Dive Brief:

• A coalition of business interests is suing to stop the National Labor Relations Board from finalizing a joint employer rule that triggered a barrage of criticism when it was proposed in October.
• The rule seeks to treat franchisors, general contractors and others that have a contractual relationship with other companies as joint employers for labor-law purposes if they exercise, or could exercise, control over the other companies’ employees, what the coalition calls an unwarranted expansion of liability that will destabilize long-standing practices without benefiting employees.
• “The rule replaces a clear standard, under which employers have tailored their business arrangements, with an arbitrary and uncertain standard that threatens chaos and indeterminacy in national labor relations across major industry sectors,” says the coalition, which includes the U.S. Chamber of Commerce and groups representing franchisors, contractors and other businesses that often work in contractual relationships with partners.

Dive Insight:

Critics’ biggest concern is over the proposed rule’s expansion of joint employers to include companies that have indirect or reserved control over just one aspect of the employer-employee relationship. Currently, based on how case law has evolved over the decades, a company must possess a certain amount of control over the “essential terms and conditions” of workers’ employment. That means wages, hours, duties and other terms like that.

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