(USNewsMag.com) – A Texas federal judge has blocked a new National Labor Relations Board (NLRB) rule that would have allowed franchise workers to more easily form unions from going into effect.
The new rule, which was supposed to go into effect March 11th, set new standards for what is considered a joint employer during labor negotiations. The rule would change the definition of a joint employer to a company that has the ability to control, indirectly or directly, one’s conditions of employment, such as scheduling, hours, work rules, hiring, wages, or benefits.
Passed by the NLRB in 2020, the current rule says that companies, such as McDonald’s, are not considered to be joint employers to most of their employees because the employees are not employed by the parent company directly but are employed by franchisees. According to the NLRB, parent companies can avoid their legal responsibility to bargain with employees because of the way the current rule is written.
In November, the NLRB was sued in the Eastern District of Texas by several business groups, such as the U.S. Chamber of Commerce, the International Franchise Association, the American Hotel and Lodging Association, and the National Retail Federation, to stop the new rule from going into effect, arguing that it violated federal labor law. The business groups said that under the new rule, parent companies would be liable for franchisees’ workers at workplaces they don’t own.
On March 8th, U.S. District Court Judge J. Campbell Barker ruled that the new NLRB rule was “arbitrary and capricious” regarding the changes to the existing rule, blocking the rule from taking effect. He added that the new rule exceeds “the bounds of the common law” by establishing new conditions for determining whether a company is considered a joint employer.
NLRB chairman Lauren McFerran said the decision is a “disappointing setback,” adding that it is under review by the board, which will determine the next steps taken by the NLRB.
Copyright 2024, USNewsMag.com
