What happened?

On March 8, 2024, U.S. District Judge J. Campbell Barker of the Eastern District of Texas vacated the National Labor Relations Board’s joint-employer status and the Board’s rescission of the 2020 joint-employer rule.

What are the details?

At the final moment, a Texas Judge vacated the awaited and feared Joint Employer Rule which made it easier for 2 entities to be employers and face the burden of joint employment.

For now, the previous rule remains (“2020 Rule”), but it is expected for the agency to continue the battle until a final decision is made, either resurrecting the rule or letting it rest in peace. 

Complicating matters further, the SEIU union has filed a lawsuit in the liberal Washington, D.C., federal court system, arguing that the rule does not go far enough. We may see a contrary order from a federal court clearing the rule, which could lead to the case being consolidated and handed to a separate appeals court via a lottery selection system, and eventually finding its way up to the U.S. Supreme Court.

Business Considerations

• Although vacated, you should continue to monitor the situation until a final decision is reached, either waiting (as expected) for the NLRB to appeal the decision or await a “revised” Joint-Employer rule.

Resources

• NLRB Official Press Release: NLRB’s Joint-Employer Rule Vacated by U.S. District Judge
• NLRB Joint Employer Status Rule (Vacated)
• U.S. District Court Eastern District of Texas, Case No. No. 6:23-cv-00553, Chamber of Commerce of the United States of America Vs. National Labor Relations Board

Source References

• Controversial Joint Employer Rule Struck Down Just Before Taking Effect: Your Blueprint For Navigating Months Ahead (Fisher & Phillips LLP.)
• NLRB: Board Issues Final Rule on Joint-Employer Status (VensureHR)
• Federal Court Vacates NLRB Joint Employer Rule, Restores 2020 “Substantial Direct and Immediate Control” Standard (Littler Mendelson P.C.)

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