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Court Partially Strikes Down Trump Administration’s Rule Narrowing Joint Employer Liability

  • A coalition of 18 Democratic AGs, led by New York AG Letitia James and Pennsylvania AG Josh Shapiro, obtained a court order partially invalidating the U.S. Department of Labor’s (“DoL”) Joint Employer Rule, which narrowed the standard for which entities may be held jointly liable for wage and hour violations under the Fair Labor Standards Act (“FLSA”).
  • The complaint alleged that the Joint Employer Rule undermines Congressional intent in enacting FLSA and was arbitrary and capricious under the Administrative Procedure Act.
  • The court’s order struck down the Joint Employer Rule as it pertains to vertical joint employer liability, finding that it conflicts with FLSA and is arbitrary and capricious. The court’s order, however, let the Rule stand as it pertains to horizontal joint employer liability, finding that this provision is severable and that the revisions it promulgated are non-substantive.