AHLA Files Lawsuit Against Biden Administration Over Controversial New Regulation

The American Hotel & Lodging Association (AHLA), in collaboration with the U.S. Chamber of Commerce and other parties, has filed a lawsuit against the National Labor Relations Board (NLRB). The legal challenge, filed in the U.S. District Court for the Eastern District of Texas, questions the legality of the NLRB’s new “joint-employer” regulation.

This regulation, which is set to be effective from December 26, changes the criteria for what constitutes a joint employer. Previously, a company was considered a joint employer only if it had ‘substantial direct and immediate control’ over employees. The new rule, however, allows a company to be treated as a joint employer, and thus be compelled to engage in collective bargaining, even in scenarios where it does not have direct control over the workers.

The AHLA is concerned that this regulation will significantly impact the hotel industry, particularly the franchise model. The new rule could potentially hold hotel brands jointly liable for employment matters at franchised locations, and also increase unionization efforts. AHLA’s President & CEO Chip Rogers argues that this regulation could undermine the franchise business model, which has been a significant contributor to economic growth and job creation in the U.S. hospitality industry.

The AHLA and its co-plaintiffs are seeking to restore the previous joint-employment standard, which they believe has been effectively governing employer-employee relations for nearly four decades. The lawsuit aims to safeguard the franchise business model and protect the interests of small business hoteliers across the country.

For more detailed information about the lawsuit and its implications, you can refer to various news sources reporting on this development.