Federal judge delays effective date of NLRB’s joint employer rule

Tyler, TX — The National Labor Relations Board’s joint employer rule, originally set to go into effect Feb. 26, has been put on hold until at least March 11.

Judge J. Campbell Barker’s Feb. 22 order from the U.S. District Court for the Eastern District of Texas came after a hearing nine days earlier with the U.S. Chamber of Commerce and other business groups.

In the final rule published Oct. 27, NLRB changed – for the second time in less than four years – its definition of a “joint employer.” The agency overturned a 2020 rule to return to a previous definition of a joint employer: when two or more entities “share or codetermine” one or more of an employee’s essential terms and conditions of employment. Those “essential terms and conditions” include responsibility for worker safety and health. Others:

• Wages, benefits and other compensation
• Hours of work and scheduling
• Assignment of duties to be performed
• Supervision of the performance of duties
• Work rules and directions governing the manner, means and methods of the performance of duties and the grounds for discipline
• Tenure of employment, including hiring and discharge

“The 2023 rule more faithfully grounds the joint-employer standard in established common law agency principles,” NLRB stated in a press release when publishing the final rule. “In particular, the 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect.

“The common law clearly recognizes that reserved control and indirect control are relevant to the analysis. By contrast, the 2020 rule made it easier for actual joint employers to avoid a finding of joint-employer status because it set a higher threshold of ‘substantial direct and immediate control’ over essential terms of conditions of employment, which has no foundation in common law.”

NLRB Chair Lauren McFerran added that the board will still determine on a case-by-case basis whether two or more employers meet the “joint employer” standard.

House lawmakers sought to nullify the regulation with a Congressional Review Act resolution (H.J. Res. 98), which was approved by 198 Republicans and eight Democrats on Jan. 12. CRA resolutions, established as part of the Small Business Regulatory Enforcement Fairness Act of 1996, allow for the repeal of regulations within 60 legislative days of issuance.

The resolution remains stalled in the Senate and is unlikely to advance further. Should it advance past the Senate, however, it would still need President Joe Biden’s signature (or a two-thirds vote of both chambers of Congress to override a veto).