The U.S. National Labor Relations Board has decided to drop its appeal of a ruling that struck down a rule treating companies as employers of certain contract and franchise workers. The rule, known as the “joint employers” rule, would have required companies to bargain with unions representing these workers. The NLRB believes the rule complies with federal labor law but wants to further consider the issues identified in the court ruling.
The rule, issued in 2023, would have considered companies as joint employers if they have control over key working conditions such as pay, scheduling, discipline, and supervision. This replaced a Trump-era regulation that required companies to have “direct and immediate” control over workers to be considered joint employers, which was favored by business groups.
U.S. District Judge J. Campbell Barker in Texas found the rule too broad and in violation of federal labor law. The NLRB’s decision to withdraw its appeal marks a shift, as President Joe Biden had previously vetoed a measure to repeal the rule. Unions and the NLRB argue that the rule is necessary for holding companies accountable for labor law violations and ensuring they come to the bargaining table.
However, business groups and Republicans believe the rule would create confusion, disrupting franchising and contracting arrangements. The NLRB’s decision highlights the ongoing debate surrounding joint employment and the need for clarity in determining when companies are considered employers of certain workers.
Overall, this development reflects the complex and contentious nature of labor relations in the U.S. and the ongoing challenges faced by businesses, unions, and government agencies in navigating these issues. The future direction of joint employment regulations remains uncertain as stakeholders continue to debate the best approach to protect workers’ rights and ensure fair labor practices.
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