IFA Heralds Court Decision Striking Down Joint Employer, Reiterates Need For CRA

March 09, 2024

IFA Heralds Court Decision Striking Down Joint Employer, Reiterates Need For CRA

Haller: Best Way For Lawmakers To Support Small Businesses Is Putting Bipartisan CRA On President Biden’s Desk

WASHINGTON –Today, Matt Haller, President and CEO of the International Franchise Association (IFA), praised the outcome of a coalition-led lawsuit striking down the National Labor Relations Board’s (NLRB) expanded joint employer rule, while also urging Congress to pass a bipartisan Congressional Review Act to provide further stability to the business community.

“Today’s court ruling is a landmark win for franchising. The ruling preserves the franchise business model – the best vehicle for small business formation on Main Street -- by rejecting a flawed regulation enacted solely for the benefit of advancing the political goals of organized labor,” said Haller. “Elected officials on both sides of the aisle talk a big game about standing up for small businesses, and now the U.S. Senate can act on those promises by putting the bipartisan CRA resolution on President Biden’s desk.”

Co-sponsored by 23 members of the U.S. Senate, the CRA passed the House of Representatives via a bipartisan vote in January 2024, and is expected to be taken up by the U.S. Senate in the near future. The new joint employer rule expands on a previous joint employer rule that destroyed 376,000 jobs, cost small businesses $33.3 billion, and led to a 93% spike in lawsuits in the franchise sector alone.

Filed in the U.S. District Court for the Eastern District of Texas, the lawsuit took aim at the NLRB for exceeding the scope of its authority and violating the Administrative Procedure Act (APA) by failing to respond to comments regarding the rule’s harmful economic consequences.

The IFA was joined in the lawsuit by the U.S. Chamber of Commerce, American Hotel and Lodging Association, Associated Builders and Contractors, Associated General Contractors of America, Coalition for a Democratic Workplace, Longview Chamber of Commerce, National Retail Federation, National Association of Convenience Stores, Restaurant Law Center, Texas Association of Business, and Texas Restaurant Association.

The full complaint is available here: https://www.franchise.org/sites/default/files/2023-11/Dkt%201_Complaint.pdf

The case is U.S. Chamber of Commerce v. National Labor Relations Board, U.S. District Court for the Eastern District of Texas, No. 6:23-cv-00553.