Joint employer battles continue

When the Biden administration succeeded in rescinding the Trump-era employer-friendly joint-employer regulation, it thought it could focus solely on drafting a new rule. That new rule is widely anticipated to resuscitate the Obama-era regulation, making it easier for workers and government agencies to file claims (and union petitions) against larger business partners, such as those in the franchise industry.

That initially means the focus will be on McDonald's and other fast-food companies, but the franchise model is now a large and expanding part of the economy that affects millions of workers. The lawsuit filed against the Trump administration's joint employer rules, however, could undermine regulatory efforts for this and future administrations.

Can states challenge federal regulation?

When the Biden administration was seeking to rescind the Trump rule, it asked that the judicial challenge brought by a number of states be dismissed. The court refused, indicating parts of the legal challenge were unresolved—most importantly, whether states have standing (i.e., the legal right) to challenge a federal rule about federal employment policy.

The Biden Justice Department (DOJ) now faces this dilemma: It could ask that the old case be dismissed as moot now that the old joint-employer rule is formally rescinded and probably succeed, but it would leave the standing issue unresolved. On the other hand, it could continue the case to challenge the standing of states to sue the federal government on matters solely affecting federal enforcement policy.