Today, the U.S. District Court for the Eastern District of Texas blocked a National Labor Relations Board (NLRB) rule to change the way joint-employer status is determined. In its decision, the court also reinstated a 2020 NLRB rule that protects businesses from undue liability for employees over whom they do not have direct control. In October 2023, the NLRB released a final rule that, starting on March 11, would have changed the standard the federal government uses to determine when two or more employers are jointly responsible for a shared group of workers’ terms and conditions of employment. The rule was designed to force franchisors to the negotiating table with workers they do not actually employ to increase unionization. In November, NRA, AHLA, and others filed a lawsuit challenging the rule’s legality. The court’s March 8 decision overturns the new rule and reinstates a 2020 NLRB rule that protects businesses from undue liability for employees over whom they do not have direct control. Under that policy, which had been rescinded by the Biden Administration in 2021, companies will only be seen as a joint employer if they maintain “substantial direct and immediate control” over workers’ terms and conditions of employment. View the court’s opinion and order and final judgment.
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