D.C. Circuit Court Agrees to Stay Lawsuit Regarding Joint Employer Rule

This is a significant procedural win in the fight against the NLRB’s rule.

June 11, 2024

The D.C. Circuit Court of Appeals has agreed to stay a lawsuit regarding the National Labor Relations Board’s (NLRB) Joint Employer Rule. The case was filed in the D.C. Circuit by the Service Employees International Union (SEIU) as a counter to an earlier suit filed by NACS and a coalition of trade associations in federal court in Texas.

To see the complaint filed by NACS, the Chamber of Commerce and other business groups, click here.

The Texas court struck down the NLRB rule, but the SEIU in its case argued that any challenges to federal regulations should be brought in the D.C. Circuit rather than various district courts. The coalition, which won in Texas, also filed a motion to dismiss the D.C. Circuit case after the Texas court acted.

The NLRB filed a motion to appeal the Texas court’s decision in the 5th Circuit Court of Appeals. That provided an opening for NACS and other litigants to seek to put the D.C. Circuit Court case on hold pending the outcome in the 5th Circuit. The D.C. Circuit granted that request.

This is a significant procedural win for NACS’ coalition fighting the NRLB rule. In part, it could be seen as an indication that the D.C. Circuit doesn’t put much stock in the SEIU’s argument that all such challenges should be restricted to the D.C. Circuit.

The focus is now entirely on the appeal in the 5th Circuit. The timeline for action in that case is not yet laid out. The same coalition that prevailed in the Texas District Court will continue to argue that the rule is impermissibly broad and that the NLRB overstepped its statutory authority with it.

Once that decision has been rendered, the path forward in the D.C. Circuit case will come back into focus. Once the 5th Circuit makes their rulings, then the parties to the D.C. Circuit case will have 30 days to file motions on how that case should proceed. It is possible that should the coalitions arguments win again, the NLRB could attempt to appeal to the U.S. Supreme Court. Should they take that action, the D.C. Circuit case could be further delayed.

For now, the Texas District Court decision invalidating the rule remains in effect pending the current appeal.