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Business groups sue US labor board to block contract, franchise worker rule

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Business groups sue US labor board to block contract, franchise worker rule

© Reuters. FILE PHOTO: The United States Chamber of Commerce building is seen in Washington, D.C., U.S., May 10, 2021. REUTERS/Andrew Kelly/File Photo - Several major U.S. business groups sued a federal labor board on Thursday, seeking to strike down a rule treating many companies as employers of contract and franchise workers and requiring them to bargain with their unions.

The rule issued by the National Labor Relations Board will treat companies as"joint employers" of contract and franchise workers when they have control over key working conditions such as pay, scheduling, discipline and supervision, even if it is indirect or not exercised. President Joe Biden's administration has previously accused trade groups and Republican-led states of improperly"judge shopping" by filing similar challenges to federal government regulations in courts stocked with Trump appointees, particularly in Texas.

The groups in Thursday's lawsuit said the rule was inconsistent with federal labor law's narrower definition of who counts as an employer.

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