U.S. House of Representatives votes to overturn the joint employer rule

Joanna Fantozzi

The U.S. House of Representatives voted ‘yes’ Friday on a resolution to overturn the National Labor Relations Board’s joint employer rule, which would hold business franchisors and franchisees jointly liable for labor terms and conditions such as union contracts, pay, scheduling, and more. As a next step, this Congressional Review Act resolution of disapproval would go to the Senate floor for a vote.

The vote to overturn the resolution largely fell on party lines, with only eight Democrats voting to repeal, and zero Republicans voting against the resolution. House Republicans have instead pointed to the Trump-era NLRB rule, which was passed in 2020 and did not hold franchisors responsible for franchisees’ adherence to labor rules and regulations.

“House Republicans are coming to the rescue of small business owners once again,” Rep. Virginia Foxx (R-N.C.) said before Friday’s vote. “At its most basic level, a joint employer standard should ensure the entity calling the shots is legally liable. The Trump NLRB had clear criteria that had to be met were met before an employer was deemed legally liable for an individual’s employment conditions. The Trump rule recognized that the ability of businesses to control their businesses is a pillar of the American dream.”

Related:Franchisors may be more liable for employees under broadened joint employer rule

President Biden has said that if Congress votes to repeal the new joint employer rule, then he would veto the resolution, with the White House Office of Management and Budget claiming that the resolution would interfere with workers' rights to bargain for better working conditions.

The National Restaurant Association and other business advocacy and lobbying groups have rallied in favor of overturning the resolution:

“The NLRB’s latest joint employer rule threatens the foundation upon which nearly a third of the restaurant industry is built by significantly expanding its scope to an unprecedented degree,” Sean Kennedy, executive vice president for public affairs at the National Restaurant Association, said in a statement. “The traditional rule has been a fundamental basis for growth and stability in the restaurant industry, especially in opening doors for people to become business owners through restaurant franchising.”

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