According to a Bloomberg report, a federal judge in Texas invalidated the National Labor Relations Board’s (NLRB) rule that broadened the criteria for determining when companies are considered joint employers of workers, sharing liability and obligations under federal labor law.
The rule, which was supposed to start on March 11, would have expanded the types of control over employment conditions that could lead to a joint employer finding. Judge J. Campbell Barker, appointed by Trump, made the decision after a lawsuit by the US Chamber of Commerce and other business groups.
Barker declared the rule invalid because it would treat some companies as employers of contract or franchise workers even though they lacked any meaningful control over their working conditions.
This ruling, which could significantly impact the franchising sector and business-to-business agreements for contract labor, is expected to be appealed to the US Court of Appeals for the Fifth Circuit, known for its conservative judgments.
Another independent contractor rule promulgated by the U.S. Department of Labor went into effect on March 11, although it still faces court challenges.
