Labor Board Joint Employer Challenge to Move First in 5th Cir.

The US Court of Appeals for the District of Columbia Circuit is taking a back seat in the legal battle over the National Labor Relations Board’s joint employer rule, putting proceedings there on hold until the Fifth Circuit rules in a similar case.

The D.C. Circuit in an unsigned order Wednesday granted a motion from a US Chamber of Commerce-led business coalition to hold the case in abeyance. The Service Employees International Union filed the Washington, D.C.-based challenge to the rule—arguing it didn’t go far enough to protect workers—around the same time the coalition filed its lawsuit in federal district court in Texas.

The NLRB appealed to the Fifth Circuit after the Texas judge struck down the regulation, agreeing with the Chamber that the rule is too broad and establishes a standard for determining joint employer relationships that directly contradicts what the common law would require.

The dueling suits had created a jurisdictional dispute over the proper venue for litigation over the measure. The D.C. Circuit is seen as more friendly toward the NLRB than the Fifth Circuit, which has historically been critical of the labor board.

The Chamber asked to put the D.C. Circuit case on hold after initially seeking to have it dismissed.

In October, the NLRB expanded the criteria under which two companies employing the same contract or franchise workers should be considered joint employers under federal labor law, making both liable for violations and on the hook for bargaining with unions.

Although joint employment is rarely litigated at the NLRB, it’s been one of the most bitterly contested issues in labor law over the past decade. The rule, which was set to take effect at the end of last year, sparked a series of legal debates on jurisdiction as well as a failed congressional attempt to overturn it.

SEIU is represented by attorneys from Bredhoff & Kaiser, PLLC and James & Hoffman, PC. Agency lawyers are representing the NLRB. The business groups are represented by lawyers from Akin Gump Strauss Hauer & Feld LLP, Littler Mendelson PC, and the US Chamber Litigation Center.

The case is SEIU v. NLRB, D.C. Cir., No. 23-1309, order 6/5/24.