NACS, the U.S. Chamber of Commerce and a coalition of business advocacy groups filed a lawsuit against the National Labor Relations Board (NLRB) in the U.S. District Court for the Eastern District of Texas over its new joint employer rule for violating the National Labor Relations Act and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act.
The new rule rescinds the 2020 joint employer measure and makes it easier for companies to qualify as joint employers, including in franchising, contracting and supply chains. The rule broadens liability for employers and enables unions to organize across companies, rather than store by store.
According to the press release, “If the rule is allowed to go into effect, it will have far-reaching consequences for businesses of all sizes. A previously expanded joint employer rule was in place from 2015 to 2017 and cost franchise businesses, a majority of which are small businesses, $33 billion per year. That resulted in 376,000 lost job opportunities and led to 93% more lawsuits.”
“The NLRB’s new joint employer rule is the latest in a string of actions to promote unionization at all costs, even when harmful to workers, employers and our economy,” said Glenn Spencer, senior vice president of the U.S. Chamber of Commerce’s Employment Policy Division. “It defies common sense to say that businesses can be held liable for workers they don’t employ at workplaces they don’t own or control. The NLRB has been overturning numerous precedents at the behest of labor unions, so the Chamber is suing to rein in this out-of-control agency.”
Some lawmakers also disagreed with the new rule, reported Bloomberg Law. Democratic Sen. Joe Manchin of West Virginia and a group of Republicans introduced a bicameral Congressional Review Act resolution to kill the rule.
Other business groups that joined the suit include the American Hotel and Lodging Association, Associated Builders and Contractors, Associated General Contractors of America, Coalition for a Democratic Workplace, International Franchise Association, Longview Chamber of Commerce, National Retail Federation, Restaurant Law Center, Texas Association of Business and Texas Restaurant Association.
The full complaint can be viewed here.
On Tuesday, November 14, at 3 p.m. EST, the NACS government relations team and labor counsels Fisher & Phillips will host a webinar to explore what challenges convenience retailers may face with the new NLRB Joint Employer rule, which goes into effect on December 16. Register for a spot here.