Biden Administration Will Appeal Court’s Joint Employer Ruling

The Biden administration is standing by its joint employer regulation after both the federal legislative and judicial branches took aim at it in recent months.

Specifically, President Joe Biden vetoed a Congressional Review Act resolution approved by bipartisan majorities in both the U.S. Senate and House that would have nullified the regulation.

A few days later, the National Labor Relations Board (NLRB) announced it would appeal a decision by U.S. District Judge J. Campbell Barker that agreed with challengers to rule, including the U.S. Chamber of Commerce, who had argued regulation is too broad and violates federal labor law.

The Biden administration’s joint employer regulation, which would have replaced a 2020 Trump administration rule, sought to greatly expand joint employer status under the National Labor Relation Act by stating that either possessing the authority to control one or more essential terms and conditions of employment (regardless of whether control is exercised), or exercising the power to control indirectly one or more essential terms and conditions of employment (regardless of whether the power is exercised directly), is sufficient to qualify an organization as a joint employer.

These provisions would have meant that either indirect or reserved control may stand alone as basis for the finding of a joint employer relationship, and that the existence of either — without regard to the extent of the reserved or indirect control — indicates joint employer status.

If the Biden administration challenge is successful and the regulation takes effect, these terms could entangle franchise businesses, subcontractors, and other firms, including many small businesses, in labor disputes even if those organizations have minimal or indirect control over the working conditions of another business’s employees and even if that control is never exercised. If implemented, the Biden administration rule also could make it more difficult for manufacturers and industrial metals companies to hire temporary workers, could create new disruptions in the workplace, and could exacerbate companies’ ability to respond to changing market demands, including efforts to address acute workforce needs.

Stay tuned to Connecting the Dots for updates on the lawsuit and what the eventual decision will mean for industrial metals companies.