Administrative Deference in Colorado

The following is an edited excerpt from an article by Justice Hart in the Harvard Journal of Law & Public Policy. 

When it comes to interpreting agency decisions, the Colorado Supreme Court has described its position on deference to the state’s administrative agencies in varied and sometimes inconsistent formulations, sometimes even within the same opinion.

It was only in 2021, however, that the Colorado Supreme Court was asked directly to take a position on whether the state aligned its law with federal law on the relationship between courts and administrative agencies. The ask came in a wage claim dispute, Nieto v. Clark’s Market, and the court declined to adopt federal law on administrative deference. 

In Nieto, the Colorado Supreme Court faced the question of how to interpret the provisions of the Colorado Wage Claim Act related to employer-provided vacation pay. The case required the court to reconcile several different provisions of the statute and in particular to determine whether they should be read together to create a separate “vesting” requirement for earned vacation pay. It also forced the court to confront directly what kind of deference it should accord the interpretation of the statute promulgated by the Colorado Department of Labor and Employment’s Division of Labor Standards and Statistics, the state agency responsible for enforcing the Wage Claim Act. 

The question was presented to the court in the context of Carmen Nieto’s discharge from Clark’s Market in 2017 after her eight-and- a-half years of employment by the store. During her employment, Nieto earned vacation pay in accordance with the policy in the Clark’s Market employee handbook. That policy includes a clause forfeiting unused vacation pay upon separation.

In light of this forfeiture clause, Clark’s did not include Nieto’s earned but unused vacation pay in her final paycheck, and it refused her written demand for payment. Nieto then sued Clark’s Market for withholding her vacation pay.

Clark’s Market moved to dismiss Nieto’s complaint for failure to state a claim, arguing that the terms of Nieto’s employment. agreement forfeited her earned vacation pay because she was terminated, so she had no right to that pay. The trial court granted the motion, reasoning that the Wage Claim Act “clearly and unambiguously gives employers the right to enter into agreements with its employees regarding vacation pay,” and the Colorado Court of Appeals affirmed that decision.

But the Colorado Supreme Court reversed the court of appeals, concluding that the language of the Wage Claim Act was ambiguous and thus turned to other interpretive aids for guidance. In National Cable & Telecommunications Association v. Brand X Internet Services, the U.S. Supreme Court held that that the federal Administrative Procedure Act permits a federal agency to abrogate a court’s prior interpretation of an ambiguous statute. 

But the Colorado Supreme Court declined Nieto’s invitation to adopt Brand X deference for the Colorado Administrative Procedure Act. Indeed, the court went further, explaining that “just as we decline to follow Brand X, we are unwilling to adopt a rigid approach to agency deference that would require courts to defer to a reasonable agency interpretation of an ambiguous statute even if a better interpretation is available.”

So, what are the indicia of agency interpretation that might give it “the power to persuade?” Examining the state’s previous rulings on deference, a couple of through lines emerge. First, when an agency is actually exercising some particular expertise in its interpretation, courts are more likely to say they defer to that interpretation. Second, when agency interpretation has been inconsistent, it is very unlikely to receive deference. A subsequent Colorado Supreme Court case, Gomez v. JP Trucking, suggests some other indicia: thoroughness, consideration of extensive feedback, and reasoning that strikes the court as valid.

These indicators, and even the notion of “the power to persuade,” strike me as quite inconsistent with the concept of “deference.” The dictionary defines deference as “respect and esteem due a superior or an elder.” Black’s Law Dictionary explains that to “defer” is to “yield to the opinion of.” Both Gomez and Nieto employed the language of persuasion in discussing the significance of the relevant agency’s statutory interpretation. In neither case was there a suggestion that the agency possessed special expertise, so that may be an area in which Colorado courts will continue to truly defer — to recognize that “in some circumstances agencies [are] more competent than courts to make these determinations.” Otherwise, Colorado appears to be charting the course set by the U.S. Supreme Court almost 80 years ago in Skidmore v. Swift & Co., where it explained that agency interpretations, “while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.” Like the Court in Skidmore, Colorado’s review of agency interpretation — not quite deference — considers “the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”

 Justice Melissa Hart is a justice on the Colorado Supreme Court. This piece is an edited excerpt of her essay “Administrative Deference in Colorado” in the Harvard Journal of Law & Public Policy.