Biden Vetoes Resolution to Block Labor Board Joint Employer Rule

President Joe Biden vetoed a measure Friday that would have overturned the National Labor Relations Board’s joint employer rule, nixing the resolution that cleared both chambers of Congress by bipartisan margins.

Biden rejected a resolution brought under the Congressional Review Act that would have blocked the NLRB’s new standard lowering the bar for whether two companies are joint employers, sharing obligations to negotiate with unions as well as joint liability for labor violations.

A two-thirds majority in the House and Senate would be required to overturn the veto, an unlikely scenario as an overwhelming majority of congressional Democrats endorse the rule.

“Without the NLRB’s rule, companies could more easily avoid liability simply by manipulating their corporate structure, like hiding behind subcontractors or staffing agencies. By hampering the NLRB’s efforts to promote the practice and procedure of collective bargaining, Republicans are siding with union-busting corporations over the needs of workers and their unions,” Biden said in a statement.

“I am proud to be the most pro-union, pro-worker President in American history. I make no apologies for my Administration protecting the right to organize and bargain collectively,” he said.

The veto comes as the administration tries to salvage the regulation, which was struck down in March by a federal court in Texas. The board is considering its options to keep the rule alive, including potentially refusing to acquiesce to the judge’s ruling outside of his district, the Eastern District of Texas.

Major employer groups, particularly in the franchise industry, have vowed to defeat the rule as they claim it will increase costs for businesses and take away jobs. The International Franchise Association, which represents corporate giants McDonald’s Corp., Yum! Brands Inc., and Subway IP LLC, has lobbied intensely to defeat the regulation in Congress.

“The Administration has solidified its position that it cares more about special interests than small business owners and their employees, who face a near-daily onslaught of costs and uncertainties from the Biden Administration’s regulatory assault,” Matthew Haller, IFA president and CEO, said in a statement.

Republicans in Congress were also quick to object to Biden’s veto, calling it an attack on small businesses. Sen. Bill Cassidy (R-La.) said the veto is detrimental to women and people of color who are “empowered” by the franchise model.

The CRA allows Congress to block executive agencies’ regulatory action through a resolution that clears both chambers by simple majorities and is signed by the president. Biden has vetoed several CRA resolutions, including one that would have overturned a Department of Labor rule on sustainable investing.