NLRB Withdraws Appeal on Joint Employer Rule, Signaling Return to Case Adjudication

The National Labor Relations Board (NLRB) has decided to abandon its efforts to revive its 2023 joint employer rule following a federal district court’s decision to strike down the regulation. On Friday, July 12th, the NLRB filed a motion with the US Court of Appeals for the Fifth Circuit, seeking dismissal of its challenge. While the NLRB continues to believe the rule is lawful, the board has stated that it will explore other options for addressing joint employer matters. The case, NLRB v. US Chamber of Commerce, 5th Cir., No. 24-40331, saw the motion for voluntary dismissal filed on July 19, 2024.

This move suggests the NLRB may revert to case adjudication for establishing the joint employment test, instead of rulemaking. The joint employer rule, vacated in March by a judge in Texas, had broadened criteria for determining when multiple companies share liability under federal labor law. A coalition led by the US Chamber of Commerce had sued to overturn it.

In response, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Service Employees International Union filed a petition advocating for a return to case adjudication. The future of the joint employer rule depends on political developments, including the Senate’s pending confirmation of NLRB Chair Lauren McFerran and the upcoming presidential election.