NLRB Joint Employer Rule Vacated

As employers may recall, on October 27, 2023, the National Labor Relations Board (“NLRB” or “Board”) published the long-awaited Final Rule (“New Rule”) concerning the joint-employer standard. The New Rule was supposed to take effect on December 26, 2023, but it was delayed more than once due to legal challenges. Most recently, the New Rule’s effective date was delayed to March 11, 2024; however, on March 8, 2024, a federal court judge in Texas vacated the New Rule. This means that for now, employers must continue to follow the joint employer rule issued in 2020. As a reminder, under that rule, a joint-employer relationship exists where a company exercises substantial direct and immediate control over the essential terms and conditions of another company’s employees.

In response to this decision, the Chairman of the NLRB stated that the Agency is reviewing the decision and actively considering next steps in the case, which could include appealing this decision to the Fifth Circuit Court of Appeals. There is another case concerning the New Rule that is pending before the District Court of Columbia Court of Appeals (D.C. Circuit) and there is a chance that the D.C. Circuit Court issues a contrary ruling and finds the New Rule to be lawful. An action such as this could result in the case being consolidated and handed to a separate appeals court via a lottery selection system.

The Firm will continue to monitor these cases and any actions taken by the Board related to this rule. Employers with questions about the current rule, the New Rule, or joint employment should contact Caroline Secola at csecola@fglawllc.com or any attorney at the firm.

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