Business Groups OK’d to Intervene in ‘Joint Employer’ Litigation

(July 7, 2020) - The business community will join the Trump administration in court to defend the Labor Department’s joint employer rule from a lawsuit filed by 18 states. A federal judge in the U.S. District Court for the Southern District of New York approved the industry coalition’s motion to intervene, finding that although the business groups don’t have a legal right to serve as a party in the litigation, their participation won’t cause harm for the Democratic state attorneys general seeking to vacate the rule. The decision allows the six leading trade associations to fulfill their goal of ensuring the rule is supported in the litigation in the event Democrats seize control of the White House in 2021 while the case is still active. The regulation, which took effect in March, narrows the scenarios in which multiple businesses can be liable under the Fair Labor Standards Act for failing to pay minimum wages and overtime to workers. Central to the final rule that’s subject to the litigation is DOL’s adoption of a four-part test to assess whether one company is a joint employer of another company’s workers. The test, which considers all factors collectively, probes whether the potential joint employer can hire or fire an employee; supervise or control work schedules; set pay rates; and maintain employment records. The groups seeking to intervene are the U.S. Chamber of Commerce, International Franchise Association, National Retail Federation, HR Policy Association, Associated Builders and Contractors, and American Lodging and Hotel Association.

Read more.