SEIU mounts challenge to NLRB's Trump-era joint employer rule

The headquarters of the National Labor Relations Board (NLRB) is seen in Washington, D.C.
The headquarters of the National Labor Relations Board (NLRB) in Washington, D.C., May 15, 2021. REUTERS/Andrew Kelly
  • SEIU says 2020 rule improperly limits factors considered by board for joint employment
  • Union claims rule puts collective bargaining out of reach for millions of workers
  • NLRB under Biden has signaled it could revive Obama-era version

(Reuters) - The Service Employees International Union on Friday filed a lawsuit seeking to strike down a Trump-era National Labor Relations Board rule that would make it more difficult to hold companies liable as "joint employers" of franchise and contract workers.

SEIU, in a complaint filed in Washington, D.C., federal court, said the 2020 rule, which the Biden-era NLRB is widely expected to undo, violates federal labor law by limiting the factors the board can consider in determining whether a company can be held jointly liable for legal violations and be made to bargain with unions.

The union said that in particular, the rule arbitrarily excludes health and safety issues from the set of employment conditions a company must control to be found a joint employer.

"The latter error is particularly egregious in the context of the global COVID-19 pandemic; it relieves companies that exercise direct control over health and safety conditions of any obligation to bargain over those conditions with the affected workers' exclusive representative," SEIU said in the complaint.

SEIU is represented by in-house counsel and lawyers from Bredhoff & Kaiser.

A spokeswoman for the NLRB did not immediately respond to a request for comment.

Joint employment has been among the most contentious topics taken up by the NLRB in recent years. Business groups criticized the Obama-era board's move toward a more expansive standard for determining joint employment, saying it threatened franchise businesses and contractor-based business models.

But unions and worker advocates have said that for about three decades beginning in the 1980s, the board had gone astray by narrowing the circumstances in which a company is considered a joint employer.

The NLRB in 2017 overturned a decision issued two years earlier that said companies could be joint employers if they had the power to alter working conditions, even when they did not exercise it. The Trump-era board said only direct and immediate control over essential terms of employment, such as hours and pay, was relevant.

But the board later vacated that decision after the agency's inspector general found that NLRB Member William Emanuel should have recused himself from the case. Emanuel's former law firm, Littler Mendelson, had represented a company involved in the Obama-era case the board had overturned.

The NLRB then turned to the rulemaking process and in February 2020 adopted a rule requiring direct and immediate control over working conditions.

In Friday's lawsuit, SEIU said the rule will place meaningful collective bargaining out of reach for millions of workers by shielding companies that control their jobs from the obligation to bargain.

The union said the rule should be set aside because it reflects a narrower definition of who counts as an employer than the common-law standard long utilized by the board.

The case is SEIU v. NLRB, U.S. District Court for the District of Columbia, No. 1:21-cv-02443.

For SEIU: Nicole Berner; Leon Dayan of Bredhoff & Kaiser

For the board: Not available

Read more:

New NLRB chair says Trump-era joint employment test 'living on borrowed time'

AFL-CIO, SEIU call on NLRB to postpone 'joint employer' rule

NLRB looks to rulemaking to set joint employer test

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Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at