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NLRB Joint Employment Rule Invalidated by Texas Federal Court

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Congress passed a law in both Houses under the Congressional Review Act to reject the new National Labor Relations Board (NLRB) Joint Employer Rule, but President Biden vetoed that bill.  However, on March 8, 2024, just days before the effective date of the new rule, a district court in Texas found the rule to be arbitrary and capricious, and thus invalid.  The court went so far as to say that: "it would treat virtually every entity that contracts for labor as a joint employer," and would "likely promote labor strife rather than peace."  It said such a rule would also exceed the common law definition of a joint employer.  On May 7, 2024, the NLRB filed a notice to appeal the district court's decision to the Court of Appeals for the Fifth Circuit.  Chamber of Commerce of United States v. NLRB, 2024 U.S. Dist. LEXIS 43016 (E.D. Tex. Mar. 8, 2024), appeal filed NLRB v. Chamber of Commerce of United States, No. 24-40331 (5th Cir. May 8, 2024). The District Court declared the rule invalid and vacated the rule, which means that the prior version of the joint employer rule adopted during the Trump administration remains in effect.

In related developments, Google has become involved in the joint employer debate when a union won an election among the workers jointly employed by Google and Accenture.  Google previously lost a challenge to the joint employer finding requiring it to bargain with the union of YouTube workers hired through the staffing agency Cognizant Technology Solutions.   NLRB prosecutors are pursuing a case alleging that the University of Southern California jointly employs USC football players along with the NCAA and the PAC-12 Conference.  The NLRB claim is that the three entities violated the federal labor law by failing to treat the college football players as employees.  

It should be noted that in the case of job temps, often unions do not attempt to bring them in to the collective bargaining unit because such issues can delay the NLRB voting process under the "quickie" election rule.  Unions do not like temp workers, and commonly seek their ouster, giving employers a reason to seek support among temp agency employees should they be deemed a part of a voting unit.


This article is part of our July 2024 Newsletter. 

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