New York – New York Attorney General Letitia James secured a major victory for workers across New York and the rest of the nation in her lawsuit against the Trump Administration’s Joint Employer Rule. The United States District Court for the Southern District of New York invalidated in large part the U.S. Department of Labor’s rule that unlawfully narrowed the standard for which entities may be held jointly liable for wage and hour violations under the Fair Labor Standards Act.
“Today’s ruling is a critical win for the many American workers who would experience wage theft or a decrease in income due to this reckless rule,” said Attorney General James. “As our country continues to face the economic impacts of the COVID-19 crisis, we cannot allow lower- and middle- income workers to be put at an even greater financial disadvantage. I will continue to do everything within my legal power to ensure the Trump Administration does not interfere with hardworking Americans receiving the wages they deserve.”
In February 2020, Attorney General James and Pennsylvania Attorney General Josh Shapiro led a coalition of 18 attorneys general coalition in filing a lawsuit challenging a DOL rule that unlawfully narrows the joint employment standard under FLSA. The FLSA is the federal law establishing a baseline of critical workplace protections, such as minimum wage and overtime, for workers across the country. The joint employment standard determines when more than one employer is responsible under FLSA because both exert sufficient influence over a worker’s employment. The Joint Employer Rule undermines critical workplace protections for the country’s low-and middle-income workers and could lead to increased wage theft and other labor law violations. The coalition asserted in the lawsuit that the rule directly undermines Congress’ intent for the FLSA, and that the USDOL violated the rulemaking process requirements. Further, they argued that the rule would impose significant regulatory burdens on states and would harm states’ economies and residents. Additionally, the coalition argued that the new rule is incompatible with the text of the FLSA and Congress’ purposes in passing it to protect workers from unscrupulous employers. The rule also violates the law by attempting to overturn a 75-year-old Supreme Court precedent via regulation.
In March 2020, the coalition urged the Trump Administration to immediately stop the implementation of the Joint Employer Rule. In a letter, they argued that as the country grapples with the economic effects of COVID-19, workers who earn hourly wages — and who would be most negatively affected by the rule — are also those most likely to suffer the adverse economic impacts caused by COVID-19, such as having hours reduced or being laid off. The Trump Administration rejected the coalition’s request. Accordingly, the coalition moved with the litigation and filed a motion for summary judgment, which today’s decision largely granted.
This case was litigated by Assistant Attorney General Fiona J. Kaye, Assistant Attorney General Daniela Nogueira — both of the Division of Federal Initiatives, Assistant Attorneys General Jessica Agarwal and Michael O’Keefe Cowles, Deputy Bureau Chief Julie R. Ulmet, Civil Enforcement Section Chief Ming-Qi Chu, General Labor Section Chief Seth Kupferberg, all of the Labor Bureau, under the supervision of Chief Counsel for Federal Initiatives Matthew Colangelo and First Deputy Attorney General Jennifer Levy.