NLRB Withdraws Joint-Employer Appeal

On July 19, the National Labor Relations Board (NLRB) withdrew its appeal of a Texas District Court ruling that invalidated the agency’s new joint-employer rule. The rule was originally scheduled to go into effect on March 11.

In October 2023, the NLRB released a final rule that, starting on March 11, would have changed the standard the federal government uses to determine when two or more employers are jointly responsible for a shared group of workers’ terms and conditions of employment. The rule would have made it easier for the NLRB to declare joint-employment status in business relationships, and enabled unions to organize by company rather than property by property.

In November 2023, the U.S. Chamber of Commerce and other leading business associations filed a lawsuit in the U.S. District Court for the Eastern District of Texas challenging the rule’s legality. The court’s March 8 decision overturned the new rule and reinstated a 2020 NLRB rule that protects businesses from undue liability for employees over whom they do not have direct control. Under that policy, which the Biden administration rescinded in 2021, companies will be seen as a joint employer only if they maintain “substantial direct and immediate control” over workers’ terms and conditions of employment.

For a previous briefing on this issue, click here. Questions? Contact TRSA’s Vice President of Government Relations Kevin Schwalb at kschwalb@trsa.org.