iUpdate: On March 8, 2024, the Eastern District of Texas granted summary judgment in favor of the Chamber of Commerce and struck down the NLRB’s new final joint employer rule. The opinion conducts a thorough review of the history of the joint employer standard and ultimately concludes that the Final Rule is contrary to the common law. The opinion critiques the Board’s rulemaking stating they failed to adequately address the disruptive effects of the new rule, resolve ambiguities, or explain how it will not cause piece-meal bargaining. The opinion then leaves the previous rule from 2020 in place which requires an entity to “possess and exercise such substantial direct and immediate control over one or more essential terms or conditions” of employment to be considered an employer. The NLRB is likely to appeal and we will continue to monitor further developments. Our previous post discusses the challenge and legal proceedings before the Eastern District of Texas.
