By Chris Farmer, NFDA General Counsel

In the wake of the U.S. Supreme Court’s ruling in the Loper Bright progeny of cases and the re-election of President Trump, the future of many actions of a Democratic-controlled Executive Branch are under careful scrutiny.

The Court’s decision in Loper Bright changed the way courts are to review a federal agency’s actions. Previously, under the Chevron case, courts were directed to defer to an agency's reasonable interpretation of an ambiguity in a law that the agency enforces. That is, if Congress was silent on an issue, the agency could fill in the gaps.

Now, courts are able to look at an agency’s actions and limit them to only those actions that are authorized by Congress. This will lead to the review of many federal administrative actions.

Corporate Transparency Act

As we have been reporting, the courts have been reviewing challenges to the Corporate Transparency Act (CTA) which requires many companies doing business in the United States to report information about the individuals who ultimately own or control them with the stated intent of curbing illicit finance.

On December 3, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction that prevented the enforcement of the CTA.

After some vacillating, the Fifth Circuit Court of Appeals has agreed to leave in place the Eastern District of Texas’s preliminary injunction pending its review of the matter. This means that, as of right now, the filing deadline, which had been moved to January 13, is off.

This is not a final ruling and is subject to change. 

Noncompete Agreements 

In August, the U.S. District Court for the Northern District of Texas held that that the FTC exceeded its statutory authority in declaring illegal agreements between employers and employees restricting their subsequent employment with competitors and vacated the rule, nationwide.

The FTC appealed this to the Fifth Circuit Court of Appeals, and it agreed that the noncompete rule should not be enforced for the time being, until the Court had a chance to rule on the matter. A decision is expected this year. As of right now, the federal ban on noncompetes is off (but state laws do differ).

It is possible, and probably likely in my opinion, that an FTC in the Trump administration could decide to abandon the rule, thus putting the state of the law back to one of a state-by-state determination as to the legality and enforceability of noncompete agreements.

The Funeral Rule

As we have been reporting, while the Funeral Rule is under review by the FTC, there have been no changes announced yet. The change in composition in the FTC will undoubtedly alter the Commission’s internal discussions, but we have no indication as yet, what the result will be.

There have been no recent judicial challenges to the Funeral Rule, and while we have discussed what our options are, we need to see what changes are made before deciding how to proceed.

What the Future Holds

The change in administration and recent federal court ruling have changed the landscape of federal administrative law. While it is hard to determine how things will be resolved in the long run as the pendulum is always swinging back and forth, I think it is fair to say that federal administrative actions will, for the time being, be more limited than in recent years. As always, we will continue to monitor and keep you updated.