As we previously reported, the National Labor Relations Board (“NLRB”) issued a final rule addressing the standard for determining joint-employer status under the National Labor Relations Act (“NLRA”).  Before the new rule became effective, the Chamber of Commerce of the United States brought a lawsuit in the Easter District of Texas, seeking to have the rule rescinded and replaced.  On March 8, 2024, the court ruled in favor of the Chamber of Commerce and vacated the NLRB’s new rule. 

The proposed new rule would have made it much easier for the NLRB to find there to be joint employer status which can have significant implications on employers, such joint liability for unfair labor practices and obligations to participate with labor unions in collective bargaining.  The court found that the new rule was overbroad in that it failed to create a clear standard for employers to follow.  Under the proposed rule, an employer could be deemed a joint employer if it merely had the right to exercise indirect control over an essential term or condition of employment, even if it never actually exercised that control. According to the court, that went beyond the bounds of the NLRA.  Therefore, the proposed rule is vacated which reinstates the previous rule in effect which requires substantial direct and immediate control over the terms and conditions of employment to find joint employment.

It is unclear whether the NLRB will appeal the court’s decision or if it will reintroduce the joint employer rule in a revised form.  We will continue to monitor developments and will keep you apprised of same. 

Should you have any questions or need assistance with submission process, please contact Ali Law Group.

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