NLRB Joint-Employer Rule Vacated by Court
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APPLIES TO Employers subject to the NLRA |
EFFECTIVE March 8, 2024 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
The National Labor Relations Board’s (NLRB) final rule on joint employment was set to go into effect on February 26, 2024. The final rule would have increased the number of employers found to be a joint employer based on the control of certain terms and conditions of a third party’s employees, even if the authority is merely reserved or only exercised indirectly. However, a number of business groups filed a lawsuit seeking to permanently block the final rule due to its adverse effects on the franchise model of businesses and relationships between contractors.
Originally, a Texas federal district court issued a two-week delay of the final rule to March 11, 2024 pending its ruling on the lawsuit. On March 8, 2024, the Texas court ultimately struck down the NLRB’s final rule as being over broad. This means that joint employer status will continue to be evaluated under the 2020 NLRB rule which states that employers must exercise “substantial direct and immediate control” over one or more essential terms or conditions of their employment, including wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction. “[C]ontrol is not ‘substantial’ if only exercised on a sporadic, isolated, or de minimis basis.”.
Joint-employer relationships must be individually analyzed based on their particular circumstances. The burden of proof is on the party claiming joint employer status. While this ruling essentially keeps the status quo, employers should continue to have their joint employer relationships reviewed by legal counsel for potential liability.
Action Items
- Review the NLRB FAQ about the existing rule here.
- Have joint-employer relationships reviewed by legal counsel.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase