Federal Judge Vacates Contentious Joint Employer Rule

Calling the National Labor Relations Board's new joint employer rule too broad and lacking in clarity, United States District Judge J. Campbell Barker for the Eastern District of Texas on Friday vacated the contentious NRLB's new joint employer rule, a regulation that has come under fire from construction industry groups, as well as from many in the general business community.

Judge Barker had postponed the rule's effective date until March 11, prior to vacating it.

The Associated General Contractors of America, which joined the U.S. Chamber of Commerce in its lawsuit, said the rule could have undermined the contractor-subcontractor relationship by drawing contractors into union disputes without the protections normally afforded neutral third parties and possibly holding contractors responsible for a subcontractor's labor practices.
The chamber argued the regulation would have made it too easy for the NLRB to declare joint-employer status, potentially leading to companies facing liability for workers not on their payroll and work establishments they don't truly control.

For example, the chamber said, a miscategorized "joint employer," as defined by the now defunct NLRB rule, could have been forced to take part in negotiations during unionization efforts and could even have been required to participate in multi-employer union pension plans, all on behalf of other companies and their employees.

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