Labor Board’s Joint Employer Rule Draws First Industry Suit (1)

A coalition of business advocacy groups filed a lawsuit seeking to nix the National Labor Relations Board’s recently finalized regulation that lowers the bar for two companies to qualify as joint employers of the same contract or franchise workers.

The NLRB’s rule is overly broad and establishes a standard for determining joint employer relationships that directly contradicts what the common law would require, the industry coalition led by the US Chamber of Commerce said in its lawsuit filed Thursday in a Texas federal court.

The groups also argued that the regulation is “arbitrary and capricious” in violation of administrative law—saying ...