On July 19, the National Labor Relations Board (NLRB) formally withdrew its appeal of the Federal District Court decision that nullified the latest effort to rewrite the joint-employer rules.
The joint-employer rule is used to determine when two or more employers should be considered responsible for an individual employee. It is most often pursued in franchisor-franchisee relationships, but the latest version of the rule would have been impermissibly vague, possibly covering nearly any contractual relationship between businesses.
NACS was part of a coalition that successfully sued to nullify the rule.
While this is welcome news, and likely means the Biden Administration’s joint-employer rule is permanently nullified, it may not be the NLRB’s last move. For now, employers are back under the 2020 rule which required direct and immediate control over another employer’s worker in order to be determined a joint employer, a standard NACS supports.
However, back in June, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Service Employees International Union (SEIU) petitioned the NLRB to move to formally withdraw that 2020 rule. Should the NLRB take such an action it would mean that determinations of joint-employer status would no longer be governed by a formal rulemaking but be left to the interpretation of the Board itself and Judges on a case-by-case basis. The unions argued that would be a preferable option to continuing under the 2020 rulemaking.
NACS believes that businesses need certainty in such determinations and would likely oppose the NLRB withdrawing the 2020 rule which provides such certainty. When the rules of the road are clearly defined, businesses are able to easily comply, creating a better situation for both employers and employees.