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Biden DOL Asks 2nd Cir. to Delay Appeal of Joint Employer Ruling

March 31, 2021, 6:15 PM

The Biden administration asked a federal appellate court to postpone a case over the Trump-era joint employment rule to allow the U.S. Labor Department time to rescind the business-friendly regulation.

The request, submitted to the U.S. Court of Appeals for the Second Circuit on Wednesday, follows up on DOL’s March 11 proposal to withdraw the Trump administration’s final rule, which advanced a more narrow interpretation of a business’s shared liability for an affiliated company’s wage violations. Joint employer policy is a major priority for franchise corporations such as McDonald’s Corp. that want to avoid being sued for minimum wage and overtime violations allegedly committed by their franchisees.

After a federal judge in New York struck down a major portion of the Trump rule in September, in a case filed by Democratic state attorneys general, the Trump administration appealed in November. Rather than flip positions before the Second Circuit, the Biden administration wants to hit pause on the legal proceedings for six months as it moves to reverse the rulemaking.

“The Department will need additional time to review the comments, analyze whether to adopt the proposed rulemaking, and finalize any determination,” Justice Department attorneys stated in a memo to the judge, referring to the DOL.

However, a coalition of business groups intervening in the litigation to defend the Trump rule has objected to a delay, the government’s filing said.

The case is New York v. Scalia, 2d Cir., No. 20-03806, motion filed 3/31/21.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editor responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Jo-el J. Meyer at jmeyer@bloombergindustry.com

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