Justice scales and books and wooden gavel
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The National Labor Relations Board is appealing a federal court’s ruling in March to vacate the board’s “joint employer” rule. The independent federal agency filed a motion Tuesday in the 5th US Circuit Court of Appeals. 

The new joint employer rule would have changed the standard used to determine joint-employer status and would have rescinded a 2020 version of the rule, promulgated under the previous board, that some viewed as being more favorable to employers.

In vacating the rule in March, US District Judge J. Campbell Barker of the Eastern District of Texas said in his final judgment that the new rule “would be contrary to law” and that the rescission of the 2020 standard would be “arbitrary and capricious.” The ruling came in a case brought by the US Chamber of Commerce and other groups. 

Senior living and care industry representatives previously told McKnight’s Senior Living that the new rule was “much broader and more vague” than the previous rule and would present greater risk for employers that contract with services providers, “creating greater liability for the actions of others.” Operators that are part of franchises, and others, also could have been affected.

News of the appeal follows President Joe Biden’s veto last week of a resolution from Congress to repeal the rule. The US Senate had passed HJ Res 98 on April 10 by a 50-48 vote, and the House of Representatives previously had passed it earlier by a 206-177 vote.

In announcing his veto, Biden told the House on Friday that “[w]ithout the NLRB’s rule, companies could more easily avoid liability simply by manipulating their corporate structure, like hiding behind subcontractors or staffing agencies.”

The US Chamber of Commerce said it was “disappointed” by the veto.

The House failed to attain the two-thirds majority required to overturn the presidential veto, voting 214-191 in favor of overriding the veto, Bloomberg Law reported Tuesday.