The National Labor Relations Board’s (NLRB) joint employer rule has sparked contradicting legal actions by the US Chamber of Commerce and the Service Employees International Union (SEIU) that may require a resolution from the US Supreme Court. The disagreements concern the ultimate court of jurisdiction that should preside over these issues.
A lawsuit against the NLRB’s rule was filed by a business consortium spearheaded by the US Chamber of Commerce in a Texas district court. On the other hand, the SEIU, who generally endorse the regulation, submitted a petition for review to the US Circuit Court of Appeals for the District of Columbia Circuit.
Richard Pierce, an administrative law academic at George Washington University, predicted complications around the jurisdictional ambiguity. Considering the disputed jurisdiction could potentially slow down the industry coalition’s challenge, he emphasized the importance of a swift resolution from the Supreme Court. The joint employer rule is set to be implemented from Dec. 26.
Should the D.C. Circuit serve as the sole reviewing court, the NLRB would likely benefit from a favorable circuit precedent. This court largely sanctioned a joint employer standard akin to the new rule’s test.
The Democratic majority on the NLRB broadened the criteria that necessitate a finding of two companies jointly employing contract or franchise workers beyond the direct control executed over job terms. The amended rule now also accounts for indirect and reserved, unexercised control.
Despite being rarely litigated at the NLRB, joint employment has been one of the most hotly disputed issues in labor law in the past decade. Companies are keen to avoid qualifying as joint employers as this would enforce shared liability for unfair labor practices while also necessitating union bargaining for workers that are directly hired by others.
The Eastern District of Texas was chosen by about a dozen business advocacy groups and the Chamber for its case against the joint employer rule. The selection of this district, regulated by two appointed judges from the Trump era, carries its own significance. The SEIU, in contrast, went for the D.C. Circuit for its review petition. Apart from supporting the rule, the union also wants NLRB to widen the critical job terms that a company could control to be classified as a joint employer.
The D.C. Circuit ruling in the election rule case offers “strong guidance” that rules involving issues of unfair labor practice, which includes the joint employer rule, should be assessed by the circuit court in direct review, as per an SEIU official.
Both the Texas district court and the D.C. Circuit are expected to address the jurisdictional contentions mired in these cases, particularly if the NLRB attempts to dismiss the industry groups’ lawsuit on grounds of inappropriate court filing.
Should the Texas case is taken up by the Fifth Circuit on appeal and stipulated that direct review commences at the circuit level, the business organizations could be obligated to accept the D.C. Circuit as the venue for their challenge.
Sean Marotta, an appellate attorney at Hogan Lovells and expert on the multi-circuit lottery, suggests that with the deadline evidently passed, the D.C. Circuit would oversee any other petitions filed.
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Despite the SEIU providing a reasonable argument about direct review in circuit court, a win on this issue will prove to be an “uphill battle”, says Jeffrey Lubbers, an administrative law professor at American University.
However, Anne Marie Lofaso, a former appellate lawyer at the NLRB who currently teaches labor law at West Virginia University, expects that the litigation will probably proceed in both courts without a speedy, final resolution of the jurisdictional issue.