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Judge delays NLRB joint-employer rule amid legal challenge

February 23, 2024

A federal judge in Texas delayed until March a US National Labor Relations Board rule change for determining joint-employer status.

US District Judge J. Campbell Barker on Thursday issued a brief order pushing back the rule’s effective date to March 11 from Feb. 26, Reuters reported. Barker, an appointee of former President Donald Trump, said “an opinion with the court’s reasoning will be issued forthwith.”

The rule dictates when two companies that conduct business together can be considered joint employers and thus liable for one another’s — or their contractors’ and franchisees’ — labor law violations.

The NLRB finalized the rule in October to replace a joint-employer rule that took effect in April 2020. The standard was originally scheduled to take effect Dec. 26, 2023; however, the NLRB in November delayed the date until Feb. 26 of this year to address legal challenges after the US Chamber of Commerce and a coalition of business groups in November 2023 sued the NLRB over the rule.

This new order delaying the measure’s effective date suggests the judge needs more time to pen an opinion that addresses the complex legal issues at play in the case, Bloomberg Law reported. Barker expressed skepticism about the rule during a Feb. 13 hearing.

The NLRB’s new joint-employer rule “seems to create a lot more uncertainty, or at least opportunity for disagreement in practice” than the narrower Trump-era measure that it’s replacing, Barker said at the hearing.

“To me, it seems like by removing some bright lines in the 2020 rule, it’s only going to increase uncertainty and litigation over the basic parameters of joint-employer status,” Barker said.