The National Labor Relations Board has withdrawn its appeal of a ruling blocking its joint employer rule, which would have expanded shared responsibility for employees between franchisers and franchisees. The decision came after opponents of the rule, including small businesses and hotels, raised concerns about its potential impact. President Joe Biden’s administration argued that the rule would have empowered employees to protect their rights more effectively.
The NLRB requested the U.S. Court of Appeals for the Fifth Circuit to dismiss its challenge, citing a desire to explore other options for addressing joint employer issues. The ruling, set to take effect in February, defined a joint employer as a company that shares or codetermines essential terms and conditions of employment. The final rule rescinded a 2020 regulation and applied a new definition that focused on entities with control over employment terms, whether direct or indirect.
The decision to withdraw the appeal was welcomed by various stakeholders, including Senator Joe Manchin from West Virginia, who had coauthored legislation to block the rule. Small businesses, particularly in West Virginia, would have faced significant challenges under the joint employer policy. The Biden Administration’s decision to veto Manchin’s legislation signaled a shift in approach to labor relations.
AHLA, the U.S. Chamber of Commerce, and other business associations expressed relief at the NLRB’s move, highlighting the potential negative impact of the rule on the franchise business model. Kevin Carey, AHLA’s interim president and CEO, praised the decision as a victory for hoteliers across the country. The withdrawal of the appeal provides the industry with much-needed certainty and safeguards the franchise business model that has supported countless hoteliers in achieving the American Dream.
The NLRB rule was criticized for its potential to complicate relationships between franchisers, hotel owners, and employees. AHLA emphasized that the rule would have limited opportunities for franchisees and workers, while also creating challenges for unionization efforts. The organization reiterated its commitment to defending the franchise business model and standing against any future attempts by the NLRB to alter the joint employer standard.
Overall, the withdrawal of the appeal marks a significant development in the ongoing debate over joint employer regulations. It reflects a collaborative effort to protect small businesses, uphold the franchise business model, and ensure fair labor practices within the hospitality industry. The decision is likely to have far-reaching implications for employers, employees, and labor organizations moving forward.
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