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U.S. District Judge J. Campbell Barker in Tyler agreed with the
challengers to the "joint employers" rule, including the U.S.
Chamber of Commerce, that it was too broad and violates federal
labor law. The rule, issued in October, had been set to take
effect on Monday.
An NLRB spokeswoman and the Chamber of Commerce did not
immediately respond to requests for comment after hours on
Friday. The NLRB is expected to appeal Barker's decision to the
New Orleans-based 5th U.S. Circuit Court of Appeals.
Industries such as manufacturing and construction rely heavily
on staffing agencies and contractors to provide workers, and
franchisers such as McDonald's, Burger King, and Dunkin' Donuts
that are not typically involved in franchisees' day-to-day
workplace issues.
The rule would treat companies as "joint employers" of contract
and franchise workers when they have control over key working
conditions such as pay, scheduling, discipline and supervision,
even if that control is indirect or not exercised.
The NLRB and many unions have said the rule is needed to ensure
that companies come to the bargaining table and can be held
liable for labor law violations when they have control over the
working conditions of these contract or franchise workers.
But business groups and many Republicans have said it would
create confusion over when businesses are considered workers'
employers, disrupting franchising and routine contracting
arrangements.
Joint employment has been one of the most contentious labor
issues for many U.S. businesses since 2015, when the NLRB during
Barack Obama's presidency adopted a standard similar to the new
one that trade groups said was unworkable and would upend the
franchising industry.
The rule issued by President Joe Biden's administration would
repeal one put in place during Donald Trump's presidency.
The U.S. Court of Appeals for the District of Columbia Circuit
in 2018 sided with a sanitation company challenging the
Obama-era standard, finding that the NLRB had not adequately
explained what kind of indirect control could lead to a finding
of joint employment. In 2020, the board adopted a rule favored
by business groups requiring companies to have "direct and
immediate" control over workers in order to be considered joint
employers.
(Reporting by Daniel Wiessner in Albany, New York; Editing by
Will Dunham, Alexia Garamfalvi and William Mallard)
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