BOGART THAT JOINT (EMPLOYER): A federal judge in Texas on Friday kneecapped the National Labor Relations Board from implementing its stricter joint-employment standard, a major blow to one of the agency’s biggest regulatory moves under the Biden administration. The two-step test at the heart of the NLRB’s rule is inherently flawed, Judge J. Campbell Barker wrote in his 31-page decision. That framework involves determining whether a business qualifies as a “common-law employer” and then assessing whether it holds control over one or more “essential terms and conditions” of a worker’s job — even if that authority is indirect or not actually exercised. “[T]he Board has not been able to come up with any example of an entity satisfying step one but not step two,” Barker, a Trump appointee who previously blocked the Biden administration’s Covid-era federal eviction ban. The NLRB tried unsuccessfully to get Barker to transfer the case to Washington, D.C., where the agency is facing a separate challenge to the rule filed by the labor union SEIU. Business groups brought the lawsuit, arguing that the NLRB’s expansive definition had the potential to expose broad swaths of employers to liability for labor law violations committed by contractors or franchisees. The NLRB acknowledged that the rule was intended to be defined broadly. But Barker sided with arguments that the agency went too far to that end, stating that the new test “would treat virtually every entity that contracts for a labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly, at least one of the specified ‘essential terms and conditions of employment.’” NLRB Chair Lauren McFerran “is reviewing the decision and actively considering next steps.” “The District Court’s decision to vacate the Board’s rule is a disappointing setback, but is not the last word on our efforts to return our joint-employer standard to the common law principles that have been endorsed by other courts," she said in a statement. The International Franchise Association, whose membership includes big-name fast food sellers and has been one of the most vocal critics of the joint employer standard, called on the Senate to vote to permanently overturn the rule via the Congressional Review Act. The House did just that earlier this year, and the Senate companion has the backing of Sen. Joe Manchin (D-W.Va.), giving it a high chance of passing. “Elected officials on both sides of the aisle talk a big game about standing up for small businesses, and now the U.S. Senate can act on those promises by putting the bipartisan CRA resolution on President Biden’s desk,” IFA President Matt Haller said in a statement. The White House has nevertheless said that President Joe Biden would veto the measure if it reaches his desk, though that of course was before Barker’s decision complicated matters. "This ruling is a major win for employers and workers who don't want their business decisions micromanaged by the NLRB,” U.S. Chamber of Commerce President Suzanne Clark said in a release following the decision. GOOD MORNING. It’s Monday, March 11. Welcome back to Morning Shift, your go-to tipsheet on labor and employment-related immigration. The forces of light have once again prevailed over darkness. Send feedback, tips and exclusives to nniedzwiadek@politico.com and gyarrow@politico.com. Follow us on X, formerly known as Twitter, at @NickNiedz and @YarrowGrace.
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