Last week, in Tennessee v. EEOC, the Eighth Circuit reversed a district court’s decision and reinstated a lawsuit by 17 states (led by the Tennessee and Arkansas attorneys general (AGs)), holding that these states have standing to sue the Equal Employment Opportunity Commission (EEOC) over its regulations implementing the Pregnant­ Workers Fairness Act, 42 U.S.C. § 2000gg. This decision deserves mention because the court seemingly made it easier to demonstrate standing by finding that the “realities facing” regulated parties can demonstrate a concrete injury even without a threat of enforcement.

The act provides liability for employers who do not make “reasonable accommodations to the known limitations related to the pregnancy, childbirth, or related medical conditions” of an employee absent undue hardship to the employer. Congress tasked the EEOC with promulgating rules implementing this requirement. In one such rule, the EEOC listed several conditions as examples that “are, or may be, related medical conditions” that the employer must accommodate under the act. The states challenged this regulation as arbitrary and capricious, exceeding the EEOC’s statutory authority, and infringing on their free speech rights. They asserted one identified example expressly conflicted with each state’s current policy, but as employers, they would have to follow the EEOC’s rule. The district court dismissed the case for lack of standing, finding no injury because there is no credible threat of enforcement — the EEOC cannot bring enforcement actions against state employers. It also found that any injury could not be redressed by a judicial decision because the act (which was not challenged), rather than the regulation, imposed the requirement to reasonably accommodate the employee, and vacating the regulation would not stop an employee from asserting those rights under the act.

After denying an injunction pending appeal and expediting the case, the Eighth Circuit held that the states had standing because, as employers, they “are the object of an agency action, [so] they are injured by the imposition of new regulatory obligations.” The court did not require the states to show any “specific economic harms or whether the States faced a credible threat of enforcement.” It rejected the EEOC’s claims that certain measures contemplated by the regulations were voluntary (such as updating employment policies) and that the regulation does not “produce an injury until an employee requests” an accommodation that the state refuses to provide. The court held in part that such contentions are “inconsistent with the realities facing these regulated parties,” noting that courts presume states will follow a regulation in effect.

The Eighth Circuit’s decision has two notable takeaways as shown by other circuit precedent addressing pre-enforcement standing. First, the court’s decision rests on the formality that issuing a rule grants a regulated party standing with or without a possibility of enforcement. The court distinguished a separate case that involved a U.S. Department of Housing and Urban Development (HUD) memorandum providing new interpretation of the Fair Housing Act, directing its agencies to “fully enforce” that interpretation. Even though a school in that case challenged the memorandum as a rule, it did not have standing because the memorandum “d[id] not expose the [school] to any legal penalties for noncompliance.” Here, the Eighth Circuit found the states have standing because the EEOC’s rule suggested an example of what “may be a related medical condition” under the Pregnant Workers Fairness Act, even though there was no threat of enforcement or legal penalties for failing to comply with that example.

Second, the decision creates some tension with Eighth Circuit precedent in Iowa League of Cities v. E.P.A. where the court held parties can challenge procedural defects when an agency promulgates a rule because the party has a right to “avoid[] regulatory obligations above and beyond those that can be statutorily imposed upon them.” That holding indicates merely promulgating a rule is an insufficient injury in fact for regulated parties and that they must also show the regulation imposes obligations on them. But unlike Iowa League of Cities, EEOC’s rule interprets the statute as imposing the obligation to provide an accommodation, not the regulation — an issue the court in Iowa League of Cities says nothing about. Nonetheless, as it stands, the decision in Tennessee v. EEOC, appears to provide an automatic injury to entities that are the object of federal regulation due to unspecified practical “realities” requiring regulated parties to take any action.

As a practical matter, the case is noteworthy because it continues the upward trend of state AGs using their status as employers to challenge federal regulations. As market participants, states or even their individual offices of AG frequently must comply with federal regulations. During the Biden administration, Republican AGs used this to challenge COVID-19 vaccine mandates and various executive orders that affected employers. In one student loan forgiveness skirmish, the Office of the Missouri AG alleged that the loan forgiveness program injured its interests because the federal Public Service Loan Forgiveness Program that the office relied on to recruit and retain employees became much less attractive. This trend has continued under the Trump administration with Democratic AGs suing over National Institutes of Health (NIH) funding freezes claiming that the loss of funding injures their state universities’ ability to employ medical and research personnel. With such a favorable decision for states, the Eighth Circuit will likely see increased litigation, and state AGs will continue to play a key role influencing federal regulations impacting the workplace.

Why It Matters

The decision in Tennessee v. EEOC highlights the ongoing trend of state AGs leveraging their status as employers to contest federal mandates and sets a precedent that could influence future regulatory challenges. By affirming states are not required to show specific economic harm or a credible threat of enforcement for standing to sue, the Eighth Circuit has empowered states to more readily contest federal rules they perceive as federal overreach. This means that state AGs will continue to play a pivotal role in the judicial review of federal regulations.

Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
	Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations, as well as litigation involving state attorneys general and other state and federal governmental enforcement bodies. He has significant experience handling actions with federal agencies, including the CFPB and FTC, as well as single plaintiff and class action litigation for clients in highly regulated sectors such as financial services, health care, pharmaceutical, and education.
	Michael Yaghi Mike handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Samuel E. “Gene” Fishel Gene is a former regulator with two decades of experience who has overseen state privacy and cybersecurity regulation enforcement, led national, multistate attorneys general privacy investigations, and prosecuted computer crimes at the state and federal levels. He has served at the forefront of state attorney general and federal enforcement, and utilizes this experience to proficiently represent client interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
	Chuck Slemp Chuck advises clients on a wide range of complex issues that frequently involve government actions, including investigations, inquiries, regulatory matters, and litigation. With a distinguished background in the law and public service, he served as chief deputy attorney general of Virginia before joining the firm. In addition to overseeing the Department of Law and Division of Debt Collection, Chuck managed a team of attorneys who handle complex litigation and investigations. He also directed the attorney general’s legislative affairs and represented the attorney general in various capacities.
	Tim Bado Tim is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, where he represents corporations and individuals facing potential civil and criminal exposure. Tim’s experience in government investigations, enforcement actions, and white-collar litigation spans a number of industries, including financial services, pharmaceutical, health care, and government contracting, among others.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Blake R. Christopher Blake collaborates with clients on matters related to government contracting, investigations, and disputes. His senior-level government experience generates valuable insights and strategies for clients across a variety of industries.
	Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. He received his J.D. from the University of Illinois College of Law, where he served as a member of the Journal of Law, Technology & Policy.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Natalia Jacobo Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based on the West Coast. She routinely counsels clients on a variety of state and federal regulatory matters, with a particular emphasis on consumer protection and data privacy matters.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues.
	Dascher Pasco Dascher is an attorney within the Regulatory Investigations, Strategy, and Enforcement practice, based in the Richmond office. She joined our firm after working in personal injury and medical malpractice for a Virginia trial law firm. Dascher brings varied legal experience to the firm with strong litigation and regulatory strategy capabilities.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues.
	Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals.
	Cole White Cole is a member of the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) group. He has a decade of experience working in the attorney general community, having joined the firm from the Wyoming Office of the Attorney General, where he was assistant attorney general.
	Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department.