Washington — President Joe Biden has vetoed a Congressional Review Act resolution intended to repeal the National Labor Relations Board’s “joint employer” rule, which remains in legal limbo.
The Senate passed H.J. Res. 98 with a 50-48 vote on April 10, after the House did so with a 206-177 vote on Jan. 12.
“The NLRB’s rule would prevent companies from evading their bargaining obligations or liability when they control a worker’s working condition – even if they reserve such control or exercise it indirectly through a subcontractor or other intermediary,” Biden writes in a May 3 veto message to the House. “If multiple companies control the terms and conditions of employment, then the right to organize is rendered futile whenever the workers cannot bargain collectively with each of those employers.
“Without the NLRB’s rule, companies could more easily avoid liability simply by manipulating their corporate structure, like hiding behind subcontractors or staffing agencies.”
Judge J. Campbell Barker from the U.S. District Court for the Eastern District of Texas struck down the joint employer rule on March 8, stating it “would treat virtually every entity that contracts for labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly, at least one of the specified ‘essential terms and conditions of employment.’”
NLRB Chair Lauren McFerran responded in a March 9 statement: “The District Court’s decision to vacate the board’s rule is a disappointing setback, but is not the last word on our efforts to return our joint-employer standard to the common law principles that have been endorsed by other courts. The agency is reviewing the decision and actively considering next steps in this case.”
The joint employer rule was originally set to go into effect Feb. 26. Published Oct. 27, it changed – for the second time in less than four years – NLRB’s definition of a “joint employer.”
The rule also overturned the agency’s 2020 rule to return to a previous definition of a joint employer: when two or more entities “share or codetermine” one or more of an employee’s essential terms and conditions of employment. Those “essential terms and conditions” include responsibility for worker safety and health. Others:
- Wages, benefits and other compensation
- Hours of work and scheduling
- Assignment of duties to be performed
- Supervision of the performance of duties
- Work rules and directions governing the manner, means and methods of the performance of duties and the grounds for discipline
- Tenure of employment, including hiring and discharge
“The 2023 rule more faithfully grounds the joint employer standard in established common law agency principles,” NLRB stated in a press release when it published the final rule. “In particular, the 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect.
“The common law clearly recognizes that reserved control and indirect control are relevant to the analysis. By contrast, the 2020 rule made it easier for actual joint employers to avoid a finding of joint employer status because it set a higher threshold of ‘substantial direct and immediate control’ over essential terms of conditions of employment, which has no foundation in common law.”
