Federal Court Blocks NLRB Joint Employer Rule, Reinstates Trump-Era Rule

March 12, 2024

What's New

A federal trial court has vacated the controversial new NLRB joint employer rule that had been scheduled to take effect March 11, 2024, and restored the 2020 version of the rule.

On March 8, 2024, the U.S. District Court for the Eastern District of Texas ruled in Chamber of Commerce of the U.S.A. v. National Labor Relations Board that the regulation issued last year was overly broad. The court said the discarded rule would have deemed an entity a joint employer merely because it has the right to exercise indirect control over one essential employment term. As a result, “virtually every entity that contracts for labor” would have been a joint employer because “virtually every contract for third-party labor has terms that impact, at least indirectly, at least one of the ‘essential terms and conditions of employment’” specified in the 2023 rule.

What It Means

The 2020 rule reinstated by the court makes it harder to find that an entity is a joint employer. This is helpful to businesses because a joint employer may be compelled to bargain with another employer’s employees, and the two employers would face joint liability for any alleged violations of the National Labor Relations Act.

The NLRB has not indicated whether it intends to appeal the district court’s ruling, although we assume that it will. Meanwhile, another lawsuit regarding the 2023 rule is pending in the U.S. Court of Appeals for the D.C. Circuit. [Service Employees International Union v. NLRB, D.C. Cir. (petition filed November 6, 2023)]

What You Should Do

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Federal Court Blocks NLRB Joint Employer Rule, Reinstates Trump-Era Rule

Mar 12, 2024 – A federal court has vacated the NLRB's 2023 joint employer rule, restoring the 2020 version. The court ruled the 2023 rule was too broad, which benefits businesses by making it harder to establish joint employer status.

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Federal Court Blocks Controversial NLRB Joint Employer Rule, Reinstates Trump-Era Rule

Mar 12, 2024 – A federal district court has ruled that a regulation issued last year by the Biden-appointed NLRB majority regarding whether two entities can be considered “joint” employers exceeds common law limits and cannot be enforced.

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Jul 17, 2023 – The Biden-era NLRB has issued a ruling that will make it more likely that a worker will be considered an employee for purposes of the National Labor Relations Act.

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