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March 18, 2024

Judge Vacates New NLRB Joint Employer Standard

A federal court granted business advocacy groups a significant win earlier this month when it vacated a National Labor Relations Board (NLRB) rule that sought to greatly expand the number of businesses that can be considered joint employers.

On March 8, 2024, the U.S. District Court for the Eastern District of Texas granted summary judgment in Chamber of Commerce of the United States of America v. National Labor Relations Board. In the opinion, the judge determined that the NLRB’s new standard broadly classified many aspects of work as essential terms and conditions of employment, meaning that there was effectively no situation where a company wouldn’t be considered a joint employer. “That would treat virtually every entity that contracts for labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly, at least one of the specified “essential terms and conditions of employment,” the opinion states.

“This ruling is a major win for employers and workers who don't want their business decisions micromanaged by the NLRB,” U.S. Chamber President and CEO Suzanne Clark said in a statement. “It will prevent businesses from facing new liabilities related to workplaces they don’t control, and workers they don’t actually employ. The U.S. Chamber will continue to fight back against the NLRB and its campaign to promote unionization at all costs.”

According to the U.S. Chamber of Commerce, a previously expanded version of the joint employer rule that was in place from 2015 to 2017 cost franchise businesses $33 billion per year – resulting in 376,000 lost job opportunities and 93 percent more lawsuits.


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