Construction contractors and organized labor are keeping their eyes on a federal court in Texas, watching for upcoming developments in a court challenge to the Biden administration’s standard that redefines what constitutes a “joint employer.”
The National Labor Relations Board on October 27 issued a final rule supported by the Biden administration that provided a broader joint employer definition than its predecessor, which was issued in 2020 under the administration from Trump
Biden’s standard would override Trump’s 2020 version.
The new regulation was welcomed by unions, including the construction trades. But it was criticized by building contractor groups and other business organisations.
On November 9, a coalition of business organizations, which included the Associated Builders and Contractors and the Associated General Contractors of America, challenged the standard in federal court.
In a lawsuit filed in the U.S. District Court for the Eastern District of Texas, the business groups asked the court to strike down the rule, arguing that it oversteps the bounds of the National Labor Relations Act.
The regulation was supposed to take effect on December 26, 2023, but the NLRB extended its effective date to February 26.
On February 23, US District Judge J. Campbell Barker issued a stay until March 11. The action means the new rule will apply only to cases filed after the rule goes into effect.
In a statement at the time Biden’s joint employer standard was issued, AFL-CIO President Liz Shuler called the rule “an important victory for workers across the country “.
Shuler added that “when workers negotiate for fair wages and working conditions, companies should not be able to hide behind a subcontractor or staffing agency to deny us what we have rightfully earned.”
Brian Turmail, vice president of public affairs and strategic initiatives at AGC of America, told ENR via email that the new rule is important because it “unlawfully makes it easier for the agency to declare that a company is the joint employer of workers of another company”.
Turmail added: “It sets an arbitrary and uncertain standard that threatens chaos and uncertainty in business and labor relations in major industry sectors, including construction.”
