AHLA Files Lawsuit Against Biden Administration Over Controversial New Regulation

by Patrick Clarke
Last updated: 2:15 PM ET, Thu November 9, 2023

The American Hotel & Lodging Association (AHLA) has teamed up with the U.S. Chamber of Commerce and other plaintiffs to sue the National Labor Relations Board (NLRB), challenging the legality of the board's new "joint-employer" regulation.

The suit, filed in the U.S. District Court for the Eastern District of Texas on Thursday, argues that the NLRB has violated the National Labor Relations Act and is acting "arbitrarily and capriciously" in violation of the Administrative Procedure Act.

The lawsuit comes on the heels of the NLRB issuing a new joint-employer standard late last month that is slated to take effect on December 26. The regulation will force hotel brands to the collective bargaining table with franchised employees over which they have no authority, AHLA points out.

"Currently, a company can be treated as a joint employer only if it has 'substantial direct and immediate control' over a group of employees. Under the NLRB’s new regulation, a company can be treated as a joint employer and forced to collectively bargain, even when it has no actual control over workers," the organization warns.

AHLA fears the change will make hotel franchisors jointly liable for workplace matters at franchise locations and force unions on hotel franchisees and their employees.

In a statement, AHLA President & CEO Chip Rogers said "NLRB’s joint-employer regulation is all about coercing businesses to the bargaining table with workers they do not actually employ to increase unionization."

"To achieve this, the NLRB is intentionally taking a wrecking ball to one of America's great economic engines – the franchise model – and jeopardizing millions of small-business jobs," added Rogers.

"The goal of this lawsuit is to reestablish the rule of law that has governed joint-employment designation for nearly four decades. It will also prevent the destruction of the franchise business model that has provided prosperity for tens of thousands of American small business hoteliers," he concluded.