FARRAGUT, Tenn. — October 2025 — A recent Tennessee Court of Appeals decision has raised serious legal and constitutional questions about the Town of Farragut’s proposed ordinance regulating home-based businesses.

The proposed local law, Ordinance 25-13, seeks to redefine and heavily regulate what the Town calls “customary home occupations.” Under the draft language, residents who operate small businesses from their homes would face restrictions on the number of clients who can visit, the types of vehicles that can park on their property, what materials they may store in their garages, and even how many deliveries they can receive per week.

While Town officials describe the measure as a way to “protect neighborhood character,” critics argue it amounts to government overreach, and possibly violates constitutional protections already addressed by Tennessee courts.

Court of Appeals Strikes Down Similar Law in Nashville

In August 2025, the Tennessee Court of Appeals issued a landmark opinion in Shaw & Raynor v. Metropolitan Government of Nashville & Davidson County, striking down nearly identical restrictions imposed by the City of Nashville on home-based businesses.

The plaintiffs, a music producer and a hairstylist, argued that Nashville’s ordinance unfairly prohibited clients from visiting their home studios, even though other home-based uses (like daycares and short-term rentals) were allowed to host visitors. The Court agreed, ruling that Metro failed to provide a rational basis for treating similar residential uses differently.

In its opinion, the Court concluded that zoning laws must have a “substantial relation” to public health, safety, or welfare, and cannot rely on arbitrary distinctions or speculative harms.

Legal analysts have noted that the Farragut proposal mirrors many of the same issues Nashville’s did, including vague definitions, arbitrary limits, and unclear enforcement mechanisms that depend heavily on neighbor complaints.

“A Solution in Search of a Problem”

Local residents and small business owners have voiced growing frustration with the proposed ordinance, saying it punishes entrepreneurship and invites unnecessary surveillance within neighborhoods.

“Regulating how many packages a homeowner can receive or how many clients can stop by isn’t protecting neighborhoods, it’s policing them,” said one Farragut resident who operates a home-based business. “The only way to enforce this is through citizen reporting, which pits neighbors against each other.”

Critics say the ordinance risks creating a culture of mistrust and discourages local innovation — especially at a time when more Tennesseans are working from home than ever before.

Legal and Policy Implications

If Farragut adopts the ordinance as written, it could face immediate legal challenges under the same constitutional grounds raised in the Nashville case.
The Institute for Justice, which successfully argued the Shaw & Raynor appeal, has stated that cities cannot impose unequal or unjustified burdens on home-based entrepreneurs without clear, evidence-based reasoning.

“Home-based businesses are a lifeline for thousands of families across Tennessee,” the group said in its 2025 statement following the appellate win. “Cities cannot discriminate against people simply because they work from home instead of renting a storefront.”

Community Reaction and Next Steps

The Town of Farragut Board of Mayor and Aldermen is expected to review the ordinance later this month. Public comment periods remain open, and several residents have urged the Town to reconsider or postpone adoption until a thorough legal review is completed.

Opponents of the measure argue that Farragut should learn from Nashville’s costly legal battle instead of repeating it.
“The Tennessee Court of Appeals has already spoken,” one resident said. “Municipalities can’t make up arbitrary rules that punish people for using their homes responsibly. Farragut shouldn’t be next in line for a lawsuit.”

Residents can view the proposed Ordinance 25-13 on the Town of Farragut’s website here

or read the full appellate court opinion in Shaw & Raynor v. Metropolitan Government of  Nashville here.