Federal Judge Rules Against Joint Employer Rule

On March 8, the District Court for the Eastern District of Texas issued a ruling that invalidates the NLRB’s joint employer final rule. The ruling finds that the joint employer rule is overly broad and violates the National Labor Relations Act. The judge wrote that the rule “would treat virtually every entity that contracts for labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly… essential terms and conditions of employment.”

The ruling effectively returns policy back to the traditional joint employer standard which requires direct and immediate control over workers’ terms and conditions of employment. The NLRB is expected to appeal the ruling.