The National Labor Relations Board (NLRB) has postponed the effective date of its controversial new joint employer rule until February 26, 2024, two months later than the originally announced effective date of December 26, 2023.
The Board said it is delaying the rule’s implementation “to facilitate resolution of legal challenges.” Two lawsuits have been filed to challenge the rule—one by the Service Employees International Union (SEIU) in the U.S. Court of Appeals for the District of Columbia Circuit, and another by a business coalition in the U.S. District Court for the Eastern District of Texas.
In the case pending in Texas, a coalition including the International Franchise Association and the National Retail Federation asserts that the rule will destroy the franchise business model. They argue that the new rule ignores widely accepted common-law standards for measuring the scope of employment relationships and erases distinctions between contractors and employers.
In addition to these lawsuits, House and Senate legislators opposed to the rule have introduced “Joint Resolutions of Disapproval” pursuant to the Congressional Review Act.