Employment Law Report
NLRB Delays Effective Date of the Controversial Joint Employer Rule to February 26, 2024
By: Sharon Gold
In October 2023, the National Labor Relations Board (“NLRB”) published a controversial Final Rule addressing the Standard for Determining Joint-Employer Status under the National Labor Relations Act (“NLRA”). The Final Rule revises the standard under the NLRA to determine whether two entities are joint employers from the prior standard of two entities having substantial direct and immediate control over employees to the new standard of finding joint employer status when there is mere authority to control employees’ essential terms and conditions of employment, even if the control is not exercised, and even if the control is indirect. The Final Rule is available here.
The Final Rule only applies to the definition of Joint Employer under the NLRA, which concerns employees’ rights to form or join unions; engage in protected, concerted activities to address or improve working conditions; or refrain from engaging in these activities. The Final Rule also only applies to cases filed after the effective date. The original effective date of the Final Rule was December 26, 2023, however in late November 2023, the NLRB pushed back the effective date to February 26, 2024. The NLRB stated that the reason for delaying the effective date was “to facilitate resolution of legal challenges with respect to the rule.”
Currently there are numerous challenges pending to the Final Rule, including a case filed by the Chamber of Commerce of the United States of America along with numerous other business-related entities in federal court in Texas. It is not clear whether the Final Rule will become effective on February 26 2024 or not due to the current legal challenges. The Rule has been challenged on several grounds in the Texas case, including being arbitrary and capricious, inconsistent with the common law, and inconsistent with the NLRA because it defines employers to include those who cannot engage in meaningful collective bargaining. Employers should monitor the NLRB for updates on the Final Rule. Employers with questions should consult their Wyatt, Tarrant & Combs labor and employment counsel.
