Joint Effort

Last month, the U.S. District Court for the Eastern District of Texas struck down the National Labor Relations Board’s (“NLRB”) 2023 rule for determining joint employer status.

The joint employer rule determines when two businesses are legally responsible for the working conditions of the same employees. Under the 2020 rule, an entity must exercise “substantial direct and immediate control” over essential terms or conditions of employment to be considered a joint employer. Under the more pro-employee 2023 rule, a business can be a joint employer simply by having the authority to control one or more terms of employment, even if it never exercises that authority.

The Texas federal court determined that the 2023 rule was overly broad and inconsistent with the National Labor Relations Act. The NLRB is expected to appeal this ruling; however, employers can take comfort that for now, the 2020 rule is in effect.

If you have questions, call us today at 248.477.6300.