Ruling narrows “Chevron deference,” reining in excesses and overreach of federal agencies like NLRB and FTC and their ability to put forth policies impacting franchising

WASHINGTON – The International Franchise Association (IFA) today issued the following statement in response to the U.S. Supreme Court ruling in Looper Bright Enterprises, et al. v Gina Raimondo, Secretary of Commerce, et al., regarding the “Chevron deference” impacting an agency’s interpretation of federal statutes:

“This ruling will rein in the heavy hand of government agencies, which for too long have been left unchecked in their ability to make new laws outside the federal rulemaking process and around the will of Congress,” said IFA President and CEO Matt Haller. “Members of the franchise community applaud this ruling which will extend to policies coming out of the NLRB, Labor Department and Federal Trade Commission – agencies that have recently and consistently exceeded their authority.”

The ruling involves the application of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., or the “Chevron deference,” which has allowed federal agencies, such as the National Labor Relations Board (NLRB) or Federal Trade Commission (FTC), to operate outside of existing precedent and statutory authority, expanding the ability of an Administration to make new laws through the executive branch. In recent years, federal agencies have interpreted the Chevron doctrine to expand their authority and disregard precedent where the then-current Board majority disagrees, causing a flip-flopping of policy with every Administration change. This unpredictable change in policy has been at the detriment of franchised businesses which need certainty to operate.

On July 24, 2023, IFA joined an amicus brief from the U.S. Chamber of Commerce seeking limitation of the application of the Chevron doctrine to reduce the ability of agencies like the NLRB to continually change its position.

 

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