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Biden Vetoes Congress: NLRB Joint Employer Rule Strikes Back

21 May

Update Applicable to:Effective date
All employersSee details below

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 5th 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


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