AGC Wins in Joint Employer Case Becomes Final After NLRB Withdraws Appeal

The U.S. Court of Appeals for the Fifth Circuit on July 19, 2024, granted the National Labor Relations Board's ("NLRB" or "Board") motion to voluntarily dismiss its appeal of a district court's order to vacate the Board's 2023 "joint employer rule." Thevacatur was a major victory for AGC and its co-plaintiffs that initiated the lawsuit challenging the Board's regulatory effort to broaden the standard for determining when an employer may be deemed a joint employer of another company's employees.

The dismissal renders the district court's ruling final and leaves the prior Board's more reasonable 2020 rule in effect. The 2020 rule allows a finding of joint-employer status under the National Labor Relations Act only when an employer actually exercises substantial direct and immediate control over essential terms and conditions of employment of the other company's employees.

AGC is pleased that the NLRB withdrew its appeal, preventing superfluous expenditure of resources on further litigation over the unlawful 2023 rule. However, AGC expects the battle to continue, as the present development signals the Board's intent to return to case adjudication as the mode of establishing a new standard for joint-employer status. AGC will continue to closely monitor and promptly report on developments in this area.

For more information, contact Denise Gold, Vice President, Corporate & Labor Legal Affairs, at [email protected] or (703) 837-5326.