WASHINGTON, D.C. – Today, the U.S. Chamber of Commerce and a coalition of business groups filed a lawsuit against the National Labor Relations Board (NLRB) in the U.S. District Court for the Eastern District of Texas over its new joint employer rule. The rule makes it easier for the agency to declare joint employment status exists in business relationships where it traditionally doesn’t, like franchising, contracting, and supply chains. It upends a longstanding precedent by broadening liability for employers and enabling unions to organize across companies rather than store by store. Many companies could find themselves facing liability for workers they don’t employ and workplaces they don’t actually control.
If the rule is allowed to go into effect, it will have far-reaching consequences for businesses of all sizes. A previously expanded joint employer rule was in place from 2015 to 2017 and cost franchise businesses, a majority of which are small businesses, $33 billion per year. That resulted in 376,000 lost job opportunities and led to 93% more lawsuits.
“The NLRB’s new joint employer rule is the latest in a string of actions to promote unionization at all costs, even when harmful to workers, employers, and our economy,” said Glenn Spencer, senior vice president of the U.S. Chamber of Commerce’s Employment Policy Division. “It defies common sense to say that businesses can be held liable for workers they don’t employ at workplaces they don’t own or control. The NLRB has been overturning numerous precedents at the behest of labor unions, so the Chamber is suing to rein in this out-of-control agency.”
The U.S. Chamber is suing the NLRB for violating the National Labor Relations Act and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act.
The Chamber is joined by co-plaintiffs: the American Hotel and Lodging Association, Associated Builders and Contractors, Associated General Contractors of America, Coalition for a Democratic Workplace, International Franchise Association, Longview Chamber of Commerce, National Retail Federation, National Association of Convenience Stores, Restaurant Law Center, Texas Association of Business, and Texas Restaurant Association.
The full complaint can be viewed here.