Sinema Pushes Back on Labor Board’s Planned Joint Employer Rule

Sen. Kyrsten Sinema (I-Ariz.) teased a potential vote to overturn the National Labor Relations Board’s planned move to alter the joint-employer standard under federal labor law.

Sinema said Tuesday that the rule proposed by the NLRB is “concerning,” and suggested she would vote to overturn the rule through a Congressional Review Act resolution. Under the CRA, Congress can reverse an agency’s rulemaking with a simple majority in both chambers.

“What we have seen in the proposal is very, very concerning,” Sinema said at an event sponsored by the International Franchise Association, which is lobbying Congress to overturn the NLRB rule once it’s finalized.

Sinema’s opposition shows that the NLRB’s proposal to change the joint employer standard faces a tough environment in Congress, where many lawmakers are concerned about what the rule could mean to franchises such as McDonald’s Corp.

The NLRB’s joint-employment framework determines when companies share liability for unfair labor practices and legal obligations to bargain with certified unions. In a break with its usual practice of setting standards via decisions in individual cases, the Trump board minted the current legal test with a regulation issued in 2020.

The NLRB’s Democratic majority last year proposed expanding what factors can trigger a joint-employer finding beyond simply one business exerting direct and immediate control over another company’s employees. The new test also would consider indirect and unexercised control.

The board plans to complete its joint employer regulation by Oct. 12, according to an August court filing.

Opposition Mounting

A bipartisan group composed of Sens. Joe Manchin (D-W.Va), Angus King (I-Maine), Susan Collins (R-Maine), James Lankford (R-Okla), and Mike Braun (R-Ind.) has been talking about the issue in the Senate, Sinema added.

“The six of us are already working together in a coalition to raise this concern,” she said. “Bureaucrats love red tape, that’s what they do. These are individuals who never owned a business, they probably don’t know franchise owners.”

Resolutions under the CRA follow a fast-track process that can circumvent Senate Majority Leader Chuck Schumer’s (D-N.Y.) ability to block them. Unlike most legislation in the chamber, which is subject to the filibuster, only 51 senators are needed to pass a CRA resolution.

Votes from Sinema, Manchin, and King would be crucial if all Republicans in the House and Senate vote to overturn the rule.

President Joe Biden can still veto the measure if it clears Congress. The president vetoed a CRA resolution in May that would have reversed a US Labor Department rule on environmental, social, and governance-focused retirement investing.

— With assistance from Robert Iafolla