A U.S. federal judge in Texas blocked the broadened National Labor Relations Board joint employer rule that was introduced in October and would have made franchisees and franchisors jointly liable for labor terms and conditions such as union contracts, pay, scheduling, and more. The rule, which was supposed to have gone into effect Monday, would have revived and updated an Obama-era rule that was limited in scope during the Trump Administration.
In his decision, U.S. District Court Judge J. Campbell Barker called the expanded joint employer rule “arbitrary and capricious,” and said that it would be “contrary to law.”
The proposed joint liability rule was widely condemned by most of the restaurant and franchising industries, with franchisees worried about the proposed increased franchisor control over their business, and franchisors critical about the added fiscal and legal resources needed to comply with the rule.
