The Democratically-controlled U.S. Senate approved a Congressional Review Act resolution to rescind the NLRB’s joint employer rule, which will now head to the President’s desk, where it is likely to be vetoed.
Background: In October, the Board issued its final joint employer rule which established extremely broad joint employer liability for employers. While most of the attention surrounding the bill has focused on franchisees, the rule could make companies liable for the labor law violations of any third parties with which they do business (including contractors, suppliers, etc.) and provide unions more avenues for organizing workers at large employers.
A timeline of legal woes for the rule:
- The rule was immediately met with lawsuits from both the business community alleging it was overly broad and beyond the scope of the Board’s authority, and from unions alleging that it did not go far enough (ed. note: shrug!)
- In January, the House of Representatives voted on party lines to rescind the rule through a Congressional Review Act (CRA) resolution.
- (CRA resolutions only require simple majorities to pass, and if passed and signed into law, both rescind regulations and prevent similar ones from being issued in the future.)
- In response, the Board delayed implementation of the rule to the end of February.
- In February, a Texas Federal District Court Judge delayed the implementation of the rule until March 11.
- In March, that same judge permanently blocked the rule and reinstated the much more business-friendly Trump-era joint employer rule.
- In response, the Board stated that it may still enforce the rule outside of that Texas district (the legality of which is uncertain) while it considers a possible appeal of the decision.
Now, the Senate has followed the House in nixing the rule. The Senate voted 50-48 to approve the CRA resolution rescinding the rule. Notably, Democratic Senators Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV) joined Republicans in voting for the rule’s nullification.
What’s next: President Biden is already on record stating that he will veto the CRA resolution, and Congress does not have the two-thirds majority votes it needs to override that veto. Regardless, the rule remains blocked by the Texas judge, with no word yet of a possible appeal.
