Texas Judge Blocks NLRB’s Union Rule

A federal judge in Texas has halted a new regulation from the National Labor Relations Board (NLRB) aimed at easing union formation for millions of workers at major corporations.

The NLRB’s rule, slated to take effect Monday, aimed to revise the criteria for identifying “joint employers” in labor negotiations. As per the 2020 rule, companies like McDonald’s are exempt from joint employer status for most workers as they’re employed by franchisees. However, the new regulation sought to expand this definition, asserting joint employment if a company controls even one aspect of employment, such as wages or scheduling.

The NLRB contended that this change was essential to prevent companies from evading their obligations to negotiate with workers. Nonetheless, various business groups, including the U.S. Chamber of Commerce and the American Hotel and Lodging Association, opposed the rule, fearing disruption to established practices.

In a decision issued on Friday, U.S. District Court Judge J. Campbell Barker ruled in favor of the plaintiffs, declaring the NLRB’s rule as “contrary to law” and “arbitrary and capricious.” Barker criticized the rule for exceeding legal boundaries by introducing new criteria for determining joint employment.

The NLRB is currently reviewing the court’s ruling and deliberating its next course of action. Despite the setback, Chairman Lauren McFerran affirmed the agency’s commitment to realigning the joint-employer standard with common law principles.

The decision by the judge to block the rule has implications for both workers and employers nationwide, as it maintains the status quo in how joint employment is determined. It underscores the ongoing debate over labor regulations and the balancing act between protecting workers’ rights and maintaining business interests. This ruling is likely to fuel further discussion and legal battles in the realm of labor law, with both sides advocating for their respective positions. As the NLRB weighs its options, the outcome will shape future labor policies and the landscape of employer-employee relations in the United States.