A Texas federal court blocked a proposed regulation by the National Labor Relations Board (NLRB) to ease employees' creation of unions at large corporations. On Monday, Mar. 11, the new rule was supposed to take effect.
Proposed Rule Modification
According to ABC News, NLRB's proposed rule would have established new criteria for identifying whether two businesses are "joint employers" for labor talks.
For instance, since most McDonald's employees are hired directly by franchisees, the current NLRB rule does not view the company as a joint employer of these people. However, under the proposed regulation change, businesses might be regarded as joint employers if they could directly or indirectly influence one or more aspects of an employee's work condition.
Wages and benefits, scheduling and work hours, job responsibilities, job regulations, and hiring are all examples of these work conditions.
The NLRB justified its proposal by saying that the present regulation only allows employers to skirt their legal obligation to negotiate with employees.
Corporations vs. NLRB
Last November, the National Retail Federation, the International Franchise Association, the American Hotel and Lodging Association, and the United States Chamber of Commerce were among the business organizations that took legal action by suing the NLRB in federal court in the Eastern District of Texas to halt the proposed rule.
Their main argument was that the new regulation would contradict previous rulings and hold businesses accountable for employees who work for them in locations they do not control.
On Friday, March 8, US District Court Judge J. Campbell Barker granted the plaintiffs' petition for summary judgment. Barker ruled that the NLRB's suggested regulation would be "arbitrary and capricious" and "contrary to law" about the current rule.
According to Barker, the new regulation from the NRLB goes beyond what is considered "the bounds of common law" since it sets out an array of additional criteria for determining whether a corporation qualifies as a joint employer.
NRLB said it looks into the court's judgment and evaluates its future moves.
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