What happened?

On May 3, 2024, President Joe Biden, as expected, announced his veto of the Congress resolution to repeal the National Labor Relations Board’s “Joint Employer” rule.

What are the details?

The Congressional Review Act permits Congress to overturn agency regulations through joint resolutions, which require the President’s signature to take effect. A presidential veto can be overridden by a two-thirds vote in both legislatures, but this is unlikely for the NLRB rule due to the current political composition of Congress.

The NLRB rule, which President Biden has vetoed a resolution to repeal, outlines the conditions under which companies could be considered joint employers, including control over wages, benefits, work hours, duties, hiring, firing, discipline, supervision, direction, and working conditions. This rule makes it easier to deem two companies as joint employers, thus sharing union negotiation obligations and liability for labor violations.

• For the 7 factors contemplated by the rule.

Now that the president has vetoed the resolution, FranchiseWire reported, “it is unlikely to achieve the two-thirds majority required to override the veto” since Congress had narrowly passed the resolution in the first place.

The Board has decided to appeal the court’s decision to the Court of Appeals for the 5^th Circuit. For additional information, click here.

Business Considerations

• Employers should make sure they fully understand the implications of the “joint employer” rule.
• Employers should review their relationships with subcontractors or staffing agencies considering the “joint employer” rule.
• Employers should consult with an attorney to understand the complexity of labor laws and the potential implications of the “joint employer” rule.
• Employers should stay informed about the evolving situation, particularly the NLRB’s appeal against the federal court’s ruling to vacate the “joint employer” rule.
• Employers should prepare for possible union negotiations if they are considered a joint employer under this rule.
• Employers should assess the potential impact of this rule on their business model, especially if they are a franchise business.

Source References

• Biden vetoes congressional effort to toss NLRB joint employer rule (Industry Dive)

Resources

• NLRB Joint Employer Rule Struck Down – Again (VensureHR)
• Mayday: NLRB Joint Employer Rule Struck Down (VensureHR)
• NLRB Notice of Appeal

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.