In October 2023, the NLRB finalized its Joint Employer Rule (the Rule), which was slated to become effective February 26, 2024. The Rule would expand when franchisors, staffing company users and other placement firms with business connections to another employer’s direct employees are considered joint employers. Per the NLRB’s press release, an entity may be considered a joint employer of a group of employees if each entity has an employment relationship with the employees and they share or codetermine one or more of the employees’ essential terms and conditions of employment. The latter are defined exclusively as: (1) wages, benefits, and other compensation; (2) hours of work and scheduling; (3) the assignment of duties to be performed; (4) the supervision of the performance of duties; (5) work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline; (6) the tenure of employment, including hiring and discharge; and (7) working conditions related to the safety and health of employees.

The effective date of the Rule has since been delayed until at least March 11, 2024. A federal district judge in Texas delayed the effective date last week while the court evaluates the challenges raised to the Rule’s legitimacy. These challenges are led by the U.S. Chamber of Commerce, which is seeking to block the Rule on the grounds that it exceeds the NLRB’s authority and violates federal rulemaking procedure. Opponents of the Rule contend that, beyond the labor law violations, the impact of the Rule would be detrimental to industries relying upon temporary and contract labor. 

Whiteford’s Labor and Employment Team will continue to monitor and update on these important and evolving issues.