If you recall, the NLRB originally issued its proposed final rule in October 2023, which would have made it easier for companies to be considered joint employers. Under the proposed final rule, companies could be considered joint employers if they had the authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect. On March 8, 2024, however, a Texas court vacated the rule because it found, in part, that the rule was overly broad. The NLRB originally challenged the vacating of its joint employer rule, but last Friday, July 19, it withdrew its appeal. This means that, as of today, companies could be considered joint employers if they possess and exercise substantial direct and immediate control over an employee’s essential terms and conditions of employment.

Although the current litigation regarding the joint employer rule is over, in its withdrawal, the NLRB indicated that it still stood behind the legality of its final rule and would be considering options to address outstanding issues on the rule. Therefore, future litigation on the enforceability of this rule is possible.

Hawaii Employers Council will continue to monitor this situation and provide updates as necessary.  If you have any questions regarding joint employment, please contact your HR Consultant or our HR Hotline.