Legal victory for AHLA: Joint employer rule revision overturned – Travel And Tour World

Kevin Carey, the Interim President & CEO of the American Hotel & Lodging Association (AHLA), made a statement following the decision by the U.S. District Court for the Eastern District of Texas to halt a rule proposed by the National Labor Relations Board (NLRB). This rule aimed to modify the criteria for determining joint-employer status. The court’s ruling not only stopped the implementation of the NLRB’s 2023 rule but also restored a 2020 guideline that shields companies from being held liable for workers they don’t directly oversee.

“This decision is a huge win for hoteliers, the lodging industry, and franchised businesses. The ruling will critically reestablish franchisees’ control over their own businesses, restore certainty in the relationships between employees and employers, and prevent costly confusion with independent contractors,” said AHLA Interim President & CEO Kevin Carey. “Our victory in this case is a testament to how hoteliers can bring positive change when we stay organized and engaged. We stand ready to fight any attempt by the NLRB to appeal this decision.”

This legal challenge began in October 2023 when the NLRB introduced a rule set to take effect on March 11, which would have altered the federal standard for when companies are considered jointly accountable for the working conditions of a shared workforce. The adjustment sought to simplify the process for the NLRB to assign joint employment status in corporate associations, facilitating broader union organization strategies across entire companies rather than individual locations.

The intention behind the rule was to encourage franchisors to engage in negotiations with employees who are not directly under their employment, aiming to boost union memberships. However, this would have potentially complicated the dynamics between hotel proprietors, their brands, and staff, while also limiting prospects for both franchisees and employees.

In response, the AHLA, together with the U.S. Chamber of Commerce and other major business organizations, initiated a lawsuit against the rule’s validity in the U.S. District Court for the Eastern District of Texas. The verdict on March 8 reversed the new regulation and reinstated the 2020 NLRB rule. This previous rule, which was revoked in 2021 by the Biden Administration, mandates that a business can only be considered a joint employer if it has “substantial direct and “direct and significant influence” over the primary terms and employment conditions.

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