Senate votes to overturn NLRB’s joint employer rule; President Biden likely to veto

On Wednesday evening, the U.S. Senate narrowly voted to repeal the National Labor Relations Board’s broadened joint employer rule introduced in October, joining the House of Representatives, which voted ‘yes’ on the resolution to overturn the rule back in January. The Congressional vote sets up a likely veto from President Biden, who had previously vowed to veto the resolution if it passed, with the White House claiming the resolution interferes with workers’ bargaining rights. 

The resolution passed more narrowly in the Senate than in the House, with U.S. Senators Joe Manchin (D-Va.), Kyrsten Sinema (I-Az.), and Angus King (I-Maine) voting in favor of the appeal.  The joint employer rule would hold business franchisors and franchisees jointly liable for labor terms and conditions such as union contracts, pay, scheduling, and more.

Congress voted to overturn the NLRB joint employer rule one month after a federal judge blocked its passage, calling the expanded joint employer rule “arbitrary and capricious,” and saying that it would be “contrary to law.”

Members of the business community and franchising associations have generally been against the newly broadened joint employer rule, which would add costs for franchisors and would lessen the scope of independence for franchisees:

“Today, Congress stood with hundreds of thousands of small businesses from around the country by rejecting this misguided joint employer rule,” International Franchise Association president and CEO Matt Haller said in a statement, adding that the IFA sent a petition with more than 5,000 signatures to the White House urging President Biden to not veto the vote. “President Biden now must join the bipartisan effort to reject this proposal, or he will be telling franchise businesses in every state that he doesn’t support them. President Biden can be both pro-union and pro-franchising, but not if he supports this joint employer rule.”

If President Biden vetoed the resolution, then it would require a two-thirds vote in both the Senate and House to overturn.

Contact Joanna at [email protected]