Dive brief:
- Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas vacated the National Labor Relations Board’s joint employer rule Friday afternoon. The rule was supposed to go into effect on Monday.
- The new rule would be “unlawful” and “arbitrary and capricious,” Barker ruled. The court had been considering a legal challenge filed in November by the US Chamber of Commerce, along with other business groups.
- Federal agencies and employers now await a possible court decision on the U.S. Department of Labor’s independent contractor rule, which also takes effect Monday.
Diving knowledge:
Published in October, the National Labor Relations Board’s joint venturer rule updated the rules by which two entities are determined to be joint venturers. Although originally expected to take effect in December, the rule’s effective date has been delayed twice.
The rule specified that an entity can be considered a joint employer of the employees of another entity if both share or codify the essential terms and conditions of employment.
Under the now-vacated rule, essential terms and conditions of employment include wages, benefits and other compensation; working hours and schedule; assignment of functions; supervision and performance of duties; rules and work instructions that regulate the manner, means and methods of action, as well as the bases of discipline; duration of employment; and working conditions related to the safety and health of workers.
In an earlier statement from the board, NLRB Chair Lauren McFerran said the new rule would have represented a “legally correct return to common law principles” and a “practical approach” to ensuring employers comply with their obligations of negotiation under national labor relations. Act.
The US Chamber of Commerce celebrated the ruling in a statement released on Saturday
“This ruling is a huge victory for employers and workers who do not want their business decisions to be micromanaged by the NLRB,” said Suzanne P. Clark, the Chamber’s president and CEO. “It will prevent companies from facing new liabilities related to jobs they don’t control and workers who aren’t actually working.”
Meanwhile, the NLRB hinted at a possible appeal in a statement sent to HR Dive.
“The District Court’s decision to strike down the Board’s rule is a disappointing setback, but it is not the last word in our efforts to return our joint venturer standard to the common law principles that have been upheld by other courts,” McFerran said. “The Agency is reviewing the decision and actively considering next steps in this case.”
