Court Upholds Trump-Era Independent Contractor Rule

Last week, the US District Court for the Eastern District of Texas reinstated the independent contractor rule promulgated during the Trump Administration. The Trump-era rule, which aimed to clarify and loosen the definition of an independent contractor versus a direct employee and which was supported by NRMCA, was withdrawn by the Biden Administration last year. Following the withdrawal in 2021, a number of business-oriented groups challenged the ability of the Department of Labor (DOL) to vacate the rule, suggesting DOL had not followed proper procedure. Judge Marcia Crone of the district court in Texas agreed and reinstated the rule, concluding that the Biden Administration violated the Administrative Procedure Act when vacating the rule.

Currently, the Trump-era independent contractor rule remains in effect. While this development is welcomed by NRMCA, DOL has not yet stated how it plans to respond. DOL may choose to appeal the ruling or start over by trying to withdraw the rule. The National Labor Relations Board has also stated its plans to review the independent contractor rule as it relates to unfair labor practices. NRMCA will continue to monitor the rule for developments and advocate for beneficial industry outcomes.

For more information, contact Kevin Walgenbach at kwalgenbach@nrmca.org.