Bipartisan Congressional Coalition and Major US Business Groups Challenge Biden's New Joint Employer Rule

Congress Pushes Back as Lawsuits Seek to Block New Labor Rule that Hikes Business Liability for Labor Law Violations; the Rule Faces Dec. 26 Implementation Deadline

The new joint employer rule implemented by the Biden administration faces significant opposition from a coalition of trade groups and bipartisan Congressional coalition. The policy proposal, set to take effect on December 26, makes it easier for businesses to be considered co-employers of workers at their contractors and franchises, potentially exposing them to greater liability or bargaining obligations for labor violations.
Two dozen major trade associations, including the American Hospital Association and the U.S. Chamber of Commerce, backed a Congressional Review Act resolution by Senators Bill Cassidy and Joe Manchin. The resolution aims to overturn the rule, which the business trade unions argue will harm millions of workers and small businesses.
Alongside the political challenge, the Chamber of Commerce and a dozen trade groups have taken legal action against the National Labor Relations Board in an attempt to block the implementation of the joint employer rule. The lawsuit alleges that the new rule is destabilizing and unlawful, threatening billions in costs and liabilities.
The rule replaces a business-friendly standard set in place during the Trump administration, which required 'direct and immediate' control over workers for joint employment. Critics of the new rule argue it contradicts established law, broadens the scope of employer responsibilities, and fosters legal confusion.
Despite the opposition, labor groups have welcomed the new rule, stating that it provides greater protection for workers by holding large corporations accountable for actions at individual franchise locations. The rule also enables workers to negotiate directly with the corporations behind franchises, potentially simplifying union contract negotiations.