Congress Opposes NLRB Joint Employer Rule

Last fall, the National Labor Relations Board published a new rule that expanded the definition of joint employers under federal labor law. The NLRB made it easier for a business to be considered a joint employer, which imposes certain bargaining obligations. Under the previous rule, joint employer status had required “substantial direct and immediate control” over essential terms and conditions of employment. The NLRB tried to align the new rule more closely with traditional agency principles. It considers an employer’s authority to control essential terms and conditions, regardless of whether this control is actually exercised or whether the exercise of control is direct or indirect.

Both chambers of Congress have opposed the new rule. Shortly after its publication, two members of the House of Representatives and two Senators triggered a process for overturning it under the Congressional Review Act. The CRA allows Congress to prevent an agency rulemaking from taking effect by issuing a resolution of disapproval. If the resolution passes in both chambers, the President will review it.

In January, the House of Representatives voted 206-177 in favor of the resolution of disapproval. The Senate then voted 50-48 in favor of the resolution last week. This will send the resolution to the desk of President Joseph Biden. In a statement of administration policy, the Executive Office of the President previously indicated that Biden would veto the resolution. If he does, Congress could override the veto only with a two-thirds vote in each chamber.

The resolution is not the only challenge faced by the new rule. Last month, a federal judge in Texas struck down (“vacated”) the rule as contrary to law and “arbitrary and capricious.” The NLRB thus will need to fight for its new view of joint employer status in the courts as well as the political process.

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