WASHINGTON (March 9, 2024) – American Hotel & Lodging Association (AHLA) Interim President & CEO Kevin Carey released the below statement today after the U.S. District Court for the Eastern District of Texas blocked a National Labor Relations Board (NLRB) rule to change the way joint-employer status is determined. In its decision, the court also reinstated a 2020 NLRB rule that protects businesses from undue liability for employees over whom they do not have direct control.
“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.”
View the court’s opinion and order and final judgment.
Background
In October 2023, the NLRB released a final rule that, starting on March 11, would have changed the standard the federal government uses to determine when two or more employers are jointly responsible for a shared group of workers’ terms and conditions of employment. The rule would have made it easier for the NLRB to declare joint employment status in business relationships, and enabled unions to organize by company rather than property by property.
The rule was designed to force franchisors to the negotiating table with workers they do not actually employ to increase unionization. It would have complicated relationships between hotel owners, brands, and employees and limited opportunities for franchisees and workers along the way.
In November, AHLA, the U.S. Chamber of Commerce, and other leading business associations filed a lawsuit in the U.S. District Court for the Eastern District of Texas challenging the rule’s legality. The court’s March 8 decision overturns the new rule and reinstates a 2020 NLRB rule that protects businesses from undue liability for employees over whom they do not have direct control. Under that policy, which had been rescinded by the Biden Administration in 2021, companies will only be seen as a joint employer if they maintain “substantial direct and immediate control” over workers’ terms and conditions of employment.