In a recent development, a federal court in Texas vacated the National Labor Relations Board’s (NLRB) “Joint Employer” rule, which was scheduled to take effect on March 11, 2024.  On March 8, 2024, the Texas court found, in part, that the NLRB’s rule was overly broad.

The NLRB’s rule would have made it easier for companies to be considered joint employers by specifying that any company that could have indirect control or could exercise control over just one essential term of employment for employees of another company are considered joint employers.  This would have expanded liability and employer-related obligations to many companies, especially those that provide contracts for labor.

The NLRB is currently reviewing the decision and has not yet announced its next steps.  For now, employers can continue to rely on the current rule in place, which focuses on whether companies share or co-exercise substantial direct and immediate control over the essential terms and conditions of employment of employees.

For more information, please visit the NLRB’s news release on March 9, 2024.