Without the rule, employers “could more easily avoid liability simply by manipulating their corporate structure,” the president said Friday.
May 6, 2024 - HR Dive
Ryan Golden, Senior Reporter
President Joe Biden signs an executive order in the East Room of the White House in Washington, D.C., on Oct. 30, 2023. Biden said Friday that the right of workers to collectively bargain under federal law “is rendered futile” when they cannot do so with each of the entities who may control separate terms and conditions of employment.
With its rule, the Board seeks a return to the joint employer standard articulated in Browning-Ferris Industries nearly a decade ago. The rule states that entities may be considered joint employers of another employer’s employees if they share or codetermine essential terms and conditions of employment with the other employer.
The Congressional Review Act allows the House and Senate to pass joint resolutions which overturn agency regulations. The president must then sign such resolutions for them to take effect. Congress also may override a presidential veto of a joint resolution via a two-thirds vote in both legislatures, but this is an unlikely outcome for the NLRB rule given Congress’ political makeup.
In a statement following the Senate’s vote on the joint resolution, Joe Manchin, D-W.Va., said the rule would cause uncertainty for small businesses and franchise entities.
“If, under their brand, there are uniform standards for their products or they require hair nets be worn, they would then be found as a joint employer,” Manchin, who voted to approve, said in reference to franchise businesses specifically. “This is despite the fact that they have no responsibility or role in hiring, firing, or wage decisions for employees.”
Biden, however, said in Friday’s statement that the right of workers to collectively bargain under the NLRA “is rendered futile” when they cannot do so with each of the entities who may control separate terms and conditions of employment.
NLRB’s rule provides an exhaustive list of essential terms and conditions over which potential joint employers could possess or exercise either direct or indirect control, including: wages, benefits, hours of work, assignment of duties, hiring, discharge, discipline, supervision, direction and working conditions.
The Board has not appealed the district court’s decision vacating the rule. In March, NLRB Chairman Lauren McFerran said the agency was “reviewing the decision and actively considering next steps in this case.”
Employer-side attorneys previously told HR Dive that the agency could still pursue joint employer issues in spite of the judge’s ruling, and it could do so via separate rulemakings as well as case-based decisions on joint employer issues.