Congress Votes to Overturn NLRB Joint Employer Rule

On April 10, the U.S. Senate voted to block the National Labor Relations Board from finalizing its new joint employer rule by advancing a bipartisan Congressional Review Act resolution in a 50-48 vote.

A rule issued by the NLRB, that has simultaneously been paused by an AGC-supported legal challenge to the rule, 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.

The Congressional Review Act (CRA) had previously passed the U.S. House of Representatives and now moves to President Biden for his signature. AGC supports the CRA legislative efforts to reign in the NLRB and is urging President Biden to sign the CRA.

Separately 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.

AGC expects the NLRB to appeal the decision.

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