A United States District Court of Texas judge has delayed the effective date of the National Labor Relations Board’s (NLRB) joint-employer liability rule until March 11, 2024. The rule, which has already been subject to delay, was scheduled to take effect on February 26, 2024. The Court issued a two-week stay on the matter to provide additional time to draft an order addressing the legal complexities at hand.
The NLRB’s new rule, which was originally issued on October 26, 2023, expands the legal test for determining whether two organizations jointly employ the same workers. The new standard changed from direct, exercised control on workers’ job terms to indirect and reserved, unexercised control. This Employers Council article provides more information.
The new rule could have a major impact on certain employers. It makes the definition of joint employer easier to meet, and employers, particularly franchisors and those who use contract labor, will have greater liability for labor law violations and bargaining obligations.
It is important to note that the NLRB will not enforce the rule on cases filed before the rule becomes effective, and it won’t be enforced retroactively. Employers Council will monitor court decisions and update members. If you are a Consulting or Enterprise member and have questions or concerns about the new definition, please contact Employers Council to discuss your situation with our Labor Relations attorneys.