Joint Employer Rulemaking Nullified by Federal Court

On March 8, the District Court for the Eastern District of Texas invalidated the NLRB’s joint employer final rule, finding it too broad and in violation of the NLRA. As Judge Barker stated, the rule “would treat virtually every entity that contracts for labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly … essential terms and conditions of employment.”

The following statement can be attributed to CDW Chair Kristen Swearingen:

“CDW applauds the District Court for recognizing what this rulemaking was – a massive expansion of the joint employer standard that would have violated both the NLRA and the common law and would have created widespread confusion throughout the economy.

“With this rule, the Board was attempting to place unions in the middle of routine business to business agreements, and the result would have been devastating for small businesses nationwide. If implemented, the rule would have destabilized labor relations and put at risk nearly every contractual relationship across the economy.

“Thankfully, Judge Barker saw through the Board’s efforts. His decision has protected American workers, businesses, and the economy from the chaos this rule would have created.”