Status
On March 8, 2024, in a victory for ABC, a federal judge in the U.S. District Court for the Eastern District of Texas vacated the 2023 National Labor Relations Board’s joint employer rule and the Board’s rescission of the preexisting ABC-supported 2020 rule. This means the 2020 NLRB final rule remains in effect, which provides clear criteria for companies to apply when determining joint-employer status under the National Labor Relations Act. The NLRB filed a notice of appeal on May 7, 2024, in the U.S. Court of Appeals for the Fifth Circuit.
Shortly after the court’s decision, on April 10, the U.S. Senate passed H.J. Res 98, the Joint Employer Congressional Review Act resolution of disapproval, in a 50-48 vote. ABC sent a key vote letter to senators ahead of the vote urging them to support the resolution, which would nullify the final rule. The Senate’s action comes two months after the U.S. House of Representatives passed H.J. Res 98 in a 206-177 vote, with eight Democrats supporting. Although President Joe Biden vetoed the resolution, passage in the House and Senate sends a strong message to the administration as they continue to implement harmful labor policies. Read ABC’s statement criticizing President Biden’s veto.
On Nov. 9, 2023, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s final rule for violating the NLRA and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act. The 2023 final rule rescinded the ABC-supported 2020 NLRB joint employer final rule.
Prior to the issuance of the joint employer final rule, Sen. Roger Marshall, R-Kan., and Rep. James Comer, R-Ky., introduced the Save Local Business Act (H.R. 2826/S. 1261) on April 25, 2023. This ABC-supported the legislation, which would make clear that an employer may be considered a joint employer in relation to an employee only if the employer directly, actually and immediately exercises significant control over the essential terms and conditions of employment.
Desired Outcome
ABC is pleased the court blocked the NLRB’s radical and overbroad joint employer standard, which would have disrupted long-established, efficient operational processes followed by construction service providers who work together to build America.
Under the 2023 final rule, contractors would be vulnerable to increased liability and risk, making them less likely to hire subcontractors, most of whom are small businesses. The rule clearly would have had a harmful effect on a significant segment of the construction industry: small businesses.
By reinstating the 2020 final rule, contractors will be better able to work and coordinate with multiple employers without fear of being unexpectedly and unfairly found to be joint employers.