Contractor chaos | NLRB 'joint employer' rule struck down in last-minute twist to contract & franchise worker saga

A federal court has struck down the “joint employers” rule that would have expanded the scope of employers required to bargain with contract and franchise workers.

The decision was made by a federal judge in Texas on Friday, with the expanded rule announced by the National Labor Relations Board (NLRB) in October 2023 set to come into effect on Monday, March 11.

Under the expansion, dubbed the “2023 rule”, companies using contract or franchise workers would have been deemed "joint employers" even if they did not have direct control over working conditions such as wages, benefits, hours of work, discharge, and discipline.

Companies such as Google which use contractors provided by third-party staffing agencies, or franchisors such as McDonald’s or Taco Bell, would likely have been liable for the conditions of workers they did not directly hire, including negotiating with unions representing the workers.