The National Labor Relations Board (NLRB) has abandoned its proposed joint employer rules, which—as we’ve said before—would have made it easier for employees to argue that one or more corporate entities were the employer of record for an employee. From the start, the NLRB’s proposed rule was met with challenges in federal district court in Texas, which struck down the rule for reasons we need not concern ourselves with here. But, just recently, the NLRB has decided to drop its appeal of the Texas federal court’s ruling, effectively meaning that the NLRB’s joint-employer rules remain struck down.
Why the NLRB’s about-face? While we cannot be certain, it appears that the NLRB’s decision not to appeal the federal district court’s ruling is fueled by recent U.S. Supreme Court holdings limiting the amount of deference that a federal court can make towards a federal agency (which the NLRB is).
The NLRB’s decision should be welcome news for employers throughout the Nation, but the NLRB does not have the last or final say in determining whether a joint employer relationship exists by or between distinct corporate entities. To the contrary both state and other sources of federal law bear on this question. Employers are advised to consult counsel to determine the existence of a joint-employer relationship to minimize the possibility that one or more their entities will be deemed the employer of your employees.
Should you have any questions about joint employment, please contact MNK Law for additional information.
