On May 3 President Joe Biden vetoed legislation that would have blocked the National Labor Relations Board from finalizing its new joint employer rule. Both the U.S. House of Representatives and Senate had previously passed a bipartisan Congressional Review Act resolution intended to block the rule.

At issue is a rule issued by the NLRB, that has simultaneously been paused by an AGC-supported legal challenge to the rule, which would allow joint employer finding based on only indirect exercise of control or mere reservation of control. Joint employer status is important because employers can be held jointly responsible for union recognition, collective bargaining and unfair labor practices.

This new standard can disrupt long-standing standards in labor law and potentially change the way the construction industry operates in detrimental ways by changing well-settled subcontracting practices in the construction industry, where critical issues such as safety and scheduling often dictate that a contractor have some say in how its subcontractors’ employees behave and have some oversight in their terms and conditions of employment.

AGC has supported legislative and legal efforts to reign in the NLRB. AGC and co-plaintiffs successfully challenged the NLRB rule in U.S. District Court in the Eastern District of Texas where we argued the NLRB exceeded authority under the National Labor Relations Act and acted arbitrarily and capriciously in violation of the Administrative Procedures Act. On March 8, the judge in Chamber of Commerce v. NLRB vacated the rule – which was scheduled to take effect on March 11 – in its entirety. The NLRB appealed the federal court decision vacating the rule on May 7 in an attempt for the rule to take effect.