The U.S. Chamber of Commerce, which led a group of business groups challenging the rule, welcomed the ruling. “This will prevent companies from facing new liabilities related to workplaces they do not control and workers they do not actually employ,” Suzanne P. Clark, executive director of the chamber, said in a statement.
President Biden’s appointee to the Labor Committee, Lauren McFerran, said in a statement that the ruling was “a disappointing setback” but “not the final word” on the common employer standard. If the board appeals the ruling, the case would be sent to the conservative U.S. Court of Appeals for the Fifth Circuit. The unemployment agency pushed to move the case to Washington, but Judge Barker denied that request.
The controversial rule, passed in October by the Labor Committee’s Democratic majority, would classify a parent company as a joint employer if it has control – directly or indirectly – over even one term of employment. The current standard, adopted in 2020 when the board was led by Republicans, classifies a company as a joint employer only if it exercises direct control over employees.
For example, nurses hired through a staffing agency may work in a hospital that sets their hours but does not directly determine their salary. If these nurses try to unionize, they could argue that the hospital is indirectly setting their salary based on contracting compensation levels. Under the rule issued in October, the hospital would likely be considered a co-employer, but under the current standard it would be easier to argue that responsibility lies only with the staffing agency that signs the nurses’ paychecks.
The new rule “would treat virtually any entity that enters into employment contracts as a joint employer, since virtually every third-party labor contract contains terms that have at least an indirect impact on at least one of the specified ‘essential terms and conditions of employment,’” Judge Barker wrote in his decision.
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2024-03-11 20:27:39
www.nytimes.com
