In a move that gave hope to many business groups, a federal judge in Texas temporarily blocked a controversial new National Labor Relations Board “joint employer” rule on February 22. The new rule, which had been set to take effect on February 26, is designed to make it easier for the NLRB to label businesses joint employers of each other’s workers. The NLRB could the use that label to hold both businesses responsible for each other’s unfair labor practices. The prospect of this has been especially worrisome to businesses that work with franchise and temporary staffing arrangements, since a franchisor could be responsible for unfair labor practices committed by a franchisee and a staffing company could be responsible for unfair labor practices committed by its client.
Under the NLRB’s new rule “two or more entities may be considered joint employers of a group of employees if each entity has an employment relationship with the employees, and if the entities share or codetermine one or more of the employees’ essential terms and conditions of employment.” The NLRB plans to apply the rule by examining whether two entities each have authority to control one or more of the following for an employee or a group of employees:
- Wages, benefits, and other compensation;
- Hours of work and scheduling;
- The assignment of duties to be performed;
- The 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;
- The tenure of employment, including hiring and discharge; and
- Working conditions related to the safety and health of employees.
The judge’s ruling this week did not permanently block the new NLRB joint employer rule, and it instead simply put it on hold until March 11 while the judge considers a lawsuit filed by the US Chamber of Commerce and other business groups. That lawsuit does seek to permanently block the new rule, and its fate remains uncertain. This is the second delay for the new rule, which was originally set to take effect on December 26. 2023.
The Labor and Employment Practice Group at Frantz Ward will continue to monitor this situation closely. If you have questions about this or other labor and employment law issues, contact Brian Kelly or another member of the group.