NLRB’s Joint Employer Rule Delayed Two Weeks

A district court judge in Texas delayed the effective date of the National Labor Relations Board’s (NLRB’s) joint employer rule two weeks, pushing it from Feb. 26 to March 11. We’ve gathered articles on the news from SHRM Online and other media outlets.

New Rule’s Broad Standard

Under the rule, companies would be considered joint employers of contract and franchise workers and required to bargain with unions when they have control over key working conditions such as pay, scheduling, discipline and supervision, even if control is indirect or not exercised. In delaying the rule, the court stated, “An opinion with the court’s reasoning will be issued forthwith.” The U.S. Chamber of Commerce and other business groups brought the lawsuit against the NLRB, claiming the rule violates federal law and would disrupt numerous industries that rely on temporary and contract labor.

 (Reuters)

Possible Effects of New Rule

The current test of whether companies are joint employers, set by a Trump-era rule, considers direct and immediate control over essential terms and conditions of employment. Business advocates challenging the new rule warn that its broader standard could upend the franchise industry and disrupt business-to-business arrangements for outsourced labor.

(Bloomberg)

New Rule Had Already Been Delayed

The NLRB already had delayed its joint employer rule, which originally was set to take effect Dec. 26, 2023, to Feb. 26. It made that announcement last year after the Government Accountability Office determined that the NLRB’s effective date was in violation of the Congressional Review Act because the U.S. Senate received the rule on Oct. 30.

(SHRM Online)

House Passed Measure to Repeal Rule

A proposal to overturn the rule passed the U.S. House of Representatives in January and is pending in the Senate. President Joe Biden has said he would veto the resolution if it passes both houses of Congress.

(Reuters and SHRM Online)

Business Policy Considerations

​A business’s response to the NLRB’s new joint employer rule, if it takes effect, may boil down to one question: whether the business would ever need to control another employer’s workers. If the business doesn’t foresee the need to control them, changes to its contracts, policies and practices may be in order, so that there isn't a joint employer relationship. However, if the business needs to control another employer’s workers and is resigned to the possibility of being a joint employer, no changes may be needed.
(SHRM Online)