chevron doctrine. In a 6–3 decision, the Court explicitly overruled Chevron, which had required courts to defer to reasonable agency interpretations of ambiguous statutes. The majority held that this framework improperly delegated interpretive authority to the Executive Branch, contravening the APA’s directive that “courts must ‘decide all relevant questions of law’” and “interpret constitutional and statutory provisions.”

The decision also clarified the status of previous decisions that relied on Chevron. While those decisions remain binding under principles of stare decisis, lower courts are no longer to apply Chevron deference prospectively. Instead, courts must engage in de novo review regardless of the technical complexity of the subject matter or the historical reliance on agency expertise.

For ERISA, this ruling is especially consequential. ERISA’s structure is deeply intertwined with administrative law and requires input from the DOL, IRS, and even the SEC. The DOL has long relied on Chevron to defend its interpretation of terms like “fiduciary,” “investment advice,” and “participant-directed account.” Courts frequently upheld these interpretations so long as they fell within the bounds of reasonableness. Now, however, the DOL must defend their regulatory authority on the merits—persuasiveness, logic, and statutory fidelity—without the benefit of formal deference.

Courts may now look to Skidmore for an alternative to Chevron when considering deference to agency interpretation. Under Skidmore, courts are not bound to agency interpretations but may give weight to them if they are persuasive. The factors considered by courts focus on the agency interpretations’ consistency with statutory text, reasoning, and precedent. While Skidmore offers an alternative deference standard, it remains to be seen whether courts will be consistent in their application of Skidmore factors. Furthermore, courts may be more likely to find certain politically charged rules more or less persuasive based on differing policy guidance from one administration to the next.

The Loper decision also sharpens the contrast between public and private deference under ERISA. While agencies are now stripped of presumptive interpretive authority, private plan administrators remain eligible for deferential review under Firestone when exercising discretionary authority. This creates an odd asymmetry in ERISA litigation: courts must scrutinize the DOL’s views de novo, yet may defer to a private insurer’s benefit denial if it was not an abuse of discretion.

In the wake of Loper, courts evaluating DOL rules, like the ESG and Fiduciary Rules, must resolve questions of statutory meaning without leaning on the agency’s regulatory history. This may increase judicial inconsistency and undermine the DOL’s efforts to promote uniform fiduciary standards. Absent deference, the DOL must now convince courts through the persuasiveness of its reasoning, invoking what remains of Skidmore and anticipating judicial skepticism. For a statute as notoriously opaque as ERISA, this places extraordinary pressure on agency rulemaking.

B. Challenges to DOL ESG Rule

The Supreme Court’s decision in Loper dismantled the Chevron doctrine and ushered in a new era of de novo judicial review for agency interpretations of law. This change has immediate implications for ERISA-related rulemaking, where statutory terms often require expert interpretation and where courts had historically deferred to the DOL’s views.

In 2022, the DOL issued its ESG rule, clarifying that plan fiduciaries may consider environmental, social, and governance factors as part of the ordinary risk-and-return analysis, and may use such factors as a “tiebreaker” between otherwise financially equivalent investments. The rule reaffirmed that fiduciaries may not subordinate participants’ financial interests to unrelated objectives.

A coalition of states and private plaintiffs challenged the rule in the Northern District of Texas, claiming it conflicted with ERISA’s duty of loyalty and with prior DOL guidance. In 2023, the district court granted summary judgment for DOL, applying Chevron deference to uphold the rule. On appeal, however, the Fifth Circuit vacated and remanded in light of Loper, directing the district court to evaluate the rule without Chevron deference. The Fifth Circuit left the rule in place during remand. On February 14, 2025, the district court again upheld the rule under de novo review, finding that it aligned with ERISA’s statutory text and was not arbitrary or capricious under the APA. The court emphasized that ESG factors may be considered only within the bounds of prudent investment analysis and, when used as a tiebreaker, do not override the requirement to act solely in participants’ financial interests.

Although the rule withstood de novo ** review, these cases illustrate the vulnerability of DOL rulemaking to judicial skepticism in the absence of deference. As one of the first rules to be examined under de novo review, Utah v. Su signaled that conclusory justifications or ambiguous statutory readings would no longer survive unchallenged without a persuasive evidentiary record. As the authority of agencies is challenged more extensively, a domino effect may set in and the foundation of agency rulemaking in certain areas could collapse. Future litigation could invoke the major questions doctrine, asserting that ESG investing is too politically charged to be regulated by agencies at all absent clear congressional authorization.

C. Challenges to DOL Fiduciary Rule

The DOL promulgates rules like the ESG and Fiduciary Rules to fulfill its statutory mandate under Title I of ERISA. The agency aims to clarify the scope of fiduciary duties and ensure that plan sponsors, administrators, and advisors act in the best interests of participants. Rules are typically issued through notice-and-comment rulemaking under the APA, often accompanied by regulatory impact analyses and explanatory preambles. In the past, Chevron deference offered a cushion against judicial reversal, allowing the agency to craft pragmatic responses to evolving market conditions. That cushion is now gone. Absent Chevron, the DOL must now bolster its rulemaking with rigorous fact-finding, clear statutory grounding, and persuasive reasoning capable of surviving de novo review.

The fragility of agency interpretations under ERISA was already evident in American Council of Life Insurers v. United States Department of Labor, which concerned the DOL’s 2024 Fiduciary Rule. This rule sought to expand fiduciary liability under ERISA by clarifying that one-time investment advice, such as recommending a rollover from a 401(k) to an IRA, could trigger fiduciary status if made under circumstances suggesting a relationship of trust and reliance.

The DOL promulgated the rule through notice-and-comment rulemaking under the APA, relying on economic studies and industry data to support its view that investment professionals often influenced retirement outcomes through isolated but critical pieces of advice. The DOL argued that the existing five-part test for fiduciary status, established in 1975, no longer reflected the realities of modern retirement planning, where one-time advice often replaced ongoing advisory relationships.

In response, the American Council of Life Insurers filed suit in the Northern District of Texas. The plaintiffs argued that the DOL’s new interpretation effectively rewrote the statute’s definition of fiduciary without congressional approval. They further contended that Congress had considered and rejected similar proposals in legislative sessions, signaling that the agency lacked authority to adopt them by regulation.

The district court agreed. In its April 2024 decision, the court held that the DOL’s rule conflicted with ERISA’s unambiguous terms and exceeded its interpretive authority. The court characterized the rule as an impermissible expansion of fiduciary status and declined to defer to the agency’s views, even though the Supreme Court had not yet overruled Chevron. As a result of a shift in administrations, the DOL ultimately decided not to continue its appeal of the ruling.

These decisions underscore a broader trend: in the absence of judicial deference, DOL rules must now survive on their persuasive strength alone. Courts are more likely to invalidate regulations that rely on ambiguous statutory language, particularly when the rule implicates contested economic or political judgments.

D. Challenges to DOL Tobacco Surcharge Rule

Significant challenges to DOL regulatory authority are emerging in district courts through litigation over the DOL’s tobacco surcharge regulations. ERISA’s nondiscrimination mandate under 29 U.S.C. § 1182 generally prohibits varying premiums based on health factors, including tobacco use. However, § 1182 includes a wellness program exception that allows premium differentials if the program is “reasonably designed” to promote health or prevent disease and offers an alternative means of qualifying for the reward. The DOL operationalizes this exception through its implementing regulations at 29 C.F.R. § 2590.702(f), which formally define a “reasonable alternative standard” (RAS) and require that participants who satisfy the RAS receive the full reward. Through the 2013 regulatory preamble, the DOL further interprets this requirement to include retroactive reimbursement when participants qualify mid-year.

Since late 2024, a wave of class actions and DOL enforcement actions has challenged employer wellness programs that imposed tobacco surcharges without complying with these regulatory safeguards. In response, defendants have increasingly invoked Loper to challenge the DOL’s authority, arguing that courts must disregard the wellness regulations and preamble interpretations absent explicit statutory authorization. District courts so far have rejected these arguments. In Mehlberg v. Compass Group USA, Inc., the Western District of Missouri denied dismissal, holding that plaintiffs plausibly alleged violations of the “full reward” requirement based on the DOL’s 2013 regulatory preamble and concluding that Loper does not nullify regulations issued through notice-and-comment rulemaking. Similarly, in Bokma v. Performance Food Group, Inc., the Eastern District of Virginia denied dismissal, emphasizing that 29 U.S.C. § 1182(b) and the Public Health Service Act (PHSA) § 2705 expressly authorize RAS and notice requirements and concluding that Loper “does not empower courts to disregard duly promulgated regulations.”

The Department itself has also pursued enforcement actions. In Secretary of Labor v. Macy’s, Inc., the DOL alleged that the Macy’s wellness plan violated ERISA and the Affordable Care Act (ACA) by conditioning surcharge waivers on cessation programs without properly offering an RAS or honoring physician accommodations. Macy’s argued that Loper stripped the DOL of authority to impose these requirements absent specific statutory delegation. The Southern District of Ohio disagreed, holding that while Loper mandates de novo review, it does not automatically invalidate the wellness rules.

These cases make the tobacco surcharge litigation one of the first significant tests of DOL regulatory authority after Loper, alongside challenges to the DOL’s ESG rule. In both contexts, courts have applied independent review while upholding DOL regulations where they rest on explicit statutory mandates. As in Su, the outcome of these wellness cases will influence how courts apply Skidmore, clarifying when agency expertise remains persuasive despite the absence of Chevron deference.

The early trend suggests that longstanding notice-and-comment regulations tied directly to statutory authority, like the wellness rules, remain relatively insulated post- Loper. However, the litigation highlights growing uncertainty: where DOL regulations rely on ambiguous statutory terms or policy judgments, courts may be less willing to sustain them without robust evidentiary support. These lawsuits thus represent an important proving ground for the DOL’s regulatory approach and illustrate the heightened litigation risks agencies face when defending ERISA rules under de novo review.

E. Challenges to DOL Procedural Rules

Statutory fidelity will likely be a point of debate for most challenges to regulations moving forward. The regulations explicitly rooted in statutory mandates will continue to be upheld while more tangentially related rules will be subject to greater scrutiny. For example, courts have continued to enforce the DOL’s procedural rules governing ERISA claims and appeals under Section 503. Codified at 29 C.F.R. § 2560.503-1, these rules establish strict timelines, require detailed denial notices, and mandate internal appeal procedures designed to ensure a “full and fair review.” Because they rest on an explicit statutory delegation, these regulations currently enjoy greater stability than the DOL’s substantive policy rules, even after Loper. However, the Supreme Court has not addressed this question directly, leaving open the possibility of future circuit splits over even seemingly stable rules surrounding procedural enforcement.

Recent cases illustrate this relative stability and further qualify the limits of Firestone deference. In Rappaport v. Guardian Life Insurance Co. of America, the Southern District of New York held that a plan administrator’s failure to comply with Section 503’s procedural rules forfeits deferential review under Firestone. Guardian argued that Loper undermined the DOL’s authority to impose procedural consequences, but the court rejected that argument, holding the rules remain binding because they implement Congress’s express mandate. The court applied de novo review under 29 C.F.R. § 2560.503-1(l)(2)(i), which treats noncompliance as an exhaustion-triggering denial “without the exercise of discretion.”

Similarly, in Halo v. Yale Health Plan, the Second Circuit adopted a strict compliance standard, holding that plan administrators must follow ERISA’s procedural rules precisely or lose deferential review, except where violations are inadvertent and harmless. Although Halo predates Loper, courts, including Rappaport, continue to rely on its reasoning, treating these procedural safeguards as integral to ERISA’s remedial framework and sheltered from Chevron ’s demise.

While these rulings may appear to insulate the DOL from challenges and weaken plan language meant to trigger Firestone -style deference, the result is in line with precedent like Fifth Third Bancorp, ** which allow for deference so long as statutory fidelity is preserved. Together, Rappaport and Halo highlight an emerging divide in ERISA litigation after Loper. Courts now apply independent judicial review when evaluating ambiguous statutory provisions, but they continue to uphold longstanding procedural regulations where Congress has clearly delegated authority. This distinction has significant implications for the DOL’s regulatory strategy. Procedural rules grounded in § 503 remain a stable foundation, but substantive policies, including fiduciary definitions, ESG-related duties, and tobacco surcharge incentives, face greater challenge under de novo review.

The landscape of ERISA rulemaking has shifted fundamentally. As the ESG and fiduciary rule challenges, tobacco surcharge litigation, and procedural enforcement disputes demonstrate, Loper has created a new judicial environment in which courts scrutinize agency interpretations without deference. While longstanding procedural rules remain stable for now, even they are not immune from future circuit splits or Supreme Court intervention. The DOL’s ability to maintain regulatory authority, protect participants, and shape ERISA policy will depend on its willingness to adapt. This requires moving beyond Chevron -based assumptions and embracing a strategy grounded in persuasive reasoning, robust evidentiary support, and a reaffirmation of plan administrator discretion. The following section offers specific recommendations for how the DOL can recalibrate its policymaking approach to meet this new reality.

IV. Recommendations

A. Reinforce Plan Administrator Discretion Under Firestone

The most ERISA-specific opportunity for administrative stability in the post- Loper era lies in reinforcing judicial deference to plan-level fiduciary decisions under Firestone. In Firestone, the Supreme Court held that when plan documents grant discretionary authority to administrators, courts should review benefit denials under an abuse of discretion standard rather than de novo. This approach reflects trust-law principles embedded in ERISA’s statutory structure and has long served as a critical source of stability for fiduciaries navigating complex benefit determinations.

The DOL and EBSA should take proactive steps to preserve and promote this doctrine. Although Firestone applies to judicial review of private decisions rather than agency action, it creates a parallel deference framework that can offset the destabilizing effects of Loper. Specifically, the DOL should begin to issue subregulatory guidance that encourages plan sponsors to adopt clear discretionary authority clauses in plan instruments. The agency can also publish model plan language and technical FAQs explaining how judicial deference to fiduciaries operates and how it interacts with regulatory compliance.

These efforts would provide much-needed clarity to plan sponsors and reduce litigation risk for fiduciaries. Courts remain more likely to uphold fiduciary decisions when plans are structured to trigger Firestone deference, especially where the administrator can show consistency and procedural diligence. Importantly, this strategy places no new burdens on the DOL’s budget and sidesteps the challenges of rulemaking under Loper. Instead, it leverages existing judicial precedent to promote compliance and stability at the plan level—where ERISA’s protective purposes are ultimately enforced.

Finally, this approach acknowledges the broader fiscal constraints facing the DOL and the PBGC. Recent expansions of Special Financial Assistance (SFA) eligibility under the American Rescue Plan have increased the PBGC’s obligations, while the DOL continues to operate under limited enforcement resources. Guidance reinforcing plan-level discretion costs little to implement but carries significant upside in reducing the volume and stakes of future litigation.

B. Strengthen Rulemaking Under Skidmore

While Chevron is gone, Skidmore offers a potential soft landing that the DOL should consider while fulfilling its regulatory agenda. Under Skidmore, courts may still credit agency interpretations that demonstrate persuasive reasoning, technical depth, and policy consistency. In the context of ERISA, where regulatory clarity often depends on actuarial modeling and complex economic assumptions, Skidmore provides a viable pathway for the DOL to preserve its influence, but only if its rules are carefully constructed.

To strengthen its rules under Skidmore, the DOL must elevate the rigor and transparency of its notice-and-comment process. Final rules should include robust factual records, detailed economic impact analyses, and clear statutory justifications. Regulatory preambles should engage with dissenting comments, preempt likely legal challenges, and explain why certain interpretive paths were chosen over others. This level of precision will increase the persuasive force of DOL regulations and reduce the likelihood of judicial override.

Importantly, high-quality rulemaking also deters litigation by setting clear standards for compliance and by reducing the possibility of differing interpretations by courts. Under Loper, ambiguous or conclusory guidance is especially vulnerable to invalidation. In contrast, a persuasive rule backed by well-documented reasoning and supported by technical evidence is more likely to withstand de novo review. For a resource-constrained agency like the DOL, reducing the risk of remands or injunctions in a cost-efficient manner is a financial imperative. Low quality rules not only waste administrative time but also invite expensive litigation that the agency and plan participants cannot afford.

Finally, the DOL should not ignore ERISA’s structural connection to the Internal Revenue Code. Many compliance provisions, including non-discrimination rules and minimum funding standards, derive authority from the tax code and have long enjoyed interpretive consistency due to their tie to Treasury regulations. The DOL can invoke this cross-agency framework in its regulatory preambles to bolster interpretive stability and reinforce the legitimacy of overlapping standards. Courts may view such alignment favorably under Skidmore, particularly when it shows coordination among expert bodies.

C. Combine Administrative Tools to Promote Predictability

While legislative reform may eventually clarify ambiguous ERISA terms, Congress is unlikely to act quickly. Administrative action, however, is already in the works. In the interim, neither Skidmore nor Firestone alone will resolve the uncertainty left by Loper. But taken together, they may be able to form a durable foundation for DOL policymaking. The DOL should issue integrative guidance that not only clarifies its own regulatory interpretations but also frames those interpretations in harmony with Firestone -style discretion. For instance, the agency could explain how fiduciaries can implement ESG policies or rollover procedures in ways that both comply with DOL rules and retain judicial deference under Firestone.

These efforts should be coordinated through informal rulemaking, technical releases, and model plan templates. By addressing common interpretive questions, such as the standard for “sole interest” under ERISA § 404(a) and offering safe harbor procedures, the DOL can reduce the likelihood of costly litigation and provide regulated parties with a clearer compliance roadmap.

The goal is not to recreate Chevron ’s presumption of validity but to build a hybrid system where plan-level discretion and agency expertise jointly support the statute’s protective mission. In doing so, the DOL can fulfill its obligations under Title I of ERISA, safeguard the interests of plan participants, and conserve administrative resources at a moment of fiscal and legal uncertainty.

Conclusion

The fall of Chevron should force a fundamental rethinking of how ERISA is interpreted and enforced. Without the shield of deference, the DOL must now persuade courts on the strength of its reasoning alone. Yet private plan administrators remain insulated by Firestone -style discretion, creating a striking imbalance: government regulators face exacting judicial review, while private fiduciaries retain leeway in construing the very same statutory terms.

This shift presents both a challenge and an opportunity. By leaning into the judicial respect for fiduciary discretion and reviving the persuasive weight of Skidmore, the DOL can reassert its influence without relying on formal authority. Strategic subregulatory guidance, carefully developed rulemaking records, and coordinated cross-agency interpretations can help restore stability in a fractured legal landscape.

These approaches are not silver bullets. They are, however, practical. They preserve the DOL’s ability to protect participants, guide fiduciaries, and reduce litigation risks in a system that cannot wait for legislative repair.

When Judge Acker wondered whether ERISA contained “a redeeming feature,” he voiced a skepticism that still resonates. But even in the wake of Loper, that feature may yet emerge. Not through sweeping judicial doctrines, but through careful, deliberate administration.

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Endnotes

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Author

Lucian Wells

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Author

Lucian Wells

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Committees

This content was produced by:

• Comparative Administrative Law Committee