In an order issued yesterday, Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas, issued a two-week stay (through March 11) of the National Labor Relations Board’s new joint employer regulations, which were scheduled to take effect this Monday. The order came in a lawsuit brought by the U.S. Chamber of Commerce, and business and employer groups.

The original effective date of the joint employer regulations was December 26, 2023. But the NLRB extended the date to this Monday, February 26. In extending the original effective date to February 26, the Board said that the extension was “to facilitate resolution of legal challenges with respect to the rule.” The back story was that there was “pushback” from U.S. Senators and members of the House of Representatives, litigation from both organized labor and employer groups, and a U.S. Government Accountability Office conclusion that the regulations were improperly issued with less than 60 days’ notice to the Senate before the effective date, as required by the Congressional Review Act.

Litigation challenging the joint employer regulations is pending in both the Eastern District of Texas, where the extension order was issued, and the U.S. Court of Appeals for the District of Columbia Circuit. The challenges are based on the substance of the regulations and which court has subject matter jurisdiction to decide a challenge to NLRB regulations. For its part, the NLRB is asserting that only a federal appeals court, and not a U.S. District Court, has subject matter jurisdiction of the matter as an “order” of the NLRB. Some commentators have said that the U.S. Supreme Court may have to resolve at least some of these issues.

Whether the regulations will actually take effect on March 11 remains to be seen. In the meantime, employers should know that the current NLRB majority views joint employment expansively. Even without new regulations, the Board is likely to interpret the National Labor Relations Act to find joint employment whenever it can, so as to have as many employers as possible under its administrative power and thus potentially responsible for unfair labor practices and obligated to bargain with organized labor.

We will continue to track the litigation and report on noteworthy developments.

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