Construction contractors and organized labor are keeping their eyes on a federal court in Texas, watching for the next development in a court challenge to the Biden administration’s standard redefining what constitutes a “joint employer.”

The National Labor Relations Board last Oct. 27 issued an administration-supported final standard that provided a more expansive definition of joint employer than its predecessor, which was issued in 2020 under the Trump administration. The Biden standard would rescind the Trump version.

The new regulation was welcomed by labor unions, including the building trades. But it was criticized by construction contractor groups and other business organizations. 

A coalition of business organizations, which included the Associated Builders and Contractors and Associated General Contractors of America, challenged the standard in federal court on Nov. 9,.

In a lawsuit filed in U.S. District Court for the Eastern District of Texas, the groups asked the court to strike down the standard, contending that it exceeds the bounds of the National Labor Relations Act.

The regulation was to take effect on Dec. 26, 2023, but the NLRB extended its effective date to Feb. 26.

On Feb. 23, U.S. District Judge J. Campbell Barker issued a stay until March 11. The action means that the new standard will be applied only to cases filed after the rule takes effect.

In a statement at the time the Biden joint-employer standard was issued, AFL-CIO President Liz Shuler called the rule "an important win for working people across the country."

Shuler added that "when workers negotiate for fair wages and working conditions, companies shouldn't be able to hide behind a subcontractor or staffing agency to deny us what we've rightfully earned."

Brian Turmail, AGC of America vice president for public affairs and strategic initiatives, told ENR via email that the new standard is important because it "unlawfully makes it easier for the agency to declare that a company is the joint employer of another company's workers."

He added: "It establishes an arbitrary and uncertain standard that threatens chaos and indeterminacy in business and labor relations across major industry sectors, including construction."