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1See Standard for Determining Joint-Employer 

Status, 87 FR 54641 (Sept. 7, 2022). 

2See, e.g., Globe Discount City, 209 NLRB 213, 

213–214 & fn. 3 (1974) (finding joint employer 

based on license agreements, without reference to 

any exercise of authority); Lowery Trucking Co., 177 

NLRB 13, 15 (1969) (finding joint employer based 

in part on unexercised right to reject other 

employer’s employee), enfd. sub nom. Ace-Alkire 

Freight Lines v. NLRB, 431 F.2d 280 (8th Cir. 1970) 

(observing that ‘‘[w]hile [putative joint employer] 

never rejected a driver hired by [supplier], it had 

the right to do so’’); United Mercantile, Inc., 171 

NLRB 830, 831–832 (1968) (finding joint employer 

based on license agreements, without reference to 

any exercise of authority); Floyd Epperson, 202 

NLRB 23, 23 (1973) (finding joint employer based 

in part on indirect control over wages and 

discipline), enfd. 491 F.2d 1390 (6th Cir. 1974); 

Buckeye Mart, 165 NLRB 87, 88 (1967) (finding 

Buckeye joint employer of employees of Fir Shoe 

based solely on contractually reserved authority 

over, inter alia, discharge decisions and rules and 

regulations governing employee conduct), enfd. 405 

F.2d 1211 (6th Cir. 1969); Jewel Tea Co., 162 NLRB 

508, 510 (1966) (finding joint employer based on 

contractually reserved, unexercised power to 

effectively control hire, discharge, wages, hours, 

terms, ‘‘and other conditions of employment’’ and 

observing: ‘‘That the licensor has not exercised such 

power is not material, for an operative legal 

predicated for establishing a joint-employer 

relationship is a reserved right in the licensor to 

exercise such control’’); Value Village, 161 NLRB 

603, 607 (1966) (finding joint employer based on 

operating agreement and observing ‘‘[s]ince the 

power to control is present by virtue of the 

operating agreement, whether or not exercised, we 

find it unnecessary to consider the actual practice 

of the parties regarding these matters as evidenced 

by the record.’’); Spartan Department Stores, 140 

NLRB 608, 608–610 & fn. 1, 4 (1963) (finding joint 

employer based solely on uniform license 

agreements); Taylor’s Oak Ridge Corp., 74 NLRB 

930, 938 (1947) (finding joint employer based solely 

on contractually reserved authority over numerous 

essential terms and conditions of employment, and 

observing: ‘‘That the Employer’s power of control 

may not in fact have been exercised is immaterial, 

since the right to control, rather than the actual 

exercise of that right, is the touchstone of the 

employer-employee relationship.’’); General Motors 

Corp. (Baltimore, MD), 60 NLRB 81 (1945) (finding 

joint employer based on contractually reserved 

authority, despite testimony that entity exercised no 

control in practice); Anderson Boarding & Supply 

Co., 56 NLRB 1204, 1206 (1944) (finding joint 

employer based on unexercised contractual 

authority); Bethlehem-Fairfield Shipyard, Inc., 53 

NLRB 1428, 1431 (1943) (finding joint employer 

based on reserved rights to dismiss employees and 

set wage scales, despite crediting testimony entity 

actually exercised no control). 

Our colleague observes that a number of these 

cases involve department store licensing 

relationships. He argues that the Board did not 

purport to apply general common-law agency 

principles in these cases but instead applied a 

distinctive analysis focused on ‘‘whether the 

department store was in a position to influence the 

licensee’s labor relations policies.’’ We disagree. 

The cases we cite above, including the department 

store cases, ultimately rest on early post-TaftHartley Board decisions that are consistent with the 

NATIONAL LABOR RELATIONS 

BOARD 

29 CFR Part 103 

RIN 3142–AA21 

Standard for Determining Joint 

Employer Status 

AGENCY: National Labor Relations 

Board. 

ACTION: Final rule. 

SUMMARY: The National Labor Relations 

Board has decided to issue this final 

rule for the purpose of carrying out the 

National Labor Relations Act (NLRA or 

Act) by rescinding and replacing the 

final rule entitled ‘‘Joint Employer 

Status Under the National Labor 

Relations Act,’’ which was published on 

February 26, 2020, and took effect on 

April 27, 2020. The final rule 

establishes a new standard for 

determining whether two employers, as 

defined in the Act, are joint employers 

of particular employees within the 

meaning of the Act. The Board believes 

that this rule will more explicitly 

ground the joint-employer standard in 

established common-law agency 

principles and provide guidance to 

parties covered by the Act regarding 

their rights and responsibilities when 

more than one statutory employer 

possesses the authority to control or 

exercises the power to control particular 

employees’ essential terms and 

conditions of employment. Under the 

final rule, an entity may be considered 

a joint employer of another employer’s 

employees if the two share or 

codetermine the employees’ essential 

terms and conditions of employment. 

DATES: Effective December 26, 2023. 

This rule has been classified as a major 

rule subject to Congressional review. 

However, at the conclusion of the 

congressional review, if the effective 

date has been changed, the National 

Labor Relations Board will publish a 

document in the Federal Register to 

establish the new effective date or to 

withdraw the rule. 

FOR FURTHER INFORMATION CONTACT: 

Roxanne L. Rothschild, Executive 

Secretary, National Labor Relations 

Board, 1015 Half Street SE, Washington, 

DC 20570–0001, (202) 273–1940 (this is 

not a toll-free number), 1–866–315–6572 

(TTY/TDD). 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Statutory Background 

Section 2(2) of the National Labor 

Relations Act defines an ‘‘employer’’ to 

include ‘‘any person acting as an agent 

of an employer, directly or indirectly.’’ 

29 U.S.C. 152(2) (emphasis added). In 

turn, the Act provides that the ‘‘term 

‘employee’ shall include any employee, 

and shall not be limited to the 

employees of a particular employer, 

unless [the Act] explicitly states 

otherwise . . . .’’ Id. 152(3). Section 7 

of the Act provides that employees shall 

have the right 

to self-organization, to form, join, or assist 

labor organizations, to bargain collectively 

through representatives of their own 

choosing, and to engage in other concerted 

activities for the purpose of collective 

bargaining or other mutual aid or protection 

and to refrain from any or all such activities. 

Id. 157. Section 9(c) of the Act 

authorizes the Board to process a 

representation petition when employees 

wish to be represented for collective 

bargaining. Id. 159(c). And Section 

8(a)(5) makes it an unfair labor practice 

for an employer to refuse to bargain 

collectively with the representatives of 

its employees. Id. 158(a)(5). 

The Act does not specifically address 

situations in which statutory employees 

are employed jointly by two or more 

statutory employers (i.e., it is silent as 

to the definition of ‘‘joint employer’’), 

but, as discussed below, the Board, with 

court approval, has long applied 

common-law agency principles to 

determine when one or more entities 

share or codetermine the essential terms 

and conditions of employment of a 

particular group of employees. 

B. The Development of JointEmployment Law Under the National 

Labor Relations Act 

As set forth more fully in the Board’s 

September 4, 2022 notice of proposed 

rulemaking (the NPRM), in Boire v. 

Greyhound Corp., 376 U.S. 473, 481 

(1964), a representation case involving 

the relationship between a company 

operating a bus terminal and its 

cleaning contractor, the Supreme Court 

explained that the question of whether 

Greyhound ‘‘possessed sufficient 

control over the work of the employees 

to qualify as a joint employer’’ was 

‘‘essentially a factual question’’ for the 

Board to determine.1 On remand, the 

Board held that Greyhound and the 

cleaning contractor were joint 

employers of the employees at issue 

because they ‘‘share[d], or 

codetermine[d], those matters governing 

essential terms and conditions of 

employment.’’ Greyhound Corp., 153 

NLRB 1488, 1495 (1965), enfd. 368 F.2d 

776 (5th Cir. 1966). For nearly two 

decades following the Board’s decision 

in Greyhound, the Board regarded the 

right to control employees’ work and 

their terms and conditions of 

employment as determinative in 

analyzing whether entities were joint 

employers of particular employees. 

Board precedent from this time period 

generally did not require a showing that 

both putative joint employers actually 

or directly exercised control.2 The 


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final rule’s approach. For example, in one early 

case, the Board held that ‘‘an employer-employee 

relationship is established where the [entity] for 

whom services are rendered possesses the right of 

control over such fundamental matters as the 

employees’ day-to-day operations and their basic 

working conditions.’’ Franklin Simon & Co., 94 

NLRB 576, 579 (1951). In that case, the Board found 

that a department store and its licensee were joint 

employers because ‘‘a substantial right of control 

over matters fundamental to the employment 

relationship is retained and exercised by both 

[entities].’’ Id. (emphasis in original). We find these 

statements instructive and see no indication that 

the Board intended such statements to apply solely 

in the department store context, as our colleague 

implies. As for Buckeye Mart, supra, which our 

colleague suggests is at odds with the broader 

principles we argue animated the Board’s early 

decisions, we note that in that case the Board found 

a department store to jointly employ the employees 

of one of its licensees but not the other. At most, 

this case shows that the Board applied the relevant 

standard to find one joint-employment relationship 

but not another based on the particular language of 

the license agreements at issue. It does not call the 

relevant standard or its underlying principles into 

question. 

3See, e.g., Carrier Corp. v. NLRB, 768 F.2d 778, 

781 (6th Cir. 1985) (finding joint employer based in 

part on entity’s consulting about wages and benefits 

with direct employer and reserved authority to 

request removal or dismissal of employees); 

International Chemical Workers Union Local 483 v. 

NLRB, 561 F.2d 253, 255 (D.C. Cir. 1977) (‘‘Whether 

Cabot and P & K were joint employers depends 

upon the amount of actual and potential control 

that Cabot had over the replacement employees. 

This in turn, to a certain extent, is dependent upon 

the amount and nature of control that Cabot 

exercised and was authorized to exercise under the 

contract.’’) (emphasis added); Vaughn Bros., 94 

NLRB 382, 383 (1951) (‘‘Under this [common-law] 

test an employment relationship exists where the 

person for whom the services are performed 

reserves the right, even though not exercised, to 

control the manner and means by which the result 

is accomplished.’’); Alaska Salmon Industry, Inc. 

(Seattle Wash), 81 NLRB 1335, 1338 (1949) (‘‘[A]n 

employee relationship . . . is found to exist where 

the person for whom the services are performed 

reserves the right (even if not exercised) to control 

the manner and means by which the result is 

accomplished.’’); San Marcos Telephone Co., 81 

NLRB 314, 317 (1949) (‘‘Under [common-law] 

doctrine, an employee relationship, rather than that 

of an independent contractor, exists where the 

person for whom the services are performed 

reserves the right (even if not exercised) to control 

the manner and means by which the result is 

accomplished.’’); Steinberg and Co., 78 NLRB 211, 

220–221, 223 (1948) (‘‘Under [common-law] 

doctrine it has been generally recognized that an 

employer-employee relationship exists where the 

person for whom the services are performed 

reserves the right to control the manner and means 

by which the result is accomplished.’’), enf. denied 

182 F.2d 850 (5th Cir. 1950). See also judicial 

decisions discussed in Sec. I.D., below. 

4See The Standard for Determining Joint 

Employer Status, 83 FR 46681 (Sept. 14, 2018). 

Then-Member McFerran dissented. 

5The court specifically required that on remand 

the Board clarify its ‘‘articulation and application 

of the indirect-control element’’ of the BFI jointemployer standard to the extent that the Board had 

not ‘‘distinguish[ed] between indirect control that 

the common law of agency considers intrinsic to 

ordinary third-party contracting relationships, and 

indirect control over the essential terms and 

conditions of employment.’’ 911 F.3d at 1222–1223. 

The court further instructed the Board on remand 

to more explicitly apply the second part of the BFI 

standard (‘‘whether the putative joint employer 

possesses sufficient control over employees’ 

essential terms and conditions of employment to 

permit meaningful collective bargaining’’), and 

specifically, to clarify ‘‘which terms and conditions 

are ‘essential’ to permit ‘meaningful collective 

bargaining,’ ’’ and what such bargaining ‘‘entails 

and how it works in this setting.’’ Id. at 1221–1222 

(quoting 362 NLRB at 1600). After accepting the 

court’s remand, a newly constituted Board declined 

to clarify the BFI standard in any respect, instead 

finding that ‘‘retroactive application of any clarified 

variant of [that standard] in this case would be 

manifestly unjust.’’ Browning-Ferris Industries of 

California, Inc., 369 NLRB No. 139, slip op. 1 

(2020), vacated and remanded, 45 F.4th 38 (D.C. 

Cir. 2022). As discussed below, and contrary to the 

view of our dissenting colleague, the instant rule 

fully explicates the indirect-control element in 

Section IV and V. 

6See Joint Employer Status Under the National 

Labor Relations Act, 85 FR 11184 (Feb. 26, 2020). 

7 Id. at 11185–11186, 11194–11198 & 11236. The 

final rule defined ‘‘indirect control’’ as ‘‘indirect 

control over essential terms and conditions of 

employment of another employer’s employees but 

not control or influence over setting the objectives, 

basic ground rules, or expectations for another 

entity’s performance under a contract.’’ Id. at 11236. 

Board’s reliance on reserved or indirect 

control in joint-employer cases during 

this period was well within the 

mainstream of both Board and judicial 

treatment of such control in the 

independent contractor context, 

including in non-labor-law settings, and 

reviewing courts broadly endorsed the 

Board’s consideration of forms of 

reserved and indirect control as 

probative in the joint-employer 

analysis.3

In NLRB v. Browning-Ferris Industries 

of Pennsylvania, Inc., 691 F.2d 1117, 

1123 (3d Cir. 1982), enfg. 259 NLRB 148 

(1981), the United States Court of 

Appeals for the Third Circuit endorsed 

the Board’s ‘‘share or codetermine’’ 

formulation of the joint-employer 

standard. While later Board decisions 

continued to adhere to this formulation, 

they also began imposing new 

requirements that the Board now 

believes lacked a clear basis in 

established common-law agency 

principles or prior Board or judicial 

decisions. See TLI, Inc., 271 NLRB 798 

(1984); Laerco Transportation, 269 

NLRB 324 (1984). In particular, these 

decisions began requiring (1) that a 

putative joint employer ‘‘actually’’ 

exercise control, (2) that such control be 

‘‘direct and immediate,’’ and (3) that 

such control not be ‘‘limited and 

routine.’’ See, e.g., AM Property Holding 

Corp., 350 NLRB 998, 999–1003 (2007), 

enfd. in relevant part sub nom. Service 

Employees International Union, Local 

32BJ v. NLRB, 647 F.3d 435 (2d Cir. 

2011); Airborne Express, 338 NLRB 597, 

597 (2002); Flagstaff Medical Center, 

357 NLRB 659, 666–667 (2011). 

In 2015, the Board restored and 

clarified its traditional, common-law 

based standard for determining whether 

two employers, as defined in Section 

2(2) of the Act, are joint employers of 

particular employees within the 

meaning of Section 2(3) of the Act. See 

Browning-Ferris Industries of California, 

Inc., d/b/a BFI Newby Island Recyclery, 

362 NLRB 1599 (2015) (BFI). Consistent 

with established common-law agency 

principles, and rejecting the controlbased restrictions that the Board had 

previously established without 

explanation, the Board announced that 

it would consider evidence of reserved 

and indirect control over employees’ 

essential terms and conditions of 

employment when analyzing jointemployer status. 

While BFI was pending on review 

before the United States Court of 

Appeals for the District of Columbia 

Circuit, and following a change in the 

Board’s composition, a divided Board 

issued a notice of proposed rulemaking 

with the goal of establishing a jointemployer standard that departed in 

significant respects from BFI.4 During 

the comment period, the District of 

Columbia Circuit issued its decision in 

Browning-Ferris Industries of California, 

Inc. v. NLRB, 911 F.3d 1195, 1222 (D.C. 

Cir. 2018), upholding ‘‘as fully 

consistent with the common law the 

Board’s determination that both 

reserved authority to control and 

indirect control can be relevant factors 

in the joint-employer analysis,’’ and 

remanding the case to the Board to 

refine the new standard.5

Thereafter, on February 26, 2020, the 

Board promulgated a final rule that 

again introduced control-based 

restrictions that narrowed the jointemployer standard.6 In light of the 

District of Columbia Circuit’s decision 

in BFI v. NLRB, the Board modified the 

proposed rule to ‘‘factor in’’ evidence of 

indirect and reserved control over 

essential terms and conditions of 

employment, but only to the extent such 

indirect and/or reserved control 

‘‘supplements and reinforces’’ evidence 

that the entity also possesses or 

exercises direct and immediate control 

over essential terms and conditions of 

employment.7 The final rule also 

explained that establishing that an 

entity ‘‘shares or codetermines the 

essential terms and conditions of 

another employer’s employees’’ requires 

showing that the entity ‘‘possess[es] and 

exercise[s] such substantial direct and 

immediate control over one or more 

essential terms or conditions of their 

employment as would warrant finding 

that the entity meaningfully affects 

matters relating to the employment 


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8 Id. at 11235. 

9 Id. at 11236. 

10 Id. at 11235–11236. 

11The NPRM set the deadline for initial 

comments as November 7, 2022, and comments 

replying to comments submitted during the initial 

comment period were due November 21, 2022. 87 

FR at 54641. On October 14, 2022, the Board 

extended the deadlines for submitting initial and 

reply comments for 30 days, to December 7, 2022, 

and December 21, 2022, respectively. 87 FR 63465 

(October 19, 2022). 

12Our dissenting colleague suggests that the 2020 

rule is defensible, as a discretionary choice, to 

decline to exert joint-employer jurisdiction over 

entities who might be statutory employers by virtue 

of reserved but unexercised control, but who have 

not actually exercised their authority to control 

terms and conditions of employment of another 

entity’s employees. Assuming arguendo that the 

Board could exercise its discretion to decline 

jurisdiction in this manner, the 2020 rule nowhere 

presents that rationale as underlying its actualexercise requirement. Moreover, any such claim is 

inconsistent with our dissenting colleague’s 

additional assertion, discussed further below, that 

the current final rule goes ‘‘beyond the boundaries 

of the common law’’ by eliminating the 2020 rule’s 

actual-exercise requirement. 

13Our dissenting colleague implicitly criticizes us 

for citing ‘‘a plethora of decisions (including state 

law cases more than a hundred years old), the 

majority of which focus on independent contractor, 

workers’ compensation, and tort liability matters.’’ 

We find it entirely appropriate, however, to seek 

guidance on the meaning of common-law terms in 

the Act in judicial opinions where common-law 

issues most frequently arise, written by state judges 

primarily responsible for applying the common law, 

from time periods that shed light on the meaning 

of those terms when Congress used them. 

14Contrary to our dissenting colleague, apart from 

recognizing that the Board must follow commonlaw agency principles in determining who is an 

‘‘employer’’ and an ‘‘employee’’ under Sec. 2 of the 

Act, we do not conclude that the common law 

dictates the specific details of the joint-employer 

standard we articulate herein. Rather, as discussed 

in more detail above and below, the final rule 

reflects our policy choices, within the bounds of the 

common law, in furtherance of the policy of the 

United States, as set forth in Sec. 1 of the Act, to 

encourage the practice and procedure of collective 

bargaining, including by providing a mechanism by 

which an entity’s rights and obligations under the 

Act may be accurately aligned with its authority to 

control employees’ essential terms and conditions 

of employment. 

15 87 FR at 54648–54650. 

16As we explained more fully in the NPRM, a 

‘‘servant’’ is an employee. 87 FR at 54645 fn. 28. 

See, e.g., 30 C.J.S. Employer—Employee sec. 1 

(2022) (‘‘The terms ‘servant’ and ‘employee’ are 

interchangeable.’’); Horace Gray Wood, A Treatise 

on the Law of Master and Servant; Covering the 

Relation, Duties and Liabilities of Employers and 

Employees (1877). 

relationship with those employees.’’ 8 In 

turn, the final rule defined ‘‘substantial 

direct and immediate control’’ to mean 

‘‘direct and immediate control that has 

a regular or continuous consequential 

effect on an essential term or condition 

of employment of another employer’s 

employees’’ and ‘‘substantial’’ to 

exclude control that is ‘‘only exercised 

on a sporadic, isolated, or de minimis 

basis.’’ 9 The final rule set forth an 

‘‘exhaustive’’ list of essential terms and 

conditions of employment comprised of 

‘‘wages, benefits, hours of work, hiring, 

discharge, discipline, supervision, and 

direction’’ and discussed some 

examples of conduct that would or 

would not rise to the level of direct and 

immediate control of each term or 

condition on the list.10

C. The Notice of Proposed Rulemaking 

On September 7, 2022, the Board 

issued a new joint-employer NPRM. 87 

FR 54641, 54663 (September 7, 2022). In 

the NPRM, the Board detailed recent 

developments in its joint-employer law. 

The Board noted that the Board’s 2020 

final rule (2020 rule) marked the first 

occasion when the Board addressed 

joint-employer doctrine through 

rulemaking. The NPRM stated the 

Board’s preliminary view, subject to 

comments, that the 2020 rule’s embrace 

of control-based restrictions 

unnecessarily narrowed the common 

law and threatened to undermine the 

goals of Federal labor law. The NPRM 

invited comments on these issues and 

on all aspects of the proposed rule, 

seeking input from employees, 

employers, and unions regarding their 

experience in workplaces where 

multiple entities have authority over the 

workplace. 

The Board set an initial comment 

period of 60 days with 14 additional 

days allotted for reply comments. 

Thereafter, the Board extended these 

deadlines to allow interested parties to 

comment for an additional 30 days.11

D. Relevant Common Law Principles 

As discussed in more detail below, 

the Board has concluded, after careful 

consideration of relevant comments, 

that the 2020 rule must be rescinded 

because it is contrary to the commonlaw agency principles incorporated into 

the Act when it was adopted and, 

accordingly, is not a permissible 

interpretation of the Act.12 Although we 

believe that the Board is required to 

rescind the 2020 rule, we would do so 

even if that rule were valid because it 

fails to fully promote the policies of the 

Act, as explained below. 

First, it is well established—and our 

dissenting colleague agrees—that the 

statutory terms ‘‘employer’’ and 

‘‘employee’’ have their common-law 

meaning, and that the common law 

accordingly governs the Board’s jointemployer analysis. See, e.g., BFI v. 

NLRB, 911 F.3d at 1207–1208. In the 

preamble to the proposed rule, the 

Board (quoting the District of Columbia 

Circuit, id. at 1208–1209) acknowledged 

that ‘‘Congress has tasked the courts, 

and not the Board, with defining the 

common-law scope of ‘employer’ ’’ and 

that ‘‘the common-law lines identified 

by the judiciary’’ thus delineate the 

boundaries of the ‘‘policy expertise that 

the Board brings to bear’’ on the 

question of whether a business entity is 

a joint employer of another employer’s 

employees under the Act. 87 FR at 

54648. Accordingly, in defining the 

types of control that will be sufficient to 

establish joint-employer status under 

the Act, the Board looks for guidance 

from the judiciary, including primary 

articulations of relevant principles by 

judges applying the common law, as 

well as secondary compendiums, 

reports, and restatements of these 

common law decisions, focusing ‘‘first 

and foremost [on] the ‘established’ 

common-law definitions at the time 

Congress enacted the National Labor 

Relations Act in 1935 and the TaftHartley Amendments in 1947.’’ Id. at 

1209 (citations omitted).13

After consideration of relevant 

comments, the Board has concluded 

that the actual-exercise requirement 

reflected in the 2020 rule is (as 

described in relevant detail below) is 

contrary to the common-law agency 

principles that must govern the jointemployer standard under the Act and 

that the Board has no statutory authority 

to adopt such a requirement. The Board 

has further concluded that the policies 

of the Act, consistent with the commonlaw principles governing the Act’s 

interpretation, make it appropriate for 

the Board to give determinative weight 

to the existence of a putative joint 

employer’s authority to control essential 

terms and conditions of employment, 

whether or not such control is 

exercised, and without regard to 

whether any such exercise of control is 

direct or indirect, such as through an 

intermediary.14

1. Reserved Control 

First, as previously set forth in the 

NPRM,15 long before the 1935 

enactment of the Act, the Supreme 

Court recognized and applied a 

common-law rule that ‘‘the relation of 

master and servant exists whenever the 

employer retains the right to direct the 

manner in which the business shall be 

done, as well as the result to be 

accomplished, or, in other words, ‘not 

only what shall be done, but how it 

shall be done.’ ’’ Singer Mfg. Co. v. 

Rahn, 132 U.S. 518, 523 (1889) 

(emphasis added) (quoting Railroad Co. 

v. Hanning, 82 U.S. 649, 657 (1872)). 

The Court in Singer affirmed the 

holding below that a worker was an 

employee 16 of a company because the 

Court concluded that the company had 

contractually reserved such control over 


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17See also Chicago Rock Island & Pac. Ry. Co. v. 

Bond, 240 U.S. 449, 456 (1916) (worker was not 

employee of railroad company where contract 

provided ‘‘company reserves and holds no control 

over [worker] in the doing of such work other than 

as to the results to be accomplished,’’ and Court 

found company ‘‘did not retain the right to direct 

the manner in which the business should be done, 

as well as the results to be accomplished, or, in 

other words, did not retain control not only of what 

should be done, but how it should be done.’’) 

(emphasis added); Little v. Hackett, 116 U.S. 366, 

376 (1886) (‘‘[I]t is this right to control the conduct 

of the agent which is the foundation of the doctrine 

that the master is to be affected by the acts of his 

servant.’’) (emphasis added) (quoting Bennet v. New 

Jersey R.R. & Transp. Co., 36 N.J.L. 225 (N.J. 1873)). 

We are puzzled by our colleague’s suggestion that 

Singer somehow fails to support the proposition 

that contractual authority to control can establish a 

joint-employer relationship because the company 

engaged the worker and compensated him for his 

work. As discussed further below, ordinary contract 

terms providing generally for engaging workers and 

setting general price terms are common features of 

any independent-contractor arrangement, and are, 

accordingly, not relevant to either the jointemployer analysis or the common-law employeremployee analysis. 

18 Maltz v. Jackoway-Katz Cap Co., 82 SW2d 909, 

912, 918 (Mo. 1934). See also McDermott’s Case, 

186 NE 231, 232–233 (Mass. 1933) (‘‘One may be 

a servant though far away from the master, or so 

much more skilled than the master that actual 

direction and control would be folly, for it is the 

right to control, rather than the exercise of it that 

is the test.’’); Larson v. Independent School Dist No. 

11J of King Hill, 22 P.2d 299, 301 (Idaho 1933) (‘‘It 

is not necessary that control be exercised, if the 

right of control exists.’’); Gordon v. S.M. Byers 

Motor Car Co., 164 A. 334, 335–336 (Pa. 1932) 

(‘‘The control of the work reserved in the employer 

which makes the employee a mere servant . . . 

means a power of control, not necessarily the 

exercise of the power.’’) (internal quotation and 

citation omitted); Brothers v. State Industrial 

Accident Commission, 12 P.2d 302, 304 (Or. 1932) 

(‘‘[T]he true test of the relationship of employer and 

employee is not the actual exercise of control, but 

the right to exercise control.’’) (internal quotation 

and citation omitted); Murrays Case, 154 A. 352, 

354 (Me. 1931) (‘‘Authorities are numerous and 

uniform that the vital test is to be found in the fact 

that the employer has or not retained power of 

control or superintendence over the employee or 

contractor. The test of the relationship is the right 

to control. It is not the fact of actual interference 

with the control, but the right to interfere that 

makes the difference between an independent 

contractor and a servant or agent. There is no 

conflict as to this general rule’’) (internal quotation 

and citation omitted); Van Watermeullen v. 

Industrial Commission, 174 NE 846, 847–848 (Ill. 

1931) (‘‘One of the principal factors which 

determine whether a worker is an employee or an 

independent worker is the matter of the right to 

control the manner of doing the work, not the actual 

exercise of that right.’’); Norwood Hospital v. 

Brown, 122 So. 411, 413 (Ala. 1929) (‘‘[T]he 

ultimate question . . . is not whether the employer 

actually exercised control, but whether it had a 

right to control.’’). 19 Grace v. Magruder, 148 F.2d 679, 681 (D.C. Cir. 

1945). See also Industrial Commission v. Meddock, 

180 P.2d 580, 584 (Ariz. 1947) (‘‘It is the right to 

control rather than the fact that the employer does 

control that determines the status of the parties, and 

this right to control is, in turn, tested by those 

standards applicable to the facts at hand.’’); D.M. 

Rose & Co. v. Snyder, 206 SW 2d 897, 904 (Tenn. 

1947) (internal quotations and citations omitted) 

(‘‘[The] right of control is the distinguishing mark 

which differentiates the relation of master and 

servant from that of employer and independent 

contractor . . . . Wherever the defendant has had 

such right of control, irrespective of whether he 

exercised it or not, he has been held to be the 

responsible principal or master.’’); Green Valley 

Coop. Dairy Co. v. Industrial Comm’n, 27 NW 2d 

454, 457 (Wis. 1947) (citation omitted) (‘‘It is quite 

immaterial whether the right to control is exercised 

by the master so long as he has the right to exercise 

such control.’’); Bobik v. Industrial Comm’n, 64 NE 

2d, 829, (Ohio 1946) (‘‘[I]t is not, however, the 

actual exercise of the right by interfering with the 

work but rather the right to control which 

constitutes the test.’’); Cimorelli v. New York Cent. 

R. Co., 148 F.2d 575, 578 (6th Cir. 1945) (‘‘The fact 

of actual interference or exercise of control by the 

employer is not material. If the existence of the 

right or authority to interfere or control appears, the 

contractor cannot be independent.’’); Dunmire v. 

Fitzgerald, 37 A.2d 596, 599 (Pa. 1944) (in 

determining ‘‘who was the controlling master of the 

borrowed employe[e], . . . . The criterion is not 

whether the borrowing employer in fact exercised 

control, but whether he had the right to exercise 

it.’’); Bush v. Wilson & Co., 138 P.2d 457, 461 (Kan. 

1943) (‘‘[W]hether a person is an employee of 

another depends upon whether the person who is 

claimed to be an employer had a right to control 

the manner in which the work was done. It has 

been pointed out many times that this means not 

actually the exercise of control, but does mean the 

right to control.’’); Ross v. Schneider, 27 SE 2d 154, 

157 (Va. 1943) (quoting Murray’s Case, 154 A. 352, 

354 (Me. 1931)) (‘‘Authorities are numerous and 

uniform that the vital test is to be found in the fact 

that the employer has or not retained power of 

control or superintendence over the employee or 

contractor. ‘The test of the relationship is the right 

to control. It is not the fact of actual interference 

with the control, but the right to interfere that 

makes the difference between an independent 

contractor and a servant or agent.’ Tuttle v. EmburyMartin Lumber Co., [158 NW 875, 879 (Mich. 

1916)].’’); Jones v. Goodson, 121 F.2d 176, 179 (10th 

Cir. 1941) (‘‘[T]he legal relationship of employer 

and employee . . . exists when the person for 

whom services are performed has the right to 

control and direct . . . the details and means by 

which [the service] is accomplished. . . . it is not 

necessary that the employer actually direct or 

control the manner in which the services are 

performed; it is sufficient if he has the right to do 

so.’’); S.A. Gerrard Co. v. Industrial Accident 

Comm’n, 110 P.2d 377 (Cal. 1941) (‘‘[T]he right to 

control, rather than the amount of control which 

was exercised, is the determinative factor.’’). 

20 General discussion of the nature of the 

relationship of employer and independent 

contractor, 19 A.L.R. 226 at sec. 7 & fn. 1 (1922) 

(emphasis added) (citations omitted). A 1931 A.L.R. 

annotation similarly reports that ‘‘[i]t is not the fact 

of actual interference or exercise of control by the 

employer which renders one a servant rather than 

an independent contractor, but the existence of the 

right or authority to interfere or control.’’ Tests in 

determining whether one is an independent 

contractor, 75 A.L.R. 725 (1931). 

Other, earlier secondary authority was also 

consistent with this view. For example, the second 

edition of The American & English Encyclopedia of 

Law, published over several years spanning the turn 

of the century, explains that ‘‘[t]he relation of 

master and servant exists where the employer has 

the right to select the employee; the power to 

remove and discharge him; and the right to direct 

both what work shall be done and the way and 

manner in which it shall be done.’’ 20 The 

American & English Encyclopedia of Law 12 Master 

and Servant (2d ed. 1902) (emphasis added) 

(citations omitted). Likewise, in 1907, the 

Cyclopedia of Law and Procedure defines ‘‘master,’’ 

inter alia, as ‘‘[o]ne who not only prescribes the 

end, but directs, or at any time may direct, the 

means and methods of doing the work.’’ 26 

Cyclopedia of Law and Procedure 966 fn. 2 Master 

and Servant (1907) (emphasis added) (citations 

omitted). The 1925 first edition of Corpus Juris 

echoes the same definitions set forth in the 

Continued 

the performance of the work that it 

‘‘might, if it saw fit, instruct [the 

worker] what route to take, or even what 

speed to drive.’’ Id. at 523. In reaching 

this conclusion, the Court relied solely 

on the parties’ contract and did not 

discuss whether or in what manner the 

company had ever actually exercised 

any control over the terms and 

conditions under which the worker 

performed his work. In other words, the 

Court found a common-law employeremployee relationship based on 

contractually reserved control without 

reference to whether or how that control 

was exercised.17

Between the Court’s decision in 

Singer and the relevant congressional 

enactments of the NLRA in 1935 and the 

Taft-Hartley amendments in 1947, 

Federal courts of appeals and State high 

courts consistently followed the 

Supreme Court in emphasizing the 

primacy of the right of control over 

whether or how it was exercised in 

decisions that turned on the existence of 

a common-law employer-employee 

relationship, including in contexts 

involving more than one potential 

employer. For example, in 1934, the 

Supreme Court of Missouri examined 

whether a worker was an ‘‘employee’’ of 

two companies under a State workers’ 

compensation statute—the terms of 

which the court construed ‘‘in the sense 

in which they were understood at 

common law’’—and affirmed that ‘‘the 

essential question is not what the 

companies did when the work was 

being done, but whether they had a right 

to assert or exercise control.’’ 18 And, in 

1945, the Court of Appeals for the 

District of Columbia Circuit explained 

that, in distinguishing employees from 

independent contractors, ‘‘it is the right 

to control, not control or supervision 

itself, which is most important.’’ 19

Unsurprisingly, early twentieth 

century secondary authority similarly 

distills from the cases a common-law 

rule under which the right of control 

establishes the existence of the 

common-law employer-employee 

relationship, without regard to whether 

or how such control is exercised. For 

example, in 1922, an American Law 

Report (A.L.R.) annotation states as 

black-letter law that: 

In every case which turns upon the nature 

of the relationship between the employer and 

the person employed, the essential question 

to be determined is not whether the former 

actually exercised control over the details of 

the work, but whether he had a right to 

exercise that control.20


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Cyclopedia, and additionally notes state high court 

common-law authority holding that ‘‘where the 

master has the right of control, it is not necessary 

that he actually exercise such control.’’ 39 C.J. 

Master and Servant sec. 1 Definitions 33 fn. 8 (1st 

ed. 1925) (emphasis added) (quoting Tucker v. 

Cooper, 158 P. 181 (Cal. 1916)). 

21Restatement (First) of Agency sec. 2 (Am. Law 

Inst. 1933) (emphasis added). See also id. at sec. 

220 (‘‘A servant is a person employed to perform 

a service for another in his affairs and who, with 

respect to his physical conduct in the performance 

of the service, is subject to the other’s control or 

right to control.’’) (emphasis added). As noted 

above, the District of Columbia Circuit observed in 

BFI v. NLRB, 911 F.3d at 1211, that ‘‘the ‘right to 

control’ runs like a leitmotif through the 

Restatement (Second) of Agency,’’ which, though 

published in 1958, is relevantly similar to the first 

Restatement. 

22 35 Am. Jur. Master and Servant sec. 3 (1st ed. 

1941) (emphasis added). 

23Ayala v. Antelope Valley Newspapers, Inc., 327 

P.3d 165, 169, 172 (Cal. 2014); see also, e.g., GarciaCelestino v. Ruiz Harvesting, Inc., 898 F.3d 1110, 

1121 (11th Cir. 2018) (‘‘We emphasize that ‘it is the 

right to control, not the actual exercise of control 

that is significant.’ ’’); Mallory v. Brigham Young 

Univ., 332 P.3d 922, 928–929 (Utah 2014) (‘‘If the 

principal has the right to control the agent’s method 

and manner of performance, that agent is a servant 

whether or not the right is specifically exercised.’’); 

Shatto v. McLeod Regional Medical Center, 753 

SE2d 416, 419, 420 (S.C. 2013) (‘‘While evidence of 

actual control exerted by a putative employer is 

evidence of an employment relationship, the 

critical inquiry is whether there exists the right and 

authority to control and direct the particular work 

or undertaking.’’); Anthony v. Okie Dokie Inc., 976 

A.2d 901, 906 (D.C. 2009) (quoting Safeway Stores 

Inc. v. Kelly, 448 A.2d 856, 860 (D.C. 1982)) (‘‘The 

determinative factor ‘is whether the employer has 

the right to control and direct the servant in the 

performance of his work and the manner in which 

the work is to be done . . . and not the actual 

exercise of control or supervision.’ ’’); Universal 

Am-Can Ltd. V. WCAB, 762 A.2d 328, 332–333 (Pa. 

2000) (‘‘[I]t is the existence of the right to control 

that is significant, irrespective of whether the 

control is actually exercised.’’); Reed v. Glyn, 724 

A.2d 464, 466 (Vt. 1998) (‘‘It is to be observed that 

actual interference with the work is unnecessary— 

it is the right to interfere that determines.’’); JFC 

Temps, Inc. v. W.C.A.B. (Lindsay), 620 A.2d 862, 

864–865 (Pa. 1996) (‘‘The law governing the 

‘‘borrowed’’ employee is well-established. . . . The 

entity possessing the right to control the manner of 

the performance of the servant’s work is the 

employer, irrespective of whether the control is 

actually exercised.’’); Harris v. Miller, 438 SE 2d 

731, 735 (N.C. 1994) (‘‘The traditional test of 

liability under the borrowed servant rule [provides 

that] a servant is the employe (sic) of the person 

who has the right of controlling the manner of his 

performance of the work, irrespective of whether he 

actually exercises that control or not.’’) (internal 

quotation and citation omitted); Beddia v. Goodin, 

957 F.2d 254, 257 (6th Cir. 1992) (‘‘The test is 

whether the employer retained control, or the right 

to control, the modes and manner of doing the work 

contracted for. It is not necessary that the control 

ever be exercised.’’); Ex parte Curry, 607 S.2d 230, 

232 (Ala. 1992) (‘‘In the last analysis, it is the 

reserved right of control rather than its actual 

exercise that provides the answer.’’); ARA Leisure 

Services, Inc. v NLRB, 782 F.2d 456, 460 (4th Cir. 

1986) (‘‘It is the right to control, rather than the 

actual exercise of control, that is significant.’’); 

NLRB v. Associated Diamond Cabs, Inc., 702 F.2d 

912, 920 (11th Cir. 1983) (‘‘[I]t is the right to control, 

not the actual exercise of control, that is 

significant.’’); Glenmar Cinestate Inc. v. Farrell, 292 

SE2d 366, 369 (Va. 1982) (‘‘It is not the fact of 

actual interference with the control, but the right to 

interfere, that makes the difference between an 

independent contractor and a servant or agent.’’); 

Baird v. Sickler, 433 NE 2d 593, 594–595 (Ohio 

1982) (‘‘For the relationship to exist, it is 

unnecessary that such right of control be exercised; 

it is sufficient that the right merely exists.’’); 

Seafarers Local 777 (Yellow Cab) v. NLRB, 603 F.2d 

862, 874 (D.C. Cir. 1978) (quoting Williams v. U.S., 

126 F.2d 129, 132 (7th Cir. 1942)) (‘‘[I]t is the right 

and not the exercise of control which is the 

determining element.’’); Combined Insurance Co. of 

America v. Sinclair, 584 P.2d 1034, 1042 (Wyo. 

1978) (‘‘The base determining factor is whether 

[putative employer] retained [t]he right of control of 

the manner that [putative employee] operated his 

vehicle and not whether such control was in fact 

exercised.’’); NLRB v. Deaton Inc., 502 F.2d 1221, 

1225 (5th Cir. 1974) (‘‘It is the right and not the 

exercise of control which is the determining 

element’’); Dovell v. Arundel Supply Corp., 361 

F.2d 543, 545 (D.C. Cir. 1966) (quoting Grace v. 

Magruder, 148 F.2d 679, 681 (D.C. Cir. 1945)) (‘‘[I]t 

is the right to control, not control or supervision 

itself, which is most important.’’); United Ins. Co. 

of America v. NLRB, 304 F.2d 86, 89 (7th Cir. 1962) 

(‘‘[I]t is the right and not the exercise of control 

which is the determining element.’’); Cohen v. Best 

Made Mfg. Co., 169 A.2d 10, 11–12 (R.I. 1961) (‘‘The 

final test is the right of the employer to exercise 

power of control rather than the actual exercise of 

such power.’’); Fardig v. Reynolds, 348 P.2d 661, 

663 (Wash. 1960) (‘‘It is well settled in this state 

that . . . [it] is not the actual exercise of the right 

of interference with the work, but the right to 

control, which constitutes the test.’’). 

24See Restatement (Second) of Agency secs. 2, 

220 (Am. Law Inst. 1958). 

25 30 C.J.S. Employer—Employee sec. 1 (2022) 

(emphasis added) (citations omitted). 

26 27 Am. Jur. 2d. Employment Relationship sec. 

1 (2022) (emphasis added) (citations omitted). 

27BFI v. NLRB, 911 F.3d at 1210 & fn. 6. 

And, the first Restatement of Agency, 

published in 1933, defines ‘‘master,’’ 

and ‘‘servant,’’ thus: 

(1) A master is a principal who employs 

another to perform service in his affairs and 

who controls or has the right to control the 

physical conduct of the other in the 

performance of the service. 

(2) A servant is a person employed by a 

master to perform service in his affairs whose 

physical conduct in the performance of the 

service is controlled or is subject to the right 

of control by the master.21

Finally, the first edition of American 

Jurisprudence, published between 1936 

and 1948, states that ‘‘the really 

essential element of the [employeremployee] relationship is the right of 

control—the right of one person, the 

master, to order and control another, the 

servant, in the performance of work by 

the latter, and the right to direct the 

manner in which the work shall be 

done,’’ and ‘‘[t]he test of the employeremployee relation is the right of the 

employer to exercise control of the 

details and method of performing the 

work.’’ 22

The Board believes, after careful 

consideration of relevant comments as 

discussed further below, and based on 

consultation of this and other judicial 

authority, that when Congress enacted 

the NLRA in 1935 and the Taft-Hartley 

Amendments in 1947, the existence of 

a putative employer’s reserved authority 

to control the details of the terms and 

conditions under which work was 

performed sufficed to establish a 

common-law employer-employee 

relationship without regard to whether 

or in what manner such control was 

exercised. 

From 1947 to today, innumerable 

judicial decisions and secondary 

authorities examining the common-law 

employer-employee relationship have 

continued to emphasize the primacy of 

the putative employer’s authority to 

control, without regard to whether or in 

what manner that control has been 

exercised. For example, in 2014, the 

Supreme Court of California affirmed 

that ‘‘what matters under the common 

law is not how much control a hirer 

exercises, but how much control the 

hirer retains the right to exercise.’’ 23 As 

noted above, the Restatement (Second) 

of Agency relevantly echoes the First 

Restatement’s emphasis on the right of 

control.24 Corpus Juris Secundum 

provides that ‘‘[a]n employee/servant is 

a type of agent whose physical conduct 

is controlled or is subject to the right to 

control by the master; the servant’s 

principal, who controls or has the right 

to control the physical conduct of the 

servant, is called the master.’’ 25 And, 

the second edition of American 

Jurisprudence provides that ‘‘the 

principal test of an employment 

relationship is whether the alleged 

employer has the right to control the 

manner and means of accomplishing the 

result desired.’’ 26 Based on its 

examination of this and other judicial 

and secondary authority, the Board 

agrees with the District of Columbia 

Circuit that ‘‘for what it is worth [the 

common-law rule in 1935 and 1947] is 

still the common-law rule today.’’ 27 The 

Board also notes that, as set forth in 

greater detail above, this view is in 

keeping with the Board’s prior treatment 

of reserved control in the period 

following the Greyhound decision and 

before the Board began imposing 

additional control-related restrictions in 

TLI/Laerco and their progeny. 

Finally, because the facts of many 

cases do not require distinguishing 

between contractually reserved and 

actually exercised control, many 

judicial decisions and other authorities 

spanning the last century have 

articulated versions of the common-law 

test that do not expressly include this 

distinction. But the Board is not aware 

of any common-law judicial decision or 

other common-law authority directly 

supporting the proposition that, given 

the existence of a putative employer’s 


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28Nationwide Mutual Insurance Co. v. Darden, 

503 U.S. 318, 322–324 (1992). 

29Community for Creative Non-Violence v. Reid, 

490 U.S. 730, 751 (1989). 

30Our dissenting colleague argues that judicial 

precedent distinguishing between independent 

contractors and employees is ‘‘ill-suited to fully 

resolve joint-employer issues’’ in part because, he 

contends, the principal in an independentcontractor relationship ‘‘necessarily exercises direct 

control of at least two things that . . . constitute 

essential terms and conditions,’’ by engaging the 

worker and deciding upon the compensation to be 

paid for the work. This argument proves too much, 

because an entity that actually determined which 

particular employees would be hired and actually 

determined the wage rates of another entity’s 

employees would be a joint employer of those 

employees for the purposes of the Act under any 

joint-employer standard, including the 2020 rule. 

See 85 FR at 11235–11236. Because every contract 

for the performance of work includes price terms 

and provides for engaging at least one worker, if 

such provisions alone were, as our colleague 

asserts, the equivalent of exercising direct control 

over hiring and wages—essential terms and 

conditions of employment under the Act—then no 

joint-employer standard could distinguish between 

control sufficient to establish a joint-employer 

relationship and control insufficient to establish a 

common-law employment relationship when 

considering only a single principal and a single 

worker. From this it is clear that, contrary to our 

colleague’s assertion, ordinary contract terms 

providing generally for engaging workers and 

setting general price terms do not constitute an 

exercise of direct control over the essential terms 

and conditions of employment of hiring and wages. 

As discussed further below, Sec. 103.40(f) expressly 

incorporates this distinction by providing that 

evidence of an entity’s control over matters that are 

immaterial to the existence of a common-law 

employment relationship and that do not bear on 

the employees’ essential terms and conditions of 

employment is not relevant to the determination of 

whether an entity is a joint employer. Recognizing 

this commonsense distinction in no way 

undermines our examination of independentcontractor authority for guidance on the commonlaw employment relationship. 

31See BFI v. NLRB, 911 F.3d at 1195 

(‘‘[E]mployee-or-independent-contractor cases can 

. . . be instructive in the joint-employer inquiry to 

the extent that they elaborate on the nature and 

extent of control necessary to establish a commonlaw employment relationship. Beyond that, a rigid 

focus on independent-contractor analysis omits the 

vital second step in joint-employer cases, which 

asks, once control over workers is found, who is 

exercising that control, when, and how.’’) (emphasis 

in original). 

32 42 U.S.C. 2000e et seq. 

33We need not decide whether the statutes our 

colleague refers to are ‘‘materially similar’’ to the 

NLRA, because, as discussed below, courts’ 

discussion and application of common-law 

principles in the cases cited by our colleague fully 

support the Board’s position. We note, however, 

that these statutes define ‘‘employer’’ and 

‘‘employee’’ differently from the Act and examine 

the relationship in different contexts. For instance, 

Title VII excludes entities that would clearly be 

statutory employers under the NLRA by defining 

‘‘employer’’ as ‘‘a person engaged in an industry 

affecting commerce who has fifteen or more 

employees for each working day in each of twenty 

or more calendar weeks in the current or preceding 

calendar year, and any agent of such a person,’’ 

subject to exclusions that also differ from the 

exclusions provided under Sec. 2 of the Act. 

Compare 42 U.S.C. 2000e(b) with 29 U.S.C. 152. 

Moreover, joint-employer questions under Title VII 

and similar statutes primarily arise in the context 

of assigning liability for workplace discrimination 

in violation of employees’ individual rights. Under 

the NLRA, by contrast, such questions arise in an 

additional forward-looking context: in order to 

correctly allocate prospective bargaining rights and 

obligations in support of employees’ collective right 

to bargain. Assuming that Title VII and similar 

statutes, like the Act, require reference to the 

content of the common-law terms ‘‘employer’’ and 

‘‘employee,’’ the necessity under the Act of 

prospectively defining bargaining obligations may 

tend to focus the common-law inquiry on questions 

involving reserved or indirect control more 

frequently than is likely under primarily backwardlooking individual-rights-protecting statutes. 

34See, e.g., Felder v. U.S. Tennis Assn., 27 F.4th 

834, 843 (2d Cir. 2022) (relying, inter alia, on Reid 

and Restatement (Second) of Agency § 220); GarciaCelestino v. Ruiz Harvesting, Inc., 843 F.3d 1276, 

1286–1287 (11th Cir. 2016) (relying on Darden and 

Reid); Al-Saffy v. Vilsack, 827 F.3d 85 (D.C. Cir. 

2016) (relying, inter alia, on ‘‘traditional agency law 

principles’’ citing Darden); Faush v. Tuesday 

Morning, Inc., 808 F.3d 208 (3d Cir. 2015) (‘‘the 

common-law test outlined in Darden governs’’); 

Plaso v. IJKG, LLC, 553 Fed. Appx. 199, 203–204 (3d 

Cir. 2015) (considering Darden factors). 

Some of the decisions our colleague cites are less 

clearly relevant, because they employ an ‘‘economic 

realities’’ test, or a hybrid test that incorporates 

elements of both a common-law control test and an 

economic-realities test. See, e.g., Perry v. VHS San 

Antonio, LLC, 990 F.3d 918, 928–929 (5th Cir. 2021) 

(applying ‘‘hybrid economic realities/common law 

control test’’); Frey v. Hotel Coleman, 903 F.3d 671, 

676 (7th Cir. 2018) (applying ‘‘an ‘economic 

realities’ test which is, in essence, an application of 

general principles of agency law to the facts of the 

case’’); Al-Saffy v. Vilsack, 827 F.3d at 96 (noting 

one of two recognized ‘‘articulations of the test for 

identifying joint-employer status. . . . speaks in 

terms of the ‘economic realities’ of the work 

relationship’’). Of course, as we note elsewhere, the 

Board is precluded by Supreme Court decisions 

interpreting the Taft-Hartley amendments from 

applying an economic-realities test. See, e.g., NLRB 

v. United Insurance Co. of America, 390 U.S. 254, 

256 (1968). Given that our colleague elsewhere 

Continued 

contractually reserved authority to 

control, further evidence of direct and 

immediate exercise of that control is 

necessary to establish a common-law 

employer-employee relationship. 

For these reasons, the Board believes 

that in light of controlling common-law 

agency principles, it does not have the 

statutory authority to require a showing 

of actual exercise of direct and 

immediate control in order to establish 

that an entity is a joint employer of 

another entity’s employees. We would 

not choose to do so, as a matter of 

policy, in any case. 

Our dissenting colleague faults us, in 

turn, both for seeking authority on 

relevant common-law principles in 

sources examining the distinction 

between employees and independent 

contractors and for failing to pay 

sufficient attention to judicial decisions 

examining joint-employer issues under 

other federal statutes in light of 

common-law principles derived from 

independent-contractor authority. In 

support of the first criticism, our 

colleague quotes selectively from BFI v. 

NLRB, in which the court rejected a 

party’s contention that the jointemployer and independent-contractor 

tests were ‘‘virtually identical.’’ 911 

F.3d at 1213–1215. We recognize, as did 

the court there, that several of the 

factors that guide the employee-orindependent-contractor determination, 

as articulated in primary judicial 

authority like Darden 28 and Reid 29 and 

in secondary compendiums, reports, 

and restatements of the common law of 

agency bearing on independentcontractor determinations will ‘‘shed no 

meaningful light’’ on joint-employer 

questions, which involve workers who 

are clearly some entity’s employees. 911 

F.3d at 1214–1215. Nevertheless, we 

agree with the court that ‘‘both tests 

ultimately probe the existence of a 

common-law master-servant 

relationship, [a]nd central to 

establishing a master-servant 

relationship—whether for purposes of 

the independent-contractor inquiry or 

the joint-employer inquiry—is the 

nature and extent of a putative master’s 

control.’’ Id. at 1214. The final rule is 

thus consistent with NLRB v. BFI in 

seeking guidance from common law 

material bearing on the independentcontractor determination to examine, as 

a threshold matter under Section 

103.40(a), whether a common-law 

employer-employee relationship exists 

between a putative joint employer and 

particular employees.30 Once the party 

seeking to demonstrate joint-employer 

status establishes the existence of a 

threshold common-law employment 

relationship, the final rule appropriately 

provides for an examination, under 

Section 103.40(c), of whether the 

character and objects of such control. 

i.e., who may exercise it, when, and 

how, extends to essential terms and 

conditions of employment that are the 

central concern of the joint-employer 

analysis within the specific context of 

the NLRA.31

Our dissenting colleague faults us for 

failing to pay sufficient heed to judicial 

decisions examining joint-employer 

questions under other statutes, 

especially Title VII of the Civil Rights 

Act of 1964,32 that he claims are 

materially similar to the NLRA.33 As a 

threshold matter, because many of the 

decisions our colleague cites take 

independent-contractor authority as the 

starting point for their analysis of jointemployer questions, these cases support 

the Board’s similar examination of 

articulations of common-law principles 

in independent-contractor authority for 

guidance on the joint-employer analysis 

under the NLRA.34


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expresses his agreement with our view that the 

Board must apply common-law agency principles 

in making joint-employer determinations under the 

Act, we find his observation that NLRB v. Hearst 

Publications, 322 U.S. 111 (1944), involved a 

question of employee-or-independent-contractor 

status rather than a question of joint-employer 

status to be something of a non sequitur. 

Finally, some of the cases our colleague relies 

upon are at best attenuated sources of authority on 

the content of the common law to the extent that 

they articulate a joint-employer standard ultimately 

derived from Board decisions—including Board 

decisions imposing an actual-exercise requirement 

without reference to any common-law authority. 

See, e.g., Nethery v. Quality Care Investors, L.P., 814 

Fed. Appx. 97 (6th Cir. 2020) (applying ‘‘share-orcodetermine’’ standard derived from NLRB v. 

Browning-Ferris Industries of Pennsylvania, Inc. 

(NLRB v. BFI of Pennsylvania), 691 F.2d 1117, 1124 

(3d Cir. 1982), via Carrier Corp. v. NLRB, 768 F.2d 

778, 781 (6th Cir. 1985)); Al-Saffy v. Vilsack, 827 

F.3d at 96 (noting one of two recognized 

‘‘articulations of the test for identifying jointemployer status. . . . borrows language from’’ 

NLRB v. BFI of Pennsylvania, above); Plaso v. IJKG, 

LLC, 553 Fed. Appx. at 204 (relying in part on NLRB 

v. BFI of Pennsylvania for ‘‘significant control’’ 

formulation); Whitaker v. Milwaukee County, 772 

F.3d 802, 810 (7th Cir. 2014) (discussed further 

below, noting ‘‘joint employer concept derives from 

labor law,’’ and citing post-TLI/Laerco NLRA 

precedent); Graves v. Lowery, 117 F.3d 723, 727 (3d 

Cir. 1997) (drawing guidance from Board ‘‘cases 

which have found joint employment status when 

two entities exercise significant control over the 

same employees’’) (citing NLRB v. BFI of 

Pennsylvania and post-TLI/Laerco NLRA 

precedent). 

35 In Garcia-Celestino v. Ruiz Harvesting, Inc., for 

example, the court concluded that, under the 

common-law standard applicable to the jointemployer question before it—which it derived from 

Supreme Court independent-contractor precedent— 

‘‘the proper focus is on the hiring entity’s right to 

control the manner and means by which the 

product is accomplished.’’ 843 F.3d at 1292–1293 

(quotation omitted) (emphasis added). After remand 

to a district court to apply the common-law 

analysis, the court later emphasized that under the 

applicable common-law control test ‘‘it is the right 

to control, not the actual exercise of control, that 

is significant.’’ 898 F.3d 1110, 1121 (11th Cir. 2018) 

(quoting NLRB v. Associated Diamond Cabs, 702 

F.2d 912, 919–920 (11th Cir. 1983)) (emphasis in 

original). See also discussion of Butler v. Drive 

Automotive Industries of Am., 793 F.3d 404 (4th 

Cir. 2015) and EEOC v. Global Horizons, Inc., 915 

F.3d 631 (9th Cir. 2019), infra. 

36See Adams v. C3 Pipeline Constr. Inc., 30 F.4th 

943, 961 (10th Cir. 2021) (quoting Knitter v. Corvias 

Mil. Living, LLC, 758 F.3d 1214, 1226 (10th Cir. 

2014) (‘‘Both entities are employers if they both 

exercise significant control over the same 

employees.’’) (internal quotation and citation 

omitted); Plaso v. IJKG, LLC, 553 Fed. Appx. at 204 

(3d Cir. 2015) (‘‘a joint employment relationship 

exists when ‘two entities exercise significant 

control over the same employees.’ ’’) (quoting 

Graves, above); Bristol v. Bd. of Cnty. Comm’rs of 

Cnty. of Clear Creek, 312 F.3d 1213, 1218 (10th Cir. 

2002) (‘‘Courts applying the joint-employer test . . . 

look to whether both entities ‘exercise significant 

control over the same employees.’ ’’) (quoting 

Graves, above). 

37Significantly, because Felder involved a Title 

VII claim of discriminatory denial of credentials 

necessary to perform certain work, the alleged 

discriminatee never performed work for the 

putative joint employer, and the court’s analysis 

necessarily examined whether the putative joint 

employer ‘‘would have exerted control over the 

terms and conditions of [the employee’s] 

anticipated employment, by, for example, training, 

supervising, and disciplining [the employee]’’—in 

other words, whether it had the power, though 

never exercised, to exert the requisite control under 

appropriate circumstances. Id. at 845. The court 

concluded that the court below had not erred in 

dismissing the discriminatee’s Title VII claims with 

respect to the putative joint employer because the 

alleged discriminatee failed to allege that the 

putative joint employer ‘‘would have significantly 

controlled the manner and means’’ of his work so 

as to establish an employment relationship. 

38See Knitter, above, 758 F.3d at 1226 (quoting 

Bristol, above, 312 F.3d at 1218 (‘‘Under the joint 

employer test, two entities are considered joint 

employer . . . if they both ‘exercise significant 

control over the same employees.’ ’’)), and Plaso, 

above, 553 Fed. Appx. at 204 (quoting Graves, 

above, 117 F.3d at 727 (‘‘[A] joint employment 

relationship exists when ‘two entities exercise 

significant control over the same employees.’ ’’)). 

39As we have noted above, courts focused on 

particular factual records that do not turn on the 

precise role of reserved or indirect control have 

frequently and reasonably refrained from 

articulating versions of a common-law employeremployee or joint-employer standard that expressly 

address whether such control can suffice alone to 

establish the relationship. See, e.g., BFI v. NLRB, 

above, 911 F.3d at 1213 (‘‘[B]ecause the Board 

relied on evidence that Browning-Ferris both had a 

right to control and had exercised that control, this 

case does not present the question whether the 

reserved right to control, divorced from any actual 

exercise of authority, could alone establish a jointemployer relationship.’’). In crafting a Final Rule of 

general prospective applicability, however, our task 

is different. We must, accordingly, seek guidance 

from those judicial articulations of common-law 

standards that have expressly addressed the 

question of whether or how authority to control 

must be exercised in order to establish the relevant 

relationship. No number of cases holding only that 

the direct exercise of control is sufficient can 

rationally establish that the direct exercise of 

control is necessary. Conversely, though, the large 

body of authority expressly stating that the direct 

exercise of control is not necessary, and, in many 

cases finding the relevant relationship without any 

direct exercise of control, weighs heavily in favor 

of our conclusion that the Board may not, 

consistent with controlling common-law agency 

principles, impose such a requirement as part of a 

joint-employer standard. 

Moreover, far from supporting our 

colleague’s claim that the Board has 

‘‘gone beyond the boundaries of the 

common law’’ by eliminating the 2020 

rule’s actual-exercise requirement, none 

of the decisions he cites articulates a 

common-law principle that would 

preclude finding a joint-employer 

relationship based on evidence of 

reserved unexercised control or 

indirectly exercised control. To the 

contrary, several of the cited cases 

affirmatively support the Board’s 

conclusion that the common law 

permits the finding of a joint-employer 

relationship based solely upon reserved, 

unexercised control or upon control 

exercised indirectly, such as through an 

intermediary.35

To begin, several of the cases our 

colleague cites articulate a version of the 

joint-employer analysis that provides 

that an entity is a common-law 

employer if it ‘‘exercises significant 

control’’ over certain terms and 

conditions of workers’ employment.36

We agree that an entity’s actual exercise 

of control may be sufficient to establish 

an employment relationship, but 

nothing about this formulation entails or 

supports our colleague’s further 

contention that the actual exercise of 

control is necessary. As discussed 

above, the facts of many cases do not 

require distinguishing between reserved 

control and actually exercised control, 

or between control that is exercised 

directly or indirectly. Where no 

question of reserved or indirect control 

is presented, it is unsurprising that 

judges articulate the test in a manner 

that does not make such distinctions, 

and such articulations, absent a specific 

claim that actual exercise of control is 

a necessary component of the analysis, 

have little to say to the specific 

disagreement between the Board and 

our dissenting colleague. 

Relatedly, our colleague cites Felder 

v. U.S. Tennis Association for its 

statement that, under a common-law 

analysis drawn from the Supreme 

Court’s decision in Reid, ‘‘the exercise 

of control is the guiding indicator.’’ But 

he fails to acknowledge the Felder 

court’s explanation that sharing 

significant control under common-law 

principles ‘‘means that an entity other 

than the employee’s formal employer 

has power to pay an employee’s salary, 

hire, fire, or otherwise control the 

employee’s daily employment activities, 

such that we may properly conclude 

that a constructive employer-employee 

relationship exists.’’ 27 F.4th 834, 844 

(2d Cir. 2022) (emphasis added).37 Our 

colleague further asserts that Felder 

‘‘quoted with approval cases from other 

circuits requiring proof that the putative 

joint employer ‘exercise[d] significant 

control.’ ’’ However, a closer 

examination of the cases cited by Felder 

reveals that they similarly support only 

the proposition that the exercise of 

control is sufficient to establish the 

relationship, not that the exercise of 

control is necessary to establish the 

relationship.38 As we have explained, 

the final rule is entirely consistent with 

the proposition that, as these cases hold, 

a joint-employment relationship exists 

when two entities exercise significant 

control over the same employees.39

Moreover, each of the cases cited in 

Felder that our colleague relies upon— 

and many others—also discussed the 

requisite control in terms of the putative 

joint-employer’s ‘‘right,’’ ‘‘ability,’’ 

‘‘power,’’ or ‘‘authority’’ to control terms 

and conditions of employment, 

consistent with the common-law 

principle consistently articulated in the 

primary judicial authority discussed 


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40See Knitter, 758 F.3d at 1226 (considering 

‘‘right to terminate’’ employment, and ‘‘ability to 

promulgate work rules and assignments, and set 

conditions of employment including compensation, 

benefits, and hours’’) (emphasis added) (quotations 

and citations omitted); Bristol, 312 F.3d at 1215 

(holding putative joint employer ‘‘lack[ed] the 

power to control the hiring, termination, or 

supervision of [undisputed employer’s] employees, 

or otherwise control the terms and conditions of 

their employment) (emphasis added); Plaso, 553 

Fed. Appx. at 204 (considering, inter alia, putative 

joint employer’s ‘‘authority to hire and fire 

employees promulgate work rules and assignments, 

and set conditions of employment, including 

compensation, benefits and hours’’) (emphasis 

added); Graves, 117 F.3d at 728 (‘‘when an 

employer has the right to control the means and 

manner of an individual’s performance . . . an 

employer-employee relationship is likely to exist.’’) 

(emphasis added) (citation omitted); see also, e.g., 

Adams, 30 F.4th at 961, (considering ‘‘right to 

terminate’’ employment relationship, and ‘‘ability to 

promulgate work rules and assignments, and set 

conditions of employment, including 

compensation, benefits, and hours’’) (quoting 

Knitter, above); Perry, 990 F.3d at 929 (‘‘The right 

to control the employee’s conduct is the most 

important component of determining a joint 

employer. . . . [including a] focus on the right to 

hire and fire, the right to supervise, and the right 

to set the employees’ work schedule.’’) (citations 

omitted). 41See Whitaker v. Milwaukee County, 772 F.3d 

802, 810 (7th Cir. 2014) (‘‘An entity other than the 

actual employer may be considered a ‘joint 

employer’ ‘only if it exerted significant control over’ 

the employee.’’) (emphasis added) (quoting G. 

Heileman Brewing Co. v. NLRB, 879 F.2d 1526, 

1530 (7th Cir. 1989), enfg. 290 NLRB 991 (1988)). 

42See G. Heileman Brewing Co., 290 NLRB 991, 

999 (1988), enfd. 879 F.2d 1256 (7th Cir. 1989). 

43 In any case, the court in Whitaker concluded, 

relying in part on an EEOC Compliance Manual, 

that the ultimate question of liability at issue in that 

case did not turn on the ‘‘technical outcome of the 

joint employer inquiry,’’ but on whether the 

putative joint employer had ‘‘participated in the 

alleged discriminatory conduct or failed to take 

corrective measures within its control’’ which the 

court found it had not. 772 F.3d at 811–812. The 

court’s suggestion that liability might have been 

found based on the putative joint employer’s failure 

to take corrective measures within its control 

supports the final rule’s treatment of reserved 

control. For example, under the final rule, but not 

under the 2020 rule, an entity that had 

contractually reserved but never exercised a right to 

veto another entity’s disciplinary actions could 

plausibly be held jointly responsible if it failed to 

prevent the second entity’s issuance of unlawful 

discriminatory discipline to discourage conduct 

protected by the Act. Cf. EEOC v. Global Horizons, 

Inc., 915 F.3d 631, 640–641 (9th Cir. 2019) 

(discussed further below, holding two fruit growers 

could be liable for discrimination in labor 

supplier’s provision to workers of certain non-wage 

benefits based on growers’ never-exercised 

authority to control the manner in which benefits 

were provided). 

44As discussed further below, we disagree with 

our colleague and the 2020 rule’s characterization 

of control exercised through an intermediary as 

direct and immediate rather than as indirect or 

mediated. 

above, that it is the authority to control 

that matters, without respect to whether 

or how such control is exercised.40

The single case cited by our colleague 

that arguably articulates a standard 

under which the exercise of control 

would be necessary to find a jointemployer relationship, Whitaker v. 

Milwaukee County, does not purport to 

draw this principle from the common 

law, but rather applies a standard 

derived from decisions under the NLRA 

at a time that the Board had, as we have 

explained above, adopted an actualexercise requirement that was 

unsupported by and insupportable 

under the common law.41 Thus, 

Whitaker drew its articulation of the 

standard from G. Heileman Brewing Co. 

v. NLRB, which enforced a Board 

Decision and Order that had adopted, 

without relevant comment, an 

administrative law judge’s finding that 

two entities were joint employers under 

Laerco based on their direct negotiation 

of a contract that set the overall 

framework of terms and conditions of 

employment of the employees.42

Because the Board is not a primary 

source of authority for the common-law 

of agency, and did not, in any case 

purport to draw the control-based 

restrictions imposed by Laerco and 

related decisions from the common law, 

Whitaker’s statement of the jointemployer standard has little to say 

regarding the common-law principles 

applicable to the final rule.43

Our dissenting colleague further seeks 

support from the court’s statement in 

Butler v. Drive Automotive Industries of 

America that ‘‘the [joint-employer] 

doctrine’s emphasis on determining 

which entities actually exercise control 

over an employee is consistent with 

Supreme Court precedent interpreting 

Title VII’s definitions.’’ 793 F.3d 404, 

409 (4th Cir. 2015) (emphasis added). In 

context, though, it is clear that the 

Butler court’s discussion of which entity 

‘‘actually exercised’’ control meant 

something entirely different from what 

our colleague means by the phrase. At 

issue in Butler was whether a 

manufacturer was a joint employer of a 

worker supplied to it by a temporary 

employment agency. The court found 

that the agency discharged the employee 

after the manufacturer requested that 

she be replaced. An agency manager 

also testified that he could not recall an 

instance when the manufacturer 

requested that an agency employee be 

disciplined or discharged and it was not 

done. Based primarily on this evidence 

that the manufacturer thus exercised 

indirect control over discipline and 

tenure of employment of the agency’s 

employees, the court held, as a matter 

of law, that the manufacturer was a 

joint-employer of the discharged 

employee.44 The court’s observation, in 

this context, that the joint-employer 

doctrine emphasizes ‘‘which entities 

actually exercise control’’ had nothing 

to do with any question involving 

reserved, unexercised control, but rather 

with the question of whether, despite 

the appearance that the agency was 

responsible for the discharge, the 

manufacturer had actually, though 

indirectly, brought it about. The court 

observed that the joint-employer test 

‘‘specifically aims to pierce the legal 

formalities of an employment 

relationship to determine the loci of 

effective control over an 

employee . . . . Otherwise, an 

employer who exercises actual control 

could avoid Title VII liability by hiding 

behind another entity.’’ 793 F.3d at 415. 

In other words, far from suggesting that 

reserved, unexercised control can never 

suffice to establish a joint-employment 

relationship under the common law, 

Butler tends rather to support the final 

rule’s treatment of indirect control, 

discussed further below. 

Our colleague further claims that 

‘‘[n]ot a single circuit has held or even 

suggested that an entity can be found to 

be the joint employer of another entity’s 

employees based solely on a neverexercised contractual reservation of 

right to affect essential terms . . . i.e., 

conduct other than actually determining 

(alone or in collaboration with the 

undisputed employer) employees’ 

essential terms and conditions of 

employment.’’ But the Court of Appeals 

for the Ninth Circuit did just that in 

EEOC v. Global Horizons, Inc., 915 F.3d 

631 (9th Cir. 2019). 

Global Horizons involved an EEOC 

Title VII enforcement action against two 

agricultural employers (the Growers) 

alleged to be joint employers of certain 

foreign workers (the Thai workers) 

supplied to the Growers by a labor 

contractor, Global Horizons, under the 

H–2A guest worker program. Global 

Horizons and the Growers contracted for 

Global Horizons to pay the workers and 

provide certain nonwage benefits 

required under Department of Labor 

regulations governing the H–2A 

program in exchange for the Growers’ 

agreement to compensate Global 

Horizons for the workers’ wages and 

benefits and pay Global Horizons an 

additional fee for its services. 915 F.3d 

at 634–635. The workers sought to hold 

the Growers responsible as joint 

employers for alleged unlawful 

discrimination in Global Horizons’ 

provision of nonwage benefits, 

including housing, meals, and 

transportation. Id. at 636. 

The court analyzed the joint-employer 

question under a common-law agency 

test derived from Darden and 

Clackamas Gastroenterology Associates, 

P.C. v. Wells, 538 U.S. 440, 448–449 

(2003). 915 F.3d at 638–639. The court 


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45Contrary to our dissenting colleague’s 

suggestion, the court in Global Horizons expressly 

applied a common-law agency test, not a test 

derived from the definition of ‘‘employer’’ in the H– 

2A regulation, to the Title VII joint-employer issue. 

See 915 F.3d at 639. The fact that the Growers’ 

authority derived from regulation, not contract, 

does not undermine the impact of the court’s 

conclusion that the existence of that authority, even 

if never exercised, sufficed to render the Growers 

joint employers. In any case, Global Horizons is far 

from unique: in fact, numerous federal and state 

high courts have long concluded, in non-NLRA 

contexts, that an entity was or could be a commonlaw employer of another employer’s employees 

based solely on the entity’s reserved right of control 

over those employees. See, e.g., Mallory v. Brigham 

Young University, 332 P.3d 922, 928–929 (Utah 

2014) (city was common-law employer of 

university’s employee performing traffic control, 

despite absence of evidence of actual exercise of 

control by city, where city retained right to control 

the manner in which workers performed city’s 

‘‘nondelegable duty of traffic control’’ because ‘‘[i]f 

the principal has the right to control the agent’s 

method and manner of performance, the agent is a 

servant whether or not the right is specifically 

exercised’’) (citation omitted); Rouse v. Pitt County 

Memorial Hosp., Inc., 470 SE 2d 44, 52–53 (N.C. 

1996) (attending physicians could be found 

employers of resident physicians employed by 

hospital based on evidence that hospital 

contractually delegated to attending physicians its 

responsibility to supervise and control resident 

physicians’ performance of duties, despite absence 

of evidence of specific instances of attending 

physicians’ control of resident physicians’ 

performance because ‘‘[w]here the parties have 

made an explicit agreement regarding the right of 

control, this agreement will be dispositive;’’) 

(citation omitted); Dunn v. Conemaugh & Black 

Lick RR, 267 F.2d 571, 577 (3d Cir. 1959) (railroad 

was employer of manufacturer’s employee based on 

railroad’s right to command employee’s 

performance without reference to any instance of 

exercise of that right because ‘‘the person is the 

servant of him who has the right to control the 

manner of performance of the work, regardless of 

whether or not he actually exercises that right;’’) 

(citation omitted); S.A. Gerrard Co. v. Industrial 

Accident Comm’n, 110 P.2d 377, 378 (Cal. 1941) 

(landowner was joint employer of farmer’s 

employee based on contract provision that picking 

should be done under the supervisions of and in 

accordance with landowner’s direction without 

reference to whether such direction was ever given 

because ‘‘the right to control, rather than the 

amount of control which was exercised, is the 

determinative factor.’’) (citation omitted). 

46Restatement (Second) of Agency sections 5(2), 

comments e, f, and illustration 6; 220(1), comment 

d; 226, comment a (1958). 

47 911 F.3d at 1217 (citing Nicholson v. Atchison, 

T. & S. F. Ry. Co., 147 P. 1123, 1126 (Kan. 1915) 

(use of a ‘‘branch company’’ as a ‘‘mere 

instrumentality’’ ‘‘did not break the relation of 

master and servant existing between the plaintiff 

and the [putative master]’’). The 2020 Rule, and our 

dissenting colleague, seek to avoid the District of 

Columbia Circuit’s endorsement of considering 

indirect control exercised through an intermediary 

as probative of joint-employer status by 

recharacterizing such control as direct and 

immediate. But an action taken through an 

intermediary is, by definition, mediated, that is, not 

immediate or direct. We accordingly join the 

District of Columbia Circuit in characterizing such 

control as indirect. See 911 F.3d at 1216–1217 

(‘‘[C]ommon-law decisions have repeatedly 

recognized that indirect control over matters 

commonly determined by an employer can, at a 

minimum, be weighed in determining one’s status 

as an employer or joint employer, especially insofar 

as indirect control means control exercised through 

an intermediary.’’) (internal quotation and citation 

omitted). 

48See also Al-Saffy, above, 827 F.3d 85, 97 

(District of Columbia Circuit in Title VII context 

relying in part on evidence that officials working for 

putative joint-employer had recommended 

employee’s dismissal as evidence supporting 

reversal of summary judgment on the jointemployer issue). 

49NLRB v. BFI, 911 F.3d at 1219. 

concluded that, while most of the 

factors it would typically consider in 

applying the common-law agency test 

under Darden did not apply on the 

specific facts before it, ‘‘the common 

law’s ‘principal guidepost’—the element 

of control—[was] determinative.’’ 915 

F.3d at 640–641. Because the Growers 

were legally obligated, under H–2A 

regulations, to provide the workers with 

wages and the nonwage benefits at 

issue, the court concluded that the 

Growers ‘‘possessed ultimate authority 

over those matters,’’ and their ‘‘power to 

control the manner in which housing, 

meals, transportation, and wages were 

provided to the Thai workers, even if 

never exercised, [was] sufficient to 

render the Growers joint employers’’ of 

those workers. Id. at 641 (emphasis 

added) (citing BFI v. NLRB, 911 F.3d 

1195 (D.C. Cir. 2018)).45 Global Horizons 

is thus consistent with the large body of 

common-law authority discussed above 

in strongly supporting the Board’s 

conclusion that the 2020 rule’s actualexercise requirement is inconsistent 

with the common law governing the 

Board’s joint-employer standard. 

2. Indirect Control, Including Control 

Exercised Through an Intermediary 

After careful consideration of relevant 

comments, as discussed in more detail 

below, the Board has concluded that 

evidence that an employer has actually 

exercised control over essential terms 

and conditions of employment of 

another employer’s employees, whether 

directly or indirectly, such as through 

an intermediary, also suffices to 

establish the existence of a jointemployer relationship. As the District of 

Columbia Circuit has recognized, ‘‘[t]he 

common law . . . permits consideration 

of those forms of indirect control that 

play a relevant part in determining the 

essential terms and conditions of 

employment.’’ BFI v. NLRB, 911 F.3d at 

1199–1200. In addition, the District of 

Columbia Circuit has explained that the 

definition of ‘‘employer’’ set forth in 

Section 2(2) of the Act ‘‘textually 

indicates that the statute looks at all 

probative indicia of employer status, 

whether exercised ‘directly or 

indirectly’ ’’ and therefore that the Act 

‘‘expressly recognizes that agents acting 

‘indirectly’ on behalf of an employer 

could also count as employers.’’ Id. at 

1216. 

Judicial decisions and secondary 

authorities addressing the common-law 

employer-employee relationship 

confirm that indirect control, including 

control exercised through an 

intermediary, can establish the 

existence of an employment 

relationship. The Restatement (Second) 

of Agency explicitly recognized the 

significance of indirect control, both in 

providing that ‘‘the control or right to 

control needed to establish the relation 

of master and servant may be very 

attenuated’’ and in discussing the 

subservant doctrine, which deals with 

cases in which one employer’s control 

may be exercised indirectly, while a 

second entity directly controls 

employees.46 As the District of 

Columbia Circuit explained in BFI v. 

NLRB, ‘‘the common law has never 

countenanced the use of intermediaries 

or controlled third parties to avoid the 

creation of a master-servant 

relationship.’’ 47 Similarly, as discussed 

in more detail above, the Fourth Circuit 

has held that an entity was a joint 

employer of another employer’s 

employees based primarily on the 

entity’s exercise of indirect control over 

the employees’ discipline and discharge 

by recommending discipline and 

discharge decisions which were 

implemented by the employees’ direct 

employer. Butler, above, 793 F.3d at 

415.48

Consistent with these longstanding 

common-law principles, the Board has 

concluded, after careful consideration of 

comments as discussed further below, 

that evidence showing that a putative 

joint employer wields indirect control 

over one or more of the essential terms 

and conditions of employment of 

another employer’s employees can 

establish a joint-employer relationship. 

Ignoring relevant evidence of indirect 

control over essential terms and 

conditions of employment would, in the 

words of the District of Columbia 

Circuit, ‘‘allow manipulated form to 

flout reality,’’ 49 contrary to the 

teachings of the common law. Under the 

final rule, for example, evidence that a 

putative joint employer communicates 

work assignments and directives to 

another entity’s managers or exercises 

detailed ongoing oversight of the 

specific manner and means of 

employees’ performance of the 

individual work tasks may demonstrate 

the type of indirect control over 

essential terms and conditions of 

employment that is sufficient to 


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50Cf. Cognizant Technology Solutions U.S. Corp. 

& Google LLC, 372 NLRB No. 108, slip op. at 1 

(2023) (finding joint-employer relationship based in 

part on Google’s exercise of authority over 

supervision through intermediary employees of 

Cognizant, treated as direct and immediate control 

under the terms of the 2020 rule). 

51 Id. at 1226. The court’s discussion and its 

instruction to the Board to draw this distinction on 

remand suggests, as we conclude, that it will be 

possible to determine, in future adjudications on 

specific factual records, that an entity’s exercise of 

certain kinds of indirect control, such a through an 

intermediary, would be independently probative of 

its joint-employer status. See id. at 1219 (‘‘If . . . 

a company entered into a contract . . . under which 

that company made all of the decisions about work 

and working conditions, day in and day out, with 

[the workers’ direct employer’s] supervisors 

reduced to ferrying orders from the company’s 

supervisors to the workers, the Board could 

sensibly conclude that the company is a joint 

employer.’’). 

52See BFI v. NLRB, above, 911 F.3d at 1221 (The 

Board’s fleshing out the operation of the jointemployer standard through case-by-case 

adjudication ‘‘depends on the Board’s starting with 

a correct articulation of the governing common-law 

test. Here, that legal standard is the common-law 

principle that a joint employer’s control—whether 

direct or indirect, exercised or reserved—must bear 

on the essential terms and conditions of 

employment and not on the routine components of 

a company-to-company contract.’’) (internal 

quotation and citation omitted). 

53Cf. Butler, above, 793 F.3d at 415 (considering 

testimony from temporary employment agency 

manager that he could not recall an instance when 

manufacturer requested an agency employee to be 

disciplined or terminated and it was not done as 

evidence that manufacturer was joint employer of 

agency’s employees). 

54Cf. 85 FR at 11187 (2020 rule omitting 

previously proposed hypothetical scenarios 

illustrating specific applications of the Board’s 

joint-employer standard). For similar reasons, we 

decline to speculate about the application of the 

final rule to the various hypothetical scenarios 

proposed by our dissenting colleague. 

55See BFI v. NLRB, 911 F.3d at 1221 (‘‘In 

principle, there is nothing wrong with the Board 

fleshing out the operation of a legal test that 

Congress has delegated to the Board to administer 

through case-by-case adjudication.’’) (citing Eastex, 

Inc. v. NLRB, 437 U.S. 556, 574–575 (1978) (‘‘[T]he 

nature of the problem, as revealed by unfolding 

variant situations, requires an evolutionary process 

for its rational response, not a quick definitive 

formula as a comprehensive answer.’’) (internal 

quotation and citation omitted)). 

56Boire v. Greyhound, 376 U.S. at 481. 

57 Felder, above, 27 F.4th at 844 (alternations in 

original) (internal quotation omitted). See also 

NLRB v. United Insurance Co., above, 390 U.S. at 

258 (‘‘What is important is that the total factual 

context is assessed in light of the pertinent 

common-law agency principles.’’). 

58NLRB v. United Insurance Co., above, 390 U.S. 

at 258. 

59See, e.g., Felder, above 27 F.4th at 838 

(‘‘[F]actors drawn from the common law of agency, 

including control over an employee’s hiring, firing, 

training, promotion, discipline, [and] supervision 

. . . are relevant to [the joint-employer] inquiry.’’). 

establish a joint-employer 

relationship.50

Our dissenting colleague contends 

that the final rule fails adequately to 

‘‘distinguish evidence of indirect 

control that bears on workers’ essential 

terms and conditions of employment 

from evidence that simply documents 

the routine parameters of company-tocompany contracting,’’ as required by 

the D.C. Circuit in BFI v. NLRB.51 To the 

contrary, Section 103.40(f) of the final 

rule expressly provides that evidence of 

an entity’s control over matters that are 

immaterial to the existence of an 

employment relationship under 

common-law agency principles and that 

do not bear on the employees’ essential 

terms and conditions of employment is 

not relevant to the determination of 

whether the entity is a joint employer. 

Pursuant to this provision, the Board 

will, in individual cases arising under 

the rule, examine any proffered 

evidence of indirect control and 

determine, as necessary, whether that 

evidence is indicative of a kind of 

control that is an ordinary incident of 

company-to-company contracting or is 

rather indicative of a common-law 

employment relationship. If the former, 

the rule provides that the Board will not 

consider that evidence as probative of 

the existence of a joint-employer 

relationship. Specifically, pursuant to 

Section 103.40(f) and consistent with 

the court’s instruction in BFI v. NLRB, 

the Board will not consider any 

evidence of indirect control that the 

common law would see as part of an 

ordinary true independent-contractor 

relationship as evidence of a commonlaw employer-employee relationship.52

If, on the other hand, such evidence 

shows that a putative joint employer is 

actually exercising (or has reserved to 

itself) a kind of control that the common 

law takes to be indicative of an 

employer-employee relationship, the 

Board will consider such evidence in 

the course of its joint-employer 

analysis.53

Our colleague also criticizes us for 

failing exhaustively to define, ex ante, 

what factual circumstances will 

evidence indirect control that is relevant 

to the joint-employer analysis. But, as 

discussed above, the joint-employer 

inquiry is essentially factual and 

requires examining all of the incidents 

of a particular relationship on a 

particular record. Small differences in 

how control has been indirectly 

exercised, when, and over what will 

predictably determine whether the 

exercise of such control in individual 

cases counts, under the common law, as 

an ordinary incident of a company-tocompany or true independent-contractor 

relationship or as evidence of the 

existence of a common-law employeremployee relationship. Because of the 

innumerable variations in the ways that 

companies interact with each other, and 

with each other’s employees, it would 

be impossible for the Board to provide 

a usefully comprehensive and detailed 

set of examples of when an entity’s 

exercise of indirect control over another 

company’s employees will count as 

evidence of a common-law employment 

relationship. We decline to try to do so 

as part of this rulemaking.54 Instead, we 

expect the contours of the Board’s 

application of this rule in particular 

scenarios to be defined through the 

future application of the final rule to 

specific factual records.55

Finally, our colleague claims that 

courts which have examined the 

common-law employer-employee 

relationship in a joint-employer context 

in decisions under Title VII and similar 

statutes, discussed above, have applied 

a significantly more demanding 

standard than the final rule articulates. 

We disagree. Thus far, our discussion 

has primarily been concerned with what 

common-law principles have to say to 

the role of reserved or indirect control 

in the joint-employer test. Of course, 

however, the common-law cases are also 

concerned with, and provide authority 

about, the objects of that control. We 

recognize that ‘‘whether [an entity] 

possess[es] sufficient indicia of control 

to be an ‘employer’ is essentially a 

factual issue,’’ 56 that ‘‘factors indicating 

a joint-employment relationship may 

vary depending on the case,’’ and that 

‘‘any relevant factor[ ] may . . . be 

considered so long as [it is] drawn from 

the common law of agency.’’ 57 Where 

courts articulating relevant common-law 

principles have identified an entity’s 

authority to control specific elements of 

the working relationship as relevant to 

the analysis, such articulations are 

primary authority to which the Board 

will look in deciding, in individual 

cases, whether ‘‘all of the incidents of 

the relationship’’ 58 indicate that the 

entity is a common-law employer of 

particular employees.59 Furthermore, 

the final rule requires the Board to 

inquire specifically into whether a 

putative joint employer possesses the 

authority to control or exercises the 

power to control one or more of the 

employees’ essential terms and 

conditions of employment implicated 

by the Act’s protection of employees’ 

forward-looking collective right to 

bargain with each employer that can 

control their terms and conditions of 

employment. Thus, the final rule both 

incorporates the common law’s broad 

focus on all of the incidents of the 

relationship in examining whether an 

entity is a common-law employer of 

particular employees and narrows the 

focus of the Board’s inquiry to essential 


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60See 29 U.S.C. 158(a)(5) (‘‘It shall be an unfair 

labor practice for an employer—to refuse to bargain 

collectively with the representatives of his 

employees.’’); 29 U.S.C. 158(d) (‘‘[T]o bargain 

collectively is the performance of the mutual 

obligation of the employer and the representative of 

the employees to meet at reasonable times and 

confer in good faith with respect to wages, hours, 

and other terms and conditions of employment.’’). 

61The NPRM stated the Board’s initial views in 

supplementary information, subject to comments, 

that (1) the proposed rule would only require a 

putative joint employer to bargain over those 

essential terms and conditions of employment it 

possesses the authority to control or over which it 

exercises the power to control, and (2) the Act’s 

purposes are best served when two or more 

statutory employers that each possess some 

authority to control or exercise the power to control 

employees’ essential terms and conditions of 

employment are parties to bargaining over those 

employees’ working conditions. 87 FR at 54645 & 

fn. 26. 

terms and conditions of employment in 

the context of the specific rights and 

obligations provided by the plain 

language of Section 8(a)(5) and 8(d) of 

the Act.60

II. Summary of Changes to the 

Proposed Rule 

In this section, we provide a summary 

overview of changes to the proposed 

rule. 

A. Overview 

The final rule, like the proposed rule, 

recognizes that common-law agency 

principles define the statutory 

employer-employee relationship under 

the Act and affirms the Board’s 

traditional definition of joint employers 

as two or more common-law employers 

of the same employees who share or 

codetermine those matters governing 

those employees’ essential terms and 

conditions of employment. Consistent 

with primary judicial statements and 

secondary authority describing the 

common-law employer-employee 

relationship, the final rule, like the 

proposed rule, provides that a commonlaw employer of particular employees 

shares or codetermines those matters 

governing employees’ essential terms 

and conditions of employment if the 

employer possesses the authority to 

control (whether directly, indirectly, or 

both) or exercises the power to control 

(whether directly, indirectly, or both) 

one or more of the employees’ essential 

terms and conditions of employment, 

regardless of whether the employer 

exercises such control or the manner in 

which such control is exercised. 

However, as described below and in 

response to comments, the Board has 

modified the proposed rule (1) to clarify 

the definition of ‘‘essential terms and 

conditions of employment,’’ (2) to 

identify the types of control that are 

necessary to establish joint-employer 

status and the types that are irrelevant 

to the joint-employer inquiry, and (3) to 

describe the bargaining obligations of 

joint employers. 

B. Definition of ‘‘Essential Terms and 

Conditions of Employment’’ 

The proposed rule provided an 

illustrative, rather than exclusive, list of 

essential terms and conditions of 

employment. The Board has modified 

this definition, for the reasons discussed 

below and in response to comments, to 

provide an exhaustive list of seven 

categories of terms or conditions of 

employment that will be considered 

‘‘essential’’ for the purposes of the jointemployer inquiry. These are: (1) wages, 

benefits, and other compensation; (2) 

hours of work and scheduling; (3) the 

assignment of duties to be performed; 

(4) the supervision of the performance 

of duties; (5) work rules and directions 

governing the manner, means, and 

methods of the performance of duties 

and the grounds for discipline; (6) the 

tenure of employment, including hiring 

and discharge; and (7) working 

conditions related to the safety and 

health of employees. 

C. Type of Control Sufficient To 

Establish Joint-Employer Status 

The proposed rule provided that a 

common-law employer’s possession of 

unexercised authority to control or 

exercise of the power to control 

indirectly, such as through an 

intermediary, one or more terms or 

conditions of employment would be 

sufficient to establish status as a joint 

employer. For the reasons discussed 

below and in response to comments, the 

Board has modified this provision to 

clarify that, in each instance, the 

relevant object of control must be an 

essential term or condition of 

employment as defined by the rule. The 

Board has also reformatted and 

streamlined this portion of the proposed 

rule to avoid surplusage. 

D. Type of Control Not Relevant to JointEmployer Status 

The proposed rule provided that 

evidence of an employer’s control over 

matters that are immaterial to the 

existence of a common-law employment 

relationship or control over matters not 

bearing on employees’ essential terms 

and conditions of employment is not 

relevant to the joint-employer inquiry. 

For the reasons discussed below and in 

response to comments, the Board has 

modified this provision to make it clear 

that the provision excludes only 

evidence that is immaterial to both the 

common-law employment relationship 

and an employer’s control over 

employees’ essential terms and 

conditions of employment, and that the 

Board does not presuppose the 

‘‘employer’’ status of an entity—such as 

the principal in a true independentcontractor relationship—that possesses 

or exercises only such immaterial forms 

of control. 

E. Bargaining Obligations of Joint 

Employers 

The proposed rule did not specifically 

address or delineate the bargaining 

obligations of joint employers in the 

proposed regulatory text.61 For the 

reasons discussed below and in 

response to comments, the Board has 

modified the final rule to provide that 

a joint employer of particular employees 

must bargain collectively with the 

representative of those employees with 

respect to any term or condition of 

employment that it possesses the 

authority to control or exercises the 

power to control (regardless of whether 

that term or condition is deemed to be 

an essential term or condition of 

employment under the rule). However, 

such entity is not required to bargain 

with respect to any term or condition of 

employment that it does not possess the 

authority to control or exercise the 

power to control. 

III. Justification for Using Rulemaking, 

Rather Than Adjudication, To Revise 

the Joint-Employer Standard 

A. Authority To Engage in Rulemaking 

Section 6 of the Act provides that 

‘‘[t]he Board shall have authority from 

time to time to make, amend, and 

rescind, in the manner prescribed by the 

Administrative Procedure Act, such 

rules and regulations as may be 

necessary to carry out the provisions of 

this Act.’’ 29 U.S.C. 156. See also NLRB 

v. Bell Aerospace Co., 416 U.S. 267, 294 

(1974) (‘‘[T]he choice between 

rulemaking and adjudication lies in the 

first instance within the Board’s 

discretion.’’); NLRB v. Wyman-Gordon 

Co., 394 U.S. 759 (1969). In the past, the 

Board has exercised its discretion to use 

the authority delegated by Congress to 

engage in substantive rulemaking. See 

American Hospital Assn. v. NLRB, 499 

U.S. 606 (1991). 

Section 6 authorizes the final rule as 

necessary to carry out Sections 2, 7, 8, 

9, and 10 of the Act, 29 U.S.C. 152, 157, 

158, 159, and 160, respectively. 

Specifically, as set forth above, Section 

2(2) of the Act defines ‘‘employer,’’ and 

Section 2(3) defines ‘‘employee.’’ 

Section 7 sets forth employees’ rights 


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62 87 FR at 54644–54645. 

63As discussed at greater length below, we note 

that even if we had not decided to promulgate a 

new standard through rulemaking, we would 

nevertheless have chosen to rescind the 2020 rule 

in its entirety because of these infirmities. See Sec. 

IV.C., J., K., and V, below. 

64Comments of Los Angeles County Federation of 

Labor AFL–CIO & Locals 396 and 848 of the 

International Brotherhood of Teamsters; Professors 

Sachin S. Pandya, Andrew Elmore, and Kati 

Griffith. 

65See also Clackamas Gastroenterology 

Associates, P.C. v. Wells, 538 U.S. 440, 448–449 

(2003); Nationwide Mutual Insurance Co. v. 

Darden, 503 U.S. 318, 322–324 (1992); Community 

for Creative Non-Violence v. Reid, 490 U.S. 730, 

740, 752 fn. 31 (1989); Kelley v. Southern Pacific 

Co., 419 U.S. 318, 323–324 (1974); NLRB v. United 

Insurance Co. of America, 390 U.S. 254, 256–258 

(1968). 

66Comments of American Federation of Labor 

and Congress of Industrial Organizations (AFL– 

CIO); Americans for Prosperity Foundation; 

American Federation of State, County & Municipal 

Employees (AFSCME); American Hotel & Lodging 

Association; Center for Law and Social Policy; 

Communications Workers of America, AFL–CIO 

(CWA); Congressman Robert C. ‘‘Bobby’’ Scott, 

Chairman of the House of Representatives 

Committee on Education and Labor, and 52 other 

Members of Congress (Congressman Scott et al.); 

Economic Policy Institute (EPI); General Counsel 

Abruzzo; Independent Bakers Association; Nicholas 

Crawford; McGann, Ketterman & Rioux; National 

Federation of Independent Business (NFIB); 

National Partnership for Women & Families; North 

Carolina Justice Center; Public Justice Center; 

Restaurant Law Center and National Restaurant 

Association; Southern Poverty Law Center (SPLC); 

TechEquity Collaborative; The Washington Center 

for Equitable Growth; United States Chamber of 

Commerce; Washington Legal Foundation; William 

E. Morris Institute for Justice. 

under the Act, including the right to 

bargain collectively through 

representatives of employees’ own 

choosing, the right to engage in 

concerted activities for the purpose of 

mutual aid or protection, and the right 

to refrain from these activities. Section 

8 of the Act defines unfair labor 

practices under the Act, and Section 

8(a)(5) makes it an unfair labor practice 

for an employer to refuse to bargain 

collectively with employees’ bargaining 

representative. Section 9 of the Act 

describes the Board’s responsibilities 

when conducting representation 

elections. Section 10 of the Act 

authorizes the Board to investigate, 

prevent, and remedy unfair labor 

practices. The Board’s joint-employer 

doctrine bears on each of these 

provisions of the Act, and Section 6 

permits the Board to promulgate rules 

carrying out these provisions. 

B. The Preference for Rulemaking Over 

Adjudication 

In the NPRM, we expressed our 

preliminary belief that rulemaking in 

this area of the law is desirable for 

several reasons. First, the NPRM set 

forth the Board’s preliminary view that 

the 2020 rule departed from commonlaw agency principles and threatened to 

undermine the goals of Federal labor 

law. Second, the NPRM stated that, in 

the Board’s preliminary view, 

establishing a definite, readily available 

standard would assist employers and 

labor organizations in complying with 

the Act. Finally, the NPRM expressed 

the Board’s view that because the jointemployer standard has changed several 

times in the past decade, there was a 

heightened need to seek public 

comment and input from a wide variety 

of interested stakeholders.62

After carefully considering nearly 

13,000 comments, the Board believes 

that it is necessary and appropriate to 

rescind the 2020 rule, which was 

contrary to the Act insofar as it was 

inconsistent with the common law of 

agency. The 2020 rule’s approach to 

defining joint-employer status again 

incorporated the control-based 

restrictions that deviated from commonlaw agency principles between the 

1980s and the Board’s 2015 decision in 

Browning-Ferris. Not only was this 

approach inconsistent with relevant 

court decisions, including the District of 

Columbia Circuit’s 2018 decision in 

Browning-Ferris Industries of California, 

Inc. v. NLRB (BFI v. NLRB), 911 F.3d 

1195 (D.C. Cir. 2018), as many 

commenters have persuasively argued, 

it also undermines the goals of Federal 

labor law. Accordingly, we rescind the 

2020 rule in its entirety.63 Although we 

believe that the Board is required to 

rescind the 2020 rule, we would do so 

even if that rule were valid because it 

fails to fully promote the policies of the 

Act. 

The Board also believes that setting 

forth a revised joint-employer standard 

through rulemaking is desirable. The 

NPRM offered a proposal to restore the 

Board’s focus on whether a putative 

joint employer possesses the authority 

to control or exercises the power to 

control particular employees’ essential 

terms and conditions of employment, 

consistent with the common law and 

relevant judicial decisions. The Board 

received many helpful comments from 

individuals and entities with 

considerable legal expertise and 

relevant experience. Having considered 

those comments, the Board has refined 

the proposed rule in several ways, as 

outlined above in Section II and 

discussed more fully below in Sections 

IV and V. We believe the proposed rule, 

as modified, appropriately defines the 

essential elements of a joint-employer 

relationship and will reduce uncertainty 

and litigation over the basic parameters 

of joint-employer status. 

IV. Response to Comments 

The Board received almost 13,000 

comments from interested 

organizations, labor unions, trade 

associations, business owners, United 

States Senators and Members of 

Congress, State Attorneys General, 

academics, and other individuals. The 

Board has carefully reviewed and 

considered these comments, as 

discussed below. 

A. Comments Regarding the Definitions 

of ‘‘Employer’’ and ‘‘Joint Employer’’ 

and Basing These Definitions on 

Common-Law Agency Principles 

The Board received numerous 

comments regarding the role of 

common-law agency principles in the 

Board’s joint-employer analysis and on 

the development of joint-employer 

doctrine under the Act. In general, the 

comments acknowledge the accuracy of 

the Board’s description of the role 

common-law agency principles have 

played in determining joint-employer 

status, as briefly summarized above in 

Section I. 

Some commenters criticize the 

Board’s preliminary view that the 

common law of agency is the primary 

guiding principle in its joint-employer 

analysis.64 These commenters argue that 

because the Taft-Hartley amendments 

did not specify that the common law 

limits the joint-employer standard, 

Congress did not intend such a 

constraint, and the Board may establish 

a joint-employer standard guided solely 

by the policies of the Act. Contrary to 

these comments, authoritative or 

relevant judicial decisions establish that 

common-law agency principles must 

guide the Board’s joint-employer 

inquiry. See, e.g., NLRB v. Town & 

Country Electric, Inc., 516 U.S. 85, 92– 

95 (1995) (where Congress uses the term 

‘‘employee’’ in a statute without clearly 

defining it, the Court assumes that 

Congress ‘‘intended to describe the 

conventional master-servant 

relationship as understood by commonlaw agency doctrine’’); BFI v. NLRB, 911 

F.3d at 1206 (‘‘[U]nder Supreme Court 

and circuit precedent, the National 

Labor Relations Act’s test for jointemployer status is determined by the 

common law of agency.’’).65

Most commenters confirm that it is 

appropriate and desirable for the Board 

to rely on common-law agency 

principles in defining the terms 

‘‘employer’’ and ‘‘joint employer’’ under 

the Act.66 Certain of these commenters 

note that by acting to overrule the 

Supreme Court’s decision in NLRB v. 

Hearst Publishing, 322 U.S. 111 (1944), 

Congress evinced its intention to make 


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67See, e.g., comments of American Hotel & 

Lodging Association. 68Comments of NFIB; Washington Legal 

Foundation. 69See, e.g., comments of AFSCME. 70See, e.g., comments of General Counsel 

Abruzzo; Michigan Regional Council of Carpenters 

and Millwrights. 71Comments of Americans for Tax Reform; 

Coalition for a Democratic Workplace (CDW); 

Freedom Foundation; International Franchise 

Association (IFA); McDonald’s USA, LLC; 

Promotional Products Association International 

(PPAI); Texas Public Policy Foundation. 72Comments of Washington Legal Foundation; 

IFA; U.S. Chamber of Commerce. 73Comments of IFA; U.S. Chamber of Commerce. 74Comments of Washington Legal Foundation. 75Comments of U.S. Chamber of Commerce. 

76As we explained more fully in the NPRM, the 

employer-employee relationship under the Act is 

the common-law employer-employee relationship. 

Beginning in the late 19th century, American legal 

commentators began using the terms ‘‘masterservant’’ and ‘‘employer-employee’’ 

interchangeably. See, e.g., Horace Gray Wood, A 

Treatise on the Law of Master and Servant; Covering 

the Relation, Duties and Liabilities of Employers 

and Employees (1877). The Restatement (Second) of 

Agency uses both sets of terms synonymously. We 

therefore refer elsewhere in the NPRM to 

‘‘employer-employee’’ relations and the ‘‘employeremployee relationship.’’ 

77See, e.g., Clackamas Gastroenterology 

Associates, 538 U.S. at 448–449 (Americans with 

Disabilities Act); Darden, 503 U.S. at 322–324 

(Employee Retirement Income Security Act of 

1974); Kelley, 419 U.S. at 323–324 (Federal 

Employers’ Liability Act). 

78See, e.g., Clackamas Gastroenterology 

Associates, 538 U.S. at 448; Kelley, 419 U.S. at 323– 

324. 

79See BFI v. NLRB, 911 F.3d at 1213 

(‘‘[C]ontrolling precedent makes the Restatement 

(Second) of Agency a relevant source of traditional 

common-law agency standards in the National 

Labor Relations Act context.’’). 

80See id. 

81See, e.g., Maltz v. Jackoway-Katz Cap Co., 82 

SW2d 909, 912, 918 (Mo. 1934). 

82Comments of American Hotel & Lodging 

Association; Bicameral Congressional Signatories; 

Council on Labor Law Equality (COLLE); 

Independent Bakers Association; National Lumber 

& Building Material Dealers Association; National 

Waste & Recycling Association; North American 

Meat Institute; Restaurant Law Center and National 

Restaurant Association; U.S. Chamber of 

Commerce. 

83The court also stated that Sec. 2(2) of the Act 

‘‘textually indicates that the statute looks at all 

probative indicia of employer status’’ because it 

‘‘expressly recognizes that agents acting ‘indirectly’ 

on behalf of an employer could also count as 

employers.’’ 911 F.3d at 1216 (quoting 29 U.S.C. 

152(2)). 

84Comments of Restaurant Law Center and 

National Restaurant Association; Retail Industry 

Leaders Association (RILA). 

common-law agency principles the 

cornerstone of the definition of 

‘‘employee’’ under the Act.67 These 

commenters also emphasized post-TaftHartley judicial decisions interpreting 

the term ‘‘employee’’ in statutes that do 

not provide more specific definitions 

using common-law agency principles.68

Some commenters note that commonlaw agency principles play an important 

functional role in the Board’s definition 

of the terms ‘‘employer’’ and 

‘‘employee,’’ observing that making an 

agency relationship the first step of the 

joint-employer analysis ensures that the 

appropriate entities are included while 

properly excluding entities who neither 

possess nor exercise sufficient control 

over employees’ essential terms and 

conditions of employment.69 These 

commenters generally agree with the 

proposed rule’s view that appropriate 

sources of common-law agency 

principles include the Restatement 

(Second) of Agency and other 

compendiums, reports, and 

restatements, along with judicial 

decisions applying the common law.70

Some commenters urge the Board to 

clarify what common-law sources it will 

consult in the final rule. Others ask the 

Board to limit its consideration to 

particular sources, arguing that because 

the common law is vast, amorphous, or 

vague, failing to impose such a 

limitation prevents the rule from 

functioning as self-contained 

guidance.71 Other commenters dispute 

the enduring relevance of the 

Restatement (Second) of Agency.72 In 

particular, some of these commenters 

take the position that because the 

Restatement (Second) of Agency 

primarily focuses on assigning liability 

in tort or contract matters, it is 

inapposite or poorly adapted to 

resolving questions related to the 

employment relationship.73 Some 

commenters propose instead that the 

Board solely consult judicial decisions 

applying common-law principles,74 or 

the Restatement of Employment Law.75

As we preliminarily indicated in the 

proposed rule, relevant sources of 

common-law agency principles are not 

difficult to find. We respond to 

commenters seeking more definitive 

guidance that some relevant sources of 

common-law agency principles include 

articulations of these principles by 

common-law judges, compendiums, 

reports, and restatements of commonlaw decisions, and early court decisions 

addressing ‘‘master-servant relations.’’ 76

Contrary to those commenters who 

suggest the common law is too vast or 

amorphous to give effect to the terms 

‘‘employer’’ and ‘‘employee’’ in the final 

rule, we find it persuasive that the 

Supreme Court has viewed common-law 

agency principles as sufficiently 

familiar and tractable to assist parties in 

interpreting and complying with other 

labor and employment statutes that use 

these terms.77

Contrary to some commenters, we 

adhere to the view preliminarily set 

forth in the NPRM that the Restatement 

(Second) of Agency (1958) is a 

particularly persuasive source of 

common-law agency principles. As we 

explained in the NPRM, the Supreme 

Court has acknowledged the 

persuasiveness of the Restatement 

(Second) of Agency when construing the 

common-law definition of 

‘‘employer.’’ 78 So, too, has the District 

of Columbia Circuit, acknowledging this 

controlling Supreme Court precedent.79

Finally, we follow the District of 

Columbia Circuit in rejecting the view 

set forth by some commenters that the 

Restatement was developed to address 

issues of liability for tort matters and 

breaches of contract and is therefore 

inapposite.80 Further, we dispute these 

commenters’ premise. Many early 

common-law decisions that helped 

define the common-law relationship in 

The Restatement (Second) of Agency 

emerged in cases involving rights and 

duties under state workers’ 

compensation laws.81 More importantly, 

all common-law cases, whether 

involving tort or contract liability or 

statutory rights and obligations, focus 

on whether a common-law agency 

relationship exists, and control is the 

touchstone of that inquiry under the 

common law. 

Some commenters argue that by 

assessing whether an entity possesses 

the authority to control or indirectly 

controls essential terms and conditions 

of employment, the Board’s proposed 

definition of ‘‘employer’’ exceeds 

common-law boundaries.82 While we 

will address commenters’ arguments 

regarding the role reserved and indirect 

control play in the proposed rule’s 

definition of ‘‘joint employer’’ at length 

below, at the outset we simply note our 

agreement with the District of Columbia 

Circuit’s view that these forms of 

control bear on the common-law 

employer-employee inquiry, BFI v. 

NLRB, 911 F.3d at 1216.83 Accordingly, 

we respectfully disagree with those 

commenters who suggest the proposed 

rule’s definition of ‘‘employer’’ exceeds 

common-law boundaries. 

Finally, some of these commenters 

argue that the proposed rule’s definition 

of ‘‘employer’’ is inappropriate because 

direct supervision over an employee is 

a necessary prerequisite to a finding of 

an employment relationship for 

purposes of the Act, citing the Supreme 

Court’s decision in Allied Chemical & 

Alkali Workers of America, Local Union 

No. 1 v. Pittsburgh Plate Glass Co., 404 

U.S. 157, 167–168 (1971).84

Respectfully, we find Allied Chemical, 

which concluded that retired workers 

were not ‘‘employees’’ because the Act’s 

legislative history and policies 


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85Comments of Americans for Prosperity 

Foundation; Associated Builders and Contractors 

(ABC); Contractor Management Services, LLC; 

Independent Bakers Association; Independent 

Lubricant Manufacturers Association; LeadingAge; 

The Mackinac Center for Public Policy; National 

Retail Federation; Taxpayers Protection Alliance. 

86Comments of Americans for Prosperity 

Foundation; National Retail Federation; 

Washington Legal Foundation. 

87See BFI v. NLRB, 911 F.3d at 1216. 

88See comments of Bicameral Congressional 

Signatories. 

89See id.; see also comments of RILA. 

90BFI v. NLRB, 911 F.3d at 1220. 

91Comments of ABC; Center for Workplace 

Compliance; IFA; National Association of 

Convenience Stores; NFIB; National Retail 

Federation. 

92Comments of AFL–CIO; Center for American 

Progress (CAP); General Counsel Abruzzo; National 

Employment Law Project (NELP); Professors 

Pandya, Elmore, and Griffith; United Brotherhood 

of Carpenters & Joiners of America (UBC); U.S. 

Senate HELP Committee Chair Patty Murray & 21 

of her Senate Democratic colleagues (Senator 

Murray et al.). 

93Comments of ABC; Associated General 

Contractors of America (AGC); COLLE; U.S. 

Chamber of Commerce. 

94Comments of ABC; AGC; American Road & 

Transportation Builders Association (ARTBA); 

National Roofing Contractors Association; U.S. 

Chamber of Commerce. 

95 Instead, the Board historically treated 

employers in the construction industry in the same 

manner as other employers for joint-employer 

purposes. See, e.g., Tradesmen International, Inc., 

351 NLRB 399, 403 & fn. 11 (2007) (adopting 

administrative law judge’s finding that two 

construction-industry entities were joint 

Continued 

contemplate individuals who are 

currently ‘‘active’’ in the workplace, 

inapposite. Nothing in the Court’s 

decision in Allied Chemical or 

subsequent cases applying it suggests 

that the Court thereby attempted to 

modify ordinary common-law agency 

principles or engraft additional ‘‘direct 

supervision’’ requirements onto the 

statutory meaning of ‘‘employer.’’ 

B. Comments Regarding the Definition 

of ‘‘Joint Employer’’ 

The proposed rule set forth a 

definition of ‘‘joint employer’’ that, like 

the definition provided in the 2020 rule, 

would apply in all contexts under the 

Act, including both the representationcase and unfair-labor-practice case 

context. No commenter has suggested 

that any joint-employer standard the 

Board adopts should only apply in one 

context or the other. We therefore find 

it appropriate to apply the new standard 

set forth in the final rule in both the 

representation-case and unfair-laborpractice case contexts. 

Our dissenting colleague and several 

commenters argue that, although the 

Board is properly guided by commonlaw agency principles when 

determining joint-employer status, the 

proposed rule’s definition of ‘‘joint 

employer’’ exceeds the boundaries of 

the common law of agency.85 These 

commenters generally contend that 

defining ‘‘joint employer’’ to include 

entities who possess but do not exercise 

control over essential terms and 

conditions of employment or entities 

who do not exercise direct control over 

essential terms and conditions of 

employment is beyond the permissible 

scope of the common law.86 As these 

arguments primarily relate to the 

treatment of reserved and indirect 

control in proposed paragraphs (c), (e), 

and (f), we discuss them in greater detail 

below. However, as noted above, we 

agree with the District of Columbia 

Circuit’s view that the common law 

requires the Board to evaluate ‘‘all 

probative indicia of employer status’’ in 

determining whether entities are 

‘‘employers’’ or ‘‘joint employers’’ under 

the Act, including forms of indirect and 

reserved control.87

A group of United States Senators and 

Members of Congress suggests that by 

seeking to define ‘‘joint employer’’ in 

the manner set forth in the proposed 

rule, the Board is effectively legislating 

and thereby usurping the role of 

Congress.88 This commenter also 

mentions that the broader definition of 

‘‘joint employer’’ set forth in the 

Protecting the Right to Organize Act of 

2021 (PRO Act), H.R. 842, failed to 

secure Senate approval.89 With respect, 

the standard set forth in the proposed 

rule and the final rule we announce 

today represents a faithful attempt to 

exercise the authority Congress has 

delegated to the Board in Section 6 of 

the Act. Further, as discussed 

previously, we are guided by Supreme 

Court decisions instructing the Board to 

consult the common law of agency 

when interpreting the term ‘‘employer’’ 

in Section 2(2) of the Act. We do not see 

the definition of ‘‘joint employer’’ in the 

PRO Act as relevant to our task, which 

is to interpret the term ‘‘employer’’ that 

appears in the current version of the 

National Labor Relations Act, consistent 

with the guidance of relevant judicial 

decisions. 

Some commenters specifically argue 

that the proposed definition of ‘‘joint 

employer’’ is insufficiently responsive 

to the District of Columbia Circuit’s 

request that the Board ‘‘erect some legal 

scaffolding’’ 90 to remain within the 

boundaries of the common law.91 Other 

commenters take the view that the 

proposed definitions of ‘‘employer’’ and 

‘‘joint employer’’ are consistent with the 

District of Columbia Circuit’s view of 

common-law agency principles and that 

the proposed rule establishes adequate 

guideposts to satisfy the court’s 

request.92 Again, because commenters 

espousing both views of this issue 

anchor their rationale in matters that 

principally relate to paragraphs (c), (e), 

and (f) of the proposed rule, we deal 

with these contentions at greater length 

below. 

Other commenters raise industryspecific concerns regarding the 

proposed definition of ‘‘joint employer.’’ 

Some commenters contend that the 

proposed, generally applicable 

definition of ‘‘joint employer’’ stands in 

tension with how other sections of the 

Act treat building and construction 

industry employers and unions and how 

the Supreme Court has interpreted those 

provisions.93 Specifically, these 

commenters urge that the Court’s 

decision in NLRB v. Denver Building & 

Construction Trades Council, 341 U.S. 

675, 689–690 (1951), stands for the 

proposition that general contractors and 

subcontractors in the construction 

industry have separate status and 

identities that, from the outset, preclude 

the Board from treating them as joint 

employers.94

We do not read Denver Building so 

broadly. Instead, Denver Building held 

that a construction industry general 

contractor’s overall responsibility for a 

project or worksite does not itself create 

an employment relationship between 

the general contractor and the 

employees of subcontractors working on 

the jobsite. See id. The proposed 

definition of ‘‘joint employer,’’ which 

we include in the final rule, requires not 

only a showing that the putative joint 

employer has a common-law 

employment relationship with 

particular employees, but also a further 

showing that a putative joint employer 

‘‘share or codetermine those matters 

governing employees’ essential terms 

and conditions of employment.’’ As a 

result, the proposed rule, which focuses 

on the particular control an entity 

wields over terms and conditions of 

employment, is consistent with Denver 

Building, which cautions the Board not 

to categorically treat all employees of a 

subcontractor as the employees of a 

general contractor without more specific 

evidence of control. We further note that 

nothing in the relevant provisions of the 

Act, including Sections 2(2), 8(a)(5), 

8(d), and 9(a), suggests that the Board is 

required—or permitted—to adopt a 

joint-employer standard in the 

construction industry that differs from 

the generally applicable definition. Nor 

is there any historical precedent for the 

Board treating the construction industry 

differently than other industries for 

joint-employer purposes.95


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employers); Ref-Chem Co., 169 NLRB 376 (1968) 

(finding that two entities were joint employers of a 

craft unit of construction employees performing 

insulation maintenance work), enf. denied on other 

grounds 418 F.2d 127 (5th Cir. 1969). See also 

Adams & Associates, Inc. v. NLRB, 871 F.3d 358, 

378–379 (5th Cir. 2017) (upholding joint-employer 

finding where prime contractor and subcontractor 

jointly developed employees’ wage structure, 

consulted with each other on human resources 

matters, and coordinated on hiring decisions and 

on-site operations). 

96See, e.g., comments of American Hospital 

Association (AHA). 

97See, e.g., comments of AHA; Federation of 

American Hospitals; U.S. Chamber of Commerce; 

Virginia Hospital & Healthcare Association. 

Certain of these commenters suggest that the 

Board’s failure to conduct a ‘‘hospital-specific 

analysis’’ violates the APA and is grounds for 

withdrawing the proposed rule. They also raise 

concerns regarding the interaction of the proposed 

rule with Federal healthcare reimbursement 

formulas or calculations. See, e.g., comments of 

AHA. Given our discussion of the distinctive 

concerns of hospitals above, we respectfully 

disagree with these commenters’ view that the 

Board has not sufficiently considered the effect of 

the proposed rule on hospitals. 

98Comments of AHA; U.S. Chamber of 

Commerce; Virginia Hospital & Healthcare 

Association (citing 29 CFR 103.30). A few 

commenters also observe that Sec. 8(d) and 8(g) of 

the Act set forth distinctive notice requirements 

before the termination or modification of collectivebargaining agreements and before work stoppages at 

hospitals. See comments of AHA; U.S. Chamber of 

Commerce; 29 U.S.C. 158 (d) & (g). These 

commenters likewise argue that the Board has at 

times adapted other generally applicable doctrines 

for the hospital setting, including solicitation and 

distribution law. See comments of AHA; U.S. 

Chamber of Commerce. 

99 Instead, pre-2020 Board decisions applied the 

same standard when one putative joint employer of 

particular employees was a hospital. See, e.g., 

Flagstaff Medical Center, 357 NLRB 659, 666–667 

(2011) (applying the TLI/Laerco test and finding 

that a hospital contractor was not a joint employer 

of a hospital’s housekeeping employees). 

100Our dissenting colleague also forecasts that the 

final rule will negatively affect hospitals and the 

healthcare sector. In particular, he anticipates that 

the final rule will make it more difficult for 

hospitals to rely on firms that supply travel nurses 

to fill staffing gaps without risking a joint-employer 

finding. We reject our colleague’s characterization 

of the final rule and emphasize that in determining 

whether a joint-employer finding is appropriate in 

any given context, the Board will consider all 

relevant evidence regarding whether a putative joint 

employer possesses or exercises the requisite 

control over one or more essential terms and 

conditions of particular employees’ employment. 

101Comments of National Grocers Association. 102Comments of American Association of 

Franchisees and Dealers; IFA; Restaurant Law 

Center and National Restaurant Association. 103Comments of National Association of 

Insurance and Financial Advisors. 104Relatedly, we also decline the request of one 

commenter to explicitly state that the final rule 

covers the relationship between local unions and 

national or international unions. See comments of 

IFA. 105Comments of Independent Bakers Association; 

National Association of Home Builders (NAHB). 

106See 29 U.S.C. 152(6) & (7); NLRB v. Fainblatt, 

306 U.S. 601, 606–607 (1939). The Board also uses 

its discretion to decline to exercise its statutory 

jurisdiction over a subset of smaller employers. See, 

e.g., Siemons Mailing Service, 122 NLRB 81 (1959) 

(describing Board’s discretionary commerce 

standard). The Board has historically combined the 

gross revenues of joint employers when applying its 

discretionary standard. See, e.g., Central Taxi 

Service, 173 NLRB 826, 827 (1968); Checker Cab 

Co., 141 NLRB 583, 586–587 (1963), enfd. 367 F.2d 

692 (6th Cir. 1966); see also CID–SAM Management 

Corp., 315 NLRB 1256, 1256 (1995). The scope of 

this rulemaking does not encompass any changes to 

the Board’s precedent governing application of its 

discretionary commerce standard. 

107Comments of Professors Pandya, Elmore, and 

Griffith. 

108See id. 

Some commenters state that, since the 

1974 Health Care amendments extended 

the coverage of the Act to include 

nonprofit hospitals, the Board has 

treated hospitals differently than other 

employers.96 They urge the Board to do 

so again in the final rule.97 In support 

of the view that hospitals should be 

entirely excluded from the ambit of the 

joint-employer rule, these commenters 

point to the Board’s 1989 health care 

rule, which established eight 

appropriate bargaining units for acutecare hospitals.98 The commenters argue 

that by broadening the definition of 

‘‘joint employer,’’ the Board risks 

authorizing a proliferation of bargaining 

units, contrary to the stated aims of the 

health care rule. 

While we acknowledge the specific 

concerns raised by these commenters, 

we are not persuaded to create a 

hospital-specific exclusion from the 

joint-employer standard. First, we note 

that no pre-2020 Board decision 

involving the joint-employer standard 

ever created such an exclusion.99 In 

keeping with the preliminary view we 

expressed in the NPRM, we are of the 

mind that the common-law agency 

principles that we apply in defining 

‘‘employer’’ apply uniformly to all 

entities that otherwise fall within the 

Board’s jurisdiction. We see no clear 

basis in the text or structure of the Act 

for exempting particular groups or types 

of employers from the final rule, nor do 

we believe that the Act’s policies are 

best served by such an exemption. That 

said, we share these commenters’ 

general views that the proper 

application of the final rule in particular 

cases will require the Board to consider 

all relevant evidence regarding the 

surrounding context.100 Finally, we 

reject the suggestion, raised by 

commenters and our dissenting 

colleague, that the final rule’s definition 

of ‘‘joint employer’’ will cause the 

proliferation of bargaining units or 

disrupt the application of the 1989 

health care rule, which deals with the 

unrelated question of which 

classifications of employees constitute 

appropriate bargaining units for 

purposes of filing a representation 

petition pursuant to Section 9 of the 

Act. 

We similarly decline other 

commenters’ invitation to exempt other 

kinds of businesses, including 

cooperative businesses,101 franchise 

businesses,102 and firms and 

independent contractors operating in 

the insurance and financial advice 

industry,103 from the joint-employer 

standard we adopt in this final rule.104

As discussed at greater length in Section 

VI below, we also decline some 

commenters’ invitation to create an 

across-the-board exemption for small 

businesses.105 One commenter observes 

that many Federal labor and 

employment statutes exempt employers 

who have less than a minimum number 

of employees and suggests that this 

provides support for a similar 

exemption from the final rule. However, 

we find further support for our view 

that the Act requires the Board to apply 

its joint-employer standard uniformly to 

all entities otherwise covered by the 

Board’s jurisdiction in the fact that the 

Act contains no similar minimumemployee threshold to those present in 

other labor and employment statutes. 

Instead, we observe that the Board has 

statutory jurisdiction over those privatesector employers whose activity in 

interstate commerce exceeds a minimal 

level.106

Finally, one commenter asks the 

Board to clarify that the proposed rule’s 

definition of ‘‘joint employer’’ does not 

preclude the Board from adopting 

rebuttable presumptions to guide it in 

applying the joint-employer standard in 

the future.107 For example, this 

commenter suggests, the Board could 

treat an entity’s possession or exercise 

of certain forms of control over essential 

terms and conditions of employment as 

giving rise to a presumption of jointemployer status.108 In light of our 

extensive discussions and guidance 

below regarding whether particular 

forms of control are material to the 

existence of an employment 

relationship under common-law agency 

principles, we decline the invitation to 

make this proposed clarification. 

C. Comments About Definition of 

‘‘Share or Codetermine’’ 

As set forth above, the proposed rule 

sought to codify the Board’s holding, 

endorsed by the Third Circuit in NLRB 

v. Browning-Ferris Industries of 

Pennsylvania, Inc., 691 F.2d 1117, 1124 

(3d Cir. 1982), enfg. 259 NLRB 148 

(1981), that entities are ‘‘joint 

employers’’ if they ‘‘share or 

codetermine those matters governing 

essential terms and conditions of 

employment.’’ Nearly all commenters 


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109See, e.g., comments of CWA; National 

Women’s Law Center; North American Meat 

Institute; TechEquity Collaborative; Women 

Employed. Other commenters implicitly approve 

the formulation, taking it as the starting point for 

their analysis of the proposed rule. 

110Comments of American Hotel & Lodging 

Association; IFA; Leading Age; National Retail 

Federation; North American Meat Institute; Society 

for Human Resource Management (SHRM). 

111 87 FR at 54663. 

112Comments of Freedom Foundation. 

113Comments of American Staffing Association; 

Independent Lubricant Manufacturers Association; 

QuickChek; RaceTrac, Inc.; Rio Grande Foundation. 

114Comments of Energy Marketers of America; 

Independent Lubricant Manufacturers Association; 

M. M. Fowler, Inc.; One Energy Inc.; Ready Training 

Online; Reid Stores, Inc. d/b/a Crosby’s. 

115Comments of American Trucking 

Associations; Americans for Prosperity Foundation; 

ANB Bank; California Policy Center; Competitive 

Enterprise Institute; Goldwater Institute; Home Care 

Association of America; Independent Electrical 

Contractors; National Black McDonald’s Operators 

Association; RaceTrac, Inc.; Rachel Greszler. 

116For this reason, we reject our dissenting 

colleague’s suggestion that the final rule will have 

an adverse effect in successorship situations. In 

successorship situations where a transaction is 

structured in such a way that more than one entity 

in the resulting structure could potentially be 

considered an employer, the final rule has the 

distinct advantage of permitting all parties to 

determine and define their NLRA rights and 

obligations, ex ante, by contract. Under the 2020 

rule, by contrast, the rights and obligations of 

contracting businesses could not be ascertained at 

the outset of a business relationship but would 

instead turn on contingent facts about whether or 

not one party chose to exercise rights it had 

reserved to itself by contract. 

117Comments of ABC; American Hotel & Lodging 

Association; Center for Workplace Compliance; 

CDW; COLLE; Competitive Enterprise Institute; 

Control Transportation Services, Inc.; HR Policy 

Association; IFA; International Foodservice 

Distributors Association (IFDA); NATSO & SIGMA; 

National Asian/Pacific Islander American Chamber 

of Commerce and Entrepreneurship (National ACE); 

National Association of Convenience Stores; 

National Taxpayers Union; National Waste & 

Recycling Association; New Civil Liberties Alliance 

& Institute for the American Worker; RILA; 

Restaurant Law Center and National Restaurant 

Association; SHRM; The Mackinac Center for 

Public Policy; U.S. Chamber of Commerce. 

One of these commenters draws an analogy to the 

Board’s treatment of primary and secondary indicia 

of supervisory status in cases involving Sec. 2(11) 

of the Act, 29 U.S.C. 152(11). Comments of COLLE. 

The scope of the definition of ‘‘supervisor’’ is an 

express exception to the definition of ‘‘employee’’ 

under Sec. 2(3) of the Act. See, e.g., NLRB v. 

Kentucky River Community Care, Inc., 532 U.S. 706, 

711 (2001). Unlike the definition of ‘‘employee,’’ 

then, the definition of supervisor turns on questions 

of statutory interpretation, not common-law agency 

principles. Accordingly, we find this analogy 

inapposite. 

agree that the basic ‘‘share or 

codetermine’’ formulation is the 

appropriate starting point for the 

Board’s joint-employer analysis.109 As 

discussed at length below, however, 

commenters’ views regarding what 

forms of control suffice to establish that 

entities ‘‘share or codetermine’’ matters 

governing particular employees’ 

essential terms and conditions of 

employment diverge significantly.110

Paragraph (c) of the proposed rule 

sought to define the phrase ‘‘share or 

codetermine those matters governing 

employees’ essential terms and 

conditions of employment’’ to mean 

‘‘for an employer to possess the 

authority to control (whether directly, 

indirectly, or both), or to exercise the 

power to control (whether directly, 

indirectly, or both), one or more of the 

employees’ essential terms and 

conditions of employment.’’ 111

One commenter suggests that because 

the Third Circuit’s formulation of the 

‘‘share or codetermine’’ standard (and 

the formulation used in paragraph (c) of 

the proposed rule) speaks in terms of 

‘‘matters’’ governing essential terms and 

conditions of employment, a putative 

joint employer must possess the 

authority to control or exercise control 

over more than one essential term or 

condition of employment to meet the 

standard.112 We do not find this 

argument persuasive as an analytical or 

logical matter. First, we do not construe 

the word ‘‘matters’’ in the standard to 

refer to essential terms or conditions of 

employment themselves, but rather to 

the workplace issues related to those 

terms or conditions. Second, we 

disagree that control over one essential 

term or condition of employment is 

necessarily insufficient. For example, as 

discussed at length below, commenters 

are unanimous that wages are an 

essential term or condition of 

employment. Given the centrality of 

wages to the employment relationship, 

it would be difficult to argue that a 

common-law employer’s control over 

wages, standing alone, is insufficient to 

create an employment relationship. 

A number of commenters challenge 

the premise that possessing but not 

exercising the authority to control or 

exercising indirect control over one or 

more essential terms and conditions of 

employment can ever serve as evidence 

of joint-employer status.113 Some of 

these commenters, especially those 

writing on behalf of small businesses, 

suggest that forms of reserved control 

that amount to ‘‘contractual fine print’’ 

that are never put into action should not 

result in a joint-employer finding.114

While others appear to concede that 

there may be circumstances in which 

indirect or reserved control is probative 

of joint-employer status, those 

commenters emphasize that requiring 

evidence that an entity actually 

exercises control is preferable.115

Consistent with the preliminary view 

set forth in our NPRM, we are 

unpersuaded by comments suggesting 

that forms of indirect or reserved control 

can never serve as evidence of jointemployer status. In our view, this 

argument is undermined by both the 

weight of common-law authority and 

relevant judicial decisions, including 

the District of Columbia Circuit’s 

decision in BFI v. NLRB. See 911 F.3d 

at 1213 & 1216 (‘‘[T]he Board’s 

conclusion that an employer’s 

authorized or reserved right to control is 

relevant evidence of a joint-employer 

relationship wholly accords with 

traditional common-law principles of 

agency,’’ and ‘‘indirect control can be a 

relevant factor in the joint-employer 

inquiry.’’). 

Moreover, ‘‘contractual fine print’’ 

bearing on the allocation of authority to 

control the details of the manner and 

means by which work is performed, and 

the terms and conditions of employment 

of those performing the work, has legal 

force and effect without respect to 

whether or not contractually reserved 

authority to control is ever exercised. By 

incorporating such contractual 

allocations of control into the Board’s 

joint-employer analysis, the final rule 

permits business entities to evaluate and 

control their potential status as joint 

employers under the Act, ex ante, based 

on their freely chosen contractual 

arrangements. By contrast, a standard 

that turns on an ex-post analysis of 

whether and to what extent a party has 

actually exercised contractually 

reserved control impedes contracting 

parties’ ability to reliably determine 

ahead of time whether or not they will 

have obligations under the Act related 

to employees of another employer. This 

distinction may be particularly 

important, for example, in 

successorship situations involving an 

incumbent union, where questions 

about bargaining obligations may arise 

before sufficient time has passed for 

parties to reliably ascertain whether and 

to what extent contractually reserved 

authority to control will be actually 

exercised.116

Another group of commenters 

suggests that while an entity’s indirect 

or reserved control over essential terms 

and conditions of employment may be 

probative, it is not sufficient, standing 

alone, to confer joint-employer status.117

These commenters argue that the Board 

has never held that a single instance of 

unexercised control was sufficient to 

create a joint-employer relationship and 

generally criticize the NPRM’s 

discussion of the Board’s precedent in 

the two decades after Boire v. 

Greyhound Corp., 376 U.S. 473, 481 

(1964), issued and before TLI, supra, 271 


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118Comments of CDW; HR Policy Association; 

IFA; NATSO & SIGMA; New Civil Liberties 

Alliance & Institute for the American Worker; RILA; 

Small Business & Entrepreneurship Council; Tesla, 

Inc.; U.S. Chamber of Commerce. 

119Our dissenting colleague criticizes our 

reliance on Jewel Tea and Value Village as support 

for our view that pre-TLI/Laerco precedent did not 

require evidence of a putative joint employer’s 

direct exercise of control, noting that other pre-TLI/ 

Laerco precedent relied on record evidence of 

actually exercised or direct control. As we note in 

Sec. I.D. above, however, it is unsurprising that 

cases where the record establishes that an entity has 

directly exercised control have not addressed the 

question of whether reserved or indirect control 

could also independently suffice to establish the 

relationship. Our colleague cites no pre-TLI/Laerco 

precedent holding that actual exercise of direct 

control was necessary, and no number of cases 

holding only that the direct exercise of control is 

sufficient can rationally establish that proposition. 

Conversely, Jewel Tea, Value Village, and the many 

other pre-TLI/Laerco decisions cited above in which 

the Board has expressly stated that control need not 

be actually exercised, or exercised in any particular 

way, in order to establish a joint-employer 

relationship clearly establish that the Board’s 

historic joint-employer standard did not include 

any such requirement. See also fn. 2, above. 

120Comments of Home Care Association of 

America; IFA; U.S. Chamber of Commerce. 

121Comments of IFA. 

122Comments of AGC; American Pizza 

Community; Americans for Prosperity Foundation; 

Competitive Enterprise Institute; HR Policy 

Association; IFA; James Bitzonis; National 

Association of Manufacturers (NAM); NAHB; 

National Retail Federation; National Roofing 

Contractors Association; Restaurant Law Center and 

National Restaurant Association. 

123Comments of AFL–CIO; Congressman Scott et 

al.; General Counsel Abruzzo; NELP. A few of these 

commenters suggest that the Board omit references 

to ‘‘reserved’’ and ‘‘indirect’’ control in the final 

rule to eschew any suggestion that the jointemployer analysis requires control to be 

taxonomized. See comments of AFL–CIO; 

International Union of Operating Engineers (IUOE). 

As we hope to make clear in our discussion of the 

comments we received and the final rule, our 

intention is for the final rule to reflect the common 

law’s view that control is the touchstone of an 

agency relationship, regardless of how it is wielded. 

While this does not require forms of control to be 

categorized in any particular way, the terminology 

used is reflective of the language contained in the 

legal precedent upon which we rely. 

124Comments of NELP. 

125Comments of AFL–CIO. 

126 87 FR at 54648–54650. 

127BFI, 911 F.3d at 1213 (‘‘[T]he Board’s 

conclusion that an employer’s authorized or 

reserved right to control is relevant evidence of a 

joint-employer relationship wholly accords with 

traditional common-law principles of agency.’’). 128Comments of American Pizza Community; 

Americans for Tax Reform; American Trucking 

Associations; ANB Bank; Connie Cessante; 

Goldwater Institute; NAHB; National Roofing 

Contractors Association; One Energy Inc.; Ready 

Training Online; Reid Stores, Inc. d/b/a Crosby’s; 

Robert Kulik; TechNet. 

129Comments of Competitive Enterprise Institute; 

Energy Marketers of America; FreedomWorks 

Foundations; Home Care Association of America; 

IFA; National Retail Federation; One Energy Inc.; 

QuickChek; RaceTrac, Inc.; The Mackinac Center 

for Public Policy. 

130Comments of American Hotel & Lodging 

Association; FMI—The Food Industry Association; 

International Bancshares Corporation; New Civil 

Liberties Alliance & Institute for the American 

Worker; Rio Grande Foundation; SHRM; Small 

Business & Entrepreneurship Council; U.S. Black 

Chambers, Inc.; U.S. Chamber of Commerce. Some 

commenters cite Computer Associates 

International, Inc., 324 NLRB 285, 286 (1987), for 

the proposition that Sec. 8(b) of the Act reflects 

Congress’s intention to protect employers’ 

autonomy in their selection of independent 

contractors. See, e.g., comments of SHRM. A 

number of individuals raised similar concerns, 

noting that they fear the proposed rule might harm 

their prospects of being hired as independent 

contractors in the future. See, e.g., comments of 

Monica Cichosz; Gregg Micalizio. 

131Comments of National Retail Federation. 

NLRB 798, and Laerco, supra, 269 NLRB 

324, were decided.118

As set forth more fully in the NPRM, 

we disagree with these commenters’ 

view of the Board’s pre-TLI/Laerco 

precedent. Instead, we view cases from 

that time period as supportive of the 

view that the right to control employees’ 

work and terms and conditions of 

employment is determinative in the 

joint-employer analysis. Cases decided 

during the two decades after Boire 

issued did not tend to turn on whether 

both putative joint employers actually 

or directly exercised control. For 

example, in Jewel Tea Co., 162 NLRB 

508 (1966), the Board found that an 

entity’s contractually reserved power to 

set working hours and to reject or 

terminate workers was sufficient to 

establish that entity’s status as a joint 

employer. In addition, in Value Village, 

161 NLRB 603, 607 (1966), the Board 

found a joint-employment relationship 

where one entity reserved control over 

‘‘the manner and method of work 

performance’’ and to terminate the 

contract at will in an operating 

agreement, emphasizing that ‘‘the power 

to control is present by virtue of the 

operating agreement.’’ 119

Some commenters specifically 

criticize the proposed rule’s treatment of 

reserved control, suggesting that it 

might be difficult to assess whether 

forms of reserved control are sufficient 

to give rise to liability or a bargaining 

obligation.120 One commenter notes that 

reservations of control are often 

‘‘boilerplate’’ inclusions in contracts 

that should not give rise to a jointemployer finding.121 Certain of these 

commenters express concerns that the 

standard might be susceptible to 

outcome-driven applications or other 

unfair results.122

Many commenters agree with the 

NPRM’s discussion of how the common 

law treats forms of reserved control.123

One of these commenters cites the 

District of Columbia Circuit’s discussion 

in BFI v. NLRB, 911 F.3d at 1211, of 

how ‘‘the ‘right to control’ runs like a 

leitmotif through the Restatement 

(Second) of Agency.’’ 124 In particular, 

some commenters cited approvingly to 

the NPRM’s discussion of common-law 

judicial decisions that treat reserved 

control as an especially probative 

indication of an agency relationship.125

See, e.g., Dovell v. Arundel Supply 

Corp., 361 F.2d 543, 545 (D.C. Cir. 1966) 

(quoting Grace v. Magruder, 148 F.2d 

679, 681 (D.C. Cir. 1945)) (‘‘[I]t is the 

right to control, not control or 

supervision itself, which is most 

important.’’). 

The final rule also adheres to the view 

that reserved control is probative and 

that it is appropriate for the Board to 

find that joint-employer status is 

established based on a putative joint 

employer’s reserved control over an 

essential term or condition of 

employment. As set forth more fully in 

the NPRM,126 the reservation of 

authority to control essential terms or 

conditions of employment is an 

important consideration under 

common-law agency principles. We 

agree with the District of Columbia 

Circuit that common-law sources treat 

the right to control as central to the 

joint-employer inquiry and that forms of 

reserved control can reveal an entity’s 

right to control essential terms or 

conditions of employment.127 As 

discussed above, incorporating parties’ 

contractual allocations of control into 

the Board’s joint-employer analysis also 

enhances contracting parties’ ability to 

evaluate and control their statutory 

obligations with respect to other 

employers’ employees at the inception 

of their business relationships. 

Certain commenters specifically take 

issue with the proposed rule’s view that 

indirect control can establish jointemployer status.128 A number of these 

commenters argue that only direct 

control can or should be relevant to the 

joint-employer inquiry.129 They urge 

that control exercised through an 

intermediary should not itself be 

sufficient to establish status as a joint 

employer, contending that this aspect of 

the proposed rule threatens to interfere 

with parties’ reliance on the use of 

independent contractors or vendors to 

perform services.130 One of these 

commenters observes that courts 

interpreting the Fair Labor Standards 

Act have at times treated forms of 

routine indirect control as immaterial to 

the existence of a joint-employer 

relationship and urges the Board to 

follow suit.131

Other commenters, citing sources of 

common-law agency principles and 

judicial decisions applying commonlaw principles, stress that an entity itself 

need not actually exercise control over 

particular employees for the Board to 


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132Comments of American Civil Liberties Union 

(ACLU); AFL–CIO; Congressman Scott et al.; CWA; 

General Counsel Abruzzo; IUOE; Lawyers’ 

Committee for Civil Rights Under Law; Los Angeles 

County Federation of Labor AFL–CIO & Locals 396 

and 848 of the IBT; NELP; Restaurant Opportunities 

Centers United; State Attorneys General; The 

Leadership Conference on Civil and Human Rights; 

The Strategic Organizing Center; United Electrical, 

Radio and Machine Workers of America (UE); 

UNITE HERE International Union; United 

Steelworkers. 

Among these commenters, several suggest that if 

the Board decides to promulgate a final rule (rather 

than simply rescind the 2020 rule), the Board 

should delete references to direct and indirect 

control in proposed subparagraph (c). See 

comments of AFL–CIO; IUOE. We address this 

aspect of these comments in our discussion below. 

133Comments of CWA; General Counsel Abruzzo; 

Los Angeles County Federation of Labor AFL–CIO 

& Locals 396 and 848 of the IBT. 

134Comments of State Attorneys General. 

135See BFI v. NLRB, 911 F.3d at 1216 (‘‘[I]ndirect 

control can be a relevant factor in the jointemployer inquiry.’’). 

136Similarly, as one commenter observed, the 

Supreme Court’s decision in Boire v. Greyhound, 

376 U.S. 473, 481 (1964), made no distinction on 

the basis of whether an entity wields direct or 

indirect control. See comments of NELP. 

137 87 FR at 54663. 

138 Id. at 54643 (citing BFI, supra, 362 NLRB at 

1613). 

139Comments of AFL–CIO; Center for Law and 

Social Policy; International Brotherhood of 

Teamsters (IBT); Lawyers’ Committee for Civil 

Rights Under Law; Los Angeles County Federation 

of Labor AFL–CIO & Locals 396 and 848 of the IBT; 

National Partnership for Women & Families; 

National Women’s Law Center; NELP; Public Justice 

Center; Restaurant Opportunities Centers United; 

SPLC; State Attorneys General; TechEquity 

Collective; The Leadership Conference on Civil and 

Human Rights; William E. Morris Institute for 

Justice; Women Employed. 

140Comments of American Staffing Association; 

ANB Bank; Asian McDonald’s Operators 

Association; ABC; California Policy Center; Center 

for Workplace Compliance; CDW; Energy Marketers 

of America; Freedom Foundation; Goldwater 

Institute; Home Care Association of America; HR 

Policy Association; International Bancshares 

Corporation; IFDA; IFA; LeadingAge; McDonald’s 

USA, LLC; NATSO and SIGMA; National 

Association of Convenience Stores; NAHB; National 

Association of Insurance and Financial Advisors; 

NAM; National Association of Realtors; National 

Black McDonald’s Operators Association; National 

Retail Federation; National Roofing Contractors 

Association; New Civil Liberties Alliance & 

Institute for the American Worker; PPAI; Rachel 

Greszler; RILA; Subcontracting Concepts, LLC; The 

Mackinac Center for Public Policy; U.S. Chamber of 

Commerce. 

141Comments of Luis Acosta; Escalante 

Organization; Independent Electrical Contractors; 

M. M. Fowler, Inc.; One Energy Inc.; QuickChek; 

RaceTrac, Inc.; Ready Training Online; Reid Stores, 

Inc. d/b/a Crosby’s; SBA Office of Advocacy. 

142Comments of CDW; IFA; The Mackinac Center 

for Public Policy. 

143Comments of General Counsel Abruzzo; IBT; 

IUOE; Jobs with Justice and Governing for Impact; 

Los Angeles County Federation of Labor AFL–CIO 

& Locals 396 and 848 of the IBT; State Attorneys 

General; UE. One of these commenters cites SunMaid Growers of California v. NLRB, 618 F.2d 56, 

59 (9th Cir. 1980) in support of this view. See Los 

Angeles County Federation of Labor AFL–CIO & 

Locals 396 and 848 of the IBT. 

find that an agency relationship 

exists.132 Many commenters approve of 

the Board’s discussion of the 

Restatement (Second) of Agency in the 

preamble to the proposed rule and cite 

portions of the Restatement 

contemplating that an agency 

relationship can be premised on indirect 

control.133 Some of these commenters 

specifically addressed the ‘‘subservant’’ 

doctrine. See Restatement (Second) of 

Agency, section 5(2), cmts. e, f, and 

illus. 6; section 220(1), cmt. d; section 

226, cmt. a (1958). One of these 

commenters, citing the District of 

Columbia Circuit’s decision in BFI v. 

NLRB, 911 F.3d at 1218, argues that the 

subservant doctrine demonstrates the 

common law’s recognition of the 

important role that forms of indirect 

control can play in an agency 

relationship.134

As noted above, because we agree 

with the commenters who discuss 

common-law precedent and the District 

of Columbia Circuit’s statements 

regarding the role indirect control plays 

in the joint-employer analysis,135 we 

respectfully reject the view of 

commenters who suggest that evidence 

of indirect control over essential terms 

or conditions of employment is 

insufficient to establish joint-employer 

status. The final rule adheres to the 

Board’s preliminary view that forms of 

indirect control may be evidence of 

joint-employer status. As set forth in the 

NPRM, we are persuaded by the District 

of Columbia Circuit’s view that the 

common-law standard requires 

consideration of indirect control. See 

BFI v. NLRB, 911 F.3d at 1216–1217 

(‘‘Common law decisions have 

repeatedly recognized that indirect 

control over matters commonly 

determined by an employer can, at a 

minimum, be weighed in determining 

one’s status as an employer of joint 

employer, especially insofar as indirect 

control means control exercised through 

an intermediary.’’).136 We further agree 

with the views of some commenters that 

the 2020 rule reintroduced controlbased restrictions, notably the 

requirement of ‘‘substantial direct and 

immediate control,’’ that are contrary to 

the common-law view of how agency 

relationships are created. For this 

reason, independent of our decision to 

promulgate a new rule, we rescind the 

2020 rule because it is inconsistent with 

common-law agency principles and 

therefore inconsistent with the National 

Labor Relations Act. Moreover, we are 

further persuaded that there is value in 

codifying the principle that forms of 

indirect control over one or more 

essential terms or conditions of 

employment are probative of jointemployer status in the final rule text, as 

discussed below. 

D. Comments About the Definition of 

‘‘Essential Terms and Conditions of 

Employment’’ 

Paragraph (d) of the proposed rule 

defined ‘‘essential terms and conditions 

of employment’’ to ‘‘generally include’’ 

but not be limited to ‘‘wages, benefits, 

and other compensation; hours of work 

and scheduling; hiring and discharge; 

discipline; workplace health and safety; 

supervision; assignment; and work rules 

and directions governing the manner, 

means, or methods of work 

performance.’’ 137 In setting forth a 

nonexhaustive list of essential terms 

and conditions of employment, the 

proposed rule relied in part on the 

Board’s 2015 BFI decision, which took 

the same approach.138 As mentioned 

above, the phrase ‘‘essential terms and 

conditions of employment’’ derives 

from the Third Circuit’s formulation of 

the joint-employer standard in NLRB v. 

Browning-Ferris Industries of 

Pennsylvania, Inc., 691 F.2d 1117, 1124 

(3d Cir. 1982), enfg. 259 NLRB 148 

(1981), where the court stated that 

entities are ‘‘joint employers’’ if they 

‘‘share or codetermine those matters 

governing essential terms and 

conditions of employment.’’ 

Although some commenters approve 

of the proposed rule’s use of an openended, nonexhaustive list of ‘‘essential 

terms and conditions of 

employment,’’ 139 many commenters 

criticize that aspect of the proposed 

rule.140 Notably, the United States Small 

Business Administration Office of 

Advocacy, along with many individuals 

and small business owners, express 

concerns about how parties covered by 

the Act will successfully comply with 

their potential obligations as joint 

employers without more clarity 

regarding the scope of ‘‘essential terms 

and conditions of employment.’’ 141

Some commenters suggest that the 

Board adopt an exhaustive list of 

essential terms and conditions of 

employment and make any further 

refinements to that list in a future 

rulemaking proceeding.142

Another group of commenters 

propose that the Board modify the 

proposed rule by explicitly tying the 

definition of ‘‘essential terms and 

conditions of employment’’ to the 

concept of mandatory subjects of 

bargaining for purposes of Section 8(d) 

of the Act.143 These commenters 

generally also favor a flexible approach 

to defining the scope of a joint 


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144Comments of Los Angeles County Federation 

of Labor AFL–CIO & Locals 396 and 848 of the IBT; 

NELP. 

145See 87 FR at 54645 fn. 26. Comments of IBT; 

IUOE; Service Employees International Union 

(SEIU); U.S. Chamber of Commerce. 

146Comments of RILA; SHRM. 

147Comments of UNITE HERE. 

148See reply comments of AFL–CIO. 

149See comments of American Staffing 

Association; RILA; SHRM; Texas Public Policy 

Foundation. One commenter notes that Board 

precedent already addresses the contours of a joint 

employer’s bargaining obligation and suggests that 

this obviates the need for a clearer articulation of 

the duty in the text of a final rule. Comments of 

AFL–CIO. 

150The list of essential terms and conditions of 

employment is discussed further in Section V.D., 

below. 

151Comments of Association of Women’s 

Business Centers; Center for Law and Social Policy; 

General Counsel Abruzzo; IFA; Lawyers’ Committee 

for Civil Rights Under Law; NAM; National 

Women’s Law Center; North Carolina Justice 

Center; Public Justice Center; RILA; SPLC; 

TechEquity Collective; The Leadership Conference 

on Civil and Human Rights; William E. Morris 

Institute for Justice; Women Employed. 

152Comments of Center for Law and Social 

Policy; General Counsel Abruzzo; Lawyers’ 

Committee for Civil Rights Under Law; National 

Partnership for Women & Families; National 

Women’s Law Center; North Carolina Justice 

Center; Public Justice Center; SPLC; TechEquity 

Collective; The Leadership Conference on Civil and 

Human Rights; RILA; William E. Morris Institute for 

Justice; Women Employed. 

153Comments of California Policy Center; General 

Counsel Abruzzo; IBT; NAM. 

Our dissenting colleague generally agrees that 

matters relating to particular employees’ hiring and 

discharge are essential, but he expresses concern 

that the formulation used in the final rule—‘‘tenure 

of employment, including hiring and discharge’’— 

is too broad and runs the risk of ‘‘making general 

contractors in the construction industry joint 

employers per se.’’ With respect, we reject our 

colleague’s characterization. General contractors in 

the construction industry will be deemed joint 

employers only if all requirements of the standard 

are established, including the threshold 

requirement that they have a common-law 

employment relationship with particular 

employees. We use the phrase ‘‘tenure of 

employment, including hiring and discharge’’ to 

encompass a range of actions that determine or alter 

individuals’ employment status, offering hiring and 

discharge as examples. As discussed elsewhere, 

nothing in the final rule intends to treat general 

contractors in the construction industry—or, 

indeed, any entities—as joint employers on a per se 

or categorical basis. 

154Comments of IBT; NELP. 

155Comments of General Counsel Abruzzo; IBT. 

156See, e.g., comments of IFA; NFIB; National 

Women’s Law Center. 

157Comments of American Association of Port 

Authorities (AAPA); American Trucking 

Associations; Association of Women’s Business 

Centers; FMI—The Food Industry Association; 

Home Care Association of America; IFA; NATSO & 

SIGMA; National Association of Convenience 

Stores; NAM; National Retail Federation; New Civil 

Liberties Alliance & Institute for the American 

Worker; North American Meat Institute; Rio Grande 

Foundation; Trucking Industry Stakeholders. 

One of these commenters argues that workplace 

health and safety was not historically regarded as 

an essential term or condition of employment under 

the common law and should therefore be omitted. 

See comments of IFA. 

employer’s bargaining obligation.144

Relatedly, some commenters request 

that the Board consider amending the 

proposed rule to incorporate a statement 

regarding the scope of a joint employer’s 

bargaining obligation that appeared in 

the NPRM’s preamble,145 while others 

suggest that the Board should clarify 

how to allocate bargaining 

responsibilities between two entities 

that share or codetermine one or more 

essential terms and conditions of 

employment.146

One of these commenters observes 

that the Board should be careful to 

distinguish control over essential terms 

and conditions of employment that is 

material to the existence of a commonlaw employment relationship from 

control over matters that the Act 

requires parties to bargain over.147

Another commenter acknowledges that 

an entity’s control over certain 

mandatory subjects of bargaining, like 

cafeteria prices, see Ford Motor Co. v. 

NLRB, 441 U.S. 488, 498 (1979), may 

control a term of employment to which 

a bargaining duty attaches but not 

possess or exercise control over an 

essential term or condition of 

employment so as to be regarded as a 

common-law employer.148

We have taken these comments into 

consideration in revising the final rule’s 

treatment of essential terms and 

conditions of employment and in 

adding paragraph (h) to the final rule. 

The final rule responds to commenters 

who suggest tying the definition of 

essential terms and conditions of 

employment to Section 8(d) of the Act 

by emphasizing that, once an entity is 

found to be a joint employer because it 

possesses the authority to control or 

exercises the power to control one or 

more essential terms or conditions of 

employment identified in the rule, that 

entity has a statutory duty to bargain 

over all mandatory subjects of 

bargaining it possesses the authority to 

control or exercises the power to 

control. That duty is common to all 

employers under the Act. See 

Management Training, 317 NLRB 1355 

(1995). The scope of a joint employer’s 

duty to bargain, however, is distinct 

from the issue of joint-employer status. 

As in other cases involving the scope of 

the duty to bargain, if a joint employer 

contests its duty to bargain over a 

particular issue, the Board will assess 

whether a particular subject of 

bargaining is mandatory on a case-bycase basis, applying familiar and 

longstanding precedent. However, the 

final rule provides the clarity and 

predictability other commenters sought 

by specifically enumerating the 

essential terms and conditions of 

employment that will, as a threshold 

matter, give rise to a finding that an 

entity is a joint employer if that entity 

possesses the authority to control or 

exercises the power to control one or 

more of the listed terms. Moreover, by 

adding paragraph (h), the final rule 

likewise responds to those commenters 

who requested that the Board include a 

statement of the nature of a joint 

employer’s bargaining obligation in the 

text of the rule itself.149

As mentioned above, the final rule 

incorporates an exhaustive list of 

essential terms and conditions of 

employment. These essential terms and 

condition of employment are: ‘‘(1) 

wages, benefits, and other 

compensation; (2) hours of work and 

scheduling; (3) the assignment of duties 

to be performed; (4) the supervision of 

the performance of duties; (5) work 

rules and directions governing the 

manner, means, and methods of the 

performance of duties and the grounds 

for discipline; (6) the tenure of 

employment, including hiring and 

discharge; and (7) working conditions 

related to the safety and health of 

employees.’’ 150 Because these essential 

terms and conditions of employment are 

substantively the same as those offered 

as illustrations in the proposed rule, we 

next address commenters’ particular 

concerns regarding the proposed rule’s 

treatment of specific terms and 

conditions of employment as 

‘‘essential.’’ 

Commenters who addressed the 

proposed rule’s treatment of specific 

‘‘essential terms and conditions of 

employment’’ unanimously agree that 

certain terms and conditions of 

employment are ‘‘essential’’ for 

purposes of the joint-employer standard. 

These include wages and benefits,151

hours of work,152 hiring, discipline, and 

discharge,153 assignment,154 and 

supervision.155 Many commenters 

specifically state that, at a minimum, 

they approve of the list of essential 

terms and conditions of employment 

that was used in the 2020 rule, 

including scheduling, hiring, 

termination, discipline, assignment of 

work, and instruction.156

A number of commenters and our 

dissenting colleague contend that 

workplace health and safety should not 

be considered an essential term or 

condition of employment for purposes 

of the joint-employer standard.157 These 

commenters emphasize the role that 

government regulation plays in setting 

minimum standards for workplace 


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158Comments of AAPA; American Trucking 

Associations; Home Care Association of America; 

National Association of Convenience Stores. As an 

example, one commenter notes that health and 

safety in the trucking industry is pervasively 

regulated by several other Federal agencies, 

including ‘‘the Department of Labor’s Occupational 

Safety and Health Administration (OSHA) and the 

Department of Transportation’s Federal Motor 

Carrier Safety Administration (FMCSA).’’ 

Comments of American Trucking Associations. 

Contrary to the suggestion of this commenter, the 

Board is aware of the expertise these regulators 

have in setting substantive health and safety 

standards and does not intend to prescribe any 

particular health and safety standards in the final 

rule. 

159Comments of American Trucking 

Associations; FMI—The Food Industry Association; 

National Waste & Recycling Association; Trucking 

Industry Stakeholders. 

160Comments of Center for Law and Social 

Policy; IBT; Lawyers’ Committee for Civil Rights 

Under Law; National Partnership for Women & 

Families; National Women’s Law Center; NELP; 

North Carolina Justice Center; Public Justice Center; 

SPLC; TechEquity Collective; The Leadership 

Conference on Civil and Human Rights; The 

Strategic Organizing Center; William E. Morris 

Institute for Justice; Women Employed. 

161Comments of State Attorneys General. 

162Comments of American Pizza Community; 

Association of Women’s Business Centers; NAM; 

SBA Office of Advocacy. 

163Comments of American Hotel & Lodging 

Association; FMI—The Food Industry Association; 

National Retail Federation. 

164Comments of SBA Office of Advocacy. 

165Comments of FMI—The Food Industry 

Association; NAM; Clark Hill PLC. 

166Comments of General Counsel Abruzzo; IBT; 

National Women’s Law Center. 

167Comments of Americans for Prosperity 

Foundation; Americans for Tax Reform; NAM; Rio 

Grande Foundation. 

168Comments of Americans for Tax Reform; Rio 

Grande Foundation. 

169Comments of General Counsel Abruzzo; NELP. 

170Comments of Center for Law and Social 

Policy; Jobs with Justice and Governing for Impact. 

171Comments of Professors Pandya, Elmore, and 

Griffith. 

172See comments of General Counsel Abruzzo; 

IBT; National Women’s Law Center. 173See, e.g., Continental Winding Co., 305 NLRB 

122, 123 fn. 4 (1991). 174Restatement (Second) of Agency, sec. 2 (1958). 

While our colleague does not find our reference to 

this ‘‘general statement’’ in the Restatement 

persuasive, we believe that ‘‘the physical conduct’’ 

of an employee ‘‘in the performance of the service’’ 

to the employer encompasses workplace health and 

safety. 

health and safety,158 especially in 

certain industries, including the 

trucking, food and consumer goods, and 

waste and recycling industries.159 Other 

commenters strenuously urge the Board 

to include workplace health and safety 

as essential.160 In fact, one commenter 

suggests that, in light of the Covid-19 

pandemic, the Board should make 

explicit that workplace health and 

safety is an essential condition of all inperson employment.161

A few commenters express the view 

that scheduling should not be an 

essential term or condition of 

employment for joint-employer 

purposes.162 In this regard, some 

commenters note that determining the 

hours of operation for a facility should 

not be treated as comparable to 

determining hours of work for all 

individuals who perform services in 

that facility,163 while others characterize 

scheduling as related to ‘‘routine’’ 

contractual provisions that speak to the 

timing for completion of a project.164

Certain commenters note that treating 

control over scheduling as indicative of 

a common-law employment relationship 

may disproportionately affect entities 

operating in the manufacturing and 

staffing industries.165 Other commenters 

observe that scheduling practices are 

intertwined with employees’ hours of 

work and should therefore be 

considered essential.166

Some commenters argue that work 

rules and directions governing the 

manner, means, or methods of work 

performance should not be essential for 

purposes of the joint-employer 

standard.167 These commenters express 

concern that including work rules and 

directions potentially sweeps too 

broadly and risks exposing small 

business owners to substantial new 

liability.168 Similarly, our dissenting 

colleague expresses concern that 

including work rules and directions on 

the list of essential terms and conditions 

of employment sweeps too broadly, 

potentially allowing the Board to make 

a joint-employer finding on the strength 

of ambiguous language in work rules. 

He also predicts that including work 

rules and directions as essential will 

lead to more frequent joint-employer 

findings in the staffing, healthcare, and 

franchise industries. Commenters who 

favor including work rules and 

directions on the list of essential terms 

and conditions of employment generally 

argue that entities reserving or 

exercising control over work rules and 

directions thereby exert considerable 

influence over the manner and means of 

particular employees’ work.169

Several commenters propose 

additional terms and conditions of 

employment that the Board should 

consider essential. A few commenters 

propose adding practices related to 

surveillance and monitoring to the 

list.170 One comment goes further, 

suggesting that the Board adopt a 

rebuttable presumption that an entity is 

a joint employer if it imposes certain 

requirements on another entity or that 

entity’s employees (among others, 

retaining discretion to hire or fire that 

entity’s employees and requiring that 

entity’s employees to enter into 

noncompete agreements or other 

restraints on operating a business in the 

same trade or industry during or after 

the contract).171

As noted above, the Board has 

determined to include an exhaustive list 

of essential terms and conditions of 

employment in the final rule. While 

commenters broadly agree on the 

content of the proposed rule’s list, we 

briefly address commenters’ specific 

concerns about our decision to include 

scheduling, workplace health and 

safety, and work rules and directions 

governing the manner, means, or 

methods of work performance. 

With respect to scheduling, we begin 

by noting several commenters’ approval 

of the 2020 Rule’s inclusion of 

scheduling along with hours of work as 

an essential term or condition of 

employment.172 We find that Section 2 

of the Restatement (Second) of Agency 

provides support for including both 

‘‘hours of work and scheduling’’ on the 

list of essential terms and conditions of 

employment. We further note that Board 

law has long treated scheduling as 

probative of joint-employer status.173

We are also persuaded by the view set 

forth by some commenters that 

scheduling practices are often 

intertwined with hours of work. 

Having carefully considered the 

valuable input of commenters on the 

proposed rule’s inclusion of workplace 

health and safety on our list of essential 

terms and conditions of employment 

(and the views of our dissenting 

colleague), we are persuaded to retain 

this aspect of the proposed rule. We find 

common-law support for including 

workplace health and safety as an 

essential term or condition of 

employment in references to the 

importance of an employer’s control 

over ‘‘the physical conduct’’ of an 

employee ‘‘in the performance of the 

service’’ to the employer.174 While 

many commenters and our dissenting 

colleague have observed that workplace 

health and safety is subject to 

substantive regulation by many federal, 

state, and local authorities, especially in 

certain industries, we do not seek to 

displace or interfere with those 

regulatory schemes by recognizing that 

control over workplace health and 

safety is indicative of a jointemployment relationship. As discussed 

further below, we do not consider 

contractual terms that do nothing more 

than incorporate regulatory 

requirements, without otherwise 

reserving authority to control or 

exercising power to control the 

performance of work or terms and 

conditions of employment, indicative of 


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175Contrary to our dissenting colleague’s 

suggestion, if an employer’s compliance with health 

and safety regulations or OSHA standards involves 

choosing among alternative methods of satisfying 

its legal obligation, a contract term that merely 

memorializes the employer’s choice regarding how 

to comply with the regulation would not indicate 

joint-employer status. To the extent that an 

employer reserves further authority or discretion 

over health and safety matters, however, such 

reserved control (or control exercised pursuant to 

such a reservation) would bear on the jointemployer inquiry. 

176 Id., sec. 2 & 220. 

177We reject our dissenting colleague’s suggestion 

that the Board will seize upon ambiguous language 

in work rules to make a joint-employer finding. 

Instead, we consider work rules or directions 

essential because they may be especially clear 

indicators of a putative joint employer’s authority 

to control or exercise of control over the details of 

particular employees’ work. Cf. Cognizant 

Technology Solutions U.S. Corp. & Google LLC, 372 

NLRB No. 108, slip op. at 1 (2023) (finding jointemployer relationship under 2020 rule based in part 

on entity’s maintenance of ‘‘‘workflow training 

charts’ which govern[ed] the details of employees’ 

performance of specific tasks.’’). 

178Contrary to the view of our dissenting 

colleague, providing an exhaustive list of essential 

terms and conditions of employment is not 

intended to address the District of Columbia 

Circuit’s concerns about the forms of indirect 

control that bear on the joint-employer inquiry, but 

to instead respond to the court’s guidance, on 

remand, that the Board ‘‘explain which terms and 

conditions are ‘essential’ to permit ‘meaningful 

collective bargaining,’’’ and to ‘‘clarify what 

‘meaningful collective bargaining’ entails and how 

it works in this setting.’’ BFI v. NLRB, 911 F.3d at 

1221–1222 (quoting BFI, 362 NLRB at 1600). 

179 87 FR at 54663. 

180Comments of American Trucking 

Associations; COLLE; Competitive Enterprise 

Institute; Escalante Organization; NAHB; SBA 

Office of Advocacy; SHRM. Some commenters 

suggest that the proposed rule is sufficiently vague 

that it could have negative effects on the residential 

construction industry, exposing homeowners who 

control access to job sites, working hours, and many 

day-to-day conditions of employment to 

classification as potential joint employers. See 

comments of NAHB; Restaurant Law Center and 

National Restaurant Association. Another 

commenter questions whether a franchisor would 

be deemed a joint employer by virtue of providing 

optional tools and resources to a franchisee. See 

comments of Escalante Organization. 

181Comments of AGC; American Pizza 

Community; Americans for Tax Reform; American 

Staffing Association; California Policy Center; 

Escalante Organization; Independent Electrical 

Contractors; IFA; Michael Remick; National 

Association of Realtors; National Black McDonald’s 

Operators Association; National Demolition 

Association; National Retail Federation; National 

Taxpayers Union; New Civil Liberties Alliance & 

Institute for the American Worker; North American 

Meat Institute; Restaurant Law Center and National 

Restaurant Association; RILA; The Mackinac Center 

for Public Policy; Yum! Brands. One commenter 

also argues that there must be a showing of regular 

and continuous control, not merely sporadic and de 

minimis control. See comments of SHRM. Another 

commenter likewise suggests that the Board 

incorporate a de minimis limitation in the final 

rule. See comments of UNITE HERE. 

182Comments of American Hotel & Lodging 

Association; COLLE; RILA. 

183Comments of RILA; SHRM. 

184The District of Columbia Circuit has recently 

emphasized that it ‘‘took great pains to inform the 

Board that the failure to consider reserved or 

indirect control is inconsistent with the common 

law of agency.’’ Sanitary Truck Drivers & Helpers 

Local 350, International Brotherhood of Teamsters 

v. NLRB, 45 F.4th 38, 47 (D.C. Cir. 2022). 

joint-employer status.175 Finally, as 

noted above, many commenters 

confirmed our preliminary view that the 

experience of the Covid–19 pandemic 

demonstrated the importance of treating 

workplace health and safety as essential. 

We also adhere to the view set forth 

in the proposed rule that work rules and 

directions governing the manner, 

means, or methods of work performance 

are properly included as essential terms 

and conditions of employment. As with 

our discussion of scheduling above, we 

note that many commenters found it 

appropriate for the Board to follow the 

2020 rule’s lead in treating work rules 

and directions as essential. Moreover, 

we find support for including work 

rules and directions on the list of 

essential terms and conditions of 

employment in Sections 2 and 220 of 

the Restatement (Second) of Agency.176

In this regard, we agree with the views 

set forth by some commenters that 

possessing or exercising control over 

work rules or directions governing the 

manner, means, or methods of work 

performance illuminates the extent of 

control an employer exercises over the 

details of the work to be performed.177

Finally, in light of the clarification we 

make regarding the content of a joint 

employer’s bargaining obligation in 

paragraph (h) of the final rule, we do not 

find it necessary to add other terms or 

conditions of employment to the final 

rule’s list of ‘‘essential’’ terms or 

conditions of employment. However, we 

believe the final rule is responsive to 

commenters’ insights that bargaining 

over certain of these subjects, like 

workplace surveillance, may be very 

important to employees who organize 

and seek to bargain collectively. As a 

result, the final rule recognizes that 

once an entity is found to be a joint 

employer on the basis of its control of 

one or more essential terms or 

conditions of employment, that entity 

will be subject to a duty to bargain over 

all mandatory subjects of employment 

that it controls.178

E. Comments About Forms of Control 

Sufficient To Establish Status as a Joint 

Employer 

Proposed paragraph (e) of the 

proposed rule provided that whether an 

employer possesses the authority to 

control or exercises the power to control 

one or more of the employees’ terms and 

conditions of employment is 

determined under common-law agency 

principles. Possessing the authority to 

control is sufficient to establish status as 

a joint employer, regardless of whether 

control is exercised. Exercising the 

power to control indirectly is sufficient 

to establish status as a joint employer, 

regardless of whether the power is 

exercised directly. Control exercised 

through an intermediary person or 

entity is sufficient to establish status as 

a joint employer.179

Some commenters specifically request 

that the Board modify this paragraph of 

the proposed rule to specify what 

quantum or degree of indirect or 

reserved control will be sufficient to 

give rise to a joint-employer finding.180

Many commenters commended the 2020 

rule for returning to TLI/Laerco’s 

‘‘substantial direct and immediate 

control’’ formulation as the threshold 

that would give rise to a joint-employer 

finding and treating ‘‘limited and 

routine’’ instances of control as 

irrelevant to the joint-employer inquiry, 

with some noting the practical benefits 

of that standard for the construction, 

franchise, retail, restaurant, and staffing 

industries.181 Our dissenting colleague 

likewise expresses his preference for the 

2020 rule’s treatment of the forms of 

control that are sufficient to establish 

status as a joint employer. Some 

commenters suggest that Congress, in 

enacting the Taft-Hartley amendments, 

implicitly contemplated that only 

substantial direct and immediate control 

could suffice to establish a jointemployer relationship.182 In addition, 

some of these commenters urge that it 

is especially important for the Board to 

ascertain whether an entity will possess 

or exercise control on a prospective 

basis as a precondition to imposing a 

bargaining obligation.183

With respect, we disagree with the 

view of some commenters and our 

dissenting colleague that only 

‘‘substantial direct and immediate 

control’’ should be relevant to the 

Board’s joint-employer inquiry. As set 

forth in the NPRM, once it is shown that 

an entity possesses or exercises relevant 

control over particular employees, the 

Board is not aware of any common-law 

authority standing for the proposition 

that further evidence of the direct and 

immediate exercise of that control is 

necessary to establish a common-law 

employment relationship. While we 

acknowledge that some commenters 

found the 2020 rule’s formulation 

beneficial, because we are bound to 

apply common-law agency principles, 

we are not free to maintain a definition 

of ‘‘joint employer’’ that incorporates 

the restriction that any relevant control 

an entity possesses or exercises must be 

‘‘direct and immediate.’’ 184 Finally, we 


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185Comments of Jobs with Justice and Governing 

for Impact; Public Justice Center; The Leadership 

Conference on Civil and Human Rights. 

186Comments of The Leadership Conference on 

Civil and Human Rights. Other commenters 

likewise argue that temporary employees frequently 

receive less safety training and are more vulnerable 

to retaliation for reporting injuries than their 

permanent-employee counterparts. See comments 

of North Carolina Justice Center. 

187Comments of ACLU; AFL–CIO; BCTGM; 

Congressman Scott et al.; CWA; Jobs with Justice 

and Governing for Impact; Lawyers’ Committee for 

Civil Rights Under Law; Los Angeles County 

Federation of Labor AFL–CIO & Locals 396 and 848 

of the IBT; National Women’s Law Center; Public 

Justice Center; Restaurant Opportunities Centers 

United; SEIU; Signatory Wall and Ceiling 

Contractors Alliance; TechEquity Collaborative; The 

Leadership Conference on Civil and Human Rights; 

The Strategic Organizing Center; UBC; UE; Women 

Employed. 

188Comments of Bakery, Confectionary, Tobacco 

Workers and Grain Millers International Union 

(BCTGM); General Counsel Abruzzo; Public Justice 

Center; Richard Eiker; TechEquity Collaborative. 

189Comments of AFL–CIO; NELP; UNITE HERE. 

One of these commenters makes the further 

suggestion that, in situations where one firm 

dominates another or where parties have an 

exclusive service relationship, the Board should 

consider applying a rule of per se joint-employer 

liability. See comments of NELP. 

190Comments of AFL–CIO. 

191Comments of Center for Law and Social 

Policy; Los Angeles County Federation of Labor 

AFL–CIO & Locals 396 and 848 of the IBT. 

192Comments of Center for Law and Social 

Policy. Other commenters likewise suggest that, at 

least in certain contexts, surveillance might 

demonstrate sufficient indirect control over 

employees’ essential terms and conditions of 

employment to justify a joint-employer finding, but 

they do not recommend modifying the proposed 

rule to include this observation. See, e.g., comments 

of IBT; Jobs with Justice and Governing for Impact; 

NELP. 

193Comments of Los Angeles County Federation 

of Labor AFL–CIO & Locals 396 and 848 of the IBT. 

194Comments of General Counsel Abruzzo. 

195See, e.g., comments of CWA; RILA; State 

Attorneys General; U.S. Chamber of Commerce. 

196As discussed below, however, we have 

reformatted § 103.40(e) of the final rule to include 

two subsections and have streamlined its text to 

avoid surplusage. 

197BFI v. NLRB, 911 F.3d at 1217. Our dissenting 

colleague questions our decision not to include an 

extensive list of examples of forms of indirect 

control that may be relevant to the joint-employer 

inquiry and asks what other forms of indirect 

control may be relevant. As set forth in Sec. I.D. 

above, we will address whether other mechanisms 

that grant third parties control over particular 

employees’ terms and conditions of employment 

establish joint-employer status in the course of 

applying the rule. In so doing, we will be guided 

by the District of Columbia Circuit’s treatment of 

indirect control and common-law agency 

principles. 

198Comments of American Hospital Association; 

American Trucking Associations; CDW; Federation 

of American Hospitals; Home Care Association of 

America; Independent Bakers Association; NAHB; 

National Retail Federation. 

199Comments of COLLE; Goldwater Institute; 

National Small Business Association; SBA Office of 

Advocacy; Thomas Jefferson Institute for Public 

Policy. One commenter provides several examples 

of such contract provisions. See comments of 

Center for Workplace Compliance. 

hope to satisfy those commenters 

seeking guidance regarding the quantum 

or type of control that is sufficient to 

establish status as a joint employer in 

the discussion that follows. 

Others approve of the proposed rule’s 

explicit recognition that control 

exercised through an intermediary 

should be sufficient to establish jointemployer status, offering examples of 

the role intermediaries play in sharing 

or codetermining essential terms and 

conditions of employment in certain 

industries, including the franchise, 

staffing, and temporary employment 

industries.185 One commenter highlights 

how the proposed rule, which would 

find indirect control over workplace 

health and safety sufficient to establish 

joint-employer status, could benefit 

employees with disabilities, who it 

represents are overrepresented in 

temporary employment and often face 

distinctive health and safety challenges 

that may require multiple firms to play 

a role in addressing.186

In addition, these commenters 

emphasize that taking all relevant forms 

of control, including indirect control, 

into account is essential to ensuring that 

bargaining is effective, especially in 

industries characterized by the 

widespread use of contracting, 

including the property services, staffing, 

and construction industries.187 Some 

commenters observe that making 

indirect control part of the jointemployer inquiry may foster compliance 

with labor and employment laws and 

encourage an appropriate sharing of 

responsibility among multiple firms that 

codetermine terms and conditions of 

employment.188 Some of these 

commenters charge that by imposing a 

requirement of ‘‘substantial direct and 

immediate control’’ over essential terms 

and conditions of employment, the 2020 

rule effectively rendered forms of 

indirect control irrelevant to the jointemployer analysis, in contravention of 

the common-law agency principles that 

must guide the Board’s application of its 

joint-employer standard.189 As one of 

these commenters adds, this error is 

especially pronounced in light of the 

District of Columbia Circuit’s later 

statement in Sanitary Truck Drivers and 

Helpers Local 350, International 

Brotherhood of Teamsters v. NLRB, 45 

F.4th 38, 46–47 (D.C. Cir. 2022), that the 

Board was not free to apply an analysis 

that effectively ignored reserved and 

indirect control.190

Certain commenters who generally 

agree with the Board’s proposed 

approach to treating indirect control as 

probative to the joint-employer analysis 

argue that certain employer actions 

should, in general, be regarded as 

amounting to the exercise of indirect 

control over particular employees.191

For example, one commenter proposes 

that the Board state that using 

surveillance technology amounts to 

indirect control over the employees 

being surveilled.192 Another commenter 

suggests that certain forms of control 

that franchisors or user firms exert over 

the nonwage cost items in franchisees’ 

or supplier firms’ budgets are 

tantamount to indirect control over 

wages.193 One commenter offers 

illustrations of forms of control she 

regards as material to the existence of a 

common-law employment relationship. 

One example includes a contract 

provision granting a user employer the 

right to require mandatory overtime by 

supplied employees.194 Some suggest 

that the Board add corresponding 

examples or hypotheticals to the final 

rule to clarify that these forms of control 

are sufficient.195

While we appreciate the views set 

forth by commenters who illustrate why 

forms of indirect control are frequently 

relevant to the joint-employer analysis, 

we decline the invitation to modify the 

text of the proposed rule to incorporate 

these insights.196 By maintaining the 

general language of the proposed rule, 

which provides that control is to be 

determined by reference to common-law 

agency principles, we aim to permit the 

application of the final rule to a diverse 

arrangement of mechanisms that grant 

third parties or other intermediaries 

authority to share or codetermine 

matters governing particular employees’ 

essential terms and conditions of 

employment. In this regard, as we apply 

the final rule to new facts, we will be 

guided by § 103.40(e)(2) of the final rule, 

which is consistent with the District of 

Columbia Circuit’s statement that ‘‘the 

common law has never countenanced 

the use of intermediaries or controlled 

third parties to avoid the creation of a 

master-servant relationship.’’ 197

Another group of comments raises 

concerns about situations where a 

putative joint employer in fact possesses 

the authority to control or exercises the 

power to control essential terms or 

conditions of employment only because 

it is required to do so by law or 

regulation.198 Some of these 

commenters state that the Federal 

Government possesses reserved and 

indirect control over certain terms and 

conditions of employment of the 

employees of companies it contracts 

with.199 For example, one commenter 


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200Comments of American Council of 

Engineering Companies. 

201Comments of ARTBA. 

202Of course, if an employer has discretion over 

how to comply with a statutory mandate, it must 

bargain about how to exercise that discretion. See, 

e.g., Roseburg Forest Products Co., 331 NLRB 999, 

1003 (2000) (requiring an employer to bargain with 

the union over how to satisfy its obligations to keep 

an employee’s medical information confidential 

under the Americans with Disabilities Act, 42 

U.S.C. 12101, et seq., while meeting its duty to 

furnish requested information to the union under 

the NLRA). 

203Cf. Management Training Corp., 317 NLRB 

1355 (1995). 

204For these reasons, we also reject the 

hypotheticals our dissenting colleague puts forward 

to suggest that the final rule exceeds the boundaries 

of the common law. Our colleague downplays the 

importance of the final rule’s threshold requirement 

of a common-law employment relationship and 

thereby concludes that entities with highly 

attenuated relationships to particular employees 

will be deemed joint employers. In applying the 

final rule, and consistent with the common law, we 

will perform the required threshold analysis. 

205Comments of AGC; COLLE; Goldwater 

Institute; Home Care Association of America. 

206Comments of COLLE. 

207Comments of National Alliance for Public 

Charter Schools. 

208 29 U.S.C. 152(2). 

209 Id. The Board uses the test approved by the 

Supreme Court in NLRB v. National Gas Utility 

District of Hawkins County, 402 U.S. 600 (1971) to 

determine whether an entity is a ‘‘political 

subdivision’’ within the meaning of Sec. 2(2) of the 

Act and therefore exempt from the Board’s 

jurisdiction. 

210See reply comments of AFL–CIO (citing 

Management Training Corp., 317 NLRB at 1358). 

211See Teledyne Economic Development v. 

NLRB, 108 F.3d 56, 59 (4th Cir. 1997) (‘‘By its terms, 

section 2(2) exempts only government entities or 

wholly owned government corporations from its 

coverage—not private entities acting as contractors 

for the government.’’). See also NLRB v. YWCA, 192 

F.3d 1111, 1117 (8th Cir. 1999) (‘‘We find ourselves 

in agreement with the opinions of our sister circuits 

on the issue of whether or not the Board can assert 

jurisdiction over an employer without regard to 

whether or not the employer’s control over its 

ability to collectively bargain is hampered or 

impeded by the employer’s operating agreement 

with the government.’’); Aramark Corp. v. NLRB, 

179 F.3d 872, 879 (10th Cir. 1999) (‘‘The Board’s 

consistent view that governmental contractors fall 

outside section 2(2)’s political subdivision 

exemption and inside that provision’s definition of 

an employer ‘is entitled to great respect.’ ’’); 

Pikeville United Methodist Hospital of Kentucky, 

Inc. v. United Steelworkers of America, 109 F.3d 

1146, 1152–1153 (6th Cir. 1997). 

describes the use of ‘‘flow-down’’ 

clauses in contracting relationships and 

how prime contractors are sometimes 

required to impose obligations under 

the Service Contract Act, 41 U.S.C. 351 

et seq., and similar local and municipal 

laws setting minimum wage and benefit 

standards on their subcontractors.200

Similarly, some commenters suggest 

that control over essential terms or 

conditions of employment is less 

probative of joint-employer status if it is 

possessed or exercised in the service of 

setting basic expectations or ground 

rules for a third-party contractor or 

contracted service.201

In response to these commenters, we 

note that if a law or regulation actually 

sets a particular term or condition of 

employment (like minimum wages, 

driving time limits for truck drivers, or 

contractor diversity requirements), an 

entity that does nothing more than 

embody or memorialize such legal 

requirements in its contracts for goods 

and services, without otherwise 

reserving the authority to control or 

exercising the power to control terms or 

conditions of employment, does not 

thereby become the employer of 

particular employees subject to those 

legal requirements. This is because the 

embodiment of such legal requirements 

is not a matter within the entity’s 

discretion subject to collective 

bargaining.202 We remind commenters 

who express concern about the role of 

entities exempt from the Board’s 

jurisdiction that, under longstanding 

Board precedent, if a common-law 

employer of particular employees lacks 

control over some of those employees’ 

terms and conditions of employment 

because those terms and conditions are 

controlled by an exempt entity, that 

common-law employer is not required 

to bargain about those terms and 

conditions of employment.203

Consistent with this precedent, the final 

rule provides that a joint employer will 

be required to bargain over only those 

mandatory subjects of bargaining that it 

possesses or exercises the authority to 

control. Finally, as discussed in more 

detail above and below, if an entity 

possesses or exercises some control over 

particular employees’ terms and 

conditions of employment, including 

indirect control, only by the terms of a 

third-party contract that sets basic 

expectations or ground rules for the 

production or delivery of goods or 

services, without otherwise reserving 

the authority or exercising the power to 

control the details of the manner and 

methods by which the work is 

performed, the entity does not thereby 

become an employer of those 

employees. This is because such 

control, as a normal incident of a thirdparty contract, does not establish the 

common-law employment relationship 

that is the threshold requirement for 

finding a joint-employer relationship.204

Several commenters raise concerns 

about the possibility that, in contexts 

where a public entity contracts with a 

private entity to render a service or 

perform a contract, the proposed jointemployer standard risks enmeshing that 

public entity in the Board’s 

jurisdiction.205 One commenter, citing 

the Board’s decision in Management 

Training Corp., 317 NLRB 1355 (1995), 

argues that the 2020 rule would better 

ensure the proper application of the 

joint-employer standard in contracting 

situations.206 One commenter expresses 

particular concern about the 

implications of a joint-employer 

relationship between a public charter 

school and third-party vendors or 

contractors it uses.207

We reject these commenters’ views 

that the proposed rule creates any novel 

risks for public or private entities who 

contract with one another. The final rule 

we adopt requires, as a threshold matter, 

that each putative joint employer meet 

the definition of ‘‘employer’’ in Section 

2(2) of the Act.208 Section 2(2) excludes 

from the definition of ‘‘employer’’ 

public entities, including, in relevant 

part, ‘‘the United States or any wholly 

owned Government corporation, or any 

Federal Reserve Bank, or any State or 

political subdivision thereof.’’ 209 While 

some commenters suggest that public 

entities possess or exercise control over 

essential terms and conditions of 

employment, we note that these facts 

are insufficient to establish a jointemployment relationship for purposes 

of the Act because the public entity is 

excluded from the statutory definition 

of ‘‘employer.’’ Finally, we regard the 

Board’s decision in Management 

Training Corp., above, as persuasive in 

addressing some commenters’ concerns 

that applying the joint-employer 

standard we adopt might cause 

distinctive problems for government 

contractors. As one commenter suggests, 

that case permits the Board to find one 

entity is an employer for purposes of 

Section 2(2) even if another, exempt 

entity also possesses or exercises control 

over particular employees’ essential 

terms or conditions of employment.210

We note that reviewing courts have 

broadly approved of the Board’s 

assertion of jurisdiction over 

government contractors.211

F. Control Over Matters That Are 

Immaterial to the Existence of an 

Employment Relationship Under 

Common-Law Agency Principles or That 

Do Not Bear on Essential Terms and 

Conditions of Employment 

Proposed paragraph (f) provided that 

‘‘[e]vidence of an employer’s control 

over matters that are immaterial to the 

existence of an employment 

relationship under common-law agency 

principles or control over matters that 

do not bear on the employees’ essential 

terms and conditions of employment is 

not relevant to the determination of 


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212 87 FR at 54663. 

213 Id. at 54651 (quoting BFI v. NLRB, 911 F.3d 

at 1221). 

214 Id. 

215 Id. 

216See, e.g., comments of General Counsel 

Abruzzo; IBT. We address cost-plus contract 

provisions below. 

217Comments of RILA. 

218Comments of Escalante Organization; IFDA; 

RILA; Tesla, Inc.; The Mackinac Center for Public 

Policy. 

219Comments of Tesla, Inc. 

220Comments of IFDA; The Mackinac Center for 

Public Policy. 

221Comments of American Hotel & Lodging 

Association; American Staffing Association; HR 

Policy Association; RILA; Tesla, Inc.; U.S. Chamber 

of Commerce; U.S. Small Business Association; U.S. 

Black Chambers, Inc. 

222BFI v. NLRB, 911 F.3d at 1220. 

223Comments of American Hotel & Lodging 

Association; CDW; Contractor Management 

Services, LLC; International Warehouse Logistics 

Association; SHRM; Tesla, Inc.; The Mackinac 

Center for Public Policy. 

224Comments of American Hotel & Lodging 

Association (citing Service Employees International 

Union, Local 32BJ v. NLRB, 647 F.3d 435, 443 (2d 

Cir. 2011); Local 254, SEIU, 324 NLRB 743, 746– 

749 (1997)); Independent Lubricant Manufacturers 

Association; Restaurant Law Center and National 

Restaurant Association; Tesla, Inc.; U.S. Chamber of 

Commerce. 

225Comments of American Hotel & Lodging 

Association. 

226Comments of American Hotel & Lodging 

Association; ARTBA; CDW; Energy Marketers of 

America; SHRM; Tesla, Inc. 

227Comments of Control Transportation Services, 

Inc.; Energy Marketers of America; Michael Remick; 

M. M. Fowler, Inc.; QuickChek; U.S. Chamber of 

Commerce. Notably, several of these commenters 

raise observations regarding the timing of deliveries 

at retail motor fuel locations, arguing that energy 

marketers often dictate when fuel can be delivered 

safely. See, e.g., comments of Energy Marketers of 

America. 

228Comments of American Hotel & Lodging 

Association; Home Care Association of America; 

IFA; Independent Lubricant Manufacturers 

Association; M. M. Fowler, Inc.; McDonald’s USA, 

LLC; National Association of Convenience Stores; 

SHRM; U.S. Chamber of Commerce; Yum! Brands. 

229Comments of American Hotel & Lodging 

Association; IFA. 

230Comments of American Hotel & Lodging 

Association; CDW; Contractor Management 

Services, LLC; Home Care Association of America; 

National Association of Convenience Stores; 

Restaurant Law Center and National Restaurant 

Association; SHRM. 

231Comments of Restaurant Law Center and 

National Restaurant Association; SHRM. 

232Comments of RILA; SHRM. 

233Comments of Center for Workplace 

Compliance; Home Care Association of America; 

National Retail Federation; RILA; SHRM; U.S. 

Chamber of Commerce. 

234Comments of American Hotel & Lodging 

Association; Energy Marketers of America; 

Independent Lubricant Manufacturers Association; 

National Retail Federation; Tesla, Inc. 

235Comments of SHRM; Tesla, Inc.; U.S. Chamber 

of Commerce. 

236Comments of U.S. Chamber of Commerce. 

whether the employer is a joint 

employer.’’ 212 As set forth more fully 

above, the preamble to the proposed 

rule expressed agreement with the 

District of Columbia Circuit’s view that 

‘‘routine components of a company-tocompany contract’’ will generally not be 

material to the existence of an 

employment relationship under 

common-law agency principles.213 The 

proposed rule cited two examples given 

by the District of Columbia Circuit as 

potential kinds of company-to-company 

contract provisions that will not 

generally be probative of joint-employer 

status: a ‘‘very generalized cap on 

contract costs’’; or ‘‘an advance 

description of the tasks to be performed 

under the contract.’’ 214 While noting 

that the proposed rule did not intend to 

exhaustively detail the kinds of business 

arrangements that might bear on the 

existence of a common-law employment 

relationship, the Board specifically 

solicited commenters’ input on other 

kinds of company-to-company contract 

provisions that might not be material to 

the existence of an employment 

relationship under common-law agency 

principles.215 Many commenters 

accepted the Board’s invitation to 

provide these examples, and we have 

carefully considered the helpful insights 

commenters shared, as discussed below. 

First, some commenters specifically 

addressed the two examples identified 

by the District of Columbia Circuit and 

in the proposed rule. A few commenters 

appeared to suggest that a generalized 

cap on contract costs might in certain 

circumstances be probative of a 

common-law employment relationship, 

especially if such a cap is coupled with 

a cost-plus arrangement or other explicit 

limitations on employee wages and 

benefits.216 But many other commenters 

generally expressed their agreement 

with the view set forth in the proposed 

rule and by the District of Columbia 

Circuit that generalized caps on contract 

costs typically resemble other ordinary 

price or quantity terms that do not have 

any necessary connection to the 

existence of a common-law employment 

relationship.217

No commenter expresses any 

concerns about treating advance 

descriptions of the tasks to be performed 

under the contract (including provisions 

setting forth objectives, ground rules, or 

expectations, or providing for oversight) 

as generally immaterial to the existence 

of a common-law employment 

relationship, while several commenters 

expressly indicate their approval of the 

proposed rule’s discussion of such 

provisions.218 One commenter suggests 

that it is common practice to include a 

‘‘statement of work’’ to define a new 

project and that the Board should regard 

these types of contract provisions as 

akin to advance descriptions of the tasks 

to be performed (and therefore not 

material to the existence of a commonlaw employment relationship).219 A few 

of these commenters make the further 

suggestion that the Board modify the 

text of proposed paragraph (f) to 

expressly reflect that descriptions of the 

tasks to be performed are not material to 

the existence of a common-law 

employment relationship.220

A number of commenters encourage 

the Board to modify the proposed rule 

to provide examples of contractual 

provisions that would not give rise to a 

finding of joint-employer status or to 

otherwise illustrate or give examples 

about how the Board will apply the 

joint-employer rule.221 These 

commenters offer a range of suggested 

‘‘routine components of a company-tocompany contract’’ 222 to exclude as 

probative of joint-employer status. 

These contractual provisions include, 

among others, those that set forth: the 

objectives, basic ground rules, and 

expectations of the relationship; 223

instructions regarding work standards or 

expectations and about what work to 

perform, or where and when to perform 

work; 224 minimum staffing 

requirements; 225 quality, productivity, 

timing, and safety terms about providing 

a service or completing a project; 226

requirements that deliveries be made 

during limited windows of time; 227

requirements about monitoring or 

maintaining brand standards or the 

design, de ́cor, logo, or image of a 

business; 228 uniform requirements; 229

generally applicable rules for 

individuals visiting a facility; 230 general 

price terms or terms governed by thirdparty or customer demand; 231 authority 

to cancel a contract, including at 

will; 232 requirements that employees 

undergo background checks or drug 

tests, comply with equal employment 

opportunity, nondiscrimination, and 

antiharassment policies, and satisfy 

licensure requirements; 233 authority to 

bar certain individuals from the 

premises or reject particular 

employees; 234 terms related to an 

entity’s control over its property, 

premises, or equipment, including 

training and safety requirements; 235

provisions related to the nondisclosure 

or confidentiality of trade secrets, 

proprietary information, or intellectual 

property; 236 construction project 

schedule requirements or safety 

programs or other site-specific 

requirements for entities visiting marine 

terminals, railyards, or other supply 


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237Comments of ABC; AGC; ARTBA; Trucking 

Industry Stakeholders. Several commenters identify 

AIA Document A201–2017, a standard form 

document setting forth the general conditions for 

construction projects, and the Federal Acquisition 

Regulation and other contracting laws and 

regulations, as important sources of contract terms 

that memorialize employers’ respective duties and 

obligations on construction jobsites. See comments 

of AGC. Others point to TSA requirements, marine 

terminal operators’ rules, and the requirements of 

the Uniform Intermodal Interchange Agreement 

(UIIA) as playing a role in defining terms and 

conditions of employment for employees who work 

at job sites governed by those rules and agreements. 

See, e.g., comments of AAPA; Trucking Industry 

Stakeholders. 

238Comments of ABC; American Trucking 

Associations; CDW; Center for Workplace 

Compliance; Home Care Association of America; 

IFA; Independent Bakers Association; IFDA; NAHB; 

National Retail Federation; SBA Office of 

Advocacy; SHRM; Tesla, Inc.; U.S. Chamber of 

Commerce. 

One of these commenters specifically observes 

that provisions that do no more than memorialize 

parties’ existing obligations to adhere to legally 

imposed minimum standards should not be 

material to the existence of a common-law 

employment relationship. See comments of CDW. 

239Comments of AHA; Federation of American 

Hospitals; U.S. Chamber of Commerce. 

240Comments of Center for Workplace 

Compliance; CDW; HR Policy Association; IFA; 

Retail Industry Leaders Association; Tesla, Inc.; 

U.S. Chamber of Commerce. 

241Comments of RILA; SHRM; U.S. Chamber of 

Commerce. However, as noted above, one 

commenter identified cost-plus contracting as 

potentially probative of a user employer’s indirect 

control over the wages of a supplier employee. 

Comments of General Counsel Abruzzo. 

242Comments of ABC; ARTBA. 

243Comments of CDW; U.S. Chamber of 

Commerce. 

244See BFI v. NLRB, 911 F.3d at 1221 (‘‘In 

principle, there is nothing wrong with the Board 

fleshing out the operation of a legal test that 

Congress has delegated to the Board to administer 

through case-by-case adjudication.’’). 

245Comments of IFA; RILA; SHRM; U.S. Chamber 

of Commerce. 

246Comments of National Home Delivery 

Association; SHRM. 

247Comments of AFL–CIO; Los Angeles County 

Federation of Labor AFL–CIO & Locals 396 and 848 

of the IBT; State Attorneys General. 

248Comments of General Counsel Abruzzo; SEIU. 

249Comments of SEIU. 

250Comments of AFL–CIO. 

251Comments of ABC; AGC. 

252Comments of ABC; AGC. Our dissenting 

colleague similarly argues that the final rule risks 

treating general contractors in the construction 

industry as joint employers on a per se basis. 

253For this reason, as mentioned above, we reject 

our dissenting colleague’s suggestion that the final 

rule will disrupt existing relationships and norms 

on construction sites. As mentioned above, we 

believe our colleague errs in downplaying the 

requirement in the final rule that a party asserting 

that an entity is a joint employer establish that that 

entity has a common-law employment relationship 

with particular employees. We are confident that 

chain hubs; 237 parties’ obligations 

under law or regulations; 238 provisions 

requiring hospitals to superintend 

contract employees as part of their 

patient-care mission; 239 goals related to 

diversity, equity, inclusion, and access 

(DEIA), corporate social responsibility 

(CSR), or environmental, social, and 

governance (ESG); 240 cost-plus 

arrangements; 241 minimum 

compensation requirements as 

determined by public contracting rules 

or regulations, including the DavisBacon Act, 40 U.S.C. 3141 et seq.242

Some commenters helpfully 

responded to the Board’s request for 

comment on this issue by providing 

sample or actual contractual language 

that they argue correspond to some of 

the categories of company-to-company 

contract provisions listed above.243

After reviewing the wide range of 

contract provisions commenters shared 

with the Board, we are persuaded that 

the approach taken in the proposed rule, 

which did not attempt to categorize 

company-to-company contract 

provisions ex ante, is the most prudent 

path forward.244 Because the language 

used in contract provisions that 

ostensibly address the same subject 

matter may vary widely, we believe that 

case-by-case adjudication applying the 

joint-employer standard is a better 

approach. To do otherwise might risk 

problems of both over- and underinclusion and overlook important 

context that might be relevant to the 

Board’s analysis. 

In addition to contractual provisions, 

other commenters suggest that the Board 

modify the proposed rule to recognize 

certain business practices as aspects of 

routine company-to-company dealings 

that are not material to the existence of 

a common-law employment 

relationship. For example, several 

commenters urge the Board to specify 

that monitoring a third party’s 

performance for the purposes of quality 

assurance or auditing for compliance 

with contractual obligations will not be 

viewed as probative of joint-employer 

status.245 A few others urge the Board to 

clarify that the mere communication of 

work assignments, delivery times, or 

other details necessary to perform work 

under a contract is not material to the 

joint-employer inquiry if it is not 

accompanied by other evidence 

showing a common-law employment 

relationship.246 We decline to modify 

the proposed rule as suggested by these 

commenters for largely the same reasons 

we decline to offer an ex ante 

categorization of company-to-company 

contract provisions. Given the diversity 

of business practices these commenters 

describe, we believe that case-by-case 

adjudication applying the jointemployer standard will be the soundest 

approach. 

Another group of commenters urge 

the Board not to provide specific 

examples of contractual provisions that 

are immaterial to the existence of a 

common-law employment relationship, 

emphasizing that it is very difficult to 

assess the effect of such provisions 

absent consideration of the surrounding 

context.247 Others take issue with 

particular examples of company-tocompany contractual provisions that 

other commenters suggest should not be 

considered material to the existence of 

a common-law employment 

relationship.248 For example, one 

commenter notes that, in its experience, 

provisions authorizing an entity to 

remove or reject an employee are 

sometimes used to retaliate against 

individuals who engage in union and 

protected concerted activities.249 One 

commenter suggests that the Board 

modify proposed paragraph (f) to clearly 

identify that decisions made as an 

exercise of ‘‘entrepreneurial control’’ are 

generally not probative of the existence 

of a common-law employment 

relationship.250 For the same reasons set 

forth above, we are not inclined to adopt 

these commenters’ suggestions that we 

specifically categorize contractual 

provisions or business practices in the 

final rule. Instead, we are persuaded 

that it would be most prudent to 

consider whether certain contractual 

provisions or business practices are 

probative of a common-law employment 

relationship when applying the final 

rule. 

Additionally, some commenters argue 

that the Board should treat employment 

relationships in the construction 

industry in a distinctive manner for 

purposes of analyzing what forms of 

control are material to the existence of 

a common-law employment 

relationship.251 While these 

commenters acknowledge that multiple 

firms reserve and exercise control over 

construction jobsites, citing Denver 

Building, supra, 341 U.S. at 689–690, 

they explain that this shared control is 

inherent in the industry and should not 

be probative of joint-employer status.252

As discussed above, we agree that the 

Supreme Court’s decision in Denver 

Building precludes treating a general 

contractor as the employer of a 

subcontractor’s employees solely 

because the general contractor has 

overall responsibility for overseeing 

operations on the jobsite. And, absent 

evidence that a firm possesses or 

exercises control over particular 

employees’ essential terms and 

conditions of employment, that firm 

would not qualify as a joint employer 

under the standard adopted in this final 

rule.253


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this threshold requirement will ensure the Board’s 

analysis of whether an entity is a joint employer 

when it applies the rule is appropriately focused. 

Further, to the extent that our colleague relies on 

language in Denver Building indicating that a 

general contractor’s ‘‘supervision over the 

subcontractor’s work’’ precludes a joint-employer 

finding, 341 U.S. at 689–690, we respectfully 

disagree with his interpretation. Denver Building 

was a case involving Sec. 8(b)(4) of the Act, not the 

joint-employer standard, and it did not address 

whether the general contractor possessed or 

exercised control over particular employees’ 

essential terms and conditions of employment, 

whether by supervising their work or otherwise. 

Instead, the case focused on the general contractor’s 

supervision of the project as a whole. 

254Comments of IFA; McDonald’s USA, LLC; 

Restaurant Law Center and National Restaurant 

Association; U.S. Chamber of Commerce; Yum! 

Brands. Our dissenting colleague also expresses 

concern about how the proposed rule will affect 

franchise businesses. 

255Comments of IFA. 

256Comments of IFA; U.S. Chamber of Commerce; 

Yum! Brands. 

257 In this regard, we also note that such matters 

are unlikely to constitute mandatory subjects of 

bargaining. See First National Maintenance Corp. v. 

NLRB, above, 452 U.S. at 676–677 (‘‘Some 

management decisions, such as choice of 

advertising and promotion, product type and 

design, and financing arrangements, have only an 

indirect and attenuated impact on the employment 

relationship.’’). 

258Comments of Subcontracting Concepts, LLC. 

259Comments of American Association of Port 

Authorities. 

260Comments of RILA; SHRM; Tesla, Inc. These 

commenters acknowledge the possible need for 

effects bargaining in these circumstances but urge 

the Board to require such bargaining to occur on an 

expedited basis. See id. 

Another commenter also cites Plumbers Local No. 

447, 172 NLRB 128 (1968) (‘‘Malbaff’’) for the 

proposition that an employer should not have a 

bargaining obligation under Sec. 8(a)(5) before 

terminating its relationship with a subcontractor or 

other business entity, which is not a violation of 

Sec. 8(a)(3). Comments of COLLE. 

261Comments of General Counsel Abruzzo. 

262 First National Maintenance, 452 U.S. at 677. 

263Comments of AGC; AHA; American Staffing 

Association; Americans for Tax Reform; Freedom 

Foundation; IFA; International Foodservice 

Distributors Association; NAM; National Retail 

Federation; National Waste & Recycling 

Association; Subcontracting Concepts, LLC; 

Thomas Jefferson Institute for Public Policy; U.S. 

Chamber of Commerce. 

264 911 F.3d at 1215. See comments of Americans 

for Prosperity Foundation; Independent Bakers 

Association; Modern Economy Project; National 

Association of Convenience Stores; National Waste 

& Recycling Association; North American Meat 

Institute; SHRM; Subcontracting Concepts, LLC; 

The Thomas Jefferson Institute for Public Policy; 

U.S. Chamber of Commerce. 

Others seek recognition of industryspecific business practices that warrant 

special consideration. A number of 

commenters raise concerns about 

whether the proposed rule pays 

adequate heed to franchisors’ need to 

protect their brands and their trade or 

service marks.254 Some of these 

commenters note that the 2020 rule 

acknowledged franchisors’ needs to 

maintain brand-recognition standards 

by providing that control over brands or 

trademarks is not probative of jointemployer status. The commenters urge 

the Board to include a similar 

acknowledgment in the final rule.255

Relatedly, a number of commenters 

argue that the proposed rule risks a 

conflict with federal trademark law, 

including the Lanham Act, 15 U.S.C. 

1051 et seq., and cognate state laws 

inasmuch as they require franchisors to 

retain control over their franchisees to 

protect their brand standards.256 A 

bipartisan group of six United States 

Senators expresses similar concerns 

regarding the need to protect franchise 

brands, noting their support for the 

Trademark Licensing Protection Act of 

2022, S.4976. 

We are mindful of franchisors’ need to 

protect their brands and their trade or 

service marks and of the need to 

accommodate the NLRA with the 

Lanham Act and federal trademark law 

more generally. That said, we view the 

likelihood of conflict as minimal under 

the standard adopted in this final rule. 

Many common steps franchisors take to 

protect their brands have no connection 

to essential terms and conditions of 

employment and therefore are 

immaterial to the existence of a 

common-law employment relationship. 

While we are not inclined to 

categorically state that all forms of 

control aimed at protecting a brand are 

immaterial to the existence of a 

common-law employment relationship, 

we stress that many forms of control 

that franchisors reserve to protect their 

brands or trade or service marks (like 

those dealing with logos, store design or 

de ́cor, or product uniformity) will 

typically not be indicative of a commonlaw employment relationship.257

Further, by making the list of ‘‘essential 

terms and conditions of employment’’ 

in the final rule exhaustive, we also aim 

to respond to the substance of these 

commenters’ concerns by offering 

clearer guidance to franchisors about the 

forms of control that the Board will find 

relevant to a joint-employer inquiry. 

Another commenter urges the Board 

to state that making a payment as part 

of a contract to provide payroll services 

is not sufficient to demonstrate control 

over wages sufficient to support a jointemployer finding.258 One commenter 

argues that the proposed rule should 

clarify that, for joint-employer purposes, 

motor carriers are the customers, not 

employees or contractors, of marine 

terminals.259 As set forth above, we are 

not inclined to modify the text of the 

final rule to specifically address these 

situations. However, we hope that we 

have satisfied these commenters’ desires 

for greater clarity regarding their 

obligations by describing our view of 

the forms of control that will be relevant 

to the joint-employer inquiry and by 

cabining the list of essential terms and 

conditions of employment that the 

Board will treat as material to the 

existence of a common-law employment 

relationship. 

Some commenters argue that because 

decisions to modify or terminate joint 

employment relationships are 

entrepreneurial decisions between 

businesses, they are not susceptible to 

decisional bargaining under First 

National Maintenance Corp. v. NLRB, 

452 U.S. 666 (1981).260 Other 

commenters note that a range of other 

company-to-company contracting 

practices would not be subject to 

bargaining under First National 

Maintenance and its progeny and 

should therefore not be considered 

probative of joint-employer status.261

As discussed above, the Board has 

determined to modify the final rule to 

clarify the nature of joint employers’ 

bargaining obligations. The final rule 

explains that, once an entity is found to 

be a joint employer because it shares or 

codetermines matters governing one or 

more of particular employees’ essential 

terms or conditions of employment, it is 

obligated to bargain over any mandatory 

subjects of bargaining it possesses or 

exercises the authority to control. As 

some commenters helpfully note, the 

Supreme Court has held that core 

entrepreneurial decisions ‘‘involving a 

change in the scope and direction of the 

enterprise’’ are not mandatory subjects 

of bargaining.262 In applying the final 

rule, we will adhere to this binding 

precedent when determining the scope 

of joint employers’ bargaining 

obligation. 

G. Comments About the ‘‘Meaningful 

Collective Bargaining’’ Step of the 

Board’s 2015 Browning-Ferris Decision 

Several commenters urge the Board to 

modify the text of the proposed rule to 

incorporate the ‘‘meaningful collective 

bargaining’’ step of the Board’s 2015 BFI 

decision or to otherwise embrace that 

portion of the BFI analysis.263 Others, 

including our dissenting colleague, take 

the position that the Board’s proposal 

should be withdrawn or modified in 

some other manner, as the proposed 

rule fails to cast light on questions the 

District of Columbia Circuit raised 

regarding ‘‘once control is found, who is 

exercising that control, when, and 

how.’’ 264 Some commenters specifically 

suggest that using a nonexhaustive list 

of ‘‘essential terms and conditions of 


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265Comments of CDW; COLLE; National 

Association of Convenience Stores; National Retail 

Federation; U.S. Chamber of Commerce. 

266See, e.g., comments of American Staffing 

Association; SHRM. 

267Comments of RILA; SHRM. 

268Comments of American Staffing Association; 

SEIU; SHRM; U.S. Chamber of Commerce. As 

mentioned previously, the NPRM provided in 

supplementary information that the proposed rule 

would only require a putative joint employer to 

bargain over those essential terms and conditions of 

employment it possesses the authority to control or 

over which it exercises the power to control. 87 FR 

at 54645 fn. 26. 

269Comments of RILA; SHRM (citing Emporium 

Capwell Co. v. Western Addition Community 

Organization, 420 U.S. 50, 64 (1975) for the 

proposition that the process and outcome of 

collective bargaining cannot lawfully be imposed 

on employees who have not chosen union 

representation). 

270Comments of AFL–CIO; SEIU. 

271Comments of General Counsel Abruzzo; SEIU. 

272Comments of National Retail Federation. 

273We note that the second element of the 

Board’s Browning-Ferris analysis, the inquiry into 

‘‘whether the putative joint employer possesses 

sufficient control over employees’ essential terms 

and conditions of employment to permit 

meaningful collective bargaining,’’ is self-imposed. 

BFI, 362 NLRB at 1600; see BFI v. NLRB, 911 F.3d 

at 1205 (noting that in Browning-Ferris, ‘‘the Board 

announced for the first time that it would subdivide 

the inquiry . . . . ’’) (emphasis added). It is neither 

a requirement under the common law of agency nor 

under the Act. As our dissenting colleague 

concedes, ‘‘[a]bsent any rule whatsoever, jointemployer status would be determined through caseby-case adjudication applying the common law of 

agency.’’ Accordingly, although we are not required 

to incorporate the ‘‘meaningful collective 

bargaining’’ step of the Board’s 2015 BFI decision 

in our current articulation of the joint-employer 

standard, we nevertheless find that § 103.40(c) of 

the final rule, providing for an examination of 

whether the character and objects of a purported 

employer’s control extend to essential terms and 

conditions of employment within the specific 

context of the Act, amply satisfies the District of 

Columbia Circuit’s instructions that the Board, on 

remand, ‘‘explain which terms and conditions are 

‘essential’ to permit ‘meaningful collective 

bargaining,’ ’’ and what such bargaining ‘‘entails 

and how it works in this setting.’’ Id. at 1221–1222 

(quoting BFI, 362 NLRB at 1600). 

274See, e.g., comments of RILA. 

275Comments of North American Meat Institute. 

276 Id. (quoting BFI v. NLRB, 911 F.3d at 1215 

(emphasis in original)). 

277Comments of State Attorneys General (quoting 

BFI v. NLRB, 911 F.3d at 1215). 

278BFI, 911 F.3d at 1215. 

279 87 FR 54663. 

employment’’ is problematic without a 

limiting principle akin to the 

‘‘meaningful collective bargaining’’ step 

of BFI or some other ‘‘guardrails.’’ 265

Similarly, a group of commenters urge 

the Board to include in the final rule 

text a statement that encapsulates or 

describes a joint employer’s duty to 

bargain.266 Some of these commenters 

suggest that the Board state that if a 

putative joint employer does not have at 

least ‘‘co-control’’ over the range of 

potential outcomes regarding an 

essential term or condition of 

employment, it is not required to 

bargain over that subject.267 Some of 

these commenters encourage the Board 

to modify the rule text to incorporate a 

principle that appeared in the preamble 

to the proposed rule about the scope of 

a joint employer’s bargaining 

obligation.268 A few commenters ask the 

Board to clarify that a joint employer 

does not have a bargaining obligation 

except as to matters that are divisible 

and limited to those employees 

represented by the union.269

Other commenters contend that, by 

making a common-law employment 

relationship the prerequisite to a jointemployer finding, the proposed rule 

contains adequate limits, as the Board 

will not find that entities with 

insufficient control over essential terms 

and conditions of employment are joint 

employers.270 These commenters take 

the position that there is no need to 

incorporate the ‘‘meaningful collective 

bargaining’’ step of BFI in the final 

rule.271

After carefully considering the 

comments raising concerns about the 

need for a limiting principle to ensure 

that the appropriate parties are brought 

within the ambit of the Board’s jointemployer standard, we have decided to 

modify the definition of ‘‘essential terms 

and conditions of employment’’ in the 

final rule, as described above. As several 

commenters observe, limiting the list of 

essential terms and conditions of 

employment is responsive to the District 

of Columbia Circuit’s request that the 

Board incorporate a limiting principle to 

ensure the joint-employer standard 

remains within common-law 

boundaries.272 By clearly identifying 

and limiting the list of essential terms 

and conditions of employment that an 

entity may be deemed a joint employer 

if it possesses the authority to control or 

exercises the power to control, the final 

rule responds to these criticisms and 

helps provide clear guidance and a more 

predictable standard to parties covered 

by the Act. Moreover, because all of the 

essential terms and conditions of 

employment as defined by the final rule 

involve matters that lie at the core of 

workplace issues appropriate for 

collective bargaining, a joint employer’s 

control over any of these matters 

ensures that there is a basis for 

meaningful collective bargaining over at 

least the essential term or condition that 

is subject to that employer’s control.273

H. Comments About IndependentContractor Precedent 

The proposed rule cites certain 

common-law agency decisions that 

apply independent-contractor 

precedent. Some commenters appear to 

approve of the Board’s reliance on these 

cases and cite independent-contractor 

precedent in support of their own 

arguments.274 Other commenters and 

our dissenting colleague criticize the 

proposed rule’s reliance on precedent 

geared toward distinguishing between 

statutory employees and independent 

contractors.275 These commenters, 

citing the District of Columbia Circuit’s 

decision in BFI v. NLRB, 911 F.3d at 

1213–1214, argue that the common-law 

independent-contractor standard and 

joint-employer standard are different. In 

particular, these commenters and our 

dissenting colleague urge that the jointemployer standard requires an analysis 

of ‘‘who is exercising . . . control, 

when, and how.’’ 276 Other commenters, 

also citing the District of Columbia 

Circuit’s BFI decision, answer that 

independent-contractor cases ‘‘can still 

be instructive in the joint-employer 

inquiry’’ to the extent that they speak to 

the common law’s view of employment 

relationships.277

As discussed in more detail above, 

while we do not quarrel with 

commenters’ and our dissenting 

colleague’s observation that the 

common-law independent-contractor 

standard and joint-employer standard 

are distinct, we do not agree that the 

differences between the standards 

preclude us from relying on precedent 

from the independent-contractor 

context, inasmuch as that precedent 

illuminates the common law’s view of 

control, which is common to both 

inquiries. As a result, while we are 

mindful of the need to carefully 

distinguish between independentcontractor and joint-employer 

precedent, we believe it is appropriate 

to continue treating independentcontractor cases as relevant where they 

speak about ‘‘the nature and extent of 

control necessary to establish a 

common-law employment 

relationship.’’ 278

I. Burden of Establishing Joint-Employer 

Status 

Proposed paragraph (g) provides that 

the party asserting joint-employer status 

has the burden of proving, by a 

preponderance of the evidence, that a 

putative joint employer satisfies the 

requirements of proposed paragraphs (a) 

through (f).279

No commenter argues that the Board 

should allocate the burden differently 

than suggested in proposed paragraph 

(g). And no party argues that the Board 

should omit proposed paragraph (g) 

from the final rule. Several commenters 

state that the proposed rule’s 

articulation of the burden of proof does 


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280Comments of SHRM; Tesla, Inc. As discussed 

below, some of these commenters argue that the 

proposed rule’s failure to more clearly describe how 

a party can carry its burden means the rule should 

also fail on the basis of the Administrative 

Procedure Act (APA), 5 U.S.C. 551 et seq. See, e.g., 

comments of Tesla, Inc. Other commenters approve 

of the proposed rule’s discussion of the burden of 

proof, noting that the APA requires the Board to 

assign the burden of proof in the manner proposed. 

See, e.g., comments of Freedom Foundation; UNITE 

HERE. We discuss these contentions separately 

below. 

281Comments of RILA; SHRM. One commenter 

makes the related suggestion that the Board clarify 

that a putative joint employer exercises the 

requisite level of control if it is in a position to 

‘‘influence the primary employer’s labor policies.’’ 

Comments of IBT. 

282 29 U.S.C. 10(c). 

283Steadman v. SEC, 450 U.S. 91, 101 (1981). 

284 87 FR at 54663. 

285 Id. 

286Comments of AFL–CIO; General Counsel 

Abruzzo; CWA; SEIU; State Attorneys General; 

UNITE HERE. 

287Comments of General Counsel Abruzzo. 

288Comments of State Attorneys General. This 

commenter further observes that if paragraphs using 

the term ‘‘essential terms and conditions of 

employment’’ were stricken, proposed 

subparagraph (d) would be unnecessary. Id. 

289Comments of CWA; SEIU. These commenters 

also suggest that if the Board is inclined to issue 

the rescission and the new standard in one 

document, the Board should make clear that these 

are separate actions and intended to be severable. 

Id. 

290See, e.g., comments of AFL–CIO; CWA; SEIU. 

291 416 U.S. 267, 294 (1974). 

292The Board recognizes that there are certain 

outstanding issues regarding the standard for 

determining joint employers under the Act 

following the District of Columbia Circuit’s remand, 

as discussed above at fn. 5. The Board will resolve 

these issues through adjudication as presented in 

cases not governed by an applicable rule, including 

cases that arose before the effective date of the 2020 

rule. 

293Two commenters express concerns regarding 

the participation of Member Wilcox and Member 

Prouty in this rulemaking proceeding, suggesting 

that their submission of comments opposing the 

2020 Rule while they were in private practice 

creates, at a minimum, the appearance of a conflict 

of interest. See comments of IFA; U.S. Chamber of 

Commerce. Members Wilcox and Prouty reject this 

challenge. Relevant precedent regarding 

decisionmakers’ participation in rulemaking 

proceedings confirms that ‘‘an individual should be 

disqualified from rulemaking only when there has 

been a clear and convincing showing’’ that the 

official ‘‘has an unalterably closed mind on matters 

critical to the disposition of the proceeding.’’ Air 

Transportation Ass’n of America, Inc. v. NMB, 663 

F.3d 476, 487 (D.C. Cir. 2011) (quoting C & W Fish 

Co. v. Fox, 931 F.2d 1556, 1564 (D.C. Cir. 1991)). 

Members Wilcox and Prouty find that these 

commenters’ general and speculative suggestions 

fall short of the clear and convincing showing that 

either Member Wilcox or Member Prouty ‘‘has an 

unalterably closed mind’’ on matters relevant to this 

rulemaking proceeding, as the law requires. Id. 

Further, although the commenters do not 

specifically argue that the participation of Member 

Continued 

not provide sufficient guidance as to 

how a party can successfully carry its 

burden.280 Some of them suggest that 

the Board clarify what kind or amount 

of evidence a party asserting jointemployer status must put forward to 

meet its burden.281

The final rule incorporates the 

assignment of the burden of proof from 

paragraph (g). While some commenters 

urge the Board to clarify how a party 

asserting joint-employer status can 

successfully carry its burden in the rule 

text itself, we find it unnecessary to do 

so in light of the final rule’s statement 

that the burden must be satisfied on the 

basis of a preponderance of the 

evidence. This familiar evidentiary 

threshold is embodied in the Act 

itself,282 has been endorsed by the 

Supreme Court in similar administrative 

proceedings,283 and should satisfy the 

commenters’ desire for guidance 

regarding the amount of evidence 

necessary to carry the burden. While 

these commenters also express a desire 

for guidance regarding what kinds or 

types of evidence will be probative of 

joint-employer status, because we have 

addressed this question at length in the 

preceding discussion, we do not find it 

necessary to modify the proposed rule’s 

treatment of the burden of proof or 

otherwise alter the text of the final rule 

in response to these comments. 

J. Severability 

Proposed paragraph (h) set forth the 

Board’s preliminary view that the 

provisions of the joint-employer rule 

should be treated as severable.284

Proposed paragraph (h) explains that 

‘‘[i]f any paragraph of this section is 

held to be unlawful, the remaining 

paragraphs of this section not deemed 

unlawful shall remain in effect to the 

fullest extent permitted by law.’’ 285

The Board specifically invited 

commenters to address severability, and 

several took the opportunity to do so. 

No commenter suggests that the Board 

should not generally treat the provisions 

of the proposed rule as severable. 

Several commenters agree with the 

Board’s preliminary view of the 

severability of the provisions of the 

proposed rule.286 One commenter takes 

the view that proposed paragraphs (a) 

through (c) are interconnected and 

cannot be severed from one another but 

that proposed paragraphs (d), (e), (f), 

and (g) are fully severable.287 Another 

commenter agrees that proposed 

paragraphs (a), (b), and (c) are logically 

intertwined and so would not be 

severable from one another.288 Another 

group of commenters suggested that the 

Board promulgate a separate rescission 

of the 2020 rule and new rule setting 

forth a new joint-employer standard.289

The final rule includes a severability 

provision modeled after proposed 

paragraph (h). Paragraph (i) recites that: 

the ‘‘provisions of this section are 

intended to be severable’’ and that ‘‘[i]f 

any paragraph of this section is held to 

be unlawful, the remaining paragraphs 

and subparagraphs of this section not 

deemed unlawful are intended to 

remain in effect to the fullest extent 

permitted by law.’’ As explained below, 

while the Board believes that the final 

rule in its entirety is consistent with the 

National Labor Relations Act and 

promotes its policies, the Board would 

adopt the separate portions of the final 

rule independently, were some other 

portion or portions held to be invalid. 

We note that some commenters urge 

the Board to make clear that the 

rescission of the 2020 rule and the 

promulgation of the final rule’s jointemployer standard are intended as 

separate actions and make a specific 

finding that the Board views these two 

actions as severable.290 The Board’s 

intention is that the two actions be 

treated as separate and severable. In the 

Board’s view, the 2020 rule is contrary 

to common-law agency principles and 

therefore inconsistent with the Act. The 

Board thus believes it is required to 

rescind the 2020 rule, as it does today. 

Even if the 2020 rule were consistent 

with the Act, the Board would still 

choose to rescind that rule as failing to 

fully promote the policies of the Act. 

The Board’s decision to rescind the 

2020 rule is intended to be independent 

of its promulgation of a new final rule 

today. If the final rule promulgated here 

were deemed invalid, the Board would 

nevertheless adhere to its decision to 

rescind the 2020 rule. In that event, the 

Board’s view is that the joint-employer 

standard would revert to the jointemployer standard established in 

Browning-Ferris Industries of California, 

Inc., d/b/a BFI Newby Island Recyclery, 

362 NLRB 1599 (2015), which 

immediately preceded the 2020 rule, 

unless and until that standard were 

revised through adjudication. In NLRB 

v. Bell Aerospace Co., the Supreme 

Court recognized the Board’s authority, 

in the first instance, to determine 

whether to engage in policymaking 

through rulemaking or adjudication.291

Consistent with this authority, the 

Board will proceed to determine jointemployer issues through adjudication, 

rather than rulemaking, should a 

reviewing court (1) find that the draft 

rule properly rescinds the 2020 rule, but 

(2) proceeds to invalidate the new jointemployer standard.292

K. Other Policy and Procedural 

Arguments 293

The proposed rule set forth the 

Board’s preliminary view that 


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Wilcox or Member Prouty in this rulemaking 

proceeding would violate Executive Order 13989 

(Jan. 20, 2021) (the Biden Ethics Pledge), to the 

extent their argument about an appearance of a 

conflict of interest is rooted in the Ethics Pledge, 

Members Wilcox and Prouty reject it because this 

rulemaking is not a ‘‘particular matter involving 

specific parties that is directly and substantially 

related to’’ Member Wilcox or Member Prouty’s 

former employers or former clients within the 

meaning of the Executive Order. They further note 

that one commenter shares their view, stating that 

the instant rulemaking ‘‘lacks even the appearance 

of a conflict of interest.’’ Comments of Congressman 

Scott, et al. 

294Comments of AFSCME; CAP; CWA; EPI; 

General Counsel Abruzzo; Lawyers’ Committee for 

Civil Rights Under Law; Los Angeles County 

Federation of Labor AFL–CIO & Locals 396 and 848 

of the IBT; McGann, Ketterman & Rioux; Michigan 

Regional Council of Carpenters and Millwrights; 

National Women’s Law Center; NELP; State 

Attorneys General; UBC; UE. 

295Comments of Senator Murray et al.; 

Congressman Scott et al. One of these commenters 

makes the further observation that the proposed 

rule would better comport with the United States’ 

obligations under international law. See comments 

of Congressman Scott et al. 

296Comments of General Counsel Abruzzo; SEIU. 

297Comments of RILA; Texas Public Policy 

Foundation. 

298Comments of McDonald’s USA, LLC; North 

American Meat Institute; RILA. 

299Comments of Center for Workplace 

Compliance; COLLE; Home Care Association of 

America; National Waste & Recycling Association; 

RILA. Our dissenting colleague likewise argues that 

the final rule will undermine the enforcement of 

Sec. 8(b)(4) of the Act. 

300Comments of ABC; AGC. 

301Comments of Competitive Enterprise Institute. 

This commenter argues that the purpose of the Act 

is narrower: to encourage collective bargaining, but 

only in those instances where ‘‘certain substantial 

obstructions’’ to interstate commerce ‘‘have 

occurred’’ already. Id. (quoting 29 U.S.C. 151). 

We disagree with this commenter’s suggestion 

that a strike or other labor dispute must have 

already occurred for the Act’s policy favoring 

collective bargaining to come into play. We find 

support for the broader view of the Act’s purposes 

in Sec. 7, 8, and 9 of the Act, which, respectively: 

set forth employees’ rights to ‘‘self-organization, to 

form, join, or assist labor organizations, [and] to 

bargain collectively through representatives of their 

own choosing,’’ 29 U.S.C. 157; make it an unfair 

labor practice for an employer to refuse to bargain 

collectively with representatives designated or 

selected by employees, id. 158(a)(5), 158(d), & 

159(a)(5); and direct the Board to conduct 

representation elections upon the filing of a petition 

supported by a substantial number of employees 

who wish to be represented for the purposes of 

collective bargaining, id. 159. None of these 

sections states or implies that a labor dispute or 

strike is a precondition to any of these rights or 

duties. 

302Auciello Iron Works, Inc. v. NLRB, 517 U.S. 

781, 790 (1996). See comments of CDW; COLLE; HR 

Policy Association; IFDA; Libertas Institute; 

National Waste & Recycling Association; RILA; 

Trucking Industry Stakeholders. Because many of 

these commenters advance empirical arguments or 

discuss their experience with bargaining when 

multiple firms are involved, we discuss these 

comments at greater length below. 

303Comments of Home Care Association of 

America; SHRM. 

304Comments of General Counsel Abruzzo. 

305Comments of Los Angeles County Federation 

of Labor AFL–CIO & Locals 396 and 848 of the IBT; 

UE. 

306 29 U.S.C. 158(b)(4). 

grounding the joint-employer standard 

in common-law agency principles 

would serve the policies and purposes 

of the Act, including the statement in 

Section 1 of the Act that one of the key 

purposes of the Act is to ‘‘encourage the 

practice and procedure of collective 

bargaining.’’ 29 U.S.C. 151. Several 

commenters specifically note their 

approval of the Board’s view that the 

proposed rule will better serve the 

policies of the Act than did the 2020 

rule, with several specifically citing 

Section 1 of the Act as providing 

support for the proposed rule.294

Notably, several commenters writing on 

behalf of Senators and Members of 

Congress agree that the proposed rule 

would further Congressional intent and 

advance the purposes of the Act.295

Others argue that the proposed jointemployer standard will advance the 

Act’s purpose of eliminating disruptions 

to interstate commerce by increasing the 

possibility that effective collective 

bargaining will forestall strikes or other 

labor disputes.296

A number of commenters contend 

that the proposed rule is at odds with 

the Act because it exceeds the 

boundaries of the common law.297

Others argue that the proposed rule 

threatens to delay employees’ remedies 

because of the need for extensive 

litigation over joint-employer issues or 

to otherwise undermine the effective 

enforcement of other provisions of the 

Act.298 A few commenters argue that 

adopting a broader joint-employer 

standard increases the risk of enmeshing 

entities as primary employers in what 

would otherwise be secondary labor 

disputes.299 Some of these commenters 

specifically urge that the proposed rule 

could stand in the way of the effective 

enforcement of portions of the Act that 

deal specifically with the building and 

construction industry.300

Some commenters disagree that the 

Act is intended to encourage the 

practice and procedure of collective 

bargaining.301 Others, including our 

dissenting colleague, agree that 

encouraging the practice and procedure 

of collective bargaining is a central goal 

of the Act but disagree with the Board’s 

view that the proposed rule is 

appropriately tailored to serve that goal 

or that the proposed rule is likely to 

‘‘achiev[e] industrial peace by 

promoting stable collective-bargaining 

relationships.’’ 302 Certain of these 

commenters observe that the proposed 

joint-employer standard may make it 

harder for the Board to make 

appropriate bargaining-unit 

determinations or protect bargainingunit boundaries.303

Other commenters observe that 

because the joint-employer standard 

will only be applied to entities that are 

found to possess or exercise control over 

employees’ essential terms and 

conditions of employment, there is no 

serious risk that the proposed rule 

would have the effect of enmeshing 

neutral parties in labor disputes.304 One 

commenter adds that employees in 

industries characterized by pervasive 

contracting are sometimes hesitant to 

engage in collective action or exercise 

their Section 7 rights for fear of 

inadvertently violating the provisions of 

Section 8(b)(4) of the Act, 29 U.S.C. 

158(d)(4).305

As we preliminarily expressed in our 

NPRM, we are persuaded that 

rescinding the 2020 Rule is a necessary 

step toward effectuating the policies of 

the Act. By unduly narrowing the 

definition of ‘‘joint employer,’’ the 2020 

Rule undermined the Act’s protections 

for employees who work in settings 

where multiple firms possess or exercise 

control over their essential terms or 

conditions of employment. We believe 

that, consistent with the common-law 

agency principles that must guide the 

Board in this area, it advances the Act’s 

purposes to ensure that, if they choose, 

all employees have the opportunity to 

bargain with those entities that possess 

the authority to control or exercise the 

power to control the essential 

conditions of their working lives. In this 

regard, we view the joint-employer 

standard adopted in this final rule as an 

important effort to ensure the uniform 

enforcement of the Act in all industries. 

And, as many commenters represent, 

our revised standard may particularly 

benefit vulnerable employees who are 

overrepresented in workplaces where 

multiple firms possess or exercise 

control, including immigrants and 

migrant guestworkers, disabled 

employees, and Black employees and 

other employees of color. 

We also wish to address comments we 

received regarding the interaction 

between the joint-employer standard 

and the Act’s prohibitions on secondary 

activity. As one commenter mentioned, 

the 2020 rule may have risked chilling 

employees’ willingness to exercise their 

statutory rights for fear of inadvertently 

running afoul of the prohibitions on 

secondary activity set out in Section 

8(b)(4) of the Act.306 We hope that the 

standard adopted in the final rule will 

provide the necessary clarity to ensure 

that employees do not fear engaging in 

protected concerted activity or raising 

workplace concerns with any entities 


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307Contrary to our dissenting colleague, we see 

little risk of enmeshing neutral employers in labor 

disputes. When more than one entity jointly 

employs particular employees, those entities are not 

neutral, and the prohibitions on secondary activity 

do not apply, regardless of what joint-employer 

standard is applied. 308Comments of ABC; CDW; COLLE; IFA; 

Independent Bakers Association; International 

Warehouse Logistics Association; RILA; U.S. 

Chamber of Commerce. 

Several of these commenters also advance an 

argument based on the nondelegation doctrine. See 

comments of COLLE; IFA. One such commenter 

specifically argues that Sec. 6 of the Act does not 

delegate sufficiently clear authority to the Board to 

define ‘‘joint employer’’ for purposes of the Act. See 

comments of IFA. As discussed in Section III above, 

we are confident that the Board has authority to 

‘‘carry out’’ the many provisions of the Act that are 

affected by how the Board defines ‘‘joint employer’’ 

through rulemaking. The Supreme Court has never 

cast doubt on the breadth of the Board’s rulemaking 

authority. Instead, it has repeatedly endorsed the 

Board’s use of rulemaking as a policymaking tool, 

including in contexts involving the scope and 

nature of bargaining obligations. See, e.g., American 

Hospital Assn. v. NLRB, 499 U.S. 606 (1991). 

309Comments of CWA; UNITE HERE; reply 

comments of AFL–CIO. 

310Comments of AFL–CIO (citing Boire v. 

Greyhound Corp., 376 U.S. 473, 481 (1964)); Long 

Lake Lumber Co., 34 NLRB 700, 717 (1941), enfd. 

NLRB v. Long Lake Lumber Co., 138 F.2d 363 (9th 

Cir. 1943); Franklin Simon & Co., 94 NLRB 576, 579 

(1951)). 

311Comments of ABC; CDW; COLLE; IFA; IFDA; 

International Bankshares Corporation; National 

Association of Convenience Stores; North American 

Meat Institute; Restaurant Law Center and National 

Restaurant Association; U.S. Chamber of 

Commerce. 

Several commenters make the specific 

observation that the proposed rule is arbitrary 

because it does not impose an express requirement 

that joint-employer status be proven by ‘‘substantial 

evidence.’’ See comments of CDW; RILA; SHRM; 

Tesla, Inc. As discussed above, we reject the view 

that the proposed rule failed to impose a 

‘‘substantial evidence’’ obligation or was otherwise 

arbitrary. These commenters, effectively reading 

discrete subparagraphs of the proposed rule in 

isolation, suggest that ‘‘any evidence’’ of control 

will be sufficient to establish status as a joint 

employer under the proposed rule. However, as 

discussed more fully above, this view overlooks the 

proposed rule’s allocation of the burden of proof 

and requirement that a party asserting jointemployer status must demonstrate that an entity is 

a joint employer by a ‘‘preponderance of the 

evidence.’’ 

Another commenter urges that the Board’s 

statements in the preamble to the proposed rule 

regarding the importance of workplace health and 

safety during the Covid-19 pandemic are 

unsupported and therefore render the inclusion of 

health and safety as an essential term or condition 

of employment, and implicitly the rule as a whole, 

arbitrary and capricious. See comments of North 

American Meat Institute. As addressed extensively 

in our discussion of essential terms and conditions 

of employment above and in our discussion of the 

final rule below, the Board has benefited from the 

input of stakeholders and organizations that 

confirmed the Board’s preliminary views that 

workplace health and safety should be treated as an 

essential term or condition of employment and that 

the Covid-19 pandemic exacerbated certain 

employees’ health and safety concerns at work. We 

therefore reject this commenter’s view that it was 

arbitrary or capricious for the Board to take these 

significant real-world developments into account 

when considering how to modify its approach to 

defining ‘‘joint employer.’’ 

312Comments of COLLE; Independent Bakers 

Association; U.S. Chamber of Commerce. 

313Comments of American Hospital Association; 

American Staffing Association; Bicameral 

Congressional Signatories; Center for Workplace 

Compliance; HR Policy Association; IFA; 

International Bancshares Corporation; McDonald’s 

USA, LLC; Modern Economy Project; North 

American Meat Institute; The Mackinac Center for 

Public Policy. 

314Comments of AFL–CIO; IUOE; United 

Association of Journeymen and Apprentices of the 

Plumbing and Pipe Fitting Industry; United 

Steelworkers. 

315Comments of COLLE; Elizabeth Boynton; 

FreedomWorks Foundation; Goldwater Institute; 

Job Creators Network Foundation; National 

Association of Convenience Stores; North American 

Meat Institute; The Thomas Jefferson Institute for 

Public Policy; U.S. Chamber of Commerce; 

Wyoming Bankers Association. We note that in the 

time since the comment period closed, the Board 

has applied the 2020 rule. See Cognizant 

Technology Solutions U.S. Corp. & Google LLC, 372 

NLRB No. 108 (2023). 

316Comments of Bicameral Congressional 

Signatories; Bipartisan Senators; CDW; IFA; 

Independent Bakers Association; U.S. Chamber of 

Commerce. 

Some commenters suggest that there is no need 

to promulgate a new joint-employer standard 

through rulemaking if the Board’s goal is to return 

to the preexisting common-law standard. See, e.g., 

comments of CDW; IFA. As described above, while 

we believe the final rule is firmly grounded in 

common-law agency principles, we see a 

Continued 

that possess or exercise control over 

their essential terms and conditions of 

employment. Of course, we will 

continue to vigorously enforce the Act’s 

prohibitions on secondary activity in 

situations where multiple firms do not 

share or codetermine those matters 

governing particular employees’ 

essential terms and conditions of 

employment.307

Certain commenters raise arguments 

regarding whether the proposed rule 

meets the requirements of the 

Constitution or the Administrative 

Procedure Act (APA), 5 U.S.C. 551 et 

seq. Some commenters suggest that, 

pursuant to the major-questions 

doctrine, as summarized in West 

Virginia v. EPA, 597 U.S. __, 2022 U.S. 

LEXIS 3268 (2022), the Board should 

‘‘hesitate before concluding that 

Congress’’ conferred authority on it to 

define ‘‘joint employer’’ because of the 

concept’s ‘‘economic and political 

significance.’’ 308

Other commenters argue that the 

major-questions doctrine does not 

present an obstacle to the current 

rulemaking effort.309 One commenter 

notes that, since the earliest days of the 

Act, the Board has, with Supreme Court 

and other reviewing courts’ approval, 

applied the Act to cover jointemployment relationships, eliminating 

any doubt that Congress intended for 

the ambit of the Act to extend to joint 

employers.310

Based on the Board’s long history of 

analyzing joint-employment 

relationships and regulating entities it 

finds to be joint employers, we find that 

the major-questions doctrine does not 

foreclose our decision to put forward a 

new interpretation of the definition of 

‘‘employer’’ in Section 2(2) of the Act. 

Not only has the Board historically 

defined ‘‘joint employer’’ through caseby-case adjudication, section 6 of the 

Act provides clear authority to the 

Board to promulgate rules to ‘‘carry out 

the provisions of [the] Act.’’ 29 U.S.C. 

156. We therefore see no constitutional 

impediment to continuing the Board’s 

decades-long effort to clarify and refine 

its joint-employer standard. 

A group of commenters argue that the 

proposed rule is arbitrary and 

capricious because it does not 

sufficiently analyze why the standard 

set forth in the 2020 rule was 

inadequate or because it fails to provide 

adequate guidance.311 Some of these 

commenters, quoting Motor Vehicle 

Manufacturers Association of the 

United States, Inc. v. State Farm 

Automobile Insurance Co., 463 U.S. 29, 

43 (1983), contend that the Board has 

either ‘‘relied on factors which Congress 

has not intended it to consider, entirely 

failed to consider an important aspect of 

the problem, offered an explanation for 

its decision that runs counter to the 

evidence before the agency, or is so 

implausible that it could not be ascribed 

to a difference in view or the product of 

agency expertise.’’ 312 Our dissenting 

colleague similarly criticizes the 

majority for failing to justify its 

departure from the 2020 rule and for 

providing insufficient guidance to 

regulated parties. 

Some commenters suggest that the 

proposed rule will lead to excessive 

litigation of joint-employer issues,313

potentially diminishing the value of 

proceeding through rulemaking and 

suggesting that case-by-case 

adjudication might be a better approach. 

Some commenters who are generally 

supportive of the proposed rule’s 

approach to the joint-employer inquiry 

also express reservations about the 

proposal to promulgate a new standard 

through rulemaking.314

Some commenters criticize the Board 

for abandoning the 2020 rule 

prematurely, arguing that because the 

Board had not yet had occasion to apply 

the rule, the Board cannot find fault 

with it and should not rescind it.315 A 

few commenters suggest that the Board 

should await federal court review of the 

2020 rule before rescinding it or 

consider other alternatives before 

proceeding further.316 Certain 


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determinate advantage in replacing the 2020 rule 

with a new standard that, like it, provides a definite 

and readily available standard. We note that by 

modifying the final rule to provide for an 

exhaustive list of essential terms and conditions of 

employment, we also introduce a new limiting 

principle that was not a feature of the Board’s jointemployer doctrine, which is responsive to one of 

these commenter’s core concerns regarding the 

proposed rule. See comments of IFA. Announcing 

this new limiting principle therefore provides 

another justification for promulgating a new rule 

rather than simply rescinding the 2020 rule. 

317Comments of Costa Enterprises; IFA; 

McDonald’s USA, LLC; New Civil Liberties Alliance 

& Institute for the American Worker; Restaurant 

Law Center and National Restaurant Association; 

Texas Public Policy Foundation; U.S. Chamber of 

Commerce; Yum! Brands. Certain of these 

commenters do not specifically identify reliance 

interests related to the 2020 Rule, but instead more 

generally suggest they structured their businesses in 

reliance on Board law prior to BFI. See, e.g., 

comments of Costa Enterprises; McDonald’s USA, 

LLC. With respect to the request to delay the 

effective date of the final rule, we note that, as some 

other commenters urge, see, e.g., comments of the 

U.S. Chamber of Commerce, the rule is subject to 

Congressional review and that, as a result, the 

effective date will await the culmination of that 

process. 

318See comments of Texas Public Policy 

Foundation. 

319Comments of California Policy Center; COLLE; 

Empire Center for Public Policy; North American 

Meat Institute; Subcontracting Concepts, LLC; U.S. 

Chamber of Commerce; Wyoming Bankers 

Association. 

320Comments of ABC; AGC; American Hotel & 

Lodging Association; Americans for Fair Treatment; 

Americans for Prosperity Foundation; American 

Staffing Association; ANB Bank; Bicameral 

Congressional Signatories; CDW; Center for 

Workplace Compliance; COLLE; Competitive 

Enterprise Institute; HR Policy Association; Home 

Care Association of America; IFA; IFDA; 

Independent Electrical Contractors; Independent 

Women’s Forum; International Bancshares 

Corporation; International Warehouse Logistics 

Association; LeadingAge; McDonald’s USA, LLC; 

Modern Economy Project; NAHB; NAM; NATSO & 

SIGMA; National ACE; National Alliance for Public 

Charter Schools; National Association of 

Convenience Stores; National Waste & Recycling 

Association; NFIB; Pacific Legal Foundation; 

Restaurant Law Center and National Restaurant 

Association; RILA; Rio Grande Foundation; Senator 

James M. Inhofe; Taxpayers Protection Alliance; 

Texas Public Policy Foundation; The Mackinac 

Center for Public Policy; U.S. Chamber of 

Commerce; Yum! Brands. 

321Comments of CDW; HR Policy Association; 

McDonald’s USA, LLC; Pacific Legal Foundation. 

322Comments of State Attorneys General. 

323Comments of General Counsel Abruzzo. 

324See Encino Motorcars, LLC v. Navarro, 579 

U.S. 211, 221 (2016); FCC v. Fox Television 

Stations, 556 U.S. at 515. 

325Comments of CWA. 

326Comments of State Attorneys General (citing 5 

U.S.C. 702(2)(A)). Another commenter makes a 

similar observation, noting that leaving the 2020 

rule intact is not an option the Board can properly 

consider in light of the District of Columbia 

Circuit’s decisions in BFI v. NLRB and Sanitary 

Truck Drivers. See AFL–CIO reply comments. 

327See comments of General Counsel Abruzzo. 

328Comments of Pacific Legal Foundation. This 

commenter also appears to suggest that it is 

unconstitutional for the Board to interpret the Act 

through rulemaking, though it does not cite any 

precedent in support of that view. Id. 

commenters point to reliance interests 

related to the 2020 rule, with some 

suggesting that the Board delay the 

effective date of the final rule to 

accommodate these concerns.317 For 

example, one commenter states that 

many staffing agencies entered into 

contracts using the 2020 rule as their 

guide.318 Others question whether any 

material legal or factual change has 

occurred since the 2020 rule was 

promulgated that would justify the 

proposed changes to the joint-employer 

standard or otherwise suggest that the 

proposed rule failed to offer a reasoned 

explanation for a policy change.319 A 

significant number of these commenters 

propose that the Board withdraw the 

proposed rule entirely and leave the 

2020 rule intact.320 Some of these 

commenters suggest, in the alternative, 

that the Board solely rescind the 2020 

rule.321

Other commenters, citing FCC v. Fox 

Television Stations, Inc., 556 U.S. 502, 

515 (2009), observe that the Board is 

permitted to advance new 

interpretations of the Act so long as it 

demonstrates good reasons for its new 

policy.322 One commenter argues that 

any reliance interests associated with 

the 2020 rule must be highly attenuated, 

given that the Rule has not yet been 

applied and because the NPRM put the 

public on notice that the Board was 

considering rescinding and/or replacing 

the 2020 rule.323

First, we reject the argument that it is 

premature to rescind the 2020 rule or to 

promulgate a new joint-employer 

standard. As noted above, so long as the 

Board sets forth good reasons for its new 

policy and sets forth a reasoned 

explanation for the change, Supreme 

Court precedent permits the Board to 

offer new interpretations of the Act.324

We have done so throughout our 

discussion of our justifications for 

rescinding the 2020 rule and 

promulgating a new standard. In 

addition, as one commenter points 

out,325 the APA does not impose any 

requirement that an agency apply a rule 

prior to replacing it, provided that the 

agency otherwise identifies problems 

with the rule and explains why it 

resolves the issue in the manner it does. 

Another commenter notes that the 2020 

rule is likewise vulnerable on APA 

grounds, as its definition of ‘‘joint 

employer’’ is ‘‘not in accordance with 

law.’’ 326

Next, while some commenters 

encourage the Board to await judicial 

review of the 2020 rule before taking 

further action, we remain of the view 

that the 2020 rule introduced controlbased restrictions that are inconsistent 

with common-law agency principles, as 

reflected in the District of Columbia 

Circuit’s statements in BFI v. NLRB, 911 

F.3d at 1211–1215, and in Sanitary 

Truck Drivers, 45 F.4th at 46–47. For 

this reason, we prefer to proactively 

rescind the 2020 rule and to articulate 

a new standard that better comports 

with the requirements of the common 

law. 

Further, while we recognize that some 

parties may have relied on the 2020 rule 

in structuring their business practices, 

we do not find such reliance interests 

sufficiently substantial to make us 

reconsider rescinding the 2020 rule and 

promulgating a new standard. We agree 

with the view of one commenter that at 

least as of the date of the NPRM, any 

such reliance on the 2020 rule cannot be 

deemed reasonable, as the Board 

indicated its preliminary view that 

rescinding or replacing that standard 

would be desirable as a policy matter.327

Moreover, because we think that the 

final rule accurately aligns employers’ 

statutory obligations with their control 

of essential terms and conditions of 

employment of their own common-law 

employees, we conclude that to the 

extent that business entities may have 

structured their contractual 

relationships under prior, overly 

restrictive versions of the joint-employer 

standard, any interest in maintaining 

such arrangements is not sufficiently 

substantial or proper as a matter of law. 

One commenter charges that the 

Board is not free to promulgate a 

standard defining the terms ‘‘employer’’ 

and ‘‘employee,’’ arguing that both the 

2020 rule and the proposed rule trench 

on the federal courts’ authority to 

interpret these terms.328 We respectfully 

disagree with this commenter’s view of 

the Board’s role in carrying out the 

provisions of the Act pursuant to 

Section 6 of the Act. We further note 

that, apart from this procedural 

disagreement, the final rule is consistent 

with the spirit of this commenter’s 

argument, as the final rule seeks to 

ground the Board’s analysis in the 

common-law agency principles that 

federal courts have instructed the Board 

to apply in construing the statutory 

definitions contained in section 2 of the 

Act. As explained above, the Board will 

draw on the Supreme Court’s binding, 

authoritative statements regarding the 

common law of agency and look to other 

judicial common-law precedent as 

primary sources of authority governing 

the Board’s interpretation. Of course, 

the Board’s joint-employer 

determinations in individual cases are 


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329 87 FR 54645. 

330Comments of CDW; California Policy Center; 

Colorado Bankers Association; Competitive 

Enterprise Institute; HR Policy Association; IFA; 

International Bancshares Corporation; National 

Small Business Administration; PPAI; Reid’s, Inc. 

d/b/a Crosby’s; Restaurant Law Center and National 

Restaurant Association; Tesla, Inc.; Yum! Brands. 

331See, e.g., comments of Americans for 

Prosperity Foundation; HR Policy Association; 

Independent Women’s Forum; International 

Bancshares Corporation; LeadingAge; Libertas 

Institute; McDonald’s USA, LLC; NAM; National 

Grocers Association; National Roofing Contractors 

Association; Restaurant Law Center and National 

Restaurant Association; The Thomas Jefferson 

Institute for Public Policy; U.S. Chamber of 

Commerce. Some of these commenters make the 

further point that the vagueness of the proposed 

rule will require small businesses to retain counsel 

or bear other compliance, legal, and administrative 

costs. See, e.g., comments of Energy Marketers of 

America; National Lumber & Building Material 

Dealers Association; The Buckeye Institute; Yankee 

Institute for Public Policy. 

332Comments of American Pizza Community; 

Energy Marketers of America; International 

Warehouse Logistics Association; National Alliance 

for Public Charter Schools; NATSO & SIGMA; 

National Taxpayers Union; PPAI; The Buckeye 

Institute; Yanxu Yang. 

333Comments of Asian McDonald’s Operators 

Association; NAHB; National Black McDonald’s 

Operators Association; U.S. Black Chambers, Inc.; 

U.S. Chamber of Commerce. 

334Comments of McGann, Ketterman & Rioux. 

335Comments of McGann, Ketterman & Rioux. 

336Comments of New Civil Liberties Alliance & 

Institute for the American Worker. 

337Comments of National Partnership for Women 

& Families; The Leadership Conference on Civil and 

Human Rights. 

338Comments of AFL–CIO (‘‘[A]ll of the 

circumstances in the worker’s relationship with 

each business should be considered to determine if 

either or both should be deemed [their] employer.’’) 

(quoting EEOC Notice No. 915.002, Enforcement 

Guidance: Applications of EEO Law to Contingent 

Workers Placed by Temporary Employment 

Agencies and Other Staffing Firms at Coverage 

Issues (Dec. 3, 1997), available at https://

www.eeoc.gov/laws/guidance/enforcementguidance-application-eeo-laws-contingent-workersplaced-temporary). 

339One commenter cites approvingly to the fourfactor joint-employer test the Department of Labor 

adopted in 2020 and encourages the Board to look 

to that test for guidance in modifying the proposed 

rule. See comments of National Demolition 

Association. We observe that on July 30, 2021, the 

Department of Labor issued a final rule rescinding 

the joint-employer standard this commenter 

references. See Rescission of Joint Employer Status 

Under the Fair Labor Standards Act Rule, 86 FR 

40939 (July 30, 2021). 

See also comments of National Retail Federation 

(discussing Singh v. 7-Eleven, Inc., 2007 U.S. Dist. 

LEXIS 16677 (N.D. Cal. Mar. 7, 2007), and Wright 

v. Mountain View Lawn Care, LLC, 2016 U.S. Dist. 

LEXIS 31353 (W.D. Va. Mar. 11, 2016), two federal 

court decisions finding that brand-recognition 

standards at franchise businesses did not create a 

joint employment relationship for purposes of the 

FLSA or Title VII of the Civil Rights Act of 1964, 

respectively). 

340Comments of New Civil Liberties Alliance & 

Institute for the American Worker. 

341 In this regard, we confirm that, contrary to a 

concern one commenter raises, the final rule solely 

relates to the definition of ‘‘joint employer’’ under 

the NLRA. See comments of American Health Care 

Association & National Center for Assisted Living. 

342Comments of Modern Economy Project; 

National Alliance for Public Charter Schools; 

Subcontracting Concepts, LLC. 

ultimately reviewable by the federal 

courts. 

Other commenters urge that the 

proposed rule is overly vague, that it 

does not meet its stated goal of 

providing a ‘‘definite, readily available 

standard,’’ 329 or that it does not meet 

the requirements of fair notice and due 

process because the proposal is not clear 

enough that parties can reasonably 

ascertain to whom it applies.330 Many of 

these commenters specifically pointed 

to the open-ended list of essential terms 

and conditions of employment as a 

feature of the proposed rule that renders 

it impermissibly vague.331 Some 

commenters argue that because BFI 

created a vague definition of joint 

employer, they fear the proposed rule, 

which codifies key elements of that test 

regarding the significance of forms of 

indirect and reserved control, would 

likewise create ambiguities and 

uncertainty.332 Others explain their 

view that the absence of practical 

guidance, illustrative examples, 

hypothetical questions, or other 

interpretive aids in the proposed rule 

undermines the proposal’s effectiveness 

and will fail to provide stakeholders 

with the guidance they need to meet 

their compliance obligations.333

Other commenters take the contrary 

view, arguing that the flexibility and 

adaptability of the proposed rule is one 

of its greatest strengths.334 Some of 

these commenters argue that the Board 

should avoid adopting too rigid a 

definition of joint employer, noting that 

changing workplace conditions will 

require refinement of the standard as it 

is applied in new factual situations.335

We have carefully considered the 

many comments we received seeking 

modifications to the proposed rule 

geared toward ensuring greater clarity 

and predictability in the Board’s jointemployer determinations. As mentioned 

elsewhere, while we acknowledge some 

commenters’ position that the 2020 rule 

fostered greater predictability and 

certainty in the Board’s joint-employer 

determinations, we have determined 

that rule is not in accordance with the 

common-law agency principles we are 

bound to apply in analyzing whether 

entities are joint employers under the 

Act. As a result, we cannot maintain 

that standard. However, we believe that 

the modifications to the text of the 

proposed rule, along with the 

comprehensive responses we offer in 

response to the helpful input we 

received during the public-comment 

process, will facilitate parties covered 

by the Act in understanding and 

meeting their compliance obligations 

and reduce uncertainty and litigation. 

Some commenters argue that the 

Board’s proposed standard will create 

inconsistencies with other regulators’ 

joint-employer standards.336 As 

discussed in Section I.D. above, our 

dissenting colleague contends that 

federal courts have applied different 

standards when determining jointemployer status under other statutes 

that define ‘‘employer’’ in common-law 

terms. Other commenters observe that 

joint-employer standards similar to the 

one set forth in the proposed rule are 

commonplace in the context of other 

labor and employment statutes.337 One 

commenter describes the Equal 

Employment Opportunity Commission 

(EEOC)’s approach to analyzing whether 

multiple firms jointly employ particular 

employees as taking forms of indirect 

and reserved control into account in 

much the same manner as does the 

proposed rule.338 A number of 

commenters discuss the Department of 

Labor’s approach to defining ‘‘joint 

employer’’ for purposes of the Fair 

Labor Standards Act (FLSA), 29 U.S.C. 

203 et seq.,339 though several 

commenters observe that the definition 

of ‘‘employee’’ under FLSA is broader 

than the common-law standard used in 

the NLRA.340

Although we agree with the view of 

several commenters that certain other 

Federal agencies’ joint-employer 

standards are broadly consistent with 

the Board’s proposed rule, we are 

guided here by the statutory 

requirement that the Board’s standard 

be consistent with common-law agency 

principles and the policies of the 

National Labor Relations Act.341

Contrary to our dissenting colleague’s 

suggestion, our standard is rooted in 

common-law agency principles, not the 

economic-realities test used to interpret 

‘‘employer’’ for purposes of the Fair 

Labor Standards Act. Cf. NLRB v. United 

Insurance Co. of America, 390 U.S. 254, 

256 (1968) (discussing limiting impact 

of Taft-Hartley amendments on the 

interpretation of the Act). 

Other commenters raise concerns 

regarding the possibility that the 

proposed joint-employer standard will 

stand in tension with state-law 

definitions of ‘‘joint employer.’’ One 

commenter argues that state authorities 

with responsibility for administering 

state-law equivalents of the Act make 

joint-employer determinations on 

different grounds than those set forth in 

the proposed rule.342

State labor and employment law 

interpretations of ‘‘joint employer’’ also 


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343See, e.g., comments of State Attorneys 

General. 344Comments of State Attorneys General. 

345Comments of Empire Center for Public Policy. 

346Comments of State Attorneys General. We note 

that the signatories of this comment included the 

Attorneys General of California, Colorado, 

Connecticut, Delaware, District of Columbia, 

Illinois, Maryland, Massachusetts, Michigan, 

Minnesota, Nevada, New Jersey, New York, North 

Carolina, Oregon, Pennsylvania, Rhode Island, and 

Washington. 

347Comments of IFA; McDonald’s USA, LLC; 

North American Meat Institute. Our dissenting 

colleague also anticipates that the final rule will 

lead to more extensive litigation of joint-employer 

questions. 

348Comments of IFA. 

349See, e.g., reply comments of AFL–CIO. 

350Comments of CDW; COLLE; International 

Warehouse Logistics Association; NAHB; National 

Association of Convenience Stores; NFIB; National 

Retail Federation. 

351Comments of CDW; COLLE; NAHB; NAM; 

National Retail Federation; National Small Business 

Association; Washington Legal Foundation. 

352Comments of American Trucking 

Associations; HR Policy Association; NAM; 

National Waste & Recycling Association. 

353Comments of International Warehouse 

Logistics Association. 

354Comments of National Lumber & Building 

Materials Dealers Association; National Small 

Business Association. 

355Comments of AHA; National Taxpayers 

Union. Certain commenters stress that labor 

shortages have been acute in hospital and 

healthcare industries since the onset of the Covid19 pandemic, making reliance on contract labor 

especially important. See, e.g., comments of AHA. 

356See, e.g., comments of Americans for Tax 

Reform; Mauro Alvarez; Kermit Begly; Rachel 

Greszler; Nichole Holles; Illinois Policy Institute; 

Jean Johns; Job Creators Network Foundation; Neil 

Kellen; McDonald’s USA, LLC; Daniel Miller; 

Russell Moss; NATSO & SIGMA; The James 

Madison Institute; The Mackinac Center for Public 

Policy; Emily Wiechmann; Yankee Institute for 

Public Policy. One commenter argues that the 

franchise business model has expanded access to 

home care services in the United States and 

expresses concerns about whether the proposed 

rule could harm access to home care services. See 

comments of Home Care Association of America. 

357See, e.g., comments of Costa Enterprises; 

Linda Bowin; David Denney; Ali Nekumanesh; 

Shelley Nilsen. 

vary. Some commenters find parallels to 

the proposed rule in certain state 

definitions of ‘‘joint employer.’’ 343 One 

commenter in particular observes that 

Illinois Department of Labor regulations 

incorporate similar common-law 

principles to those set out in the 

proposed rule.344 By contrast, one 

commenter notes that New York State 

uses a standard for determining jointemployer status for purposes of publicsector labor relations that more closely 

corresponds to the 2020 rule.345

We are not persuaded that these 

commenters’ concerns about the 

possibility of tension with state-law 

definitions of ‘‘joint employer’’ provide 

a sufficient reason to abandon our 

rulemaking effort. Certain of these 

commenters appear to suggest the 

possibility for a state-by-state patchwork 

of interpretations of the joint-employer 

standard if state courts apply or 

interpret the Board’s joint-employer 

standard. We respectfully note that, 

under principles of federal labor law 

preemption, the Board has exclusive 

jurisdiction to administer the Act. See 

San Diego Building Trades Council v. 

Garmon, 359 U.S. 236, 245 (1959) 

(‘‘When an activity is arguably subject to 

[section] 7 or [section] 8 of the Act, the 

States as well as the federal courts must 

defer to the exclusive competence of the 

National Labor Relations Board if the 

danger of state interference with 

national policy is to be averted.’’). A 

group of 18 State Attorneys General 

argues that it relies on the Board’s 

enforcement of private-sector labor law 

to protect employees in their States.346

L. Empirical Arguments 

As stated above, one of the goals of 

the proposed rule is to reduce 

uncertainty and litigation over questions 

related to joint-employer status. Some 

commenters challenge the premise of 

the proposed rule, predicting that the 

proposed rule will fuel time-consuming 

and costly litigation.347 One of these 

commenters points to data that it 

represents shows that after the Board’s 

BFI decision in 2015, petitions and 

unfair labor practice charges raising 

joint employer issues increased 

dramatically at the Board.348 Some 

respond to this contention by noting 

that findings of joint-employer status 

remained constant during this period.349

While we have carefully considered 

parties’ arguments that the 2020 rule 

fostered predictability and reduced 

litigation, we nevertheless conclude that 

we are foreclosed from maintaining the 

joint-employer standard set forth in that 

rule because it is not in accordance with 

the common-law agency principles the 

Board is bound to apply in making jointemployer determinations. That said, we 

note one commenter’s view that 

findings of joint-employer status did not 

markedly increase following the Board’s 

decision in BFI. In addition, we hope to 

have minimized the risk of uncertainty 

or increased litigation of joint-employer 

questions by comprehensively 

addressing the comments we received in 

response to the proposed rule and by 

modifying the proposed rule in several 

respects to enhance its clarity and 

predictability. 

Some commenters argue that the 2020 

rule encouraged business cooperation 

and led to partnerships that benefit 

small businesses.350 These commenters 

take the view that the proposed rule 

would diminish these beneficial 

practices or make it harder for 

companies to communicate or cooperate 

without risking a finding that they are 

joint employers.351 Our dissenting 

colleague also argues that changing the 

joint-employer standard will make it 

more difficult for businesses to 

cooperate and share resources. In 

particular, some commenters predict 

that the Board’s proposed jointemployer standard will disincentivize 

conduct that tends to improve the 

workplace, like training, safety and 

health initiatives, and corporate social 

responsibility programs.352 Others 

suggest that the proposed rule will lead 

to uncertainty about obligations, 

creating a business climate of risk and 

increasing costs, especially in the thirdparty logistics industry.353 Some 

commenters predict that the proposed 

rule could discourage larger companies 

from entering into contracts with third 

parties to perform work.354 Others 

specifically note that the proposed rule 

could make it more difficult for 

companies to seek temporary employees 

to address labor shortages or deal with 

fluctuating seasonal demand for 

labor.355

We have seriously considered 

commenters’ concerns, especially those 

of individuals and small business 

owners, regarding how the jointemployer standard we adopt today 

might influence their business 

relationships. Insofar as the Act itself 

requires the Board to conform to 

common-law agency principles in 

adopting a joint-employer standard, 

these concerns seem misdirected. 

Nevertheless, we hope that the 

modifications to the proposed rule and 

clarifications we offer today will 

alleviate some of these concerns. We 

also note that the Board’s definition of 

joint employer, which implements 

common-law agency principles, does 

not preclude or intend to preclude any 

particular kinds of business 

arrangements or relationships. 

A number of commenters, including 

many individuals, argue that the 

proposed rule would negatively affect 

the franchise industry.356 In particular, 

some individuals express the view that 

a broader joint-employer standard may 

inhibit franchisors’ abilities to help 

them develop the skills necessary to 

manage successful businesses.357 Others 

suggest that one benefit of the franchise 

model is the independence it affords 

franchisees. They argue that the 

proposed rule might encourage 

franchisors to take a more active role in 

the day-to-day operation of franchise 

businesses, undermining franchisees’ 


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358Comments of Escalante Organization; National 

Taxpayers Union; The Buckeye Institute; Yanxu 

Yang. We note in particular that some individuals 

express concerns that instead of being treated as 

independent business owners, the joint-employer 

rule will cause larger firms to treat them as 

employees or micromanage their work. See, e.g., 

comments of Amber Niblock; Kerry Stone; Tom 

Webster. 

359Comments of Association of Women’s 

Business Centers; IFA; National Black McDonald’s 

Operators Association; U.S. Black Chambers, Inc. 

360Comments of COLLE; IFA; U.S. Black 

Chambers, Inc. 

361Comments of Bicameral Congressional 

Signatories; Bipartisan Senators; IFA; McDonald’s 

USA, LLC; National ACE; National Retail 

Federation; SBA Office of Advocacy; Yum! Brands. 

As some of these commenters note, recent Census 

data shows that 30.8 percent of franchise businesses 

are minority owned, compared to 18.8 percent of 

nonfranchised businesses. See, e.g., comments of 

Bicameral Congressional Signatories. The 

comments of McDonald’s USA, LLC note that ‘‘31% 

of [its] U.S. franchisees are minority-owned 

businesses, and that 29% are women-owned 

businesses.’’ 

In particular, the SBA Office of Advocacy 

expresses concern that the proposed rule could 

violate ‘‘a new federal mandate to bolster the ranks 

of underserved small business federal contractors, 

including women-owned, Black-owned, Latinoowned, and other minority-owned small 

businesses.’’ Comments of SBA Office of Advocacy 

(citing Press Release, The White House, Statements 

and Releases, FACT SHEET: Biden-Harris 

Administration Announces Reforms to Increase 

Equity and Level the Playing Field for Underserved 

Small Business Owners, (Dec. 2, 2021)). Other 

commenters echo the SBA Office of Advocacy’s 

concern regarding the possibility of conflicts 

between the proposed rule and federal contracting 

law and practice. Comments of CDW; COLLE; 

National Retail Federation; Thomas Jefferson 

Institute for Public Policy; U.S. Black Chambers, 

Inc. One individual commenter expresses a concern 

that the proposed rule might make it more difficult 

for small businesses to bid for and win government 

contracts. See comments of Sherri Smalling. 

362Comments of Bipartisan Senators; Costa 

Enterprises; FreedomWorks Foundations; IFA; 

Libertas Institute; McDonald’s USA, LLC; North 

American Meat Institute; Senator Inhofe; U.S. Black 

Chambers, Inc.; U.S. Chamber of Commerce. 

363Comments of Asian McDonald’s Operators 

Association; Escalante Organization; 

FreedomWorks Foundations; Goldwater Institute; 

IFA; Job Creators Network Foundation; McDonald’s 

USA, LLC; NFIB; National Black McDonald’s 

Operators Association; National Association of 

Convenience Stores; National Retail Federation; 

Restaurant Law Center and National Restaurant 

Association; SBA Office of Advocacy; The 

Mackinac Center for Public Policy. See also, e.g., 

comments of Neil Kellen; Carole Montgomery; 

Deborah Robart; James Weaver; Yanxu Yang. 

364Comments of Center for Law and Social 

Policy; General Counsel Abruzzo. 

365Comments of EPI; reply comments of AFL– 

CIO. These commenters cross-reference a set of 

reply comments submitted by EPI in response to the 

Board’s 2018 joint-employer notice of proposed 

rulemaking, available at https://

www.regulations.gov/comment/NLRB-2018-0001- 

29072. 

366Comments of EPI. 

367Comments of CAP. 

368Comments of Center for Law and Social 

Policy; Daniel Struckhoff. 

369Comments of Richard Eiker. 

370Comments of ABC; AGC; National Demolition 

Association; Rachel Greszler. Some of these 

commenters suggest that the rule will require 

parties to renegotiate or revise contracts, resulting 

in significant transaction costs. See comments of 

American Trucking Associations; Rachel Greszler. 

371Comments of ANB Bank; CDW; Competitive 

Enterprise Institute; Independent Electrical 

Contractors; International Warehouse Logistics 

Association; Job Creators Network Foundation; 

NFIB; National Taxpayers Union. One commenter 

suggests that these dynamics may cause 

consolidation in the grocery market, harming 

independent grocers and consumers alike. See 

comments of National Grocers Association. 

372Comments of Andrea Karns; National 

Association of Realtors. 

373Comments of ABC; AGC. 

autonomy and creativity.358 A number 

of groups writing on behalf of Black 

franchisees, franchisees of color, veteran 

franchisees, and women and LGBTQ 

franchisees argue that the franchise 

model has been especially successful in 

improving their members’ lives and 

economic prospects.359 They, and other 

commenters, express concerns about the 

effect of the proposed rule on 

franchisees and small business owners 

of color.360 Groups representing 

franchisors, a bipartisan group of United 

States Senators and Members of 

Congress, and the United States Small 

Business Administration Office of 

Advocacy echo these concerns.361 A 

number of commenters cite an economic 

analysis commissioned by the 

International Franchise Association that 

sought to demonstrate the cost of the 

Board’s 2015 BFI standard on the 

franchise business model.362 Others, 

including some individuals and 

franchisees, make similar arguments, 

stating that the proposed rule could 

increase costs for franchise business 

owners if franchisors engage in 

‘‘distancing behaviors’’ and are no 

longer willing to provide franchisees 

with training and recruitment materials, 

employee handbooks, or educational 

materials on new regulations.363

By contrast, other commenters 

dispute the contention that the 

proposed rule will negatively affect the 

franchise business model.364 Several 

commenters specifically address the IFA 

study regarding the costs associated 

with the 2015 BFI standard.365 One of 

these commenters disputes the 

methodology used in preparing the 

analysis, noting that there were ‘‘serious 

concerns about the survey design and 

statistical analysis.’’ 366 Another argues 

that, in 2015 and 2016, following BFI 

and the Department of Labor’s 

promulgation of a broader jointemployer standard, franchise 

employment grew by 3 percent and 3.5 

percent, outpacing growth in other 

private, nonfarm employment, 

undermining the argument that the 

proposed rule would slow job growth in 

franchise businesses.367

We have seriously considered the 

arguments by commenters advancing 

different views regarding the accuracy 

and explanatory force of the IFA study. 

We do not believe that the study 

provides an appropriate or sufficient 

basis to abandon our effort to rescind 

the 2020 rule and promulgate a new 

joint-employer standard. There is no 

suggestion in the Act’s text or legislative 

history that the Board has the authority 

to depart from common-law agency 

principles in adopting and applying a 

joint-employer standard because of its 

predicted effect on a particular industry 

or industries, irrespective of statutory 

policy or Congressional intent. 

Other commenters make qualitative 

empirical arguments regarding the 

proposed rule’s potential positive effect 

on franchise businesses. These 

commenters argue that the proposed 

rule might improve operations at 

franchise businesses and make franchise 

businesses better and safer 

workplaces.368 Several commenters are 

employees who work for franchise 

businesses, and they argue that 

franchisors exercise significant control 

over the day-to-day details of their 

working lives.369 These comments 

arguably illuminate how forms of 

reserved and indirect control can 

implicate essential terms and conditions 

of employment, but the final rule is not 

based on the Board’s assessment of the 

new standard’s effect—negative or 

positive—on franchise businesses, as 

that consideration has no clear basis in 

the Act. 

A group of commenters argue that the 

proposed rule will increase compliance 

and administrative costs for general 

contractors, subcontractors, and other 

construction industry employers.370

Some of these commenters raise 

concerns that these increased costs will 

diminish opportunities for growth for 

vendors or smaller contractors.371

Several commenters also raise concerns 

about the possibility that the Board will 

find that individuals who provide 

services to other entities as independent 

contractors are joint employers with 

those entities.372 They also argue that 

the proposed rule risks destabilizing 

longstanding multiemployer bargaining 

practices in the construction industry 

and could potentially create new 

withdrawal liability in the context of 

multiemployer defined-benefit pension 

plans.373 Certain of these commenters 

take the view that the 2020 rule did not 

adversely affect labor peace and 

implicitly suggest that the proposed rule 

might lead to an increase in labor 


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374Comments of Empire Center for Public Policy. 

375Comments of AHA; ABC; CDW; COLLE; 

Federation of American Hospitals; HR Policy 

Association; IFDA; International Bancshares 

Corporation; National Waste & Recycling 

Association; New Jersey Food Council; Rachel 

Greszler; Restaurant Law Center and National 

Restaurant Association; U.S. Chamber of 

Commerce; Wyoming Bankers Association. Some of 

these commenters liken the proposed rule to 

government-mandated multiemployer bargaining. 

Comments of ABC; COLLE; Tesla, Inc. As set forth 

above, we reject this characterization. Under the 

final rule, businesses remain free to structure their 

business operations however they wish. The rule 

creates no mandate to engage in bargaining on a 

multifirm basis whatsoever. 

376See, e.g., comments of Americans for Tax 

Reform; IFA; Independent Women’s Forum; 

National Grocers Association; North American Meat 

Institute; Rachel Greszler; Stephen Clark; Yankee 

Institute for Public Policy. 

A few of these commenters express concerns that 

the proposed rule will adversely affect particular 

state economies. See, e.g., comments of California 

Policy Center (California); Goldwater Institute 

(Arizona); Libertas Institute (Utah); Rio Grande 

Foundation (New Mexico); The Buckeye Institute 

(Ohio); Thomas Jefferson Institute for Public Policy 

(Virginia). 

Some commenters, especially individuals and 

small business owners, argue that the proposed rule 

is poorly timed in light of larger macroeconomic 

trends, including inflation, and the lingering effects 

of the Covid-19 pandemic on supply chains. See, 

e.g., comments of Daniel Amare; Marlo Andeersen; 

Hugh Blanchard; Jon Clegg; Harold Heller; Justin 

Hood; Catherine Parker; Larry Verlinden. 

377Comments of American Federation of 

Musicians Local 47; Congressman Scott et al.; 

General Counsel Abruzzo; National Women’s Law 

Center. 

378Comments of AFL–CIO; General Counsel 

Abruzzo. 

379Comments of ACLU; BCTGM; Center for Law 

and Social Policy; Southern States Millwright 

Regional Council, UBC and Central South 

Carpenters Regional Council, UBC; District Council 

of New York City & Vicinity of the UBC; NELP; 

Restaurant Opportunities Centers United; Signatory 

Wall and Ceiling Contractors Alliance; The 

Leadership Conference on Civil and Human Rights; 

UBC; United for Respect. 

380Comments of ACLU; Lawyers’ Committee for 

Civil Rights Under Law; NELP; National Black 

Worker Center; National Partnership for Women 

and Families; NELP; SPLC; TechEquity 

Collaborative. 

381Comments of District Council of New York 

City & Vicinity of the UBC; McGann, Ketterman & 

Rioux; Signatory Wall and Ceiling Contractors 

Alliance; Southern States Millwright Regional 

Council, UBC and Central South Carpenters 

Regional Council, UBC; UBC. 

382Comments of American Federation of 

Musicians Local 47; AFSCME; Asian Pacific 

American Labor Alliance, AFL–CIO; EPI; Los 

Angeles County Federation of Labor AFL–CIO & 

Locals 396 and 848 of the IBT; National Women’s 

Law Center; SEIU; The Strategic Organizing Center; 

The Washington Center for Equitable Growth; UE; 

UNITE HERE. 

383Comments of American Federation of 

Musicians Local 47; General Counsel Abruzzo; 

Hawaii Regional Council of Carpenters; Jobs with 

Justice and Governing for Impact; Los Angeles 

County Federation of Labor AFL–CIO & Locals 396 

and 848 of the IBT; National Women’s Law Center; 

NELP; SEIU; Texas RioGrande Legal Aid, Inc; 

UNITE HERE. 

384Comments of NELP; National Women’s Law 

Center; National Black Workers Center; Richard 

Eiker; SPLC; The Strategic Organizing Center; 

William E. Morris Institute for Justice; Women 

Employed. In addition, one commenter notes its 

long history of successful multiemployer and other 

disputes.374 Our dissenting colleague 

likewise takes the position that 

changing the joint-employer standard 

may adversely affect certain businesses, 

including by discouraging ‘‘efforts to 

rescue failing businesses’’ through 

successorship. 

As expressed elsewhere, we are 

sensitive to commenters’ concerns that 

the joint-employer standard we adopt in 

this final rule might have unwanted 

effects on their businesses. In particular, 

we have thoroughly reviewed 

submissions from individuals and small 

business owners raising such concerns. 

However, we are not persuaded that 

these concerns reflect considerations 

that, as a statutory matter, may 

determine the Board’s choice of a jointemployer standard. As we have 

explained, the Board must adhere to 

common-law agency principles. These 

commenters have failed to explain how, 

consistent with the Act’s requirements 

and statutory policy, the Board could 

treat their concerns as determinative. In 

addition, to the extent some of these 

commenters explain that they prefer the 

2020 rule to the proposed rule, we 

reiterate our view that we are foreclosed 

from maintaining the 2020 rule because 

it is inconsistent with common-law 

agency principles and does not advance 

the policies of the Act. 

Other commenters raise practical 

objections to the proposed jointemployer standard, urging the Board to 

consider the potentially harmful effect 

of enmeshing multiple firms in 

collective bargaining. These 

commenters generally argue that 

bargaining with more than one firm will 

be cumbersome, unworkable, or 

otherwise undesirable.375 Our 

dissenting colleague similarly argues 

that bargaining involving multiple firms 

may be stymied by conflicts among the 

firms and will be less likely to 

culminate in workable collectivebargaining agreements. Others, 

including some individuals, small 

business owners, and groups that 

represent the interests of women small 

business owners and small business 

owners of color, express concern that 

the joint-employer standard will limit 

opportunities for new business or job 

creation or otherwise diminish their 

economic opportunities or harm 

consumers.376

By contrast, certain commenters 

suggest that a broad joint-employer 

standard will ensure that the proper 

parties are present for bargaining and 

may help smaller entities bear only their 

share of the liability for conduct that 

violates the Act.377 Others note that 

some commenters’ criticisms of the 

proposed rule would apply to any jointemployer standard, since they 

principally relate to the dynamics of 

bargaining that involves more than one 

firm.378 In this regard, they contend, the 

criticisms are not unique to the 

proposed rule and should not weigh 

against the Board’s rescission of the 

2020 rule or promulgation of a new 

joint-employer standard. 

Other commenters argue that ensuring 

the appropriate entities are recognized 

as joint employers is essential to 

deterring practices in certain industries, 

including staffing, temporary warehouse 

work, and food processing, that they 

represent have led to the underpayment 

of wages, worker misclassification, and 

unsafe working conditions.379 Several of 

these commenters observe that these 

harmful practices disproportionally 

affect Black employees, Latinx 

employees, immigrant employees and 

migrant guestworkers, women and 

LGBTQ employees, and employees of 

color.380 A number of organizations also 

commented on the use of ‘‘labor broker’’ 

arrangements in the construction 

industry and how the proposed jointemployer standard might ensure that all 

entities who possess the authority to 

control or exercise control over 

construction industry employees’ 

essential terms and conditions of 

employment fully comply with their 

obligations under the Act and other 

labor and employment statutes.381

Specifically, some commenters 

discuss the ‘‘fissuring’’ of the workplace 

and note that modern business practices 

often result in multiple firms sharing 

control over aspects of employees’ terms 

and conditions of employment, making 

it important to define the joint-employer 

standard in a manner that brings all 

necessary parties to the bargaining 

table.382 Certain of these commenters 

note that an unduly cramped jointemployer standard might hinder the 

efficacy of the Board’s remedial orders 

by targeting an entity that cannot, by 

itself, make employees whole or engage 

in the kind of effective collective 

bargaining that the Act contemplates.383

Several individual employees and 

commenters with experience 

representing employees in industries 

characterized by extensive 

subcontracting represent that a jointemployer standard that brings the 

proper parties to the bargaining table 

could help make jobs in those industries 

safer, especially for Black and 

immigrant workers and women 

workers.384


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multifirm bargaining as support for the Board’s 

preliminary view that the proposed joint-employer 

rule would facilitate effective bargaining. See 

comments of IUOE. 

385Comments of EPI. 

386 Id. Several other commenters cite approvingly 

to EPI’s economic analysis. See, e.g., comments of 

National Women’s Law Center. Based on its 

assessment that the Bureau of Labor Statistics 

Contingent Worker Supplement (CWS) to the 

Current Population Survey likely underestimates 

how many workers work for contract firms and 

temporary help agencies, this commenter offers 

revised estimates over the total workforce in these 

settings. See comments of EPI. This commenter 

likewise offers a revised estimate of the number of 

franchise employees and employees of contractors 

or temporary staffing agencies who it represents 

would benefit from the proposed rule. Id. 

387Comments of ACLU; General Counsel 

Abruzzo. 

388Comments of LeadingAge; National ACE; 

Trucking Industry Stakeholders. 

389Comments of James Bitzonis; COLLE. 

390Comments of COLLE. One commenter also 

expresses concern that the proposed rule might 

interfere with single-employer doctrine under the 

Act. See comments of U.S. Chamber of Commerce. 

With respect, we note that questions of jointemployer and single-employer status under the Act 

are distinct. See generally Radio & Television 

Broadcast Technicians Local Union 1264 v. 

Broadcast Service of Mobile, Inc., 380 U.S. 255, 256 

(1965) (approving the Board’s single-employer 

analysis based on a four-factor test considering 

entities’ ‘‘interrelation of operations, common 

management, centralized control of labor relations 

and common ownership’’). 391See reply comments of AFL–CIO. 

392See NLRB v. Town & Country Electric, Inc., 

516 U.S. 85, 92–95 (1995) (where Congress has used 

the term ‘‘employee’’ in a statute without clearly 

defining it, the Court assumes that Congress 

‘‘intended to describe the conventional masterservant relationship as understood by common-law 

agency doctrine’’). See also Clackamas 

Gastroenterology Associates, P.C. v. Wells, 538 U.S. 

440, 448–449 (2003); Nationwide Mutual Insurance 

Co. v. Darden, 503 U.S. 318, 322–324 (1992); 

Community for Creative Non-Violence v. Reid, 490 

U.S. 730, 740, 752 fn. 31 (1989); Kelley v. Southern 

Pacific Co., 419 U.S. 318, 323–324 (1974); NLRB v. 

United Insurance Co. of America, 390 U.S. 254, 

256–258 (1968). As noted above, many sources refer 

to the common-law employer-employee 

relationship using the terms ‘‘master’’ and 

‘‘servant.’’ 

393BFI v. NLRB, 911 F.3d at 1208–1209. 

Other commenters argue that the 

proposed rule would lead to positive 

economic outcomes for employees. For 

example, one commenter notes that by 

ensuring that the proper parties are 

brought to the bargaining table, unions 

will be able to bargain effectively, 

creating a positive ‘‘spillover’’ effect that 

will raise the floor for wages, benefits, 

and working conditions.385 This 

commenter estimates that the proposed 

rule ‘‘will result in a boost of pay to 

workers of $1.06 billion annually or 

$20.4 million per week.’’ 386 Several 

other commenters likewise argue that 

the benefits of the proposed rule will 

have a broad effect on the economy 

given the high concentration of 

employees in industries marked by 

extensive contracting practices.387

A number of commenters raise 

concerns about the specter of litigation 

and eventual liability if their businesses 

are deemed joint employers with other 

entities.388 Others respond that an 

overbroad joint-employer standard risks 

exposing other entities, like lead firms 

or franchisors, solely because those 

entities are viewed as having the ability 

to satisfy a judgment.389 Some of these 

commenters suggest that principles of 

joint liability might suffice to ensure 

that the Board’s make-whole remedies 

are effective, rendering a joint-employer 

finding unnecessary in such 

circumstances.390

Contrary to these commenters, while 

the final rule establishes a jointemployer standard that will apply in 

unfair-labor-practice cases, it does not 

purport to assign liability or otherwise 

depart from well-established principles 

regarding how to apportion 

responsibility for unlawful conduct 

among multiple parties. Likewise, we 

disagree with commenters who argue 

that principles of joint liability might 

foreclose the need for a revised jointemployer standard, as the jointemployer standard serves important 

functions beyond those related to 

assigning liability. Similarly, principles 

of joint liability sometimes come into 

play in circumstances where there is no 

dispute that entities are joint employers. 

One commenter, citing Capitol EMI 

Music, Inc., 311 NLRB 997, 1000 (1993), 

notes that the Board imposes certain 

unfair labor practice liability for the 

actions of one joint employer on another 

entity only if that other entity knew of 

the action and did nothing to protest 

it.391 We agree that this longstanding 

Board precedent discussing how to 

assign liability to joint employers will 

continue to guide the Board in making 

these determinations. Additionally, 

business entities remain free under this 

joint-employer standard, as before, to 

structure their contractual relationships 

according to their chosen allocation of 

both authority to control and unfair 

labor practice liability, including by the 

use of indemnification clauses. 

V. The Final Rule 

The joint-employer doctrine plays an 

important role in the administration of 

the Act. The doctrine determines when 

an entity that exercises control over 

particular employees’ essential terms 

and conditions of employment has a 

duty to bargain with those employees’ 

representative. It also determines such 

an entity’s potential liability for unfair 

labor practices. The joint-employer 

analysis set forth in this final rule is 

based on common-law agency 

principles as applied in the particular 

context of the Act. In our considered 

view, the joint-employer standard that 

we adopt today removes artificial 

control-based restrictions with no 

foundation in the common law that the 

Board has previously imposed in cases 

beginning in the mid-1980s discussed 

above, and in the 2020 rule. By 

incorporating common-law agency 

principles, as the Act requires, the final 

rule appropriately aligns employers’ 

responsibilities with respect to their 

employees with their authority to 

control those employees’ essential terms 

and conditions of employment and so 

promotes the policy of the United 

States, as articulated in Section 1 of the 

Act, to encourage the practice and 

procedure of collective bargaining and 

to protect the exercise by workers of full 

freedom of association, selforganization, and designation of 

representatives of their own choosing, 

for the purpose of negotiating the terms 

and conditions of their employment or 

other mutual aid or protection. 

A. Definition of an Employer of 

Particular Employees 

Section 103.40(a) of the final rule 

provides that an employer, as defined 

by Section 2(2) of the Act, is an 

employer of particular employees, as 

defined by Section 2(3) of the Act, if the 

employer has an employment 

relationship with those employees 

under common-law agency principles. 

This provision expressly recognizes the 

Supreme Court’s conclusion that 

Congress’s use of the terms ‘‘employer’’ 

and ‘‘employee’’ in the NLRA was 

intended to describe the conventional 

employer-employee relationship under 

the common law.392 Because ‘‘Congress 

has tasked the courts, and not the Board, 

with defining the common-law scope of 

‘employer,’’’ the Board—in evaluating 

whether a common-law employment 

relationship exists—looks for guidance 

from the judiciary, including primary 

articulations of relevant principles by 

judges applying the common law, as 

well as secondary compendiums, 

reports, and restatements of these 

common law decisions, focusing ‘‘first 

and foremost [on] the ‘established’ 

common-law definitions at the time 

Congress enacted the National Labor 

Relations Act in 1935 and the TaftHartley Amendments in 1947.’’ 393 By 

explicitly grounding the Board’s jointemployer analysis in common-law 

agency principles, this provision 

recognizes that the existence of a 

common-law employment relationship 

is a necessary prerequisite to a finding 


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394Compare BFI, above, 362 NLRB 1599 

(considering whether two entities were joint 

employers for purposes of petition for 

representation election), and Browning-Ferris 

Industries of Pennsylvania, Inc., 259 NLRB 148 

(1981) (considering whether two entities were joint 

employers for purposes of liability for employee 

discharges in violation of section 8(a)(3) of the Act), 

enfd. 691 F.2d 1117 (1982). 

395See BFI v. NLRB, 911 F.3d at 1209 (citing 

Dunkin’ Donuts Mid-Atlantic Distribution Center v. 

NLRB, 363 F.3d 437, 440 (D.C. Cir. 2004)); NLRB v. 

Browning-Ferris Industries of Pennsylvania, Inc., 

691 F.2d 1117, 1124 (3d Cir. 1982). See also 3750 

Orange Place Limited Partnership v. NLRB, 333 

F.3d 646, 660 (6th Cir. 2003); Holyoke Visiting 

Nurses Assn. v. NLRB, 11 F.3d 302, 306 (1st Cir. 

1993). 

396BFI, above, 362 NLRB at 1610. 

397See BFI v. NLRB, above, 911 F.3d at 1221– 

1222. 

that an entity is a joint employer of 

particular employees. 

B. Definition of Joint Employers 

Section 103.40(b) provides that, for all 

purposes under the Act, two or more 

employers of the same particular 

employees are joint employers of those 

employees if the employers share or 

codetermine those matters governing 

employees’ essential terms and 

conditions of employment. The 

provision thus first recognizes, as did 

the 2020 rule, that joint-employer issues 

may arise (and the same test will apply) 

in various contexts under the Act, 

including both representation and 

unfair labor practice case contexts.394

The provision goes on to codify the 

longstanding core of the joint-employer 

test, consistent with the formulation of 

the standard that several Courts of 

Appeals (notably, the Third Circuit and 

the District of Columbia Circuit) have 

endorsed.395 By providing that a 

common-law employer of particular 

employees must also share or 

codetermine those matters governing the 

employees’ essential terms and 

conditions of employment in order to be 

considered a joint employer, the 

provision recognizes and incorporates 

the principle from BFI that ‘‘the 

existence of a common-law employment 

relationship is necessary, but not 

sufficient, to find joint-employer 

status.’’ 396

C. Definition of ‘‘share or codetermine’’ 

Section 103.40(c) of the final rule 

provides that to ‘‘share or codetermine 

those matters governing employees’ 

essential terms and conditions of 

employment’’ means for an employer to 

possess the authority to control 

(whether directly, indirectly, or both) or 

to exercise the power to control 

(whether directly, indirectly, or both) 

one or more of the employees’ essential 

terms and conditions of employment. 

This provision incorporates the view of 

the Board and the District of Columbia 

Circuit in BFI that evidence of the 

authority or reserved right to control, as 

well as evidence of the exercise of 

control (whether direct or indirect, 

including control through an 

intermediary, as discussed further 

below) is probative evidence of the type 

of control over employees’ essential 

terms and conditions of employment 

that is necessary to establish jointemployer status. After careful 

consideration of comments, as reflected 

above, the Board has concluded that this 

definition of ‘‘share or codetermine’’ is 

consistent with common-law agency 

principles and best serves the policy of 

the United States, embodied in the Act, 

to encourage the practice and procedure 

of collective bargaining by ensuring that 

employees have the ability to negotiate 

the terms and conditions of their 

employment, through representatives of 

their own choosing, with all of their 

employers that possess the authority to 

control or exercise the power to control 

those terms and conditions. 

D. Definition of ‘‘essential terms and 

conditions of employment’’ 

Section 103.40(d) defines ‘‘essential 

terms and conditions of employment’’ 

as (1) wages, benefits, and other 

compensation; (2) hours of work and 

scheduling; (3) the assignment of duties 

to be performed; (4) the supervision of 

the performance of duties; (5) work 

rules and directions governing the 

manner, means, and methods of the 

performance of duties and the grounds 

for discipline; (6) the tenure of 

employment, including hiring and 

discharge; and (7) working conditions 

related to the safety and health of 

employees. The Board has decided, after 

careful consideration of comments as 

reflected above, to modify the proposed 

rule’s definition of ‘‘essential terms and 

conditions of employment’’ by setting 

forth an exclusive, closed list of terms 

and conditions of employment that may 

serve as the objects of control necessary 

to establish joint-employer status. 

Terms and conditions of employment 

falling in these seven categories are not 

simply common across employment 

relationships, they represent the core 

subjects of collective bargaining 

contemplated by the Act, as illuminated 

by the Board’s administrative 

experience. Thus, Section 8(d) of the 

Act expressly provides that the 

collective-bargaining obligation 

encompasses a duty to confer with 

respect to wages and hours, subjects 

falling within categories (1) and (2). 

Categories (3), (4), and (5) similarly 

include terms involving the assignment, 

supervision, and detailed control of 

employees’ performance of work 

duties—and the grounds for discipline 

of employees who fail to perform as 

required—all common across 

employment relationships and subjects 

of central concern to employees seeking 

to improve their terms and conditions of 

employment through collective 

bargaining. Terms and conditions in 

Category (6), addressing the conditions 

for the formation and dissolution of the 

employment relationship itself, are 

clearly essential conditions of 

employment. Finally, as many 

commenters have observed, terms 

setting working conditions related to the 

safety and health of employees— 

encompassed in category (7)—are basic 

to the employment relationship and lie 

at or near the core of issues about which 

employees would reasonably seek to 

bargain. By providing that a commonlaw employer of particular employees 

will be considered a joint employer of 

those employees only if it possesses the 

authority to control or exercises the 

power to control one or more terms and 

conditions of employment falling into 

one of these seven categories, this 

provision ensures that such an employer 

will be in a position to engage in 

meaningful bargaining over an issue of 

core concern to the employees involved. 

This provision thus effectively 

incorporates the second step of the 

Board’s joint-employer test set forth in 

BFI, above, as described by the District 

of Columbia Circuit in BFI v. NLRB, and 

addresses that court’s concern that the 

Board had failed, in BFI, adequately to 

delineate what terms and conditions are 

‘‘essential’’ to make collective 

bargaining ‘‘meaningful.’’ 397

E. Control Sufficient To Establish JointEmployer Status 

Section 103.40(e) provides, consistent 

with § 103.40(a) and (c), that whether an 

employer possesses the authority to 

control or exercises the power to control 

one or more of the employees’ essential 

terms and conditions of employment is 

determined under common law-agency 

principles. Thus, this provision explains 

that, subject to the terms of the 

preceding provisions, (1) possessing the 

authority to control one or more 

essential terms and conditions of 

employment is sufficient to establish 

status as a joint employer regardless of 

whether the control is exercised; and (2) 

exercising the power to control 

indirectly (including through an 

intermediary) one or more essential 

terms and conditions of employment is 

sufficient to establish status as a joint 


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398As noted above, the Board has modified this 

provision from the version set forth in the NPRM 

for clarity. 399 911 F.3d at 1219–1220. 

400See, e.g., Ford Motor Co., Chicago Stamping 

Plant v. NLRB, 441 U.S. 488, 501–503 (1979) 

(affirming Board’s conclusion that manufacturer 

was required to bargain over in-plant food service 

and prices because manufacturer contractually 

reserved right to review and control services and 

prices directly set by a third-party contractor). 

401Cf., e.g., Management Training Corp., 317 

NLRB 1355, 1358 & fn. 16, 1359 (1995) (holding that 

an entity that controls sufficient matters relating to 

the employment relationship to make it a statutory 

employer may be required to bargain over terms and 

conditions of employment within its control, but 

certification of representative does not obligate an 

employer to bargain concerning mandatory subjects 

of bargaining controlled exclusively by a distinct 

entity that is exempt from the Board’s statutory 

jurisdiction). 

employer, regardless of whether the 

control is exercised directly. 

As discussed above, the Board has 

modified this provision from the version 

set forth in the NPRM by clarifying that, 

in every case, the object of a commonlaw employer’s control that is relevant 

to the question of whether it is also a 

joint employer under the Act must be an 

essential term and condition of 

employment as defined in § 103.40(d). 

In combination with the Board’s 

limitation of ‘‘essential’’ terms and 

conditions of employment to matters 

that lie near the core of the collectivebargaining process, this change is 

intended to address the concerns of 

commenters (discussed above) that the 

standard should not require the Board to 

find a joint-employer relationship based 

on an entity’s attenuated, insubstantial, 

or unexercised control over matters 

that—while they may be mandatory 

subjects of bargaining—are actually 

peripheral to the employment 

relationship or to employees’ terms and 

conditions of employment. The version 

of § 103.40(e) that appears in the final 

rule is reformatted to include two 

subsections and has been streamlined to 

avoid surplusage. 

F. Control Immaterial to Joint-Employer 

Status 

Section 103.40(f) provides that 

evidence of an entity’s control over 

matters that are immaterial to the 

existence of an employment 

relationship under common-law agency 

principles and that do not bear on the 

employees essential terms and 

conditions of employment is not 

relevant to the determination of whether 

the employer is a joint employer.398 As 

discussed above, many commenters 

have expressed a concern that the 

proposed rule could result in the Board 

finding joint-employer relationships 

based on kinds of control that are not 

indicative of a common-law 

employment relationship or that do not 

form a proper foundation for collective 

bargaining or unfair-labor practice 

liability. Similarly, the District of 

Columbia Circuit in BFI v. NLRB 

criticized the Board’s BFI decision for 

failing, in its articulation and 

application of the indirect-control 

element of the standard, to distinguish 

between indirect control that the 

common law of agency considers 

intrinsic to ordinary third-party 

contracting relationships and indirect 

control over essential terms and 

conditions of employment.399 This 

provision addresses these concerns by 

expressly recognizing that some kinds of 

control, including some of those 

commonly embodied in a contract for 

the provision of goods or services by a 

true independent contractor, are not 

relevant to the determination of whether 

the entity possessing such control is a 

common-law employer of the workers 

producing or delivering the goods or 

services, and that an entity’s control 

over matters that do not bear on 

workers’ essential terms and conditions 

of employment are not relevant to the 

determination of whether that entity is 

a joint employer. 

G. Burden of Proof 

Section 103.40(g) provides that a 

party asserting that an employer is a 

joint employer of particular employees 

has the burden of establishing, by a 

preponderance of the evidence, that the 

entity meets the requirements set forth 

above. This allocation of the burden of 

proof is consistent with the 2020 Rule, 

BFI, and pre-BFI precedent. See 85 FR 

11227; BFI, 362 NLRB at 1616. 

H. Bargaining Obligations of a Joint 

Employer 

Section 103.40(h) provides that a joint 

employer of particular employees must 

bargain collectively with the 

representative of those employees with 

respect to any term and condition of 

employment that it possesses the 

authority to control or exercises the 

power to control, regardless of whether 

that term and condition is deemed to be 

an essential term and condition of 

employment under the definition above, 

but is not required to bargain with 

respect to any term and condition of 

employment that it does not possess the 

authority to control or exercise the 

power to control. 

As discussed above, some 

commenters have requested that the 

Board provide a concise statement of 

joint employers’ bargaining obligations 

in order to clarify both that a joint 

employer—like any other employer— 

must bargain over any mandatory 

subject of bargaining that is subject to its 

control, and that a joint employer— 

again, like any other employer—is not 

required to bargain about workplace 

conditions that are not subject to its 

control. Particularly in light of the 

Board’s determination, discussed above, 

to adopt a closed list of ‘‘essential terms 

and conditions of employment,’’ as 

objects of control relevant to the jointemployer determination, the Board has 

concluded, after careful consideration of 

the comments, that it is desirable to 

expressly provide that a joint 

employer’s bargaining obligations are 

not limited to those ‘‘essential terms and 

conditions’’ of employment that it 

controls, but extend to any ordinary 

mandatory subject of bargaining that is 

also subject to its control. Clarifying a 

joint employer’s bargaining obligation in 

this way further ensures that collective 

bargaining involving the joint employer 

will be meaningful, because such 

bargaining will be able to address not 

only the core workplace issues the 

control of which establishes the 

employer’s status as a joint employer 

but also any other matters subject to the 

joint employer’s control that sufficiently 

affect the terms and conditions of 

employees’ employment to permit or 

require collective bargaining under 

section 8(d) of the Act.400

On the other hand, the Board has also 

concluded that it serves a useful 

clarifying purpose to expressly provide, 

consistent with extant Board precedent 

not affected by the final rule, that where 

two or more entities each control terms 

and conditions of employment of 

particular employees, an employer is 

not required to bargain over any such 

terms and conditions which are in no 

way subject to its own control.401

I. Severability 

Section 103.40(i) provides that the 

provisions and subprovisions of the 

final rule are intended to be severable, 

and that if any part of the rule is held 

to be unlawful, the remainder of the rule 

is intended to remain in effect to the 

fullest extent permitted by law. The 

Board believes, on careful 

consideration, that the final rule in its 

entirety flows from and is consistent 

with common-law principles as we have 

received them from judicial authority; 

reflects a permissible exercise of the 

Board’s congressionally delegated 

authority to interpret the Act; and best 

effectuates the Board’s statutory 

responsibility to prevent unfair labor 

practices and to encourage the practice 


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402As noted above and discussed more fully 

below, while we have concluded that the 2020 

rule’s actual-exercise requirement is impermissible 

under the Act as contrary to common law agency 

principles, and apart from recognizing that the 

Board must follow common-law agency principles 

in determining who is an ‘‘employer’’ and an 

‘‘employee’’ under Sec. 2 of the Act, we do not 

conclude, as our colleague suggests, that the 

common law dictates the specific details of the final 

rule’s joint-employer standard. Rather, the final rule 

reflects our policy choices, within the bounds of the 

common law, in furtherance of the policy of the 

United States, as set forth in Sec. 1 of the Act, to 

encourage the practice and procedure of collective 

bargaining, including by providing a mechanism by 

which an entity’s rights and obligations under the 

Act may be accurately aligned with its authority to 

control employees’ essential terms and conditions 

of employment. 

403 42 U.S.C. 2000e et seq. 

404See Sec. I.D., above, and cases discussed there. 

See also BFI v. NLRB, 911 F.3d at 1195 

(‘‘[E]mployee-or-independent-contractor cases can 

. . . be instructive in the joint-employer inquiry to 

the extent that they elaborate on the nature and 

extent of control necessary to establish a commonlaw employment relationship.’’). 

405See, e.g., EEOC v. Global Horizons, 915 F.3d 

631, 640–641 (9th Cir. 2019) (two entities were joint 

employers with a direct employer based on entities’ 

‘‘power to control the manner in which [benefits] 

and wages were provided to the . . . workers, even 

if never exercised.’’); Mallory v. Brigham Young 

University, 332 P.3d 922, 928–929 (Utah 2014) (city 

was employer of university’s employee because ‘‘[i]f 

the principal has the right to control the agent’s 

method and manner of performance, the agent is a 

servant whether or not the right is specifically 

exercised’’) (citation omitted); Rouse v. Pitt County 

Memorial Hosp., Inc., 470 SE 2d 44, 52–53 (N.C. 

1996) (attending physicians could be found 

employers of resident physicians employed by 

hospital absent evidence of actual exercise of 

control because ‘‘[w]here the parties have made an 

explicit agreement regarding the right of control, 

this agreement will be dispositive;’’) (citation 

omitted); Dunn v. Conemaugh & Black Lick RR, 267 

F.2d 571, 577 (3d Cir. 1959) (railroad was employer 

of manufacturer’s employee based on railroad’s 

right to command employee’s performance without 

reference to any instance of exercise of that right 

because ‘‘the person is the servant of him who has 

the right to control the manner of performance of 

the work, regardless of whether or not he actually 

exercises that right;’’) (citation omitted); S.A. 

Gerrard Co. v. Industrial Accident Comm’n, 110 

P.2d 377, 378 (Cal. 1941) (landowner was joint 

employer of farmer’s employee based on contract 

provision that picking should be done according to 

landowner’s direction without reference to whether 

such direction was ever given because ‘‘the right to 

control, rather than the amount of control which 

was exercised, is the determinative factor.’’) 

(citation omitted). 

406As noted above, we agree with the District of 

Columbia Circuit’s common-sense characterization 

of control exercised through an intermediary as 

indirect control, rejecting our colleague and the 

2020 Rule’s counterintuitive characterization of 

such control as direct and immediate. See BFI v. 

NLRB, 911 F.3d at 1216–1217. 

407See id. at 1217 (‘‘[T]he common law has never 

countenanced the use of intermediaries or 

controlled third parties to avoid the creation of a 

master-servant relationship.’’) (citing Nicholson v. 

Atchison, T. & S. F. Ry. Co., 147 P. 1123, 1126 (Kan. 

1915) (use of a ‘‘branch company’’ as a ‘‘mere 

instrumentality’’ ‘‘did not break the relation of 

master and servant existing between the plaintiff 

and the [putative master]’’); Butler v. Drive 

Automotive Industries of America, 793 F.3d 404, 

415 (4th Cir. 2015) (the joint-employer test 

‘‘specifically aims to pierce the legal formalities of 

an employment relationship to determine the loci 

of effective control over an employee . . . . 

Otherwise, an employer who exercises actual 

control could avoid Title VII liability by hiding 

behind another entity.’’); Al-Saffy v. Vilsack, 827 

F.3d 85 (D.C. Cir. 2016) (relying in part on evidence 

that officials working for putative joint employer 

had recommended employee’s dismissal as 

evidence supporting reversal of summary judgment 

on the joint-employer issue). See also discussion 

and sources cited in Sec. I.D., above. 

and procedure of collective bargaining. 

However, the Board necessarily 

acknowledges the possibility that a 

reviewing body might disagree with our 

conclusion in some respect, and, in that 

event, the Board desires to preserve so 

much of the rule as such a body 

approves. Separately, as noted above, 

the Board intends the action of 

rescinding the 2020 Rule in itself to be 

severable from any of the terms of the 

final rule, so that if a reviewing body 

were to disapprove the final rule in its 

entirety, the Board’s action in 

rescinding the 2020 Rule should still be 

given effect. 

VI. Response to Dissent 

Our dissenting colleague advances 

several reasons for declining to join the 

majority in rescinding and replacing the 

2020 Rule. We have addressed some of 

these arguments above. Here, we offer 

additional responses to several of our 

colleague’s contentions. 

First, our dissenting colleague 

contends that common-law agency 

principles do not compel the Board to 

rescind the 2020 Rule, and, further, 

actually preclude the Final Rule’s 

elimination of the 2020 Rule’s actualexercise requirement.402 He also 

criticizes us for seeking relevant 

common-law principles in authority 

relating to the distinction between 

employees and independent contractors, 

and for failing to pay sufficient attention 

to judicial articulations of relevant 

common-law principles in decisions 

involving joint-employer questions 

under other federal statutes, including 

Title VII of the Civil Rights Act of 

1964.403

To the contrary, as set forth more fully 

above, both the District of Columbia 

Circuit’s discussion of independentcontractor authority in BFI v. NLRB, and 

the approach taken by many other 

courts examining joint-employer 

questions in other contexts, fully 

support the Board’s reference to 

independent-contractor authority to 

shed light on the common-law 

employer-employee relationship and the 

joint-employer relationship under the 

Act.404 To the extent that the other 

federal cases relied upon by our 

colleague articulate joint-employer 

standards drawn from common-law 

principles, those cases at best support 

the proposition that an entity’s actual 

exercise of control over appropriate 

terms and conditions of employment of 

another employer’s employees is 

sufficient to establish that it is a jointemployer—a proposition with which we 

agree—but not our colleague’s further 

claim that such exercise of control is 

necessary to find a joint-employer 

relationship. Rather, numerous federal 

courts of appeals and state high courts 

have concluded, in non-NLRA contexts, 

that entities were common-law 

employers of other employers’ 

employees based solely on the entities’ 

unexercised power or authority to 

control.405 These decisions fully 

support our conclusion that the 

common law does not require an 

entity’s actual exercise of a reserved 

authority to control in order to establish 

a joint-employer relationship. Judicial 

decisions and secondary authorities 

addressing the common-law employeremployee relationship and the jointemployer relationship further confirm 

that indirect control, including control 

exercised through an intermediary,406

can establish the existence of an 

employment relationship, including a 

joint-employer relationship.407

We note, moreover, that the District of 

Columbia Circuit not only upheld the 

Board’s recognition of this point in BFI 

v. NLRB, but also reprimanded the 

Board that issued the 2020 rule for 

neglecting it. In International 

Brotherhood of Teamsters v. NLRB, 45 

F.4th 38 (D.C. Cir. 2022), in rejecting the 

Board’s decision not to apply the BFI 

standard retroactively, the court 

reaffirmed its previous holding, noting 

that it had ‘‘held that ‘[t]he Board [in 

Browning-Ferris I] . . . correctly 

determined that the common-law 

inquiry is not woodenly confined to 

indicia of direct and immediate 

control;’’’ [and that] ‘‘[I]n BrowningFerris II—a decision issued just five 

months after the Board announced the 

2020 Rule—the Board inexplicably 

overlooked the longstanding role of 

indirect control in the Board’s jointemployer inquiry . . . . Our court’s 

2018 decision made clear that ‘the rightto-control element of the Board’s jointemployer standard [discussed in 

Browning-Ferris I] has deep roots in the 

common law [citation omitted],’ and 

that the common law rule is that 

‘unexercised control bears on employer 

status . . . . ’ Further, we held that 

‘there is no sound reason that the . . . 

joint-employer inquiry would give 

[indirect control] a cold shoulder.’ [911 

F.3d] at 1218 (‘[The] argument that the 


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408 45 F.4th at 42, 44, 46–47. 409As noted above, we reject any suggestion that 

the 2020 rule recognized that an entity’s 

contractually reserved but unexercised control is 

sufficient to establish a common-law employeremployee relationship but declined, as a 

discretionary matter, to exercise joint-employer 

jurisdiction over statutory employers who did not 

actually exercise such control—a rationale nowhere 

presented in the text or preamble of the 2020 rule. 

410See discussion in Sec. IV.D., above. 

411 Indeed, the 2020 rule treated both work 

directions and discipline as essential. See 85 FR at 

11225 & 11236 (citing Laerco Transportation, 269 

NLRB at 325). See also, e.g., Cognizant Technology 

Solutions U.S. Corp. & Google LLC, 372 NLRB No. 

108, slip op. at 1 (2023) (finding joint-employer 

relationship under 2020 rule based in part on 

entity’s maintenance of ‘‘ ‘workflow training charts’ 

which govern[ed] the details of employees’ 

performance of specific tasks.’’). 

412Accordingly, as noted above, we reject our 

colleague’s suggestion that we take common-law 

agency principles to dictate the precise contours of 

the final rule. 

common law of agency closes its mind 

to evidence of indirect control is 

unsupported by law or logic.’); see id. at 

1216 (a ‘rigid distinction between direct 

and indirect control has no anchor in 

the common law’) . . . . [W]e took great 

pains to inform the Board that the 

failure to consider reserved or indirect 

control is inconsistent with the common 

law of agency.’’ 408

In sum, the Board’s careful 

examination of relevant common-law 

principles as articulated in a 

voluminous body of primary judicial 

authority and secondary compendiums, 

reports, and restatements of these 

common-law decisions has persuaded 

us that the controlling common-law 

agency principles do not permit the 

Board to require that an entity that 

possesses authority to control also 

exercise that control, or exercise it in 

any particular way, in order to be found 

a joint employer under the Act.409

Next, our colleague contends that the 

final rule unjustifiably expands the list 

of essential terms and conditions of 

employment. Specifically, our colleague 

takes issue with our inclusion of three 

specific terms and conditions of 

employment in the exhaustive list set 

forth in Section 103.40(d): ‘‘work rules 

and directions governing the manner, 

means, and methods of the performance 

of duties and the grounds for 

discipline’’; ‘‘the tenure of employment, 

including hiring and discharge’’; and 

‘‘working conditions related to the 

safety and health of employees.’’ 

As discussed more extensively 

above,410 we find our colleague’s 

concerns regarding the final rule’s 

treatment of these terms and conditions 

of employment as essentially 

unfounded. With respect to ‘‘the tenure 

of employment, including hiring and 

discharge,’’ our colleague seems to take 

issue with the form rather than the 

substance. Indeed, the 2020 rule treated 

hiring and discharge as essential, 

making it even more evident that our 

colleague’s quarrel with our formulation 

is principally semantic. As we indicated 

previously, the phrase we have chosen 

to include in the final rule is meant to 

encompass the range of actions that 

determine an individual’s employment 

status. We reject the suggestion that our 

framing of this term of employment is 

overbroad. Similarly, our colleague does 

not seriously contend that an entity’s 

reservation or exercise of control over 

the manner, means, and methods of the 

performance of duties or the grounds of 

discipline are not essential.411 Instead, 

he focuses on our description of ‘‘work 

rules or directions’’ that address these 

aspects of particular employees’ 

performance of work, arguing that 

ambiguous language in an employee 

handbook may be used to justify a jointemployer finding. We find this concern 

misplaced and emphasize that in 

applying the final rule, we will take a 

functional approach to assessing 

whether a putative joint employer who 

meets the threshold requirement of 

having a common-law employment 

relationship with particular employees 

possesses or exercises the requisite 

control over essential terms and 

conditions of employment. 

Lastly, we part company with our 

colleague when it comes to including 

workplace health and safety as an 

essential term or condition of 

employment. In our view, it is 

appropriate to regard an entity that 

possesses or exercises control over 

workplace health and safety as a joint 

employer. As set forth above, to the 

extent an entity solely memorializes its 

compliance with legal obligations 

pertaining to health and safety, it will 

not for that reason alone be regarded as 

a joint employer. However, and contrary 

to our colleague, we believe that entities 

that exercise discretion over particular 

employees’ workplace health and safety 

are properly treated as joint employers. 

We believe that common-law employers 

of particular employees that have 

authority to exercise discretion over 

those employees’ workplace health and 

safety are properly treated as joint 

employers because employees’ ability to 

bargain with all of the entities that may 

exercise such control is central to the 

Act’s protection of employees’ collective 

rights. 

Our colleague argues that setting forth 

an exhaustive list of essential terms and 

conditions of employment in the final 

rule nevertheless fails to address the 

District of Columbia Circuit’s concerns 

in BFI about the Board’s treatment of 

forms of indirect control when applying 

the joint-employer standard. Our 

colleague misstates our rationale for 

closing the list of essential terms and 

conditions of employment. After 

carefully considering the views of 

commenters, we have included an 

exhaustive list of essential terms and 

conditions of employment in the final 

rule to ensure that any required 

bargaining would be meaningful. By 

contrast, we incorporate the District of 

Columbia Circuit’s views regarding the 

forms of indirect control that bear on the 

joint-employer inquiry in § 103.40(e) 

and (f) of the final rule. In this regard, 

the final rule is faithful to the District 

of Columbia Circuit’s guidance 

regarding the need for a limiting 

principle to ensure the joint-employer 

standard remains within common-law 

boundaries. 

The dissent next argues that the 

majority does not set forth a substantial 

policy justification for rescinding and 

replacing the 2020 rule. The dissent 

argues that because the majority focuses 

on the common-law shortcomings of the 

2020 rule, it pays insufficient heed to 

commenters’ policy-based objections to 

the final rule. 

As noted at the outset, while we are 

persuaded that the 2020 rule should be 

rescinded because it is at odds with 

common-law agency principles, we 

have stated repeatedly that we would 

nevertheless rescind the 2020 rule and 

replace it with the final rule for policy 

reasons.412 We reiterate that position 

here. In our view, the joint-employer 

standard we adopt today is more 

consistent with Section 1 of the Act and 

will better facilitate effective collective 

bargaining than the standard set forth in 

the 2020 rule. Our colleague’s 

contention that we have not made a 

policy-based decision for changing our 

approach to determining joint-employer 

status under the Act is therefore 

unfounded. 

In addition, the dissent contends that 

the majority does not offer a satisfactory 

response to those commenters who take 

the view that the final rule will 

adversely affect employers in particular 

industries or sectors, including the 

building and construction industry, the 

franchise industry, the staffing industry, 

and the healthcare sector. As discussed 

more extensively in Section IV.D., 

above, we are of the view that the Act— 

by referring generally to ‘‘employers’’ 

and ‘‘employees’’ and by effectively 

incorporating the common-law 

definition of those terms—requires the 

Board to apply a uniform joint-employer 

standard to all entities that fall within 


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413 Ford Motor Co., Chicago Stamping Plant v. 

NLRB, 441 U.S. 488, 501–503 (1979). 

414 In this respect, the final rule will help avoid 

the scenario our colleague describes where courts 

bind entities later found to be joint employers to 

collective-bargaining agreements they ‘‘neither 

negotiated nor signed.’’ 415BFI v. NLRB, 911 F.3d at 1221. 

the Board’s jurisdiction. For this reason, 

we have declined several commenters’ 

requests for the Board to exempt certain 

industries from the coverage of the final 

rule. However, we are mindful that 

applying the final rule will require 

sensitivity to industry-specific norms 

and practices, and we will take any 

relevant industry-specific context into 

consideration when considering 

whether an entity is a joint employer. 

Our dissenting colleague also takes 

the position that the final rule will 

frustrate bargaining and undermine the 

policies of the Act favoring the 

resolution of labor disputes and the 

promotion of stable bargaining 

relationships. In this regard, he offers 

several hypotheticals that he suggests 

illustrate the potential for the final rule 

to be applied in a manner that will 

frustrate effective collective bargaining 

by extending joint-employer obligations 

to entities whose control over terms and 

conditions of employment is too 

attenuated to warrant their participation 

in bargaining. 

We respectfully disagree with our 

dissenting colleague’s view of how the 

final rule will operate. In reciting the 

standard set forth in the final rule, our 

colleague elides the threshold 

significance of § 103.40(a), which 

requires a party seeking to demonstrate 

the existence of a joint-employment 

relationship to make an initial showing 

that the putative joint employer has a 

common-law employment relationship 

with particular employees. Because the 

application of the final rule will be 

limited to entities who are common-law 

employers, many of the hypothetical 

scenarios our colleague suggests will 

give rise to a joint-employer finding 

cannot arise. For example, as noted 

above, an entity may control a term of 

employment to which a bargaining duty 

attaches but not possess or exercise the 

requisite control over the performance 

of the work to be regarded as a commonlaw employer. For example, while the 

Supreme Court has recognized that an 

employer has a duty to bargain over inplant food service and prices,413 that 

fact alone will not support a finding that 

the third-party contractor who supplies 

the food, and codetermines pricing, is a 

joint employer. Instead, § 103.40(a) of 

the final rule establishes a threshold 

requirement that a putative joint 

employer must be the common-law 

employer of particular employees. 

Absent evidence that an entity is the 

common-law employer of particular 

employees, then, there is no basis for a 

joint-employer finding under the final 

rule. Accordingly, there is no risk that 

the final rule will be applied broadly to 

encompass entities whose relationship 

to the performance of the work is clearly 

too attenuated to support finding that 

they are common-law employers, as our 

dissenting colleague fears. 

In addition to these hypotheticals 

concerning the application of the final 

rule, our colleague makes several 

predictions about how the final rule will 

affect particular businesses. Our 

colleague repeats the contention raised 

by several commenters (and addressed 

more fully above) that the possibility of 

conflict among joint employers will 

complicate bargaining and lead to worse 

outcomes for employees. As an initial 

matter, we question our colleague’s 

suggestion that the final rule will make 

it more difficult for parties to reach 

agreements. Instead, we are persuaded 

that a standard that ensures that those 

entities who possess or exercise control 

over particular employees’ essential 

terms and conditions of employment are 

present for bargaining will help avoid 

fruitless negotiations. In our view, 

aligning employers’ responsibilities 

under the Act with their authority to 

control terms and conditions of 

employment will lead to better 

outcomes overall. Ensuring that the 

necessary parties may all have a seat at 

the bargaining table will also empower 

entities who have chosen to 

contractually retain or exercise control 

over particular employees’ essential 

terms and conditions of employment to 

formalize their responsibilities and 

protect their interests in collectivebargaining agreements they also 

negotiate and sign.414 Further, we 

observe that, even assuming arguendo 

that our colleague’s concern about the 

potential difficulties associated with 

joint-employer bargaining were valid, 

such difficulties would arise under any 

joint-employer standard, and 

accordingly do not support specific 

criticism of the current final rule. 

Finally, our dissenting colleague 

contends that the final rule is arbitrary 

and capricious under the 

Administrative Procedure Act for 

several reasons. First, he argues that the 

majority has failed to respond to 

significant points urged by commenters. 

We reject this characterization and note 

our extensive discussion of the points 

urged by commenters in Section IV.D., 

above. Not only did we respond to 

commenters’ significant arguments, we 

also made adjustments to the text of the 

final rule in response to commenters’ 

valuable input. We are confident that 

the final rule is stronger and will 

provide better guidance to regulated 

parties because of the helpful public 

input we received and the changes we 

made in light of commenters’ views. 

Next, our colleague argues that the 

final rule ‘‘offers no greater certainty or 

predictability than adjudication, and it 

will not reduce litigation.’’ As discussed 

in Section IV.D. above, we are of the 

view that the final rule will reduce 

uncertainty by codifying the general 

principles that will guide the Board in 

making joint-employer determinations. 

While the final rule does not purport to 

anticipate the myriad arrangements 

under which entities possess or exercise 

control over particular employees’ 

essential terms and conditions of 

employment, it offers a framework for 

analyzing such questions that is rooted 

in common-law agency principles and 

ensures greater predictability by offering 

an exhaustive list of the essential terms 

and conditions of employment that may 

give rise to a joint-employer finding and 

detailing the forms of control that the 

Board will treat as probative of jointemployer status. In this regard, we 

respectfully disagree with our 

colleague’s suggestion that ‘‘[t]his is 

precisely how the determinations would 

be made if there were no rule at all.’’ 

Finally, to the extent our colleague’s 

criticism amounts to an observation that 

the final rule will need to be applied on 

a case-by-case basis moving forward, we 

observe that the same can be said for the 

2020 rule, which also required the 

Board to apply the joint-employer 

standard in diverse contexts based on 

the particular evidence put forward by 

a party seeking to establish jointemployer status. Moreover, as the 

District of Columbia Circuit has 

observed, it is appropriate for the Board 

to ‘‘flesh out the operation of a legal test 

that Congress has delegated to the Board 

to administer’’ on an ongoing, case-bycase basis.415

Ultimately, our colleague concludes 

that the final rule must be arbitrary and 

capricious because, given his view that 

common-law agency principles do not 

compel the Board to rescind and replace 

the 2020 rule, the final rule is ‘‘legally 

erroneous.’’ As we have discussed in 

detail above, the great weight of 

common-law authority supports our 

conclusion that the 2020 rule is contrary 

to common-law agency principles in 

requiring that an entity actually exercise 

control over another employer’s 

employees in order to be found to be a 

joint employer. In any case, as we have 


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416Browning-Ferris Industries of California, Inc., 

d/b/a BFI Newby Island Recyclery, 362 NLRB 1599 

(2015) (BFI). 417 Id. at 1647 (Members Miscimarra and Johnson, 

dissenting). 418 Id. at 1609 (stating the BFI majority’s view that 

requiring direct and immediate control ‘‘is not 

mandated by the Act’’). 419 Id. at 1614 (‘‘The right to control . . . is 

probative of joint-employer status, as is the actual 

exercise of control, whether direct or indirect.’’). 

420 Id. 

421 Id. 

422 85 FR 11184 (Feb. 26, 2020) (codified at 29 

CFR 103.40). 

423Browning-Ferris Industries of California, Inc. 

v. NLRB, 911 F.3d 1195, 1216 (D.C. Cir. 2018). 

424NLRA Sec. 1. 

425BFI, 362 NLRB at 1619 (Members Miscimarra 

and Johnson, dissenting). Moreover, because jointemployer status makes an otherwise neutral 

business primary for purposes of Sec. 8(b)(4) of the 

Act, the union that represents CleanCo’s 

maintenance employees would not be limited to 

picketing CleanCo’s headquarters but could 

lawfully picket all one hundred clients. 

also explained above, we would rescind 

and replace the 2020 rule for policy 

reasons even if we had not concluded 

that its actual-exercise requirement were 

precluded by the Act’s incorporation of 

common-law agency principles. We 

accordingly respectfully disagree with 

our colleague’s contention that the final 

rule is arbitrary and capricious under 

the Administrative Procedure Act. 

VII. Dissenting View of Member Kaplan 

My colleagues have accomplished 

something truly remarkable. They have 

come up with a standard for 

determining joint-employer status that 

is potentially even more catastrophic to 

the statutory goal of facilitating effective 

collective bargaining, as well as more 

potentially harmful to our economy, 

than the Board’s previous standard in 

Browning-Ferris Industries.416 As the 

dissent noted in Browning-Ferris, the 

joint-employer standard the Board 

adopted in that decision not only 

‘‘affect[ed] multiple doctrines central to 

the Act’’ but had ‘‘potentially massive 

economic implications.’’ 417 The final 

rule the majority issues today, 

concerningly, goes beyond BFI in 

several ways. BFI went no further than 

to assert that the ‘‘direct and immediate 

control’’ standard of pre-BFI precedent 

is not compelled by the National Labor 

Relations Act (NLRA or the Act); the 

majority now claims that it is statutorily 

impermissible.418 BFI held that 

contractually reserved but unexercised 

control and indirect control are 

probative of joint-employer status; 419

the majority now makes them 

dispositive of that status. BFI recognized 

that ‘‘of course,’’ the ‘‘existence, extent, 

and object of a putative joint employer’s 

control . . . all may present material 

issues’’ in a joint-employer 

determination; 420 the majority removes 

the term ‘‘extent.’’ Under their final 

rule, joint-employer status is established 

if control exists (even if only potentially 

or indirectly) and if the object of control 

is an essential term and condition of 

employment of another entity’s 

employees, regardless of the extent of 

that control. Put differently, the final 

rule eliminates the second step of the 

BFI standard, which required the Board 

to determine whether the extent of a 

putative joint-employer’s control over 

the terms and conditions of employment 

of another business’s employees was 

sufficient ‘‘to permit meaningful 

collective bargaining.’’ 421

As explained below, the majority’s 

final rule effects an unprecedented and 

unwarranted expansion of the Board’s 

joint-employer doctrine. The majority 

misapprehends common-law agency 

principles in holding that those 

principles compel the Board to rescind 

its 2020 Rule on Joint Employer Status 

Under the National Labor Relations Act 

(the 2020 Rule) 422 and replace it with 

a joint-employer standard not seen 

anywhere else in the law. My colleagues 

dispense with any requirement that a 

company has actually exercised any 

control whatsoever (much less 

substantial control) over the essential 

terms and conditions of another 

company’s employees. Under the final 

rule, an entity’s mere possession of a 

never-exercised contractual reservation 

of right to control a single essential term 

and condition of employment of another 

business’s employees makes that entity 

a joint employer of those employees. So 

does its ‘‘indirect’’ control of an 

essential term and condition, a term my 

colleagues fail to define or otherwise 

cabin. As I will show, these standards 

(in the words of the United States Court 

of Appeals for the District of Columbia 

Circuit) ‘‘oversho[o]t the common-law 

mark.’’ 423

My colleagues claim that their final 

rule effectuates ‘‘the policy of the 

United States to eliminate the causes of 

certain substantial obstructions to the 

free flow of commerce . . . by 

encouraging the practice and procedure 

of collective bargaining,’’ 424 but in 

reality it will frustrate national labor 

policy by placing at the bargaining table 

a second ‘‘employer’’ that has never 

exercised any control over the 

employment terms of another entity’s 

employees. Indeed, it may place many 

more than just two such ‘‘employers’’ at 

the bargaining table. To borrow a 

hypothetical from the BFI dissent, 

suppose CleanCo is in the business of 

supplying maintenance employees to 

clients to clean their offices. Suppose 

further that CleanCo supplies employees 

to one hundred clients, and that each 

CleanCo-client contract contains a 

provision that gives the client the right 

to prohibit, on health and safety 

grounds, CleanCo’s employees from 

using particular cleaning supplies. 

Because the clients possess a 

contractually reserved authority to 

control ‘‘working conditions related to 

the safety and health of employees’’—an 

essential employment term newly 

invented by my colleagues—each of 

those one hundred clients would be a 

joint employer of CleanCo’s employees. 

Now, suppose a union wins an election 

in an employer-wide unit of CleanCo’s 

maintenance employees. Because all 

one hundred clients jointly employ 

those employees, all one hundred 

would be compelled to participate in 

collective bargaining. As the dissenters 

in BFI put it, ‘‘no bargaining table is big 

enough to seat all of the entities that 

will be potential joint employers under 

the majority’s new standards.’’ 425

My colleagues repeatedly insist that 

their approach—specifically, 

eliminating the requirement of proof 

that an entity has actually exercised 

control over another entity’s employees 

before it can be deemed their joint 

employer—is the only permissible one 

under the common law and the Act. In 

response to commenters who point out 

the significant negative effects that an 

expanded joint-employer standard will 

have on businesses in wide variety of 

sectors, they repeatedly say that it 

cannot be helped because their 

approach is statutorily compelled. 

Accordingly, they provide no 

substantive response to these 

commenters’ weighty objections. 

Moreover, because my colleagues insist 

that their hands are tied and fail to 

acknowledge that common-law agency 

principles, and therefore the Act, permit 

the 2020 Rule, they fail to engage in any 

real policy-based choice between 

competing alternatives. Consequently, 

the final rule must stand or fall on the 

majority’s assertion that their position is 

compelled by the common law and 

hence the only permissible construction 

of the Act. It falls. Indeed, not only is 

their position—i.e., that the actualexercise requirement is impermissible— 

not compelled by the common law, it 

results in a final rule that exceeds the 

limits of the common law, as I will 

show. In any event, the courts have 

made clear that the Board may adopt a 

joint-employer standard under the 

NLRA that does not extend to the 

outermost limits of the common law. 

Even accepting for argument’s sake that 


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426NLRB v. United Insurance Co. of America, 390 

U.S. 254, 256 (1968). 427CNN America, Inc., 361 NLRB 439, 441 (2014) 

(citing TLI, Inc., 271 NLRB 798, 798 (1984)), enf. 

denied in part 865 F.3d 740 (D.C. Cir. 2017). The 

‘‘share or codetermine’’ standard was first stated by 

the United States Court of Appeals for the Third 

Circuit in NLRB v. Browning-Ferris Industries of 

Pennsylvania, Inc., 691 F.2d 1117, 1123 (3d Cir. 

1982). As the D.C. Circuit observed in its 2018 

decision reviewing BFI, after the Third Circuit 

formulated the ‘‘share or codetermine’’ standard, 

the Board and the courts began coalescing around 

it. Browning-Ferris Industries of California, Inc. v. 

NLRB, 911 F.3d at 1201. 

428See Northwestern University, 362 NLRB 1350, 

1352 (2015) (declining to assert jurisdiction over 

Northwestern University football players who 

receive grant-in-aid scholarships, even assuming 

they are statutory employees, due to the nature and 

structure of the NCAA Division I Football Bowl 

Subdivision); Brevard Achievement Center, 342 

NLRB 982, 983–985 (2004) (declining to exercise 

the majority’s rule does not exceed the 

common law’s boundaries, compelling 

policy considerations counsel against its 

promulgation and in favor of leaving the 

2020 Rule in place. Because I would 

retain that rule, I dissent. 

Background 

In determining, under the Act, 

whether an employment relationship 

exists between an entity and employees 

directly employed by a second entity, 

common-law agency principles are 

controlling.426 Under those principles, 

the Board will find that two separate 

entities are joint employers of 

employees directly employed by only 

one of them if the evidence shows that 

they share or codetermine those matters 

governing the employees’ essential 

terms and conditions of employment.427

For many years, the Board, with court 

approval, held that a determination that 

two or more entities share or 

codetermine such matters requires proof 

that a putative joint employer has 

actually exercised substantial direct and 

immediate control over one or more 

essential terms and conditions of 

employment of another entity’s 

employees. See Summit Express, Inc., 

350 NLRB 592, 592 n.3 (2007) (finding 

that the General Counsel failed to prove 

direct and immediate control and 

therefore dismissing joint-employer 

allegation); Airborne Express, 338 NLRB 

597, 597 n.1 (2002) (holding that ‘‘the 

essential element’’ in a joint-employer 

analysis ‘‘is whether a putative joint 

employer’s control over employment 

matters is direct and immediate’’) (citing 

TLI, Inc., 271 NLRB 798, 798–799 

(1984)); Laerco Transportation, 269 

NLRB 324, 325–326 (1984) (dismissing 

joint-employer allegation where user 

employer’s supervision of supplied 

employees was limited and routine); see 

also NLRB v. CNN America, Inc., 865 

F.3d at 748–751 (finding that the Board 

erred by failing to adhere to its ‘‘direct 

and immediate control’’ standard); SEIU 

Local 32BJ v. NLRB, 647 F.3d 435, 442– 

443 (2d Cir. 2011) (‘‘ ‘An essential 

element’ of any joint employer 

determination is ‘sufficient evidence of 

immediate control over the 

employees.’ ’’) (quoting Clinton’s Ditch 

Co-op Co. v. NLRB, 778 F.2d 132, 138 

(2d Cir. 1985)). Under this precedent, an 

entity’s unexercised contractual 

reservation of a right to control or 

indirect control/influence was 

insufficient to establish joint-employer 

status. 

In 2015, a divided Board significantly 

lowered the bar for proving a jointemployer relationship in BFI, 362 NLRB 

at 1599. There, a Board majority 

retained the ‘‘share or codetermine’’ 

standard but eliminated the preexisting 

requirement of proof that a putative 

joint employer had exercised direct and 

immediate control over essential terms 

and conditions of employment. Id. at 

1613–1614. The BFI majority created a 

new two-step standard. At step one, the 

inquiry was ‘‘whether there is a 

common-law employment relationship 

with the employees in question.’’ Id. at 

1600. If so, the analysis proceeded to a 

second step, where the Board was to 

determine ‘‘whether the putative joint 

employer possesses sufficient control 

over employees’ essential terms and 

conditions of employment to permit 

meaningful collective bargaining.’’ Id. In 

addition, the BFI majority held that a 

joint-employer relationship could be 

based solely on an unexercised 

contractual reservation of right to 

control and/or indirect control. In other 

words, the BFI majority expanded the 

joint-employer doctrine to potentially 

include in the collective-bargaining 

process an employer’s independent 

business partner that has an indirect or 

merely potential impact on the 

employees’ essential terms and 

conditions of employment, even where 

the business partner has not itself 

actually established any of those 

essential employment terms or 

collaborated with the undisputed 

employer in setting them. 

The defining feature of the Board’s 

BFI standard was its elimination of the 

preexisting requirement of proof that a 

putative joint employer actually 

exercised substantial direct and 

immediate control over the essential 

terms and conditions of another 

company’s employees. The Court of 

Appeals for the District of Columbia 

Circuit (the D.C. Circuit) did not uphold 

that defining feature. It expressly left 

undecided whether indirect control or 

contractually-reserved-but-unexercised 

authority to control could, standing 

alone, establish joint-employer status. 

As the court stated, ‘‘because the Board 

relied on evidence that Browning-Ferris 

both had a ‘right to control’ and had 

‘exercised that control,’ this case does 

not present the question whether the 

reserved right to control, divorced from 

any actual exercise of that authority, 

could alone establish a joint-employer 

relationship.’’ Browning-Ferris 

Industries of California, Inc. v. NLRB, 

911 F.3d at 1213 (internal citation 

omitted). Similarly, the court said that 

‘‘whether indirect control can be 

‘dispositive’ is not at issue in this case 

because the Board’s decision turned on 

its finding that Browning-Ferris 

exercised control ‘both directly and 

indirectly.’ ’’ Id. at 1218. 

After canvassing common-law agency 

principles, the D.C. Circuit upheld ‘‘as 

fully consistent with the common law 

the [BFI] Board’s determination that 

both reserved authority to control and 

indirect control can be relevant factors 

in the joint-employer analysis.’’ Id. at 

1222 (emphasis added). Although the 

court held that contractually reserved 

control and indirect control can 

contribute to a joint-employer finding, it 

declined to reach the question of 

whether either one could independently 

establish joint-employer status. 

The D.C. Circuit made several other 

important points that subsequently 

informed the 2020 Rule. First, the court 

made clear that the common law sets 

the outer limit of a permissible jointemployer standard under the Act, 

without suggesting in any way that the 

Board’s standard must or should be 

coextensive with that outer limit. ‘‘The 

policy expertise that the Board brings to 

bear on applying the National Labor 

Relations Act to joint employers is 

bounded by the common-law’s 

definition of a joint employer. The 

Board’s rulemaking, in other words, 

must color within the common-law lines 

identified by the judiciary.’’ Id. at 1208 

(emphasis added). Hence, while it is 

clear that the Board is precluded from 

adopting a more expansive jointemployer doctrine than the common 

law permits, it may adopt a narrower 

standard that promotes the Act’s 

policies. This is a point that was 

recognized by the Board majority in BFI 

itself. BFI, 362 NLRB at 1613 (‘‘The 

common-law definition of an 

employment relationship establishes the 

outer limits of a permissible jointemployer standard under the Act.’’). 

Indeed, the Board, with court approval, 

has long made policy choices not to 

exercise the full extent of its 

jurisdiction, including as to particular 

classes of employment relationships.428


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jurisdiction over disabled workers whose 

relationship with an employer is ‘‘primarily 

rehabilitative’’ as opposed to ‘‘typically industrial’’ 

because ‘‘Congress did not intend that the Act 

govern’’ the former); Brown University, 342 NLRB 

483, 493 (2004) (dismissing representation petition 

based on the ‘‘belief that the imposition of 

collective bargaining on graduate students would 

improperly intrude into the educational process 

and would be inconsistent with the purposes and 

policies of the Act’’), overruled on policy grounds 

by Columbia University, 364 NLRB 1080 (2016); 

Siemons Mailing Service, 122 NLRB 81 (1959) 

(describing Board’s discretionary commerce 

standard). 

In sum, even if the majority’s final rule does not 

exceed the bounds of the common law, the Board 

possesses discretion to adopt, for sound policy 

reasons, a standard that excludes from jointemployer status entities that have never actually 

exercised control over the terms and conditions of 

employment of another employer’s employees. 

Moreover, although my colleagues and I agree that 

the joint-employer standard is bounded by the 

common law, they point to no authority (nor can 

they) for the proposition that the Act compels the 

Board to extend joint-employer status to the 

outermost limits permissible under the common 

law. 

429On remand, the Board found that retroactive 

application of any refined standard would be 

manifestly unjust. The Board therefore dismissed 

the complaint and amended the certification of 

representative to remove BFI as a joint employer. 

Browning-Ferris Industries of California, Inc. d/b/a 

BFI Newby Island Recyclery, 369 NLRB No. 139, 

slip op. at 1 (2020). Thereafter, a divided Board 

denied the union’s motion for reconsideration. 

Browning-Ferris Industries of California, Inc. d/b/a 

BFI Newby Island Recyclery, 370 NLRB No. 86 

(2021). 

On further review, the D.C. Circuit found the 

Board’s retroactivity analysis erroneous, granted the 

union’s petition for review, vacated the Board’s 

order dismissing the complaint and amending the 

certification of representative, and remanded the 

case to the Board for further proceedings consistent 

with the court’s opinion. Sanitary Truck Drivers & 

Helpers Local 350, International Brotherhood of 

Teamsters v. NLRB, 45 F.4th 38 (D.C. Cir. 2022). 

The case is presently pending before the Board. 

Second, the D.C. Circuit made clear 

that, under the common law, the 

standard for determining independentcontractor status, with its emphasis on 

the right to control the manner and 

means of performance, is different from 

the joint-employer standard: ‘‘[T]he 

independent-contractor and jointemployer tests ask different questions. 

The independent-contractor test 

considers who, if anyone, controls the 

worker other than the worker herself. 

The joint-employer test, by contrast, 

asks how many employers control 

individuals who are unquestionably 

superintendent.’’ 911 F.3d at 1214. In 

this regard, the court explained that ‘‘a 

rigid focus on independent-contractor 

analysis omits the vital second step in 

joint-employer cases, which asks, once 

control over the workers is found, who 

is exercising that control, when, and 

how.’’ Id. at 1215; see also Redd v. 

Summers, 232 F.3d 933, 937–938 (D.C. 

Cir. 2000) (expressing doubt that 

independent-contractor precedent is 

well suited to address issues of joint 

employment). Accordingly, ‘‘the vital 

second step’’ of a common-law jointemployer analysis does indeed focus on 

the exercise of control, including its 

form, frequency, and extent. 

Third, the D.C. Circuit held that the 

BFI decision’s treatment of the indirectcontrol factor contravened the common 

law. Browning-Ferris Industries of 

California, Inc. v. NLRB, 911 F.3d at 

1221. Specifically, the court concluded 

that the BFI decision had ‘‘overshot the 

common-law mark’’ by failing to 

distinguish evidence of indirect control 

that bears on workers’ essential terms 

and conditions of employment from 

evidence that simply documents the 

routine parameters of company-tocompany contracting. Id. at 1216. The 

court explained that, for example, it 

would be inappropriate to give any 

weight in a joint-employer analysis to 

the fact that Browning-Ferris had 

controlled the basic contours of a 

contracted-for service, such as by 

requiring four lines’ worth of employee 

sorters plus supporting screen cleaners 

and housekeepers. Id. at 1220–2221. 

Finally, and importantly, the court 

held that the Board had erred by failing 

to apply the second step of its two-step 

standard: whether the putative joint 

employer possesses sufficient control 

over employees’ essential terms and 

conditions of employment to permit 

meaningful collective bargaining. The 

court rebuked the Board for ‘‘never 

delineat[ing] what terms and conditions 

of employment are ‘essential,’ ’’ for 

adopting an ‘‘inclusive’’ and ‘‘nonexhaustive’’ approach to the meaning of 

‘‘essential terms,’’ and for failing to 

clarify what ‘‘meaningful collective 

bargaining’’ might require. Id. at 1221– 

1222. The court remanded the case to 

the Board for further proceedings 

consistent with the court’s opinion.429

The 2020 Joint-Employer Rule 

Against this background, the Board in 

2020 promulgated a joint-employer rule 

that was clear and consistent with 

common-law agency principles. The 

2020 Rule provided much needed 

guidance to the regulated community. It 

adopted the universally accepted 

general formulation of the jointemployer standard that an entity may be 

considered a joint employer of a 

separate entity’s employees only if the 

two entities share or codetermine the 

employees’ essential terms and 

conditions of employment. The 2020 

Rule then further defined that standard 

in a manner that eliminated the 

unjustified features introduced in BFI. 

The 2020 Rule explained that to show 

that an entity shares or codetermines the 

essential terms and conditions of 

another employer’s employees, ‘‘the 

entity must possess and exercise such 

substantial direct and immediate control 

over one or more essential terms or 

conditions of their employment as 

would warrant finding that the entity 

meaningfully affects matters relating to 

the employment relationship with those 

employees.’ ’’ 85 FR at 11186 & 11236. 

The Board defined ‘‘substantial direct 

and immediate control’’ to mean ‘‘direct 

and immediate control that has a regular 

or continuous consequential effect on an 

essential term or condition of 

employment of another employer’s 

employees.’’ Id. at 11203–11205 & 

11236. The 2020 Rule also specified that 

control is not ‘‘substantial’’ if it is ‘‘only 

exercised on a sporadic, isolated, or de 

minimis basis.’’ Id. at 11236. 

The 2020 Rule recognized that certain 

other forms of control and authority to 

control play an appropriately limited 

role in the joint-employer analysis. It 

deemed probative of joint-employer 

status evidence of an entity’s indirect 

control over essential terms and 

conditions of employment of another 

employer’s employees, the entity’s 

contractually reserved but never 

exercised authority over the essential 

terms and conditions of employment of 

another employer’s employees, and the 

entity’s control over mandatory subjects 

of bargaining other than the essential 

terms and conditions of employment. 

Id. But those types of control could tend 

to support a finding of joint-employer 

status ‘‘only to the extent [they] 

supplement[ed] and reinforce[d] 

evidence of the entity’s possession or 

exercise of direct and immediate control 

over a particular essential term and 

condition of employment.’’ Id. They 

could not, standing alone, establish 

joint-employer status. 

The Board also made clear that the 

2020 Rule was not intended to 

immunize an entity from joint-employer 

status through use of an intermediary to 

exercise control, explaining that 

‘‘[d]irect and immediate control 

exercised through an intermediary 

remains direct and immediate.’’ Id. at 

11209 (citing Browning-Ferris Industries 

of California, Inc. v. NLRB, 911 F.3d at 

1217 (‘‘[T]he common law has never 

countenanced the use of intermediaries 

or controlled third parties to avoid the 

creation of a master-servant 

relationship.’’)). 

In response to the court’s criticism of 

the Board’s failure to define what 

constitutes ‘‘essential terms and 

conditions of employment’’ in BFI, the 

2020 Rule defined a closed set of terms 

and conditions of employment: wages, 


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73990 Federal Register / Vol. 88, No. 207 / Friday, October 27, 2023 / Rules and Regulations 

430Citations in this paragraph to the Code of 

Federal Regulations refer to the regulations in place 

before the amendments made by the majority’s final 

rule. 

431 ‘‘The Standard for Determining Joint Employer 

Status,’’ 83 FR 46681, 46688 (2018) (then-Member 

McFerran, dissenting). 

432See Hy-Brand Industrial Contractors, Ltd. & 

Brandt Construction Co., 365 NLRB No. 156, slip 

op. at 40 (2017) (Member Pearce and then-Member 

McFerran, dissenting) (‘‘What is the justification for 

overruling BFI after just [two] years[?] . . . . [A]fter 

a mere [two] years, any accounting of BFI’s effects 

would be premature; indeed, before it was 

overruled today, BFI has been applied by the Board 

in only one other Board decision. The complete 

absence of relevant experience under BFI 

underscores the essentially reflexive nature of 

today’s exercise.’’), vacated 366 NLRB No. 26 

(2018). 

433The majority states that ‘‘the joint employer 

standard that [they] adopt today removes artificial 

control-based restrictions with no foundation in the 

common law that the Board has previously imposed 

in cases beginning in the mid-1980s discussed 

above, and in the 2020 Final Rule.’’ In its 2022 

Notice of Proposed Rulemaking (NPRM), the 

majority identified those control-based restrictions 

as ‘‘restrictions requiring (1) that a putative joint 

employer ‘actually’ exercise control, (2) that such 

control be ‘direct and immediate,’ and (3) that such 

control not be ‘limited and routine.’ ’’ 87 FR 54641, 

54643. 

benefits, hours of work, hiring, 

discharge, discipline, supervision, and 

direction. 29 CFR103.40(b).430 The 2020 

Rule further specified how direct and 

immediate control would be determined 

with respect to each essential term, 

providing concrete examples. Id. 

§ 103.40(c)(1) through (8). For example, 

with respect to hiring, the 2020 Rule 

provided that ‘‘[a]n entity exercises 

direct and immediate control over 

hiring if it actually determines which 

particular employees will be hired and 

which employees will not. An entity 

does not exercise direct and immediate 

control over hiring by requesting 

changes in staffing levels to accomplish 

tasks or by setting minimal hiring 

standards such as those required by 

government regulation.’’ Id. 

§ 103.40(c)(4). And with respect to 

supervision, ‘‘[a]n entity exercises direct 

and immediate control over supervision 

by actually instructing another 

employer’s employees how to perform 

their work or by actually issuing 

employee performance appraisals,’’ but 

it does not do so by providing 

‘‘instructions [that] are limited and 

routine and consist primarily of telling 

another employer’s employees what 

work to perform, or where and when to 

perform the work, but not how to 

perform it.’’ Id. § 103.40(c)(7). 

Taken together, the features of the 

2020 Rule were intended to ensure that 

an entity would be found to be a joint 

employer of another employer’s 

employees if (and only if) it had played 

an active and substantial role in hiring, 

supervising, or directing those 

employees, in setting their work hours, 

wages or benefits, and/or in disciplining 

or discharging them. Of course, an 

entity could be found to be a joint 

employer if it had taken only one of 

these actions (either on its own or in 

collaboration with the employees’ 

undisputed employer), but there was a 

substantiality requirement, a threshold 

of extent of control that had to be 

crossed. In this way, the Board 

addressed the court’s concern that the 

Board had failed in BFI to ensure that 

the extent of the purported joint 

employer’s control over the terms and 

conditions of employment of the direct 

employer’s employees was sufficient to 

make that entity’s participation in 

collective bargaining necessary for 

meaningful bargaining to take place. 

The Board explained that the 2020 

Rule was consistent with common-law 

agency principles and promoted the 

Act’s policies by imposing bargaining 

obligations only on entities that actually 

control essential working conditions 

and by establishing a ‘‘discernible and 

predictable’’ standard to guide regulated 

parties, stating as follows: 

The Board believes a standard that requires 

an entity to possess and exercise substantial 

direct and immediate control over essential 

terms and conditions of employment is 

consistent with the purposes and policies of 

the Act . . . . The Act’s purpose of 

promoting collective bargaining is best 

served by a joint-employer standard that 

places at the bargaining table only those 

entities that control terms and conditions 

that are most material to collective 

bargaining. Moreover, a less demanding 

standard would unjustly subject innocent 

parties to liability for others’ unfair labor 

practices and coercion in others’ labor 

disputes. A fuzzier standard with no bright 

lines would make it difficult for the Board to 

distinguish between arm’s-length contracting 

parties and genuine joint employers. 

Accordingly, preserving the element of direct 

and immediate control over essential terms 

and conditions draws a discernible and 

predictable line, providing ‘‘certainty 

beforehand’’ for the regulated community. 

85 FR 11205. 

The Majority’s Final Rule 

The 2020 Rule was promulgated a 

mere three-and-a-half years ago, and 

since it took effect, the Board has 

applied it exactly once. See Cognizant 

Technology Solutions U.S. Corp., 372 

NLRB No. 108 (2023) (denying Google’s 

request for review of a regional 

director’s determination under the 2020 

Rule that it is the joint employer of a 

subcontractor’s employees based on its 

exercise of substantial direct and 

immediate control over their 

supervision, benefits, and hours of 

work). Nevertheless, my colleagues have 

plowed ahead with this rulemaking, 

even though ‘‘[i]t is common knowledge 

that the Board’s limited resources are 

severely taxed by undertaking a 

rulemaking process.’’ 431 And they have 

done so despite the fact that one 

member of the current majority sharply 

criticized a prior Board majority for 

changing the joint-employer standard 

under strikingly similar 

circumstances.432

The final rule promulgated today 

makes extreme and troubling changes to 

Board law, including but not limited to 

the following revisions. The rule makes 

contractually reserved but unexercised 

control and indirect control not merely 

probative of joint-employer status (as 

did BFI), but independently sufficient to 

establish that status. It scraps what it 

characterizes as ‘‘artificial control-based 

restrictions’’ in the 2020 Rule.433 And it 

jettisons the second step of BFI’s jointemployer standard, which required 

proof that a putative joint employer 

‘‘possesses sufficient control over 

employees’ essential terms and 

conditions of employment to permit 

meaningful collective bargaining.’’ 362 

NLRB at 1600. 

The final rule starts off mundanely 

enough, declaring in paragraph (a) of 

newly revised Section 103.40 of the 

Board’s Rules & Regulations that an 

entity is an ‘‘employer’’ of particular 

employees ‘‘if the employer has an 

employment relationship with those 

employees under common-law agency 

principles.’’ Paragraph (b) provides that 

two employers of the same employees 

‘‘are joint employers’’ if ‘‘they share or 

codetermine those matters governing 

employees’ essential terms and 

conditions of employment.’’ 

Paragraph (c), which defines the 

‘‘share or codetermine’’ standard, is 

where the trouble really starts. It 

provides that ‘‘[t]o ‘share or codetermine 

those matters governing employees’ 

essential terms and conditions of 

employment’ means for an employer to 

possess the authority to control 

(whether directly, indirectly, or both), or 

to exercise the power to control 

(whether directly, indirectly, or both), 

one or more of the employees’ essential 

terms and conditions of employment.’’ 

The effect of this subsection is dramatic. 

It mandates a finding of joint-employer 

status based on the mere possession of 

authority to control, directly or 

indirectly, a single essential term (e.g., 

hours of work). The majority has 

eliminated any need for proof of actual 

exercise, much less substantial exercise, 

of control over employees’ essential 


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434Under the 2020 Rule, control exercised 

through an intermediary could establish jointemployer status if it was otherwise sufficient. 

‘‘Direct and immediate control exercised through an 

intermediary remains direct and immediate.’’ 85 FR 

at 11209 (citing Browning-Ferris Industries of 

California v. NLRB, 911 F.3d at 1217 (‘‘[T]he 

common law has never countenanced the use of 

intermediaries or controlled third parties to avoid 

the creation of a master-servant relationship.’’)). My 

colleagues and I disagree about whether to 

characterize control exercised through an 

intermediary as direct control or indirect control. In 

my view, an intermediary (e.g., a supervisor 

employed by the undisputed employer) who 

operates as a mere conduit of the putative joint 

employer’s commands functions as its agent. The 

putative joint employer there is exercising control 

even more directly than when it engages in 

collaborative decision-making with the undisputed 

employer, which is direct control. The majority’s 

reclassification of control exercised through an 

intermediary as indirect control makes little sense. 

Moreover, because the majority does not limit 

‘‘indirect control’’ to that example, they leave the 

door open to finding other kinds of indirect control. 

The important question, which my colleagues do 

not answer, is, what else will count as ‘‘indirect 

control’’? 

435Comments of Center for Law and Social 

Policy; Los Angeles County Federation of Labor 

AFL–CIO & Locals 396 and 848 of the IBT. 

436Comment of Los Angeles County Federation of 

Labor AFL–CIO & Locals 396 and 848 of the IBT 

(internal citation and quotations omitted). 

437Comment of Los Angeles County Federation of 

Labor AFL–CIO & Locals 396 and 848 of the IBT 

(internal citation and quotations omitted). 

438 In response to my criticism, the majority states 

that they ‘‘deci[ded] not to include an extensive list 

of examples of forms of indirect control that may 

be relevant to the joint-employer inquiry.’’ I am not, 

however, criticizing my colleagues for failing to 

provide ‘‘an extensive list of examples.’’ Rather, I 

observe that the majority does not identify even one 

example of such indirect control other than control 

exercised through an intermediary. Given that the 

majority makes indirect control sufficient to 

establish joint-employer status, this lack of 

guidance is a serious shortcoming. As with much 

else in the final rule, the majority leaves the 

fleshing out of ‘‘indirect control’’ to be determined 

case by case—and this leaves businesses affected by 

the new rule, and facing the complicated task of 

planning for its impact, utterly at sea. 

Relatedly, my colleagues are wrong in asserting 

that the role I give (and the 2020 Rule gave) to 

indirect control somehow conflicts with the D.C. 

Circuit’s opinion in Browning-Ferris Industries of 

California v. NLRB. In remanding that case to the 

Board to elucidate the distinction between indirect 

control that bears on essential employment terms 

and the routine parameters of business-to-business 

contracting, the court did not imply that indirect 

control could independently establish a jointemployer relationship. The court expressly 

withheld judgment on that issue. The court simply 

instructed the Board to explain the difference 

between control that is relevant to a joint-employer 

analysis and that which carries no weight at all. 

439My colleagues say that their decision to close 

the set of ‘‘essential’’ terms and conditions of 

employment is not intended to address the D.C. 

Circuit’s criticism of BFI’s failure to distinguish 

indirect control that bears on joint-employer status 

from routine aspects of company-to-company 

contracting but rather responds to the court’s 

instruction to ‘‘explain which terms and conditions 

are ‘essential’ to permit ‘meaningful collective 

bargaining,’ ’’ and to ‘‘clarify what ‘meaningful 

collective bargaining’ entails and how it works in 

this setting.’’ Browning-Ferris Industries of 

California, Inc. v. NLRB, 911 F.3d at 1221–1222 

(quoting BFI, 362 NLRB at 1600). But this 

clarification is at odds with their simultaneous 

claim that a closed set of terms and conditions 

heeds the D.C. Circuit’s request for a limiting 

principle ‘‘to ensure the joint-employer standard 

remains within common-law boundaries.’’ The D.C. 

Circuit’s directive that the standard remain within 

common-law boundaries flows directly from its 

finding that BFI ‘‘overshot the common-law mark’’ 

by failing to distinguish between indirect control 

that bears on the joint-employer inquiry and the 

routine components of company-to-company 

contracting. Accordingly, I do not mischaracterize 

their position when I point out that closing the set 

of essential terms and conditions fails to provide 

the ‘‘legal scaffolding’’ the D.C. Circuit called for. 

440AIA Document A201–2017 (cited in comment 

of Associated General Contractors of America). 

441The majority also says that Sec. 103.40(f) of 

the final rule responds to the D.C. Circuit’s 

instruction that the Board separate indirect control 

that bears on the joint-employer inquiry from 

routine components of company-to-company 

contracting. I address this claim below. 

terms. Moreover, paragraph (c) refers 

broadly to ‘‘authority to control,’’ 

without limiting it to contractually 

reserved authority. A ‘‘user’’ business 

possesses authority to indirectly control 

the hours of work of employees 

supplied to it by a ‘‘supplier’’ employer 

merely by virtue of the fact that it 

decides when it is open for business. If 

that is sufficient to make ‘‘user’’ 

businesses joint employers of supplied 

employees, then paragraph (c) of revised 

§ 103.40 makes every ‘‘user’’ business a 

joint employer. 

The final rule’s treatment of indirect 

control is similarly problematic. Given 

that possession or exercise of indirect 

control will establish a joint-employer 

relationship under § 103.40(b) and (c) of 

the final rule, it seems critically 

important for the majority to explain 

what constitutes ‘‘indirect control.’’ 

They do not do so. The final rule 

identifies control exercised through an 

intermediary as an example of ‘‘indirect 

control,’’ 434 but this necessarily implies 

that the exercise of ‘‘indirect control’’ is 

not limited to control exercised through 

an intermediary. What else might count 

as the exercise of indirect control? My 

colleagues do not say, but they take note 

of comments contending that certain 

circumstances should be regarded as 

demonstrating indirect control,435

including that franchisors necessarily 

have indirect control because they ‘‘are 

the parties with meaningful profit 

margins that could be redistributed to 

the workforce during bargaining’’ and 

because most franchisees’ revenue and 

cost variables ‘‘greatly constrain 

franchisees’ practical ability to offset 

concessions to their workers.’’ 436 The 

same commenter suggests that 

businesses that engage service 

contractors necessarily have indirect 

control because ‘‘service contractors 

rarely have room to grant wage increases 

without renegotiating their own 

contracts with clients and thus the 

clients effectively control the economic 

terms of employment for the 

contractors’ employees.’’ 437 Are these 

the kinds of circumstances that my 

colleagues have in mind as evidencing 

‘‘indirect control’’? We do not know 

because they do not say.438

Further, the final rule does not 

adequately ‘‘distinguish evidence of 

indirect control that bears on workers’ 

essential terms and conditions from 

evidence that simply documents the 

routine parameters of company-tocompany contracting.’’ Browning-Ferris 

Industries of California v. NLRB, 911 

F.3d at 1226. According to the majority, 

‘‘limiting the list of essential terms and 

conditions of employment is responsive 

to the District of Columbia Circuit’s 

request that the Board incorporate a 

limiting principle to ensure the jointemployer standard remains within 

common-law boundaries.’’ 439 But 

closing the list of essential terms and 

conditions is not enough because 

routine components of company-tocompany contracts may indirectly 

impact essential terms. For example, a 

widely used standard contract in the 

construction industry 440 includes a 

provision that makes the general 

contractor ‘‘responsible for initiating, 

maintaining, and supervising all safety 

precautions and programs in connection 

with the performance of the [c]ontract.’’ 

That clause—a routine component of 

company-to-company contracting in the 

construction industry—evidences the 

general contractor’s indirect control (at 

least) of ‘‘working conditions related to 

the safety and health of employees’’ of 

each of its subcontractors, an essential 

term and condition of employment 

under § 103.40(d)(7) of the final rule.441

Additionally, my colleagues perform 

some sleight of hand regarding the final 

rule’s treatment of what was BFI’s 

second step: proof that ‘‘the putative 

joint employer possesses sufficient 

control over employees’ essential terms 

and conditions of employment to permit 

meaningful collective bargaining.’’ 362 

NLRB at 1600. In the 2022 NPRM, my 

colleagues straightforwardly 

acknowledged that their proposed rule 

‘‘d[id] not incorporate’’ BFI’s second 

step, dubiously declaring that ‘‘any 

required bargaining under the new 

standard will necessarily be 

meaningful.’’ 87 FR at 54645 n. 26. 

Accordingly, they repudiated the BFI 

majority’s recognition that in some 

cases, a putative joint employer’s extent 

of control over the terms and conditions 

of employment of the employees of an 

undisputed employer will be 


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442As noted above, the majority also denies that 

their rule fails adequately to distinguish evidence 

of indirect control that bears on the joint-employer 

inquiry from evidence that simply documents the 

routine parameters of company-to-company 

contracting, as mandated by the D.C. Circuit, by 

pointing to § 103.40(f) of the final rule. Sec. 

103.40(f) provides that evidence of an entity’s 

control over matters that are immaterial to the 

existence of an employment relationship under 

common-law agency principles and that do not bear 

on the employees’ essential terms and conditions of 

employment is not relevant to the determination of 

whether the entity is a joint employer. In other 

words, § 103.40(f) is mostly just the inverse of Sec. 

103.40(a) and, as such, furnishes no more guidance 

than does § 103.40(a). And to the extent that it is 

not the inverse of § 103.40(a), it is the inverse of 

§ 103.40(b), which confirms that my colleagues do 

indeed take the position that by defining a closed 

set of essential terms and conditions, they have 

responded to the D.C. Circuit’s mandate. 

insufficient to warrant placing that 

entity at the bargaining table, and that 

in those circumstances, it would be 

contrary to the policies of the Act to 

find joint-employer status. 362 NLRB at 

1610–1611; id. at 1614 (‘‘The existence, 

extent, and object of a putative joint 

employer’s control, of course, all may 

present material issues.’’) (emphasis 

added). In the final rule, the majority 

takes a different route than they took in 

the NPRM, but they arrive at the same 

destination. The majority says that the 

final rule ‘‘effectively incorporates the 

second step of the Board’s jointemployer test set forth in BFI’’ because 

the final rule (unlike the proposed rule) 

makes the list of ‘‘essential’’ terms and 

conditions of employment exhaustive. 

But BFI’s second step addresses the 

extent of a putative joint employer’s 

control over essential terms and 

conditions. What constitutes essential 

terms and conditions pertains to what is 

controlled, i.e., the object of control— 

and as BFI makes clear, extent of control 

and object of control present distinct 

issues in the joint-employer analysis. 

Plainly, the final rule does not 

‘‘incorporate[ ] the second step’’ of the 

BFI standard, and this is made all the 

more apparent by newly revised 

§ 103.40(e), which provides that merely 

‘‘[p]ossessing the authority to control is 

sufficient to establish status as a joint 

employer,’’ and so is ‘‘[e]xercising the 

power to control,’’ without any 

requirement that there be a sufficient 

amount of control to permit meaningful 

collective bargaining. 

My colleagues dismiss this concern by 

saying that § 103.40(a) of the final rule 

will prevent the rule from being applied 

overbroadly ‘‘to encompass entities 

whose relationship to the performance 

of the work is clearly too attenuated.’’ 

They say that my criticism of their rule 

‘‘elides the threshold significance of 

§ 103.40(a), which requires a party 

seeking to demonstrate the existence of 

a joint-employment relationship to 

make an initial showing that the 

putative joint employer has a commonlaw employment relationship with 

particular employees.’’ But it is my 

colleagues who have failed to explain 

how § 103.40(a) functions in the jointemployer analysis. They do not explain 

what, if any, limitations it imposes on 

joint-employer determinations. They do 

not convey that it establishes some 

minimum level of control (in terms of 

extent of control over a particular term 

or condition of employment or breadth 

of control across multiple terms or 

conditions) that must be reached before 

joint-employer status is found. But even 

accepting that some unstated minimum 

quantum of authority to control is 

implicit in the threshold requirement of 

§ 103.40(a), nothing in their rule 

enlightens the regulated community 

what that minimum quantum might be. 

Like ‘‘indirect control,’’ that is left to be 

determined case by case, with the 

majority here saying, in effect, ‘‘trust us, 

we’ll be reasonable,’’ even though 

nothing in the text of the rule constrains 

the Board from drawing the line 

unreasonably. And my colleagues 

certainly do not suggest that § 103.40(a) 

implicitly sneaks an actual-exercise 

requirement in through the back door. 

Any hope in that regard is laid to rest 

by their insistence, in discussing 

§ 103.40(c), that exercise of control is 

unnecessary under the common law. In 

short, my colleagues have not blunted 

my criticism of their abandonment of 

the actual-exercise requirement by 

pointing to § 103.40(a) and its nebulous 

threshold requirement.442

In short, the combined effect of all 

these features of the final rule results in 

a dramatic expansion of the Board’s 

joint-employer doctrine compared with 

the 2020 Rule and even compared with 

the Board’s holding in BFI. At least it 

will do so if the final rule survives one 

or more of the inevitable court 

challenges it is destined to face. A 

betting person might hesitate to put 

money on its chances because, as 

demonstrated below, the final rule is 

wrong as a matter of law and 

unadvisable as a matter of policy. 

Common-Law Agency Principles Do Not 

Compel or Even Support the Final Rule 

My colleagues repeatedly and 

emphatically declare that common-law 

agency principles, and therefore the Act 

itself, preclude the 2020 Rule and 

compel their final rule. Among the 

statements they make are the following: 

• ‘‘After carefully considering nearly 

13,000 comments, the Board believes 

that it is necessary and appropriate to 

rescind the 2020 rule, which was 

contrary to the Act insofar as it was 

inconsistent with the common law of 

agency.’’ 

• ‘‘[W]e believe that the Board is 

required to rescind the 2020 rule . . . .’’ 

• ‘‘[W]e rescind the 2020 rule because 

it is inconsistent with common-law 

agency principles and therefore 

inconsistent with the National Labor 

Relations Act.’’ 

• ‘‘[B]ecause we are bound to apply 

common-law agency principles, we are 

not free to maintain a definition of ‘joint 

employer’ that incorporates the 

restriction that any relevant control an 

entity possesses or exercises be ‘direct 

and immediate.’ ’’ 

• ‘‘[T]he 2020 rule introduced 

control-based restrictions that are 

inconsistent with common-law agency 

principles.’’ 

• ‘‘[W]e are foreclosed from 

maintaining the joint-employer standard 

set forth in [the 2020 rule] because it is 

not in accordance with the common-law 

agency principles the Board is bound to 

apply in making joint-employer 

determinations.’’ 

• ‘‘[T]he Board has concluded that 

the actual-exercise requirement 

reflected in the 2020 rule is . . . 

contrary to the common-law agency 

principles that must govern the jointemployer standard under the Act and 

that the Board has no statutory authority 

to adopt such a requirement.’’ 

A reader might reasonably expect the 

majority to follow up those assertions 

with citations to judicial decisions, 

involving the NLRA and other 

materially similar statutes, in which the 

courts have found joint-employer status 

based exclusively on a never-exercised 

contractual right to control and/or 

indirect control of an essential term and 

condition of employment. Such readers 

will be sorely disappointed. The 

majority fails to cite a single judicial 

decision, much less a body of court 

precedent rising to the level of 

establishing the common law, that bases 

a joint-employer finding solely on a 

never-exercised contractual reservation 

of right to control or on indirect control 

of employees’ essential terms and 

conditions. As I will show, judicial 

precedent addressing joint-employer 

status under both the NLRA and 

materially similar statutes requires that 

control be actually exercised. And as the 

following discussion will demonstrate, 

so does Board precedent, with narrow 

exceptions. Accordingly, the majority is 

mistaken when they claim that requiring 

the exercise of substantial direct and 

immediate control to establish jointemployer status is inconsistent with 

‘‘prior Board and judicial decisions.’’ 


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443 In an earlier case related to Greyhound, the 

Supreme Court held that a federal district court 

lacked subject-matter jurisdiction to enjoin the 

Board from conducting a representation election 

based on the plaintiff’s challenge to the Board’s 

joint-employer determination in the representation 

proceeding. Boire v. Greyhound Corp., 376 U.S. 473 

(1964). Although the Court did not rule on the jointemployer issue, it did not criticize the Board’s 

finding that Greyhound and the cleaning contractor 

constituted a joint employer ‘‘because they had 

exercised common control over the employees.’’ Id. 

at 475 (emphasis added). 

444The issue here is not whether an unexercised 

contractual right of control and/or indirect control 

is or are relevant considerations in a joint-employer 

analysis. They are, as the 2020 Rule recognized. The 

issue is whether either one can independently 

establish joint-employer status. 

445As these department-store cases demonstrate, 

licensed departments were seamlessly integrated 

with the department store as a whole, and 

employees of the licensee were indistinguishable 

from the department store’s employees. See, e.g., 

Spartan Department Stores, 140 NLRB 608, 610 

(1963) (observing that the agreement between the 

department store and the licensee was ‘‘in 

furtherance of Spartan’s intention of creating the 

appearance of a single, integrated department 

store’’). Indeed, in one such case, the parties’ 

contract expressly provided that employees in the 

licensed department ‘‘shall be the employees of’’ 

the department store. Taylor’s Oak Ridge Corp., 74 

NLRB 930, 932 (1947). 

446 In the department-store cases, the Board did 

not purport to apply common-law agency 

principles, much less cite common-law cases 

finding joint-employer status based on reserved 

authority to control alone. When the Board stated 

any standard at all, it relied on whether the 

department store was in a position to influence the 

licensee’s labor relations policies. See, e.g., United 

Mercantile, Inc. d/b/a Globe Discount City, 171 

NLRB 830 (1968); Buckeye Mart, 165 NLRB 87 

(1967), enfd. mem. 405 F.2d 1211 (6th Cir. 1969); 

Value Village, 161 NLRB 603 (1966). These cases do 

not support the majority’s view that the common 

law compels a conclusion that contractually 

reserved authority to control is sufficient to make 

an entity a joint employer of another entity’s 

employees. Indeed, in Buckeye Mart, it was found 

that the department store (Buckeye) was not the 

joint employer of the employees of the licensee 

(Manley) despite possessing contractually reserved 

authority to require Manley to discharge employees 

that Buckeye deemed objectionable. 165 NLRB at 88 

(‘‘Although Buckeye may compel the discharge of 

any Manley employee . . . . Buckeye is not in a 

position to ‘influence’ Manley’s labor policies and 

. . . is not a joint employer with Manley . . . .’’). 

Accordingly, the majority’s reliance on Board cases 

involving licensing relationships in the departmentstore industry is misplaced. The majority also cites 

two cases—General Motors Corp. (Baltimore, MD), 

60 NLRB 81 (1945), and Anderson Boarding & 

Supply Co., 56 NLRB 1204 (1944)—where the issue 

was whether an industrial facility was the joint 

employer of employees working in its cafeteria. In 

neither case did the Board mention the common 

law of agency, and even if the common law was 

implicit in its analysis, two cases do not amount to 

a ‘‘traditional’’ practice. Moreover, as the D.C. 

Circuit forcefully reminded the Board in BrowningFerris Industries of California, Inc. v. NLRB, 

‘‘Congress has tasked the courts, and not the Board, 

with defining the common-law scope of 

‘employer.’ ’’ 911 F.3d at 1208. The Board, as an 

administrative agency, has no power to do so. 

The 2020 Rule was not inconsistent 

with the majority of Board precedent 

addressing joint-employer status under 

the Act. 

A survey of Board decisions 

addressing the issue of joint-employer 

status reveals that, with narrow 

exceptions, the Board has relied, at least 

in part, on the putative joint-employer’s 

actual exercise of direct control over 

terms and conditions of employment. 

Accordingly, the majority’s decision to 

make never-exercised authority to 

control or indirect control 

independently sufficient to establish 

joint-employer status represents a sharp 

break from Board precedent. 

Contrary to my colleagues’ suggestion, 

Greyhound Corp., 153 NLRB 1488 

(1965), does not support finding jointemployer status based exclusively on a 

never-exercised right to control or 

indirect control. There, the Board found 

that Greyhound was a joint employer of 

its cleaning contractor’s employees 

based in part on Greyhound’s actual 

exercise of substantial direct and 

immediate control over the employees’ 

essential terms and conditions of 

employment. Specifically, the Board 

relied on the fact that Greyhound had 

actually engaged in ‘‘detailed 

supervision’’ of the contractor’s 

employees on a day-to-day basis 

regarding the manner and means of their 

performance. Id. at 1496. The Board also 

relied on evidence that Greyhound had 

actually prompted the discharge of one 

of the contractor’s employees whom 

Greyhound deemed unsatisfactory. Id. at 

1491 n. 8. To be sure, the Board also 

gave some weight to provisions in the 

contract between Greyhound and the 

contractor, which granted Greyhound 

the right to specify the ‘‘exact manner 

and means’’ through which the 

employees’ work would be 

accomplished, to control their wages, to 

set their schedules, and to assign 

employees to perform the work. Id. at 

1495–1496. But the Board specifically 

stated that ‘‘[t]he joint employer finding 

herein is premised on the common 

control exercised by Greyhound and 

[the cleaning contractor] over the 

employees.’’ Id. at 1492 (emphasis 

added). And the Board explained that 

Greyhound had ‘‘reserved to itself, both 

as a matter of express contractual 

agreement and in actual practice, rights 

over these employees which are 

consistent with its status as their 

employer along with [the cleaning 

contractor].’’ Id. at 1495 (emphasis 

added). In short, Greyhound is 

consistent with both subsequent Board 

joint-employer precedent and the 2020 

Rule. It does not support the majority’s 

final rule.443

The majority mischaracterizes Board 

precedent during the two decades 

following Greyhound, implying that it 

reflects a ‘‘traditional’’ approach under 

which proof that an entity exercised 

control over the terms and conditions of 

employment of another employer’s 

employees was unnecessary to establish 

joint-employer status.444 The majority 

asserts that ‘‘Board precedent from this 

time period generally did not require a 

showing that both putative joint 

employers actually or directly exercised 

control.’’ But they fail to acknowledge 

that the Board has never based a jointemployer finding solely on ‘‘indirect 

control,’’ and most of the Board cases 

my colleagues cite as demonstrating a 

‘‘traditional’’ reliance on a contractual 

reservation of right to control are 

limited to a single category of cases 

involving department stores with 

licensed departments.445 These cases do 

not bear the weight the majority gives 

them.446

In fact, during the two decades 

following Greyhound, the Board 

regularly found no joint-employer status 

where the putative joint employer 

possessed some reserved contractual 

authority to control essential terms, and 

even where it actually exercised control 

but to too limited an extent to warrant 

a joint-employer finding. For example, 

in Hychem Constructors, Inc., 169 NLRB 

274, 276 (1968), the Board found no 

joint-employer status despite a putative 

employer’s reserved right to approve 

wage increases and overtime, its policy 

of consulting on proposed layoffs, and 

its ‘‘as yet unexercised prerogative to 

remove an undesirable . . . employee.’’ 

Similarly, in S. G., Tilden, Inc., 172 

NLRB 752, 753 (1968), the Board found 

a franchisor was not a joint employer of 

its franchisees’ employees despite its 

specification of the franchisees’ hours of 

operation and its requirement that they 

adhere to certain pricing and 

housekeeping standards. Echoing the 

standard applied in the departmentstore cases, the Board in S. G. Tilden 

found ‘‘no clear indication . . . that 

Respondent Tilden intended to, or in 

fact did, exercise direct control over the 

labor relations of [the franchisees].’’ Id. 

(emphasis added); see also Furniture 

Distribution Center, Inc., 234 NLRB 751, 

751–752 (1978) (evidence that ‘‘user’’ 

business and ‘‘supplier’’ business 

conferred and jointly decided on the 

number of supplied employees and the 

number of hours those employees 

would work each week deemed 

insufficient to create a joint-employer 

relationship); Cabot Corp., 223 NLRB 

1388, 1389, 1390 n.10, 1392 (1976) (no 

joint-employer status despite putative 

joint employer reserving the right to 

inform direct employer of the specific 


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447For example, in Floyd Epperson, cited by the 

majority, the Board noted anecdotal evidence of the 

putative joint employer’s indirect control over 

wages and discipline, but its joint-employer finding 

was largely based on evidence of direct and 

immediate supervision of the employees involved. 

202 NLRB 23, 23 (1973), enfd. 491 F.2d 1390 (6th 

Cir. 1974). In Lowery Trucking Co., also cited by the 

majority, the Board noted the putative joint 

employer’s unexercised right to reject a supplier 

employer’s driver, but it highlighted the putative 

joint employer’s actual exercise of detailed 

supervision, participation in the hiring process, 

discharge of two drivers, and discipline of a third. 

177 NLRB 13, 15 (1969), enfd. sub nom. Ace-Alkire 

Freight Lines v. NLRB, 431 F.2d 280 (8th Cir. 1970). 

Similarly, in Carrier Corp. v. NLRB, 768 F.2d 778 

(6th Cir. 1985), the court of appeals relied in part 

on the putative joint employer’s reserved authority 

to reject drivers that did not meet its standards and 

to direct the primary employer to remove drivers for 

improper conduct, but in finding that substantial 

evidence supported the Board’s joint-employer 

finding, the court primarily relied on evidence that 

Carrier ‘‘exercised substantial day-to-day control 

over the drivers’ working conditions’’ and 

consulted with the undisputed employer over 

wages and benefits. Id. at 781; see also International 

Chemical Workers Local 483 v. NLRB, 561 F.2d 253, 

257 (D.C. Cir. 1977) (affirming Board’s finding of no 

joint-employer status in part because the putative 

joint employer ‘‘did not have authority to, and did 

not actually, direct [the primary employer’s] 

employees in the details of their work’’) (emphasis 

added). Moreover, most of the cases my colleagues 

rely on to support their claim that the Board 

adhered to a ‘‘traditional, common-law based’’ 

joint-employer standard prior to TLI and Laerco 

involved department stores with licensed 

departments, where, as explained above, the Board 

stated and applied a test that asked whether the 

store was in a position to influence the licensee’s 

labor policies—and Buckeye Mart reveals the 

difference between that standard and a commonlaw based standard as my colleagues construe it. 

448As noted above, the final rule incorporates the 

‘‘share or codetermine’’ standard in newly revised 

Sec. 103.40(b). However, in Sec. 103.40(c), the final 

rule defines the ‘‘share or codetermine’’ standard to 

include indirect control of, and possession of a 

never-exercised authority to control, any essential 

term or condition of employment. This is not how 

the standard has been understood or applied 

historically, and it is contrary to the understanding 

of the very court that announced it, which defined 

the ‘‘share or codetermine’’ standard as a shared 

‘‘exert[ion]’’ of ‘‘significant control’’ over a group of 

employees. NLRB v. Browning-Ferris Industries of 

Pennsylvania, 691 F.2d at 1124. 

449The Board in TLI reached this conclusion 

notwithstanding the language of the applicable 

contract, which provided that the putative joint 

employer ‘‘will solely and exclusively be 

responsible for maintaining operational control, 

direction and supervision’’ over the supplier’s 

drivers. Id. at 798. As explained above, this is 

consistent with the historical treatment of reserved 

authority to control as generally being insufficient 

to support joint-employer status absent evidence of 

substantial direct control. The Board also noted that 

the presence of the putative joint employer’s 

representative at two bargaining sessions did not 

alter the outcome, as ‘‘there [was] no evidence that 

he demanded specific reductions or that he made 

particular proposals.’’ Id. at 799. 

work to be performed and the 

equipment and personnel used, 

maintaining the right to ‘‘inspect, test, 

approve, and disapprove of work and 

services,’’ requiring all employees to 

follow its safety regulations, and 

retaining the right to remove employees 

it deemed incompetent), affd. sub nom. 

International Chemical Workers Local 

483 v. NLRB, 561 F.2d 253 (D.C. Cir. 

1977); Westinghouse Electric Corp., 163 

NLRB 914, 914–915 (1967) (no jointemployer status despite putative joint 

employer’s occasional direct 

supervision of supplier employer’s 

employees, review of supplied 

employees’ timesheets for auditing 

purposes, and reservation of the right to 

request removal of ‘‘disorderly, 

incompetent, or objectionable persons 

from working at the site . . . . [S]uch 

conduct is clearly consistent with that 

of a contractor seeking to police its 

subcontract.’’); Space Services 

International Corp., 156 NLRB 1227, 

1232–1233 (1966) (no joint-employer 

status where putative joint employer 

‘‘[reserved] the right to require removal 

from the work of any employee it deems 

incompetent, careless, or insubordinate’’ 

and exercised this right on at least one 

occasion with respect to a management 

official). Accordingly, contrary to the 

majority’s assertion, Board precedent 

prior to the 1984 joint-employer 

decisions in TLI and Laerco 

Transportation did not make indirect 

control independently sufficient to 

establish joint-employer status, and 

cases relying solely on contractually 

reserved authority to control do not 

apply a common-law test and therefore 

do not support the majority’s claim that 

TLI and Laerco abandoned a 

‘‘traditional, common-law based 

standard’’ for determining jointemployer status.447

Nor do the last forty years of relevant 

Board precedent support the majority’s 

characterization of that period as 

marked by a radical departure from a 

prior ‘‘traditional’’ joint-employer 

standard. To begin, TLI and Laerco 

Transportation merely clarified the 

appropriate legal standard by echoing 

the United States Court of Appeals for 

the Third Circuit’s articulation in NLRB 

v. Browning-Ferris Industries of 

Pennsylvania, Inc., 691 F.2d at 1123: 

‘‘The basis of the [joint-employer] 

finding is simply that one employer 

while contracting in good faith with an 

otherwise independent company, has 

retained for itself sufficient control of 

the terms and conditions of employment 

of the employees who are employed by 

the other employer. Thus, the ‘joint 

employer’ concept recognizes that the 

business entities involved are in fact 

separate but that they share or codetermine those matters governing the 

essential terms and conditions of 

employment’’ (internal citations 

omitted) (emphasis in original). 

Importantly, the Third Circuit equated 

this ‘‘share or codetermine’’ standard 

with the exertion—i.e., exercise—of 

significant control: ‘‘[W]here two or 

more employers exert significant control 

over the same employees—where from 

the evidence it can be shown that they 

share or co-determine those matters 

governing essential terms and 

conditions of employment—they 

constitute ‘joint employers’ within the 

meaning of the NLRA.’’ Id. at 1124. The 

Third Circuit’s ‘‘share or codetermine’’ 

standard is consistent (with narrow 

exceptions) with the Board’s pre-TLI 

and pre-Laerco joint-employer 

decisions. As shown below, it is also 

consistent with TLI, Laerco, and the 

Board’s subsequent joint-employer 

decisions—until, of course, BFI took 

joint-employer doctrine in an entirely 

unprecedented direction. But it flatly 

contradicts the definition of that 

standard that my colleagues adopt 

today.448

In TLI, Inc., 271 NLRB at 798–799, the 

Board reversed a judge’s finding of jointemployer status, noting that the putative 

joint employer did not sufficiently affect 

the terms and conditions of employment 

of the supplier employer’s drivers: the 

‘‘supervision and direction exercised by 

[the putative joint employer] on a dayto-day basis [was] both limited and 

routine.’’ Id. at 799.449 Similarly, in 

Laerco Transportation, 269 NLRB at 

325, the Board found that the putative 

joint employer did not possess 

‘‘sufficient indicia of control’’ over a 

supplier employer’s drivers to create a 

joint-employer relationship. The Board 

found evidence that the putative joint 

employer gave drivers directions on 

which routes to follow and attempted to 

resolve personality conflicts to 

constitute merely ‘‘minimal and 

routine’’ supervision, and that most 

other terms and conditions of 

employment of the drivers were 

effectively controlled by their direct 

employer. Id. at 326. Thus, in TLI and 

Laerco, the Board faithfully applied the 

Third Circuit’s standard—requiring 

‘‘two or more employers [to] exert 

significant control over the same 

employees’’ in order to satisfy the 

‘‘share or codetermine’’ standard and 

create a joint-employer relationship 

under the Act—to the facts of those 

cases, contrary to the majority’s 

assertion that these decisions lacked ‘‘a 

clear basis in established common-law 

agency principles or prior . . . judicial 

decisions.’’ 

Subsequent joint-employer decisions 

were similarly consistent with both the 


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450 In Airborne, the Board said that about twenty 

years earlier, it had ‘‘abandoned its previous test in 

this area, which had focused on a putative joint 

employer’s indirect control over matters relating to 

the employment relationship.’’ Id. (emphasis in 

original). Frankly, I believe this statement 

mischaracterized the Board’s earlier joint-employer 

precedent. As shown above, that precedent did not 

focus on indirect control. Those cases ascribed 

some significance to indirect control, but they did 

not find indirect control to be outcomedeterminative absent evidence of direct control. 

451Those factors are (1) the skill required; (2) the 

source of the instrumentalities and tools; (3) the 

location of the work; (4) the duration of the 

relationship between the parties; (5) whether the 

hiring party has the right to assign additional 

projects to the hired party; (6) the extent of the 

hired party’s discretion over when and how long to 

work; (7) the method of payment; (8) the hired 

party’s role in hiring and paying assistants; (9) 

whether the work is part of the regular business of 

the hiring party; (10) whether the hiring party is in 

business; (11) the provision of employee benefits; 

and (12) the tax treatment of the hired party. Id. 

452One reason that judicial precedent 

distinguishing between independent contractors 

and employees is ill-suited to fully resolve jointemployer issues is that independent-contractor 

Continued 

Third Circuit’s definition of the ‘‘share 

or codetermine’’ standard and, in 

general, the Board’s pre-1984 jointemployer decisions. In AM Property 

Holding Corp., 350 NLRB 998, 1001 

(2007), the Board explained that it has 

‘‘generally found supervision to be 

limited and routine where a supervisor’s 

instructions consist primarily of telling 

employees what work to perform, or 

where and when to perform the work, 

but not how to perform the work.’’ It 

further explained that ‘‘[i]n assessing 

whether a joint employer relationship 

exists, the Board does not rely merely 

on the existence of . . . contractual 

provisions [governing the right to 

approve hiring], but rather looks to the 

actual practice of the parties.’’ Id. at 

1000. 

In Airborne Express, 338 NLRB 597 

(2002), the Board adopted the judge’s 

finding that there was no joint-employer 

relationship, based in part on evidence 

that the putative joint employer entered 

into contracts that explicitly afforded 

the independent contractors full and 

complete control over hiring, firing, 

discipline, work assignment, and other 

terms and conditions of employment. 

Id. at 605. The Board noted that ‘‘the 

essential element in this analysis is 

whether a putative joint employer’s 

control over employment matters is 

direct and immediate.’’ Id. at 597 n.1; 450

see also Flagstaff Medical Center, 357 

NLRB 659, 667 (2011) (‘‘[T]he evidence 

regarding Sodexho’s role in hiring, 

discharging, disciplining, supervising, 

and evaluating housekeepers does not 

establish that Sodexho shared or 

codetermined essential terms and 

conditions of employment.’’). 

During this time period, no appellate 

court criticized the Board’s formulation 

of the joint-employer standard. As the 

BFI dissenters observed, if it were true 

that TLI, Laerco, and subsequent 

decisions departed without explanation 

from the Board’s prior joint-employer 

precedent, some court of appeals would 

have taken issue: ‘‘It is simply 

impossible that all the courts of appeals 

would have missed this train wreck.’’ 

BFI, 362 NLRB at 1633 (Members 

Miscimarra and Johnson, dissenting). 

The final rule’s reliance on 

independent-contractor precedent to 

support their standard for determining 

joint-employer status is misplaced. 

The majority’s legal justification for 

abandoning the requirement that a 

putative joint employer actually 

exercise some control over at least one 

term or condition of employment of 

another employer’s employees boils 

down to a misplaced reliance on broad 

statements in cases where the issue 

presented is whether certain individuals 

are employees or independent 

contractors. Based on a review of 

judicial decisions and compendiums of 

law addressing common-law principles 

pertinent to deciding that issue, my 

colleagues say that they are ‘‘not aware 

of any common-law judicial decision or 

other common-law authority directly 

supporting the proposition that, given 

the existence of a putative employer’s 

contractually reserved authority to 

control, further evidence of direct and 

immediate exercise of that control is 

necessary to establish a common-law 

employer-employee relationship.’’ They 

miss my point, however, by conflating 

separate and distinct points. The issue 

here is not whether actual exercise of 

control by a putative employer is 

required to make a worker an employee 

of that employer and not an 

independent contractor. The issue is 

whether a worker who is undisputedly 

an employee of one entity is jointly 

employed by a second entity. My 

colleagues acknowledge that these are 

distinct issues. They must do so, as the 

D.C. Circuit has emphatically rejected 

any attempt to equate them. See 

Browning-Ferris Industries of California, 

Inc. v. NLRB, 911 F.3d at 1213 

(‘‘Browning-Ferris cites no case in 

which we have applied an employee-orindependent-contractor test to resolve a 

question of joint employment, and we 

have found none.’’) Yet, immediately 

following the statement quoted above— 

which, again, is based on precedent that 

addresses the employee-or-independentcontractor issue—my colleagues leap to 

the conclusion that they are statutorily 

precluded from requiring actual exercise 

of control to establish that an entity is 

a joint employer. In other words, the 

majority acknowledges the distinction 

between the employee-or-independentcontractor issue and the joint-employer 

issue and erases the distinction 

practically in the same breath. To stay 

within the boundaries of the common 

law as regards joint-employer status, 

they should not—indeed, must not— 

promulgate a rule that permits that 

status to be predicated solely on a 

never-exercised contractual reservation 

of right to control and/or indirect 

control where judicial decisions in 

joint-employer cases do not go that far— 

and as I explain below in the section 

after this one, they do not. 

Moreover, my colleagues’ reliance on 

independent-contractor precedent to set 

the standard for determining jointemployer status depends on equating 

‘‘right to control’’ for purposes of 

deciding employee-or-independentcontractor issues with contractually 

reserved authority to control the terms 

and conditions of employment of 

another business’s employees—but the 

equation does not hold. As the majority 

emphasizes, courts have explained that 

workers are employees rather than 

independent contractors if the putative 

employer possesses a right to control 

their manner and means of performance, 

regardless of whether that right is 

exercised. However, the independentcontractor cases make clear that in that 

context, a finding of ‘‘right to control’’ 

is a legal conclusion based on a totalityof-the-circumstances analysis applying 

twelve factors culled from the federal 

common law of agency to the facts of 

the case. See, e.g., Community for 

Creative Non-Violence v. Reid, 490 U.S. 

730, 751–752 (1989) (listing the relevant 

factors).451 And, as the Supreme Court 

recognized, ‘‘no one of these factors is 

determinative.’’ Id. at 752. If, on 

balance, an analysis of the facts of a case 

in light of these multiple factors 

supports a finding that the hiring party 

has the right to control the manner and 

means of the worker’s performance, 

then the hiring party is the worker’s 

employer regardless of whether it 

exercises its right to control her manner 

and means of performance by directing 

the details of her work. In short, the 

‘‘right to control manner and means of 

performance’’ under independentcontractor precedent is one thing, and a 

never-exercised contractual reservation 

of right to affect one or more essential 

terms and conditions of employment of 

another employer’s employees is quite 

another. The majority simply errs in 

treating these two distinct legal 

doctrines as equivalent.452


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cases necessarily involve exercise of control by the 

sole putative employer over the putative employee. 

That entity has engaged the worker (i.e., hired her 

to perform work), has decided upon the 

compensation to be paid (i.e., determined her 

wages), and has actually paid her that 

compensation. This is seen in Singer Mfg. Co. v. 

Rahn, 132 U.S. 518, 523 (1889), a case my 

colleagues rely on heavily to support their 

proposition that exercise of control is unnecessary 

under the common law, not only in the 

independent-contractor context but in the jointemployer context as well. In Singer Mfg. Co. v. 

Rahn, the Court held that a worker was an 

employee, not an independent contractor, based on 

the written terms of a contract between the worker 

and the company. There, the company engaged (i.e., 

hired) an individual to sell its sewing machines and 

decided upon his compensation, which, along with 

other terms, was set forth in a contract between the 

two parties. To be sure, the Court’s analysis focused 

on the terms of the contract, but to conclude that 

this compels the conclusion that joint-employer 

status likewise may be based solely on a neverexercised contractual right to control ignores that in 

the independent-contractor context, where there is 

only one alleged employer, that entity necessarily 

exercises direct control of at least two things that 

my colleagues and I agree constitute essential terms 

and conditions. Even if it exercises control of 

nothing else, it engages—i.e., hires—the worker, 

and it compensates—i.e., pays—the worker. 

Notably, it may do so and the individual thus hired 

and paid may still be an independent contractor, yet 

my colleagues would make a joint employer of 

businesses that never exercise direct control over 

any essential term or condition. Precedent like 

Singer does not support the proposition that a court 

(or the Board) must or should find that one entity 

is a joint employer of another entity’s employees 

based exclusively on a never-exercised contractual 

reservation of right to control. 

453My colleagues cite a plethora of decisions 

(including state law cases more than a hundred 

years old), the overwhelming majority of which 

focus on independent contractor, workers’ 

compensation, and tort liability matters. Although 

these cases are informative regarding the contours 

of the master-servant doctrine with respect to 

individuals alleged to have an employment 

relationship with a single entity, they have limited 

utility where workers are unquestionably 

employees of one entity, and the issue is whether 

a second entity jointly employs them. My view here 

is fully consistent with that of the D.C. Circuit in 

Browning-Ferris Industries of California, Inc. v. 

NLRB. As the court there stated, ‘‘Browning-Ferris’s 

contention that the joint-employer and 

independent-contractor tests are virtually identical 

lacks any precedential grounding. Browning-Ferris 

cites no case in which we have applied an 

employee-or-independent-contractor test to resolve 

a question of joint employment, and we have found 

none.’’ 911 F.3d at 1213. 

454See, e.g., Hurst v. McDonough, 2022 U.S. App. 

LEXIS 9725 (10th Cir. Apr. 12, 2022); Felder v. U.S. 

Tennis Assn., 27 F.4th 834 (2d Cir. 2022); Perry v. 

VHS San Antonio, LLC, 990 F.3d 918 (5th Cir. 

2021); Nethery v. Quality Care Investors, L.P., 814 

Fed. Appx. 97 (6th Cir. 2020); EEOC v. Global 

Horizons, Inc., 915 F.3d 631 (9th Cir. 2019); Frey 

v. Hotel Coleman, 903 F.3d 671 (7th Cir. 2018); 

Garcia-Celestino v. Ruiz Harvesting, Inc., 843 F.3d 

1276 (11th Cir. 2016); Al-Saffy v. Vilsack, 827 F.3d 

85 (D.C. Cir. 2016); Faush v. Tuesday Morning, Inc., 

808 F.3d 208 (3d Cir. 2015); Casey v. Dep’t of 

Health & Human Services, 807 F.3d 395 (1st Cir. 

2015); Butler v. Drive Automotive Industries of Am., 

793 F.3d 404 (4th Cir. 2015). 

455 42 U.S.C. 2000e et seq. 

456 29 U.S.C. 621 et seq. 

457 29 U.S.C. 794. In contrast, under the Fair 

Labor Standards Act, 29 U.S.C. 621 et seq., the 

joint-employer doctrine is not limited by commonlaw agency principles. See, e.g., Salinas v. 

Commercial Interiors, Inc., 848 F.3d 125, 137 (4th 

Cir. 2017) (‘‘[T]he FLSA’s definition of ‘employee’ 

encompass[es] a broader swath of workers than 

would constitute employees at common law.’’) 

(citing Nationwide Mutual Ins. Co. of America v. 

Darden, 503 U.S. 318, 326 (1992)). 

458The First Circuit examines fifteen factors, 

which ‘‘are to be weighed in their totality,’’ with a 

stated emphasis on the extent to which the putative 

joint employer controls the manner and means by 

which the worker completes her tasks. Casey, 807 

F.3d at 405 (finding no joint-employer relationship 

where the putative joint employer ‘‘did not exert 

such control over [the employee’s] performance of 

her job duties as to establish an employment 

relationship’’). The Second Circuit asks whether 

two or more entities ‘‘share significant control’’ over 

the same employees, examining thirteen nonexhaustive factors, with no single factor being 

decisive, and focusing on the extent to which 

control was exercised. Felder, 27 F.4th 843–844 

(finding no joint-employer relationship despite fact 

that putative joint employer exercised control by 

preventing its subcontractor from referring a 

particular worker for assignment). The Third Circuit 

focuses on which entity paid workers’ salaries, 

hired and fired them, and had control over their 

daily employment activities. Faush, 808 F.3d at 216 

(holding that district court erred in granting 

summary judgment in favor of putative joint 

employer that had given employee assignments, 

directly supervised him, provided site-specific 

training, furnished necessary equipment and 

materials, and verified the number of hours he had 

worked on a daily basis). The Fifth Circuit applies 

a ‘‘hybrid’’ test that focuses on the right to hire, fire, 

supervise, and set work schedules, and on which 

entity paid the employee’s salary, withheld taxes, 

provided benefits, and set the terms and conditions 

of employment. Perry, 990 F.3d at 928–929 (finding 

that hospital was not joint employer of physician 

supplied to it by professional association despite 

fact that hospital had exercised its ‘‘limited 

contractual right to ‘fire’ [him] by requesting that 

[the professional association] terminate his 

professional services agreement’’). The Sixth Circuit 

asks whether two entities share or codetermine 

those matters governing essential terms and 

conditions of employment, examining a putative 

joint employer’s exercise of its ability to hire, fire 

or discipline employees, affect their compensation 

and benefits, and direct and supervise their 

performance. EEOC v. Skanska USA Building, Inc., 

550 Fed. Appx. 253, 256 (6th Cir. 2013) (finding 

that general contractor was joint employer of 

This was made clear by the D.C. 

Circuit’s opinion in Browning-Ferris 

Industries of California v. NLRB. As 

noted above, the court of appeals made 

clear that ‘‘a rigid focus on independentcontractor analysis omits the vital 

second step in joint-employer cases, 

which asks, once control over the 

workers is found, who is exercising that 

control, when, and how.’’ 911 F.3d at 

1215 (emphasis in original). As the 

court explained, ‘‘using the 

independent-contractor test exclusively 

to answer the joint-employer question 

would be rather like using a hammer to 

drive in a screw: it only roughly assists 

the task because the hammer is designed 

for a different purpose.’’ Id. Today’s 

final rule simply disregards the second 

step of the common-law joint-employer 

standard identified by the D.C. Circuit. 

It eliminates any requirement of actual 

exercise of control and thus renders 

immaterial ‘‘how’’ control is exercised 

(directly or indirectly) or ‘‘when’’ 

(never, rarely, occasionally, or 

frequently). Further, the D.C. Circuit’s 

pointed decision to avoid answering 

whether a joint-employer finding could 

ever be based solely on an unexercised 

contractual reservation of authority to 

control, 911 F.3d at 1213, or on indirect 

control, id. at 1218, undermines my 

colleagues’ assertion that the commonlaw of agency compels affirmative 

answers to those two questions.453

The final rule is inconsistent with the 

common-law joint-employer standard 

applied by the courts under other 

federal statutes. 

The majority minimizes federal court 

precedent specifically analyzing jointemployer issues under materially 

similar federal statutes, i.e., statutes 

that, like the NLRA, contain a definition 

of ‘‘employee’’ that may not be 

interpreted to exceed the boundaries 

established by common-law agency 

principles.454 These statutes include 

Title VII of the Civil Rights Act of 

1964,455 the Age Discrimination in 

Employment Act,456 and Section 504 of 

the Rehabilitation Act of 1973.457

Applying common-law agency 

principles in these joint-employer cases, 

federal appellate courts have considered 

the extent to which a putative joint 

employer has exercised control over the 

essential terms and conditions of 

employment of another company’s 

employees. Courts have considered a 

host of factors (e.g., control exercised 

over hiring, firing, and day-to-day 

supervision), drawing guidance from 

Supreme Court precedent distinguishing 

between independent contractors and 

employees, but tailoring the analysis to 

account for the joint-employer context, 

i.e., workers who are undisputedly an 

employee of one employer but who may 

have a second, joint employer. Courts 

consider the totality of the 

circumstances, with no one factor being 

determinative, in ascertaining whether 

the putative joint employer has exerted 

a sufficient amount of control over the 

workers at issue to be deemed their joint 

employer. Generally speaking, they have 

emphasized the extent of the putative 

joint employer’s active role in hiring 

and firing the workers at issue and in 

supervising their manner and means of 

performance. 

Applying common-law principles, 

every circuit court that has decided 

joint-employer issues under statutes 

materially similar to the NLRA applies 

a significantly more demanding jointemployer standard than the one 

promulgated by my colleagues today.458


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subcontractor’s elevator-operator employees 

because it had ‘‘supervised and controlled the 

operators’ day-to-day activities without any 

oversight from [the subcontractor],’’ ‘‘routinely 

exercised its ability to direct and supervise the 

operators’ performance,’’ and ‘‘set the operators’ 

hours and daily assignments’’). The Seventh Circuit 

applies five factors: (1) the extent of the putative 

joint employer’s control and supervision of the 

worker, including scheduling and manner and 

means of performance of work; (2) the kind of 

occupation and nature of skill required, including 

whether skills are obtained in the workplace; (3) 

responsibility for the costs of operation, such as 

equipment, supplies, fees, licenses, workplace, and 

maintenance of operations; (4) method and form of 

payment and benefits; and (5) length of job 

commitment and/or expectations. Frey, 903 F.3d at 

676. The Seventh Circuit explained that in applying 

its five-factor test, it ‘‘looks to see whether the 

putative employer exercised sufficient control.’’ Id. 

at 678. The Ninth Circuit focuses on ‘‘the extent of 

control that one may exercise over the details of the 

work of the other,’’ ‘‘with no one factor being 

decisive.’’ Global Horizons, Inc., 915 F.3d at 638. 

The Tenth Circuit applies the ‘‘share or 

codetermine’’ standard and looks to whether both 

entities ‘‘exercise[d] significant control.’’ Adams v. 

C3 Pipeline Constr. Inc., 30 F.4th 943, 961 (10th Cir. 

2021). 459The majority disputes this statement, citing 

EEOC v. Global Horizons, Inc., 915 F.3d at 631. 

That case does not support my colleagues’ position, 

for reasons explained below. 

460The court in Felder, id. at 843–844, cited 

Knitter v. Corvias Mil. Living, LLC, 758 F.3d 1214, 

1226 (10th Cir. 2014) (quoting Bristol v. Bd. of Cnty. 

Comm’rs of Cnty. of Clear Creek, 312 F.3d 1213, 

1218 (10th Cir. 2002) (‘‘Under the joint employer 

test, two entities are considered joint employer . . . 

if they both ‘exercise significant control over the 

same employees.’ ’’)), and Plaso v. IJKG, LLC, 553 

Fed. Appx. 199, 204 (3d Cir. 2015) (quoting Graves 

v. Lowery, 117 F.3d 723, 727 (3d Cir. 1997) (‘‘[A] 

joint employment relationship exists when ‘two 

entities exercise significant control over the same 

employees.’ ’’)). 

461The majority dismisses the Seventh Circuit’s 

decision in Whitaker because, they say, the court 

‘‘drew its articulation of the [joint-employer] 

standard from a Board decision’’ applying Laerco. 

What my colleagues fail to acknowledge, however, 

is that the court adopted that standard as circuit 

law. Moreover, the Seventh Circuit in Whitaker did 

not rely on Board precedent for its holding that 

joint-employer status requires that an entity must 

exercise control to be deemed a joint employer. See 

Whitaker, 772 F.3d at 810–811 (‘‘We . . . have held, 

however, ‘that for a joint-employer relationship to 

exist, each alleged employer must exercise control 

over the working conditions of the employee, 

although the ultimate determination will vary 

depending on the specific facts of each case.’ 

Moldenhauer v. Tazewell-Pekin Consol. Commc’ns 

Ctr., 536 F.3d 640, 644 (7th Cir. 2008) (emphasis 

added). . . .’’). 

462My colleagues’ overly selective reading of the 

Title VII cases is unpersuasive. Despite their best 

efforts, my colleagues’ parsing of isolated words or 

phrases does not detract from the primary theme in 

the Title VII cases that exercise of control is the 

‘‘guiding indicator.’’ Felder, 27 F.4th at 844; id. at 

847 (‘‘Absent further allegations that the USTA 

would have significantly controlled the manner and 

means of Felder’s work as a security guard, the 

complaint does not cross the line from speculative 

to plausible on the essential Title VII requirement 

of an employment relationship.’’) (emphasis added). 

Additionally, my colleagues say that in some of 

the Title VII cases I cite above, the courts applied 

a standard that incorporates an ‘‘economic realities’’ 

test, and those cases cannot inform the Board’s 

formulation of a joint-employer standard under the 

NLRA because Congress, in the Taft-Hartley Act, 

repudiated the ‘‘economic realities’’ test the 

Supreme Court applied in NLRB v. Hearst 

Publications, 322 U.S. 111 (1944). Once again, the 

majority is crossing its wires between independentcontractor law and joint-employer law. In Hearst, 

the Court applied an ‘‘economic realities’’ standard 

to determine employee-or-independent-contractor 

status under the NLRA. In Title VII cases, circuit 

courts apply an ‘‘economic realities’’ test to discern 

whether a putative joint employer actually 

exercised control over essential terms and 

conditions of employment of another employer’s 

employees. See, e.g., Perry v. VHS San Antonio, 

LLC, 990 F.3d at 929 (‘‘The economic-realities 

component of the ‘hybrid economic realities/ 

common law control test’ focuses on who paid the 

employee’s salary, withheld taxes, provided 

benefits, and set the terms and conditions of 

employment.’’). Here again, my colleagues’ 

insistence on basing a joint-employer standard on 

independent-contractor precedent leads them 

astray. 

Not a single circuit has held or even 

suggested that an entity can be found to 

be the joint employer of another entity’s 

employees based solely on a neverexercised contractual reservation of 

right to affect essential terms or on 

‘‘indirect control,’’ i.e., conduct other 

than actually determining (alone or in 

collaboration with the undisputed 

employer) employees’ essential terms 

and conditions of employment.459

Illustrative is Felder v. U.S. Tennis 

Assn., 27 F.4th at 842–844. In that case, 

the Second Circuit articulated for the 

first time its standard for analyzing 

joint-employer status under Title VII. 

After surveying the legal landscape, the 

court explained that it will find a jointemployer relationship ‘‘when two or 

more entities, according to common law 

principles, share significant control of 

the same employee.’’ Importantly, the 

court quoted with approval cases from 

other circuits requiring proof that the 

putative joint employer ‘‘exercise[d] 

significant control.’’ 460 The court 

explained that, ‘‘[b]ecause the exercise 

of control is the guiding indicator, . . . 

any relevant factor may be considered 

so long as [it is] drawn from the 

common law of agency’’ synthesized in 

Community for Creative Non-Violence v. 

Reid, 490 U.S. at 730. Id. at 844 

(emphasis added). Broadly, those factors 

include whether the putative joint 

employer ‘‘ ‘paid [the employees’] 

salaries, hired and fired them, and had 

control over their daily activities.’ ’’ Id. 

at 843 (quoting Faush v. Tuesday 

Morning, Inc., 808 F.3d at 214 (3d Cir. 

2015) (alteration in Felder)). Applying 

this standard, the Felder court held that 

a lower court had properly granted the 

putative joint employer’s motion to 

dismiss the complaint because the 

plaintiff had failed to allege that the 

putative joint employer ‘‘would have 

exerted significant control’’ over his 

terms and conditions of employment 

had it not rejected a subcontractor’s 

attempt to refer him to it. Id. at 845. 

Similarly, in Butler v. Drive 

Automotive Industries of America, the 

Fourth Circuit explained that ‘‘the 

[joint-employer] doctrine’s emphasis on 

determining which entities actually 

exercise control over an employee is 

consistent with Supreme Court 

precedent interpreting Title VII’s 

definitions.’’ 793 F.3d at 409 (emphasis 

added). See also Adams v. C3 Pipeline 

Constr. Inc., 30 F.4th at 961 (10th Cir. 

2021) (‘‘Both entities are [joint] 

employers if they both exercise 

significant control over the same 

employees.’’) (internal quotation marks 

and citations omitted); Whitaker v. 

Milwaukee County, 772 F.3d 802, 810 

(7th Cir. 2014) (‘‘An entity other than 

the actual employer may be considered 

a ‘joint employer’ ‘only if it exerted 

significant control over’ the employee.’’) 

(quoting G. Heileman Brewing Co. v. 

NLRB, 879 F.2d 1526, 1530 (7th Cir. 

1989) (emphasis added)); 461 Gulino v. 

N.Y. State Educ. Dept., 460 F.3d 361, 

379 (2d Cir. 2006) (‘‘The Reid factors 

countenance a[n employment] 

relationship where the level of control 

is direct, obvious, and concrete, not 

merely indirect or abstract.’’).462

The standard promulgated today, 

which does not require proof of any 

exercise of control, is strikingly 

inconsistent with the standards applied 

by the federal courts of appeals when 

applying common-law agency 

principles to determine joint-employer 

status. As summarized above, federal 

appellate courts have repeatedly 

focused on the extent to which a 

putative joint employer has exercised 

control. In contrast, the standard my 

colleagues promulgate resembles the 

substantially easier-to-satisfy standard 

applicable under the Fair Labor 

Standards Act, where ‘‘economic reality 

. . . is to be the test of employment.’’ 

Goldberg v. Whitaker House Co-op., 

Inc., 366 U.S. 28, 33 (1961) (internal 

quotation marks omitted). ‘‘Because of 

the uniqueness of the FLSA, a 

determination of joint employment 

[under that statute] ‘must be based on a 

consideration of the total employment 

situation and the economic realities of 

the work relationship.’ ’’ In re Enterprise 

Rent-A-Car Wage & Employment 

Practices Litigation, 683 F.3d 462, 469 

(3d Cir. 2012) (quoting Bonnette v. 

California Health & Welfare Agency, 704 

F.2d 1465, 1470 (9th Cir. 1983)). 

Application of a control-based test 

‘‘would only find joint employment 

where an employer had direct control 

over the employee, but the FLSA 

designates those entities with sufficient 

indirect control as well.’’ Id. at 469. 


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463Even under the economic-realities standard 

applicable under the FLSA, the Third Circuit in 

Enterprise Rent-A-Car held that Enterprise 

Holdings, Inc. was not a joint employer of the 

employees of its wholly owned subsidiaries (rentalcar facilities), despite its potential impact on their 

essential terms and conditions of employment. 

Among other significant actions, the parent 

corporation recommended salary ranges for the 

subsidiaries’ branch employees and provided a 

standard performance-review form, job 

descriptions, and best practices. Id. at 466. Each 

subsidiary had discretion to adopt or disregard the 

parent’s recommended employment practices. In 

finding that such indirect influence did not render 

the parent a joint employer under the FLSA, the 

court emphasized that the record failed to show 

‘‘that [the parent’s] actions at any time amounted to 

mandatory directions rather than mere 

recommendations.’’ Id. at 470. 

464Contrary to my colleagues’ assertion, the final 

rule’s elimination of the actual-exercise 

requirement finds no support in EEOC v. Global 

Horizons. In that case, it was undisputed that two 

companies operating orchards (the ‘‘Growers’’) were 

joint employers of workers from Thailand supplied 

by Global Horizons under the federal H–2A guest 

worker program. 915 F.3d at 634 (‘‘All parties agree 

that the Growers and Global Horizons were joint 

employers of the Thai workers with respect to 

orchard-related matters.’’). The only issue presented 

in EEOC v. Global Horizons was ‘‘whether the 

EEOC plausibly alleged that the Growers were also 

joint employers with respect to non-orchard related 

matters.’’ Id. The court’s analysis of that issue was 

shaped, as it had to have been, by federal 

regulations governing the H–2A guest worker 

program. First, under those regulations, an 

‘‘employer’’ is required to provide H–2A guest 

workers certain benefits, including housing, meals, 

and transportation. ‘‘The H–2A program thus 

expands the employment relationship between an 

H–2A ‘employer’ and its workers to encompass 

housing, meals, and transportation, even though 

those matters would ordinarily fall outside the 

realm of the employer’s responsibility.’’ Id. at 640. 

Second, H–2A regulations define the term 

‘‘employer’’ as an entity that, among other things, 

‘‘has an employer relationship with respect to 

employees . . . as indicated by the fact that it may 

hire, pay, fire, supervise or otherwise control the 

work of any such employee.’’ Id. (quoting 20 CFR 

655.100(b)) (emphasis added). In other words, H– 

2A regulations define employer status with 

reference to authority to control essential terms and 

conditions of employment. It was in this unique 

context that the court stated that ‘‘[t]he power to 

control the manner in which housing, meals, 

transportation, and wages were provided to the 

Thai workers, even if never exercised, is sufficient 

to render the Growers joint employers as to nonorchard-related matters.’’ Id. at 641. Importantly, 

the court did not rely on a contractual reservation 

of right to control as the basis for its joint-employer 

finding. Rather, the court held that the Growers 

were joint employers by virtue of their regulatory 

obligations, and their ‘‘contractual delegation [of 

those duties to Global Horizons] did not absolve the 

Growers of their legal obligations as ‘employers’ 

under H–2A regulations.’’ Id. at 640. 

465See NLRB v. United Insurance Co. of America, 

390 U.S. at 256. 

466See Browning-Ferris Industries of California v. 

NLRB, 911 F.3d at 1208 (‘‘The policy expertise that 

the Board brings to bear on applying the National 

Labor Relations Act to joint employers is bounded 

by the common-law’s definition of a joint employer. 

The Board’s rulemaking, in other words, must color 

within the common-law lines identified by the 

judiciary.’’). Additionally, the Board has authority 

to define the duty to bargain in good faith under 

Sec. 8(a)(5) and 8(d). See Ford Motor Co. v. NLRB, 

441 U.S. 488, 496 (1979) (‘‘It is thus evident that 

Congress made a conscious decision to continue its 

delegation to the Board of the primary 

responsibility of marking out the scope of the 

statutory language [of Sec. 8(a)(5) and 8(d)] and of 

the statutory duty to bargain.’’). This authority 

includes the authority to define that duty in the 

joint-employer context—provided, of course, that 

the Board stays within common-law limits—in such 

a way as to trigger a joint employer’s bargaining 

obligation only upon its actual exercise of 

substantial direct and immediate control over the 

essential terms and conditions of employment of 

another entity’s employees. 

Notably, in contrasting the breadth of 

the FLSA’s economic-realities standard 

with the common-law test, the Third 

Circuit quoted its earlier—and leading— 

decision on the joint-employer standard 

under the NLRA, writing that under the 

Act, ‘‘the alleged [joint] employer must 

exercise ‘significant control.’ ’’ Id. at 468 

(quoting Browning-Ferris Industries of 

Pennsylvania, 691 F.2d at 1124).463

As the preceding discussion 

demonstrates, in eliminating the 

requirement that a putative joint 

employer must be shown to have 

exercised substantial direct and 

immediate control over the essential 

terms and conditions of employment of 

another entity’s employees, my 

colleagues have gone beyond the 

boundaries of the common law.464 They 

fail to support their repeated 

declarations that common-law agency 

principles compel the Board to adopt a 

standard that does not require proof that 

an entity actually exercised control over 

the employment terms and conditions of 

another employer’s employees before it 

will be found to be their joint employer. 

This is fatal to the majority’s final rule. 

In enacting the Taft-Hartley Act, 

Congress made clear that under the 

NLRA, the common law of agency is the 

controlling standard,465 and ‘‘ ‘an 

agency regulation must be declared 

invalid, even though the agency might 

be able to adopt the regulation in the 

exercise of its discretion, if it was not 

based on the [agency’s] own judgment 

but rather on the unjustified assumption 

that it was Congress’ judgment that such 

[a regulation is] desirable’ or required.’’ 

Transitional Hospitals Corp. of La. v. 

Shalala, 222 F.3d 1019, 1029 (D.C. Cir. 

2000) (quoting Prill v. NLRB, 755 F.2d 

941, 948 (D.C. Cir. 1985)). Today’s final 

rule is based on such an unjustified 

assumption. 

The Final Rule Is Unsound as a Matter 

of Policy 

In a couple of paragraphs, my 

colleagues do very briefly pay lip 

service to a backup position that, even 

assuming the 2020 Rule is permissible 

under the Act, they would rescind it 

and promulgate their final rule for 

policy reasons. In this regard, my 

colleagues assert that the final rule 

‘‘advances the Act’s purposes to ensure 

that, if they choose, all employees have 

the opportunity to bargain with those 

entities that possess the authority to 

control or exercise the power to control 

the essential conditions of their working 

lives,’’ and that the final rule ‘‘may 

particularly benefit vulnerable 

employees who are overrepresented in 

workplaces where multiple firms 

possess or exercise control, including 

immigrants and migrant guestworkers, 

disabled employees, and Black 

employees and other employees of 

color.’’ But these are mere conclusory 

remarks. My colleagues do not support 

their assertions; they dismiss 

commenters’ weighty policy-based 

criticisms of the rule as ‘‘misdirected’’; 

and they fail to grapple with the reality 

that their joint-employer standard is 

likely to frustrate collective bargaining 

and erect barriers to reaching collectivebargaining agreements. It is not clear to 

me how the vulnerable employees cited 

by my colleagues are benefited by a rule 

that makes it more difficult for their 

representatives to obtain a collectivebargaining agreement and, in turn, for 

them to gain the statutory protections 

afforded by such an agreement. 

Even assuming for argument’s sake 

that the final rule does not exceed the 

limits established by common-law 

agency principles and therefore is not 

impermissible under the Act, I would 

still dissent from my colleagues’ 

decision to promulgate the final rule 

because the 2020 Rule better promotes 

the Act’s policy of encouraging 

collective bargaining as a means to 

reduce obstacles to the free flow of 

commerce. It bears repeating that the 

common law sets the outer limit of a 

permissible joint-employer standard 

under the Act and that the Board may 

adopt a more demanding standard for 

policy reasons.466 In my view, jointemployer status under the Act should be 

imposed only on entities that play a 

significant, active role in hiring, 

supervising, or directing another 

employer’s employees, in setting their 

wages, benefits, or hours of work, and/ 

or in disciplining or discharging them. 

Only upon such a showing should the 

Board find joint-employer status and, 

accordingly, impose on the joint 

employer a duty to bargain in good faith 

with a union representing the jointly 

employed employees. That approach, 

requiring proof of exercise of control, is 

reflected in the 2020 Rule. 

In contrast, I believe that today’s final 

rule, rather than making bargaining 

more ‘‘meaningful,’’ will prove 

detrimental to productive collective 


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467 I do not agree that making it more difficult for 

parties to reach agreement through collective 

bargaining advances the concept of ‘‘meaningful’’ 

bargaining. 

468See, e.g., Comments of the National Waste and 

Recycling Association and the American Hospital 

Association. 

469Federal courts have indicated that a nonsignatory joint employer may be bound by a 

collective-bargaining agreement signed by the direct 

employer and a labor union representing the 

jointly-employed workers. See Armogida v. Jobs 

with Justice, Inc., 2022 U.S. Dist. LEXIS 174658 at 

*13 (S.D. Ind. Sept. 26, 2022) (‘‘[A] party may be 

bound by a labor contract by virtue of its status as 

a ‘joint employer’ with a signatory of the 

contract.’’); Mason Tenders Dist. Council v. CAC of 

N.Y., Inc., 46 F. Supp. 3d 432, 438 n.11 (S.D.N.Y. 

2014) (‘‘Since joint employer status functions, in 

cases like the one at bar, to bind a non-signatory 

to the terms of an otherwise-operative collective 

bargaining agreement, the typical scenario would 

focus on whether that non-signatory . . . could 

properly be treated as a joint employer.’’) (emphasis 

in original); Newmark & Lewis, Inc. v. Local 814, 

Teamsters, 776 F. Supp. 102, 106 (E.D.N.Y. 1991) 

(federal court jurisdiction under LMRA Sec. 301 

includes determining whether a non-signatory to a 

collective-bargaining agreement is contractually 

obligated to arbitrate under joint-employer theory); 

Central States, Southeast & Southwest Areas 

Pension Fund v. International Comfort Products, 

LLC, 787 F. Supp. 2d 696, 702 (M.D. Tenn. 2011) 

(‘‘J.E. Hoetger makes it clear that § 301 of the LMRA 

binds a joint employer to the terms of a collective 

bargaining agreement signed by a co-joint employer. 

Phrased another way, § 301 creates an ongoing duty 

for a joint employer to abide by the terms of its 

employees’ collective bargaining agreement, 

regardless of whether that employer signed the 

agreement.’’) (citing Metropolitan Detroit 

Bricklayers District Council v. J.E. Hoetger & Co., 

672 F.2d 580, 583 (6th Cir. 1982) (‘‘We recognize 

that courts have generally held that [Sec. 301] 

creates federal jurisdiction only over parties to the 

contract being sued upon. However, since the 

primary issue in this case was whether Hoetger was 

a ‘joint employer’ such that it could be bound by 

the collective bargaining agreement, we conclude 

that the district court had jurisdiction under 

§ 301(a) to decide this claim.’’)). 

The possibility that a joint employer could be 

bound to a collective-bargaining agreement that it 

neither negotiated nor signed strongly counsels 

against the majority’s decision to permit a jointemployer finding to be made absent any exercise of 

control whatsoever over the covered employees. 

Indeed, given that the final rule is to be applied 

retroactively, it is all but certain that countless 

employers—that have never been identified as a 

joint employer nor exercised any control over 

another employer’s employees—will now be 

required to adhere to the terms of other parties’ 

collective-bargaining agreements. 

470See also Colgate-Palmolive-Peet Co. v. NLRB, 

338 U.S. 355, 362 (1949) (‘‘To achieve stability of 

labor relations was the primary objective of 

Congress in enacting the National Labor Relations 

Act.’’). 

471 It is evident that the final rule is likely to 

create significant delay for parties as they endeavor 

to reach final collective-bargaining agreements. For 

example, should a labor union insist on the 

participation of a putative joint employer that has 

never directly exercised any control over any 

essential term and condition of employment of 

another employer’s employees, and that entity 

refuses to bargain based on its conviction that it is 

not a joint employer, bargaining between the 

undisputed employer and the union will be delayed 

while the union files an unfair labor practice charge 

and the issue is litigated to a final determination, 

possibly including litigation in the courts. It is selfevident that such delay to the collective-bargaining 

process could be substantial. 

472See, e.g., Central Taxi Service, 173 NLRB 826, 

827 (1968); Checker Cab Co., 141 NLRB 583, 586– 

587 (1963), enfd. 367 F.2d 692 (6th Cir. 1966); see 

also CID—SAM Management Corp., 315 NLRB 

1256, 1256 (1995). 

473My colleagues say that they ‘‘see little risk of 

enmeshing neutral employers in labor disputes’’ 

because ‘‘[w]hen more than one entity jointly 

employs particular employees, those entities are not 

neutral, and the prohibitions on secondary activity 

do not apply, regardless of what joint-employer 

standard is applied.’’ Obviously, however, the point 

I am making and that my colleagues do not dispute 

is that, by eliminating the actual-exercise 

requirement, the majority’s relaxed standard will 

Continued 

bargaining.467 Imagine a scenario in 

which an undisputed employer has 

exercised complete control over every 

aspect of its employees’ essential terms 

and conditions and that a second entity 

possesses, but has never exercised, a 

contractual reservation of right to 

codetermine the employees’ wages. 

Under the majority’s final rule, that 

second entity will be deemed a joint 

employer, but given that it has never 

exercised its contractually reserved 

authority, it makes little if any sense to 

seat it at the bargaining table. Doing so 

will have little if any benefit, while 

creating a substantial risk of frustrating 

agreement between the undisputed 

employer and the union because the 

interests of the undisputed employer 

and the second entity might well be in 

conflict.468 What if the two employerside entities were each to insist, in good 

faith, on different wage rates? What if an 

agreement were held up by the second 

entity’s refusal to agree to wage 

proposals that were agreeable to the 

union and the undisputed employer? 

Would that prevent the formation of a 

collective-bargaining agreement? If not, 

is the second entity bound by the 

agreement’s wage terms despite its 

refusal to agree to them? How will the 

rules of impasse and implementation 

upon impasse apply in this scenario? 

My colleagues fail to consider the 

implications of their final rule for 

collective bargaining.469

It is difficult to imagine a better recipe 

than today’s final rule for injecting 

chaos into the practice and procedure of 

collective bargaining that the majority 

claims to promote. Accordingly, the 

final rule is contrary to the national 

labor policy Congress established, 

which is to ‘‘achiev[e] industrial peace 

by promoting stable collectivebargaining relationships.’’ Auciello Iron 

Works, Inc. v. NLRB, 517 U.S. 781, 790 

(1996) (emphasis added).470 Moreover, 

collective bargaining was intended by 

Congress to be a process that could 

conceivably produce agreements. See, 

e.g., NLRB v. Insurance Agents’ 

International Union, 361 U.S. at 485 

(Congress intended collective bargaining 

to be ‘‘a process that look[s] to the 

ordering of the parties’ industrial 

relationship through the formation of a 

contract.’’); H.J. Heinz Co. v. NLRB, 311 

U.S. 514, 523 (1941) (The object of 

collective bargaining under the Act is 

‘‘an agreement between employer and 

employees as to wages, hours and 

working conditions.’’). There is nothing 

stable about the collective-bargaining 

relationships the final rule will 

predictably create, and the final rule 

will frustrate rather than facilitate 

reaching agreements.471

Its predictable adverse effect on the 

practice and procedure of collective 

bargaining is far from the only policybased objection to the final rule. I am 

also concerned about its impact on 

small businesses that, on their own, fall 

below the Board’s discretionary 

jurisdiction thresholds. Under extant 

law, the Board combines the gross 

revenues of joint employers when 

applying its discretionary jurisdictional 

standards.472 That historic practice was 

acceptable under the more rigorous 

joint-employer standard the Board 

applied both before and after TLI and 

Laerco and codified in the 2020 Rule. 

But now that my colleagues have 

lowered the bar, significantly greater 

numbers of small businesses never 

before subject to the Board’s jurisdiction 

will be swept within it. As a result, they 

will be saddled with costs they can ill 

afford, particularly the expense of hiring 

an attorney to represent them in 

collective bargaining. I’m concerned 

that the final rule will impose 

significant economic hardships on these 

small entities, without any 

countervailing benefit to collective 

bargaining that would outweigh this 

burden. 

Additionally, the final rule 

undermines Section 8(b)(4)’s protection 

of neutral employers against picketing 

and boycotts. That provision was 

designed to ‘‘shield[ ] unoffending 

employers and others from pressures in 

controversies not their own.’’ NLRB v. 

Denver Building Trades Council, 341 

U.S. 675, 692 (1951). By expanding the 

universe of joint employers to include 

entities that exercise an undefined 

indirect control or that merely possess 

but have never exercised authority to 

control, the final rule will convert 

heretofore neutral employers into 

primary employers, subjecting them to 

lawful picketing. This result will be 

particularly unjust where the labor 

dispute involves an essential term or 

condition of employment over which 

the joint employer has no control.473


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render many more businesses joint employers 

despite them never having played any role in 

actually exercising control over any term or 

condition of employment of another employer’s 

employees. By drawing such businesses into labor 

disputes not their own, the final rule diminishes 

Sec. 8(b)(4)’s protection against picketing and 

boycotts. 

474 ‘‘[I]n reviewing rules promulgated under the 

notice and comment rulemaking requirements of 

the Administrative Procedure Act, 5 U.S.C. 553 

(‘APA’), courts must assure that the agency has 

provided a reasoned explanation for its rule. In 

particular, a reasoned explanation for agency action 

must be based on a consideration of relevant factors 

. . . . [A]n agency decision may not be reasoned if 

the agency ignores vital comments regarding 

relevant factors, rather than providing an adequate 

rebuttal.’’ Western Coal Traffic League v. U.S., 677 

F.2d 915, 927 (D.C. Cir. 1982) (citations omitted); 

see also Alternate Fuels, Inc. v. Lujan, 1992 U.S. 

Dist. LEXIS 15785 (D. Kan. Sept. 22, 1992) (‘‘An 

agency should rebut vital relevant comments. The 

opportunity to comment is meaningless unless the 

agency responds to significant points raised by the 

public.’’) (citations omitted). 

475 Indeed, the 2020 Rule does not include 

industry-specific carveouts. 

The majority’s final rule will also 

discourage efforts to rescue failing 

businesses. Suppose a unionized 

company that supplies employees to 

‘‘user’’ businesses is going under and 

seeks a buyer to acquire its assets. If that 

supplier is independent of the user 

businesses it supplies, the usual rules of 

successorship would apply. A 

prospective buyer would understand 

that if a majority of its post-acquisition 

workforce consists of former employees 

of the seller, it would have to recognize 

and bargain with the incumbent union 

(and it would also understand that it 

cannot discriminate in hiring to avoid 

that duty), but it would not have to 

assume the seller’s collective-bargaining 

agreement, and it would be free to set 

its own initial terms and conditions of 

employment unilaterally. See NLRB v. 

Burns International Security Services, 

Inc., 406 U.S. 272 (1972); Fall River 

Dyeing & Finishing Corp. v. NLRB, 482 

U.S. 27 (1987). The Supreme Court 

created this framework based in part on 

the public policy of facilitating the 

rescue of ‘‘moribund’’ businesses. 

Burns, 406 U.S. at 287–288 (‘‘A 

potential employer may be willing to 

take over a moribund business only if he 

can make changes . . . . Saddling such 

an employer with the terms and 

conditions of employment contained in 

the old collective-bargaining contract 

may make these changes impossible and 

may discourage and inhibit the transfer 

of capital.’’). 

All this changes, however, if user 

businesses are deemed joint employers 

of the supplier’s employees, a scenario 

the final rule will make far more 

common. For the sake of simplicity, 

assume that only one such jointemployer user business exists. (In the 

real world, there would likely be 

multiple joint employers, upping the 

complications.) If a user business is a 

joint employer of the supplier’s 

employees, it will likely be a joint 

employer of the supplier’s successor’s 

employees, and its ongoing duty to 

bargain bridging the two supplier 

employers would prevent the successor 

from setting initial terms and conditions 

of employment different from those of 

the predecessor. See Whitewood 

Maintenance Co., 292 NLRB 1159, 

1168–1169 (1989) (holding that 

contractor that substituted one 

subcontractor for another jointly 

employed both the old and new 

subcontractors’ employees, so the new 

subcontractor could not set its own 

initial terms), enfd. 928 F.2d 1426 (5th 

Cir. 1991). Moreover, it is no answer to 

say that the user business could prevent 

this ‘‘bridging’’ by subcontracting the 

work performed by the supplier’s 

employees to the employees of a 

different supplier because, as the joint 

employer of the employees of its 

existing supplier, it would have a duty 

to bargain with their union 

representative over that subcontracting 

decision and its effects. See Fibreboard 

Paper Products Corp. v. NLRB, 379 U.S. 

203 (1964). Accordingly, by making 

scenarios like this far more likely than 

under the 2020 Rule, the majority’s final 

rule will discourage attempts to rescue 

failing businesses. 

In short, policy considerations 

militate against the majority’s radical 

expansion of the joint-employer 

doctrine. Any purported benefit of 

eliminating the requirement that control 

actually be directly exercised is nominal 

at best and is outweighed by the 

detrimental consequences outlined 

above. In my view, retaining the 2020 

Rule would better promote the policies 

of the Act and public policy generally. 

But in this section of my dissent, I have 

barely scratched the surface of the 

adverse consequences that predictably 

will flow from the final rule, 

consequences that commenters have 

brought to the Board’s attention, to no 

avail. To these, I turn next. 

The Majority Fails Adequately To 

Respond to Public Comments 

My colleagues briefly describe, but 

proceed to disregard as irrelevant, a 

variety of public comments regarding 

the new rule’s likely impact on 

businesses generally and on those in 

specific sectors of the economy where 

the joint-employer issue frequently 

arises. For example, some commenters 

predict that the Board’s new jointemployer standard will disincentivize 

conduct that tends to improve the 

workplace, like providing training 

sessions; undertaking safety and health 

initiatives; and developing corporate 

social responsibility programs, 

including diversity, equity, and 

inclusion initiatives. Others predict that 

the new rule will discourage larger 

companies from entering into contracts 

with smaller third parties to perform 

work, which would tend to harm 

business owners from underrepresented 

communities. Still others say that the 

new rule will make it more difficult for 

companies to seek temporary employees 

to address labor shortages or deal with 

fluctuating seasonal demand for labor. 

What is the majority’s response to 

these and other legitimate objections to 

their rule? My colleagues brush them 

aside, stating that ‘‘insofar as the Act 

itself requires the Board to conform to 

common-law agency principles in 

adopting a joint-employer standard, 

these concerns seem misdirected.’’ 

The majority similarly disregards the 

effects of the new rule on businesses in 

specific sectors of the economy. 

Although my colleagues express an 

awareness of ‘‘commenters’ concerns 

that the joint-employer standard we 

adopt in this final rule might have 

unwanted effects on their businesses,’’ 

they conclude that there is ‘‘no clear 

basis in the text or structure of the Act 

for exempting particular groups or types 

of employers from the final rule.’’ More 

decisively, they believe ‘‘that these 

concerns reflect considerations that, as 

a statutory matter, may [not] determine 

the Board’s choice of a joint-employer 

standard.’’ 

When the majority dismisses 

commenters’ objections as ‘‘misplaced’’ 

or says that they may not determine the 

choice of a joint-employer standard ‘‘as 

a statutory matter,’’ they mean, of 

course, that the common law of agency, 

and therefore the Act itself, precludes 

the standard the Board implemented in 

the 2020 Rule and compels the standard 

they promulgate today. But as I have 

shown, they are mistaken: the final rule 

is not compelled by the common law of 

agency and the Act. Accordingly, the 

majority has no valid basis for refusing 

to respond to the substance of the 

comments and therefore has failed to 

fulfill its statutory duty under the 

Administrative Procedure Act to 

provide a reasoned response to these 

comments.474

Moreover, the question here is not 

whether the Board should craft 

industry-specific joint-employer 

standards or exceptions.475 Rather, the 

point is that, in crafting a single, 

generally applicable joint-employer 


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476See, e.g., Comments of U.S. Chamber of 

Commerce; Associated Builders and Contractors; 

Associated General Contractors of America; U.S. 

Small Business Administration Office of Advocacy. 

477AIA Document A201–2017 (cited in comment 

of Associated General Contractors of America). 

478For additional examples of frequently used 

standard-form provisions, see Comment of 

Associated General Contractors of America. 

479See, e.g., Comments of International Franchise 

Association; Bicameral Congressional Signatories; 

Bipartisan Senators; U.S. Chamber of Commerce; 

U.S. Small Business Administration Office of 

Advocacy; McDonald’s USA, LLC; McDonald’s USA 

LLC Reply. 

480See, e.g., Comment of Bicameral Congressional 

Signatories (citing census data showing that 30.8 

percent of franchise businesses are minority owned, 

compared to 18.8 percent of non-franchise 

businesses); Comment of International Franchise 

Association (predicting that the proposed rule, if 

enacted, would be especially harmful to minority, 

female, and LGBTQ franchise operators). 

standard within the boundaries of the 

common law, the Board should— 

indeed, must—consider the substance of 

vital comments opposing as well as 

supporting the proposed rule. Having 

dismissed those comments on the 

erroneous ground that their hands are 

tied by the common law, my colleagues 

have conspicuously failed to do that 

here. And the legitimate objections to 

the proposed rule articulated in 

numerous major comments further 

persuade me that the final rule, in 

addition to being statutorily precluded, 

is unsound as a matter of policy. 

One illustrative example is the 

negative impact of the rule on the 

construction industry. As several 

commenters note, due to the particular 

nature of this industry, multiple 

employers typically operate on a given 

project.476 Multi-employer worksites are 

common in the construction industry, 

where a general contractor coordinates 

the work of multiple subcontractors, 

sometimes in multiple tiers. Each of 

these parties typically remains the sole 

employer of its own employees. But a 

general contractor must exert a degree of 

control over subcontractors and their 

employees to ensure that work on a 

given project meets efficiency, quality, 

and safety benchmarks. In fact, project 

owners routinely require general 

contractors to sign standard-form 

agreements, which obligate the general 

to reserve and exercise some level of 

control over their subcontractors’ 

employees, arguably impacting essential 

terms and conditions of employment. 

Illustrative are several provisions in two 

standard contracts 477 widely used in 

the construction industry: 

• ‘‘The Contractor shall enforce strict 

discipline and good order among the 

Contractor’s employees and other 

persons carrying out the [w]ork. The 

Contractor shall not permit employment 

of unfit persons or persons not properly 

skilled in tasks assigned to them.’’ 

• ‘‘The Contractor shall be 

responsible for initiating, maintaining, 

and supervising all safety precautions 

and programs in connection with the 

performance of the [c]ontract.’’ 

• ‘‘Unless the Contract Documents 

instruct otherwise, [the general 

contractor] shall be responsible for the 

supervision and coordination of the 

[w]ork, including the construction 

means, methods, techniques, sequences, 

and procedures utilized.’’ 478

Under the final rule, there is a 

significant risk that these and similar 

standard contract provisions will be 

found to vest in the general contractor 

reserved authority to control hiring, 

supervision, discipline, and discharge of 

its subcontractors’ employees—not to 

mention authority to control ‘‘working 

conditions related to the safety and 

health of employees’’—making the 

general contractor a joint employer of 

every single employee who performs 

work on the project. 

This puts the final rule at odds with 

the Supreme Court’s decision in NLRB 

v. Denver Building & Construction 

Trades Council, 341 U.S. at 689–690. 

There, the Court stated that ‘‘the fact 

that the contractor and subcontractor 

were engaged on the same construction 

project, and that the contractor had 

some supervision over the 

subcontractor’s work, did not eliminate 

the status of each as an independent 

contractor or make the employees of one 

the employees of the other. The business 

relationship between independent 

contractors is too well established in the 

law to be overridden without clear 

language doing so’’ (emphasis added). 

My colleagues address Denver Building 

Trades by construing it narrowly, but 

this will not do. The Court held that the 

general contractor was not the joint 

employer of its subcontractor’s 

employees simply because it exercised 

‘‘some supervision over the 

subcontractor’s work,’’ but under the 

final rule, a general contractor will be 

the joint employer of its subcontractors’ 

employees where it exercises no 

supervision over subcontractors’ work 

but merely possesses a contractually 

reserved authority to affect 

subcontractors’ employees’ terms and 

conditions of employment. If Denver 

Building Trades precludes finding a 

general contractor a joint employer 

where it exercises some supervision 

over work performed by employees of 

the subcontractors, it must also preclude 

finding a general contractor a joint 

employer where it exercises no 

supervision over work performed by 

employees of the subcontractors. The 

final rule cannot be reconciled with 

Denver Building Trades. 

The majority has similarly afforded 

insufficient attention to the impact of 

the final rule on the franchise industry. 

As numerous commenters note, the 

majority’s rule compromises the 

viability of franchises nationwide in key 

respects.479 Unsurprisingly, 

commenters warn the Board that the 

rule’s vast reach creates a significant 

risk that many franchisors will be held 

liable as joint employers of their 

franchisees’ employees. For example, 

McDonald’s LLC informs us that all its 

franchisees have unfettered discretion to 

hire, assign work, set wages, benefits, 

and schedules, and carry out day-to-day 

supervision. Yet McDonald’s franchise 

system—typical of countless others— 

requires franchisees to adhere to strict 

brand standards. The majority says that 

‘‘many forms of control that franchisors 

reserve to protect their brands or trade 

or service marks . . . will typically not 

be indicative of a common-law 

employment relationship,’’ but they 

decline to ‘‘categorically state that all 

forms of control aimed at protecting a 

brand are immaterial to the existence of 

a common-law employment 

relationship.’’ And it is entirely 

foreseeable that franchisors’ monitoring 

of franchisees’ cleanliness and hygiene 

protocols to protect brand standards 

would make franchisors joint employers 

of their franchisees’ employees under 

either or both of two newly adopted 

essential employment terms: ‘‘work 

rules and directions governing the 

manner, means, or methods of work 

performance’’ and/or ‘‘working 

conditions related to the safety and 

health of employees.’’ Commenters 

predict that franchisors will respond in 

one of two ways. Some will exert much 

greater control over their franchisees, 

effectively turning previously 

independent owners of franchisees into 

glorified managers; others will distance 

their franchisees by denying them 

guidance—particularly with respect to 

human resources—previously 

furnished, forcing franchisees to incur 

the expense of obtaining that guidance 

from other sources, i.e., labor and 

employment attorneys. Both outcomes 

are bad. Many commenters also 

highlight the disproportionate impact 

that the final rule will have on members 

of minority groups.480

Several commenters warn the Board 

that the staffing industry will be 


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481See, e.g., Comments of American Staffing 

Association; U.S. Chamber of Commerce; American 

Hospital Association; FMI—Food Industry 

Association; National Association of Manufacturers; 

Clark Hill PLC. 

482The importance of staffing firms to the health 

of the economy is difficult to overstate. As one 

commenter explains, they are crucial to ensuring 

that food is delivered to consumers in a timely 

fashion despite the persistence of significant supply 

chain disruptions. See Comment of FMI—Food 

Industry Association. 

483See Comment of Clark Hill PLC. 

484See, e.g., Comments of U.S. Chamber of 

Commerce; American Hospital Association. 

485See Bertha Coombs, With travel nurses making 

$150 an hour, hospital systems are forced to 

innovate, CNBC (Mar. 28, 2023), https://

www.cnbc.com/2023/03/28/with-travel-nursesmaking-150-an-hour-hospital-systemsinnovate.html. 

486What Is a Travel Nurse? Job Description and 

Salary, St. Catherine University, https://

www.stkate.edu/academics/women-in-leadershipdegrees/what-is-a-travel-nurse#:∼:text=

Travel%20nurses%20sign

%20a%20contract,a%20new

%20destination%20and%20opportunity (last 

visited Oct. 19, 2023). 

487See Comment of American Hospital 

Association. 

488See the Board’s Second Notice of Proposed 

Rulemaking on Collective-Bargaining Units in the 

Health Care Industry, 53 FR 33900, 33909 (1988): 

‘‘In view of Congressional concern in the health 

care amendments with the ability of health care 

institutions to deliver uninterrupted health 

services, it is relevant to consider whether multiple 

units increase costs to health care institutions so as 

to disrupt the stability of the institutions.’’ 

489Comment of American Hospital Association. 

490The role of increased work stoppages, which 

will likely occur as a result of the rule, is easy to 

glean from recent events. See, e.g., Nurses end 

nearly 10-month strike at Tenet Healthcare-owned 

hospital, Dallas Morning News (Jan. 5, 2022), 

https://www.dallasnews.com/business/localcompanies/2022/01/05/nurses-end-nearly-10- 

month-strike-at-tenet-healthcare-owned-hospital/ 

(noting that a dozen inpatient behavioral health 

beds were closed due to staffing challenges 

presented by the strike). 

severely impaired by the final rule.481

Staffing firms play a significant role in 

the economy by recruiting and hiring 

employees and placing them in 

temporary assignments with a wide 

range of clients on an as-needed 

basis.482 Under the final rule, virtually 

every client of a staffing firm 

predictably will be the joint employer of 

that firm’s supplied employees. The 

client will at least reserve authority to 

control and/or indirectly control at least 

one essential employment term, and 

probably more than one (e.g., hours of 

work and scheduling; tenure of 

employment; possibly ‘‘work rules and 

directions governing . . . the grounds 

for discipline’’). I have already 

described the deleterious consequences 

the final rule predictably will have in 

the user employer/supplier employer 

setting, and staffing firms are a subset of 

the broader ‘‘supplier employer’’ 

category. Those consequences, 

particularly the prospect of getting 

trapped in a contractual relationship 

from which it cannot readily extricate 

itself, will incentivize user businesses to 

avoid contracting with staffing firms 

altogether, whether or not those firms 

are unionized. Contracting with a firm 

whose employees are unrepresented is 

no guarantee of protection, since there’s 

always the risk that those employees 

will choose representation. Rather than 

run the risk of incurring joint-employer 

status of a staffing firm’s employees—a 

risk that the final rule increases 

dramatically—user businesses might 

well decide to bring their contracted-out 

work in-house, to the detriment of 

staffing firms generally and the broader 

economy. Moreover, where the costs to 

the (former) user business of bringing 

work in-house exceed the costs of 

contracting out that work, the impact 

may be felt by the (former) user 

businesses’ own employees. As one 

commenter cautions, ‘‘[a]s in any case 

where a business is forced to incur 

unexpected costs, it will be forced to 

look for other ways to remain profitable. 

Often this leads to reduced headcount 

or other cost-saving measures that could 

impact workers.’’ 483

In addition, the final rule will 

negatively impact the healthcare sector. 

As several commenters point out, the 

rule’s unprecedented elevation of 

indirect control and reserved authority 

to control to dispositive status in the 

joint-employer analysis risks 

encroaching on a host of business 

relationships that hospitals rely on to 

provide lifesaving patient care.484 For 

instance, since the onset of the Covid– 

19 pandemic, many hospitals have 

utilized contracted labor in the form of 

travel nurses to fill critical staffing 

gaps.485 Travel nurses typically sign a 

contract with a staffing agency to 

occupy a temporary position at a 

hospital that can range in duration from 

several days to a few months.486 Under 

the final rule, a hospital that maintains 

(or merely has the authority to maintain) 

work rules and schedules for travel 

nurses on its premises will be their joint 

employer and duty-bound to bargain 

with the union that represents nurses 

directly employed by the staffing 

agency. Moreover, travel nurses are 

required to comply with the health and 

safety policies of the hospital where 

they work, which may impose more 

stringent requirements than those 

mandated by law. Again, under the final 

rule, the maintenance of these policies 

will make the hospital the joint 

employer of those nurses. The 

problematic consequences are not 

difficult to imagine. Among other 

things, all the adverse consequences 

discussed above with respect to 

businesses in the user employer/ 

supplier employer context apply here as 

well, and coming to grips with those 

takes time and costs money. As one 

commenter accurately observes, 

hospitals will be forced ‘‘to spend time 

and resources that could be devoted to 

patient care on administrative and 

management issues as it works to 

understand the scope of its joint 

employer liability [and] revises policies, 

practices, and contracts to address that 

liability . . . .’’ 487

Furthermore, although my colleagues 

assert that the final rule is ‘‘unrelated 

to’’ the Board’s 1989 health care rule, I 

respectfully disagree. It is true that the 

text of the final rule does not directly 

impact bargaining units in any 

particular hospital. But a foreseeable 

consequence of the final rule will be a 

proliferation of bargaining units in 

hospitals, contrary to policy concerns 

embedded in the 1974 Health Care 

amendments.488

The net benefit of the final rule to 

unions in the healthcare sector is also 

questionable. As I explain above, the 

impact of the rule on collective 

bargaining is murky at best and 

disastrous at worst. With increasing 

regularity, representatives of businesses 

that have never exercised control over 

any essential term or condition of 

employment of other businesses’ 

employees will crowd around the 

bargaining table with one another and 

the direct employer’s representatives, 

and they will have competing interests 

and motives, complicating the prospects 

of securing an agreement. As one 

commenter observes, ‘‘[c]ollective 

bargaining is difficult enough when just 

one employer sits across the table and 

approaches issues and proposals with a 

unitary perspective. When a union must 

simultaneously bargain with two, three, 

or four employers whose interests and 

priorities do not align, finalizing an 

agreement will be orders of magnitude 

more difficult.’’ 489 This observation 

applies to any industry but is 

particularly troubling in the healthcare 

space. The potential adverse 

consequences of the final rule on critical 

patient care warrant the most serious 

consideration,490 and my colleagues do 

not give them that attention because, 

they say, it cannot be helped because 

the common law and the Act leave them 

no other choice. For reasons already 

explained, they are wrong. 


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491 In support of its position, the majority merely 

cites the general statement in the Restatement 

(Second) of Agency, section 2, that a servant is an 

agent employed by a master to perform service in 

his affairs whose ‘‘physical conduct in the 

performance of the service’’ is controlled by the 

master. That citation is insufficient to justify the 

majority’s decision. And as numerous commenters 

point out, a variety of courts have rejected the 

notion that an entity’s control over workplace safety 

tends to prove a joint-employer relationship. See, 

e.g., Comment of New Civil Liberties Alliance and 

the Institute for the American Worker (citing cases). 

492For example, a number of OSHA standards 

establish alternative methods by which an employer 

can satisfy its duties, which, as explained above, are 

owed to other entities’ employees on a multiemployer worksite. See, e.g., 29 CFR 1926.55 

(‘‘Gases, vapors, fumes, dusts, and mists. To 

achieve compliance with paragraph (a) of this 

section, administrative or engineering controls must 

first be implemented whenever feasible. When such 

controls are not feasible to achieve full compliance, 

protective equipment or other protective measures 

shall be used to keep the exposure of employees to 

air contaminants within the limits prescribed in 

this section.’’); 29 CFR 1926.652(c) (‘‘Design of 

support systems, shield systems, and other 

protective systems. Designs of support systems, 

shield systems, and other protective systems shall 

be selected and constructed by the employer or his 

designee and shall be in accordance with the 

requirements of paragraph (c)(1); or, in the 

alternative, paragraph (c)(2); or, in the alternative, 

paragraph (c)(3); or, in the alternative, paragraph 

(c)(4) as follows: . . . .’’). The fact that an employer 

has discretion in this regard arguably makes the 

majority’s carveout for measures that are legally 

required inapplicable. 

493Curiously enough, because the property owner 

(or lessee) would become an employer of everyone 

on its property directly employed by other 

employers, it would arguably incur the same duties 

to them that it owes to its own directly employed 

employees under the Occupational Safety and 

Health Act and its implementing regulations! 

However, I doubt that the property owner would be 

heard to contend that its joint-employer status is 

negated the very instant it is created by virtue of 

the final rule’s carveout for workplace safety 

measures compelled by law. Whether or not such 

an argument, strictly speaking, would be circular, 

it would certainly be given to rotation. 

494See Occupational Safety and Health 

Administration, U.S. Department of Labor, CPL 02– 

00–124, OSHA Instruction: Multiemployer Citation 

Policy (Dec. 10, 1999), https://www.osha.gov/ 

enforcement/directives/cpl-02-00-124 (last visited 

Oct. 19, 2023). 

The Majority Erroneously, and 

Unreasonably, Expands and Modifies 

the List of ‘‘Essential’’ Terms and 

Conditions of Employment 

The Board should not make ‘‘working 

conditions related to the safety and 

health of employees’’ an essential term 

and condition of employment. 

I disagree with several of the changes 

my colleagues make to the list of 

essential terms and conditions of 

employment, but the most problematic 

of the bunch is their decision to make 

‘‘working conditions related to the 

safety and health of employees’’ a newly 

essential term and condition. Doing so 

is not compelled or supported by 

common-law agency principles, and it is 

unwise as a matter of policy. The 

majority fails to cite a single court case 

identifying working conditions related 

to employees’ health and safety as an 

essential term and condition of 

employment.491 Further, in light of the 

significant federal regulatory obligations 

in the area of workplace safety, cited by 

many commenters, the majority fails to 

explain why, in their view, an entity’s 

exercise of control over or reservation of 

authority to control the workplace 

health and safety of another entity’s 

employees should create joint-employer 

status. 

The Occupational Safety and Health 

Act, 29 U.S.C. 654, obligates employers 

to protect the safety and health of not 

only their own employees but also the 

employees of other entities in the 

workplace. Under section 654: 

(a) Each employer— 

(1) shall furnish to each of his employees 

employment and a place of employment 

which are free from recognized hazards that 

are causing or are likely to cause death or 

serious physical harm to his employees; 

(2) shall comply with occupational safety 

and health standards promulgated under this 

chapter. 

To be sure, an employer’s duty under 

subsection (a)(1)—known as the general 

duty clause—is owed only to its own 

employees. However, subsection (a)(2) 

‘‘does not limit its compliance directive 

to the employer’s own employees, but 

requires employers to implement the 

Act’s safety standards for the benefit of 

all employees in a given workplace, 

even the employees of another 

employer.’’ Universal Construction Co. 

v. OSHRC, 182 F.3d 726, 728 (10th Cir. 

1999). In short, federal law requires 

employers to exert control over the 

workplace health and safety of workers 

employed by other employers—and in 

complying with its statutory and 

regulatory obligations, an employer 

might need to exercise discretion.492

Additionally, an employer/property 

owner who adopts certain safety rules to 

satisfy its general-duty obligation to its 

own employees under section 654(a)(1) 

is also likely to require others on its 

premises to abide by these safety rules, 

and doing so has been found not to 

create joint-employer status. Knitter v. 

Corvias Military Living, LLC, 758 F.3d at 

1230 (finding no joint-employer status 

despite company’s exercise of control 

over workplace safety because company 

‘‘naturally would be concerned about 

[vendor’s employees’] safety, even if 

only for liability purposes, just as they 

would for any employee or nonemployee on premises.’’). Businesses are 

required by law to protect the safety of 

their own employees, and my colleagues 

say that measures required by law will 

not evidence joint-employer status—but 

the court’s reasoning in Knitter exposes 

the inadequacy of that carveout. As the 

court points out, a business will apply 

its workplace safety measures to 

everyone on its property, for liability 

purposes if for no other reason, 

regardless of whether it is compelled to 

do so by statute or regulation. And by 

doing so it will become, under the final 

rule, the joint employer of everyone on 

its property that is employed by another 

entity.493

The majority’s decision to make 

‘‘working conditions related to the 

safety and health of employees’’ an 

essential term and condition of 

employment is also at odds with the 

Occupational Safety and Health 

Administration’s guidance on the duties 

owed by employers on multi-employer 

worksites.494 That guidance does not 

contemplate that one company is or 

becomes the joint employer of another 

company’s employees by virtue of the 

control it possesses or exercises over 

workplace safety measures. 

OSHA’s guidance identifies four types 

of employers on a multi-employer 

worksite: the creating employer, the 

exposing employer, the correcting 

employer, and the controlling employer. 

Id. The creating employer is an 

employer that caused a hazardous 

condition that violates an OSHA 

standard. The exposing employer is an 

employer whose own employees have 

been exposed to the hazard. The 

correcting employer is an employer who 

is engaged in a common undertaking, on 

the same worksite, as the exposing 

employer and is responsible for 

correcting the hazard. And the 

controlling employer is an employer 

who has general supervisory authority 

over the worksite, including the power 

to correct safety and health violations 

itself or require others to correct them. 

Each type of employer owes duties to 

employees. The extent of an employer’s 

duties depends on its proper 

categorization, and an employer may 

have multiple roles. Id. 

In Universal Construction Co. v. 

OSHRC, 182 F.3d at 726, the court held 

that a general contractor in the 

construction industry (Universal) was 

citable for hazardous conditions created 

by a subcontractor where only the 

subcontractor’s employees had been 

exposed to the danger. The court 

explained that under 29 U.S.C. 

654(a)(2), a general contractor—the 

controlling employer in the foregoing 

schema—is responsible for safety 

violations that it could reasonably have 

been expected to prevent or abate by 

reason of its supervisory capacity, 


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495See Comment of Associated Builders and 

Contractors. 

496See, e.g., Comments of American Trucking 

Association and National Association of 

Manufacturers. 

497See Comment of the American Trucking 

Associations. Indeed, in the 2015 BFI decision, the 

Board majority found the presence of a jointemployer relationship in part because the user 

employer noticed the supplier’s employees 

committing several safety violations. The BFI 

official ‘‘witnessed two Leadpoint employees 

passing a pint of whiskey at the jobsite’’ and 

reported it. 362 NLRB at 1602. The facility in 

question used conveyor belts, a type of powered 

haulage, to move materials to be sorted for 

recycling. Id. at 1600. It is obvious that consuming 

alcohol near powered haulage is inherently 

hazardous. With all due respect to my colleagues, 

I genuinely wonder whether a potential joint 

employer will flag blatant safety violations like this 

with as much urgency after their final rule takes 

effect. 

498Contrary to my colleagues’ assertion, my 

disagreement here is not ‘‘principally semantic.’’ As 

I explained, the majority’s inclusion of ‘‘the tenure 

of employment, including hiring and discharge’’ 

significantly broadens the potential scope of 

essential terms and conditions of employment 

compared to the 2020 Rule’s more clearly defined 

set. The majority’s statement that it refers to ‘‘the 

range of actions that determine or alter an 

individual’s employment status’’ provides no 

further definition, and does not foreclose the 

possibility that this essential term could be used to 

make general contractors in the construction 

industry the joint employer of every single one of 

its subcontractors’ employees. I leave it to those 

more deeply conversant with the workings of the 

construction industry to flesh out the implications 

of such a scenario. I will note, however, that under 

John Deklewa & Sons, 282 NLRB 1375, 1377–1378 

(1987), enfd. sub nom. Iron Workers, Local 3 v. 

NLRB, 843 F.2d 770 (3d Cir. 1988), employers that 

are party to a Sec. 8(f) collective-bargaining 

agreement can withdraw recognition from the union 

and change their employees’ terms and conditions 

of employment upon the expiration of the 8(f) 

agreement. But a general contractor that, by virtue 

of its indirect control over ‘‘tenure of employment,’’ 

becomes a joint employer of employees of 

subcontractors that are party to Sec. 8(f) agreements 

is not itself party to a Sec. 8(f) agreement. Would 

it stand in the shoes of its subcontractors? Or would 

the fact that it is not itself signatory to its 

subcontractors’ 8(f) agreements disrupt the 

applicability of Deklewa’s rules? Would it be 

permitted to withdraw recognition when the 

subcontractor’s 8(f) agreement expires? Could it do 

so if the subcontractor does not withdraw 

recognition when the 8(f) agreement expires? I do 

not envy employers who will need to navigate such 

uncharted—and complicated—legal waters in light 

of my colleagues’ final rule. 

regardless of whether it created the 

hazard or whether its own employees 

had been exposed to the hazard. Id. at 

732. Under the final rule my colleagues 

promulgate today, which renders 

‘‘working conditions related to the 

safety and health of employees’’ an 

essential term and condition of 

employment, a general contractor in 

Universal’s shoes would become the 

joint employer of the employees directly 

employed by the ‘‘exposing employer’’ 

subcontractor—and possibly employees 

directly employed by every 

subcontractor on the project—if it 

exercised discretion in responding to 

the hazardous condition or went beyond 

the minimum required by law. This is 

not consistent with Supreme Court 

precedent. See NLRB v. Denver Building 

& Construction Trades Council, 341 U.S. 

at 689–690 (‘‘[T]he fact that the 

contractor and subcontractor were 

engaged on the same construction 

project, and that the contractor had 

some supervision over the 

subcontractor’s work, did not eliminate 

the status of each as an independent 

contractor or make the employees of one 

the employees of the other’’).495

Additionally, a number of 

commenters point out that treating 

‘‘working conditions related to the 

safety and health of employees’’ as an 

essential term and condition of 

employment creates a perverse 

incentive for companies to avoid 

protecting the employees of other 

employers or to avoid maintaining 

safety standards or applying safety 

measures that are any more protective 

than legally-mandated minimums.496 As 

stated by one commenter, ‘‘[p]lacing the 

regulated community in a position 

where they must choose between robust 

workplace health and safety standards 

contractually mandated and monitored 

on the one hand and, on the other hand, 

a potential joint employer classification 

over individuals whom all involved 

considered to be employees of only one 

employer, is bad public policy.’’ 497

These comments, which resonate with 

me, are not satisfactorily addressed by 

the majority. 

Other changes to the list of essential 

terms and conditions invite mischief. 

I also disagree with the majority’s 

decision to add ‘‘work rules and 

directions governing the manner, 

means, or methods of the performance 

of duties and the grounds for 

discipline’’ to the list of essential terms 

and conditions of employment. My 

concern is with the phrase ‘‘work rules 

. . . governing . . . the grounds for 

discipline,’’ which brings to mind the 

Board’s history of policy oscillation 

regarding the proper analysis of 

workplace rules that allegedly interfere 

with protected activity. See Stericycle, 

Inc., 372 NLRB No. 113 (2023) (Member 

Kaplan, dissenting). The final rule’s 

incorporation of this phrase invites 

unions to comb through a putative joint 

employer’s manuals in search of 

ambiguous language, argue that workers 

employed by another entity (i.e., 

supplied employees performing work 

for a putative-joint-employer user 

business) ‘‘could’’ reasonably interpret 

the language to interfere with protected 

activity, and rely on it to support a jointemployer finding. Such an argument 

would have legs regardless of whether 

the user employer actually applied its 

workplace rules to employees of a 

supplier employer because even if it did 

not (which seems unlikely), it would 

possess the authority to do so. 

Finally, I believe that my colleagues’ 

substitution of ‘‘hiring’’ and ‘‘discharge’’ 

as essential terms and conditions of 

employment under the 2020 Rule with 

‘‘the tenure of employment, including 

hiring and discharge’’ (emphasis added) 

will be used to make general contractors 

in the construction industry joint 

employers per se. As is well known to 

those in the regulated community, a 

wide variety of unionized businesses in 

the construction industry employ a 

comparatively small complement of 

permanent employees, and then, when 

they are awarded a subcontract on a 

construction site, ‘‘staff up’’ from the 

union hiring hall with employees whose 

employment lasts only for the duration 

of the project for which they are hired. 

It could easily be argued that the general 

contractor, which ultimately determines 

the duration of each part of the 

construction project—every stage from 

excavation through interior finishing 

work—indirectly controls ‘‘the tenure of 

employment’’ of every employee hired 

only for the duration of his or her 

employer’s subcontracted part of the 

project, and is therefore the joint 

employer of every single one of those 

employees.498

For these reasons, I disagree with the 

majority’s decision to rescind and revise 

the 2020 Rule’s appropriate 

determination of the terms and 

condition of employment that should be 

considered ‘‘essential’’ for purposes of 

determining joint-employer status. 

The Final Rule Is Arbitrary and 

Capricious Under the Administrative 

Procedure Act 

The Administrative Procedure Act 

(APA), 5 U.S.C. 551 et seq., establishes 

standards that federal agencies must 

follow when engaged in notice-andcomment rulemaking. Specifically, the 

APA prohibits administrative agencies 

from acting arbitrarily and capriciously. 

In this regard, the Supreme Court has 

explained that the APA requires the 

agency to ‘‘provide reasoned 

explanation for its action . . . . And of 

course the agency must show that there 

are good reasons for the new policy.’’ 

FCC v. Fox Television Stations, Inc., 556 

U.S. 502, 515 (2009) (internal citation 

omitted). More recently, the Supreme 

Court succinctly held that ‘‘[t]he APA’s 

arbitrary-and-capricious standard 

requires that agency action be 


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499See NLRB v. United Insurance Co. of America, 

390 U.S. at 256 (holding that the Board must ‘‘apply 

general agency principles in distinguishing between 

employees and independent contractors under the 

Act’’); Browning-Ferris Industries of California v. 

NLRB, 911 F.3d at 1214–1215 (‘‘[E]mployee-orindependent-contractor cases can still be instructive 

in the joint-employer inquiry to the extent that they 

elaborate on the nature and extent of control 

necessary to establish a common-law employment 

relationship. Beyond that, a rigid focus on 

independent-contractor analysis omits the vital 

second step in joint-employer cases, which asks, 

once control over the workers is found, who is 

exercising that control, when, and how.’’) (emphasis 

in original). 

reasonable and reasonably explained.’’ 

FCC v. Prometheus Radio Project, __U.S. 

__, 141 S. Ct. 1150, 1158 (2021). The 

final rule fails this test. 

I have already pointed out one respect 

in which the final rule contravenes the 

APA—namely, that the final rule fails to 

respond to significant points urged in 

vital comments. But the reason it fails 

to do so portends a more fundamental 

problem for my colleagues’ final rule. 

The majority has taken the position that 

common-law agency principles, and 

therefore the NLRA itself, compel the 

Board both to rescind the 2020 Rule and 

to promulgate a final rule that does not 

require proof that an entity has 

exercised any control whatsoever before 

it may be found to be a joint employer 

of another entity’s employees. For 

reasons explained at length above, that 

position is legally erroneous, and since 

it is the very foundation of the final 

rule—again, the rule barely mentions 

policy grounds—it renders the final rule 

arbitrary and capricious in its entirety. 

The majority misconstrues common-law 

agency principles applied in the jointemployer context, ignores judicial 

precedent addressing joint-employer 

status under statutes materially similar 

to the NLRA—i.e., statutes that, like the 

NLRA, define ‘‘employee’’ in such a 

manner as to make the common law of 

agency govern the interpretation—and 

refuse to acknowledge that the Board, 

for policy reasons unique to the NLRA, 

may adopt a joint-employer standard 

that does not extend to the outermost 

limits of the common law. Because the 

majority erroneously deems the 2020 

Rule statutorily precluded and their 

final rule statutorily compelled, they 

dismiss as ‘‘misdirected’’ the many 

public comments that point out the 

ways in which the proposed rule— 

implemented with minor changes in the 

final rule—would harm businesses and 

destabilize labor relations. For these 

reasons, the majority’s final rule is 

neither reasonable nor reasonably 

explained. 

Further, my colleagues fail adequately 

to justify their decision to engage in this 

rulemaking by claiming that the final 

rule, among other things, establishes ‘‘a 

definite and readily available standard’’ 

that will assist employers and labor 

organizations in complying with the Act 

and ‘‘reduce uncertainty and litigation 

over the basic parameters of jointemployer status’’ compared to 

determining that status through case-bycase adjudication. These claims are 

simply untrue. The final rule fails to 

achieve these things. It offers no greater 

certainty or predictability than 

adjudication, and it will not reduce 

litigation, because it expressly 

contemplates that joint-employer status 

will be determined through adjudication 

under the common law, not under the 

provisions of the final rule, in most if 

not all cases. In this respect, it will also 

provide markedly less guidance to 

parties than did the 2020 Rule. 

Absent any rule whatsoever, jointemployer status would be determined 

through case-by-case adjudication 

applying the common law of agency.499

Rather than specify how common-law 

principles will be applied in 

determining joint-employer status, 

however, the final rule simply 

incorporates the common law of agency 

by reference in no fewer than three 

places. Section 103.40(a) of the final 

rule provides that ‘‘an employer, as 

defined by Section 2(2) of the National 

Labor Relations Act (the Act), is an 

employer of particular employees, as 

defined by Section 2(3) of the Act, if the 

employer has an employment 

relationship with those employees 

under common-law agency principles.’’ 

Section 103.40(e) of the final rule 

provides that ‘‘[w]hether an employer 

possesses the authority to control or 

exercises the power to control one or 

more of the employees’ terms and 

conditions of employment is 

determined under common-law agency 

principles.’’ And Section 103.40(f) of 

the final rule provides that ‘‘[e]vidence 

of an employer’s control over matters 

that are immaterial to the existence of 

an employment relationship under 

common-law agency principles or 

control over matters that do not bear on 

the employees’ essential terms and 

conditions of employment is not 

relevant to the determination of whether 

the employer is a joint employer.’’ 

Determinations of joint-employer status 

under each of these provisions will 

require adjudication under the common 

law (which the majority has 

mischaracterized), since the final rule 

by its terms provides no other guidance. 

This is precisely how the 

determinations would be made if there 

were no rule at all. 

The final rule is a step backward from 

the 2020 Rule in all these respects. As 

noted above, the 2020 Rule specified the 

factors to be considered in making a 

joint-employer determination and 

explained how they relate to each other. 

This permitted parties to determine 

whether a joint-employer relationship 

would be found based on the text of the 

rule itself, without any need to resort to 

Restatements of Agency, precedent 

applying the common law, or any other 

source to make that determination 

because the 2020 Rule itself reflected 

(and remained within) the boundaries 

established by the common law. For all 

these reasons, the 2020 Rule 

indisputably provided parties with 

greater certainty and predictability than 

they would have if joint-employer status 

were decided by adjudication. The final 

rule, on the other hand, does not. 

Although administrative agencies 

have the authority to revise or amend 

previously promulgated rules, the APA 

requires the agency to ‘‘provide 

reasoned explanation for its action 

. . . . [and] show that there are good 

reasons for the new policy.’’ FCC v. Fox 

Television Stations, Inc., 556 U.S. at 515 

(internal citation omitted). Here, the 

majority fails to acknowledge that 

today’s final rule provides less guidance 

for the regulated community than did 

the 2020 Rule. Nor have they shown 

that there are ‘‘good reasons’’ for 

replacing a clear, well-defined, and 

comprehensive rule with one that 

simply sets employers, employees, and 

unions adrift in a sea of common-law 

cases, just as if there were no jointemployer rule at all. Most of all, they 

fail to show that there are good reasons 

for the final rule because their primary 

supporting rationale—that the final rule 

is compelled as a matter of law—is 

wrong, and their alternative supporting 

rationale—that the final rule is superior 

to the 2020 Rule as a matter of policy— 

is cursory at best and fails to reckon 

with the substance of vital comments 

that attack the rule on policy grounds. 

For all these reasons, the final rule is 

arbitrary and capricious. 

The Majority’s Final Regulatory 

Flexibility Analysis Is Arbitrary and 

Capricious 

My colleagues err in asserting that 

their final joint-employer rule will not 

have a significant economic impact on 

a substantial number of small entities. 

In their view, ‘‘[t]he only direct 

compliance cost for any of the 6.1 

million American business firms (both 

large and small) with employees is 

reading and becoming familiar with the 

text of the new rule.’’ They peg that 

familiarization cost at $227.98, 

representing their estimate of the cost of 

an hour-long review of the rule by a 


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500See comments of the U.S. Small Business 

Administration Office of Advocacy, Wyoming 

Bankers Association, National Federation of 

Independent Business; National Association of 

Convenience Stores; McDonald’s USA, LLC, and 

The Colorado Bankers Association. 

501One study found that it takes an average of 409 

days for an employer and a union to reach a first 

contract. Robert Combs, ANALYSIS: How Long Does 

It Take Unions to Reach First Contracts? 

(Bloomberg Law News, June 1, 2021), available at 

https://news.bloomberglaw.com/bloomberg-lawanalysis/analysis-how-long-does-it-take-unions-toreach-first-contracts (last visited Oct. 19, 2023). 

human resources specialist or labor 

relations specialist and an hour-long 

consultation between that specialist and 

an attorney. As the public comments 

make clear, the majority grossly 

underestimates the actual costs that 

small businesses will incur to 

familiarize themselves with the final 

rule. It is not clear how a human 

resources specialist will be able to read 

the rule, which nearly 63,000 words in 

length, in an hour, let alone 

comprehend the full ramifications of its 

changed legal standard in this 

complicated area of the law. 

More importantly, my colleagues 

erroneously deem irrelevant (for 

purposes of a regulatory flexibility 

analysis) certain direct costs of 

compliance that the rule imposes on 

small businesses. The final rule will 

transform many small businesses that 

were not joint employers under the 2020 

Rule into joint employers, with an 

entirely new duty to engage in collective 

bargaining. This will impose direct 

compliance costs in two ways. First, to 

determine whether they would be 

subject to that duty, small businesses 

will have to review their existing 

business contracts and practices to 

determine whether they possess any 

reserved authority to control or exercise 

any indirect control over any essential 

term and condition of employment of 

another business’s employees, neither of 

which could alone establish jointemployer status under the 2020 Rule but 

either of which will make an entity a 

joint employer of another business’s 

employees under the majority’s final 

rule. Second, small businesses whose 

joint-employer status has been changed 

by the final rule and that contract with 

an employer whose employees are 

unionized will be required to participate 

in collective bargaining, as mandated by 

new Section 103.40(h). 

The Regulatory Flexibility Act, as 

amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996, 5 U.S.C. 601–612, ‘‘obliges federal 

agencies to assess the impact of their 

regulations on small businesses.’’ 

United States Cellular Corp. v. FCC, 254 

F.3d 78, 88 (D.C. Cir. 2001). Among 

other things, the Regulatory Flexibility 

Act requires that a federal agency 

issuing a rule under the Administrative 

Procedure Act publish an initial 

regulatory flexibility analysis, consider 

the comments received in response, and 

publish a final regulatory flexibility 

analysis (FRFA) when promulgating its 

final rule. See 5 U.S.C. 603, 604. An 

agency’s FRFA must meet certain 

statutory requirements. It must state the 

purpose of the final rule and, if possible, 

the estimated number of small 

businesses that it will affect. 

Additionally, each FRFA must 

summarize comments filed in response 

to the agency’s initial regulatory 

flexibility analysis, along with the 

agency’s assessment of those comments. 

Finally, each FRFA must include ‘‘a 

description of the steps the agency has 

taken to minimize the significant 

economic impact’’ that its rule will have 

on small businesses, ‘‘including a 

statement of the factual, policy, and 

legal reasons for selecting the alternative 

adopted in the final rule and why each 

one of the other significant alternatives 

to the rule considered by the agency 

which affect the impact on small 

entities was rejected.’’ 5 U.S.C. 

604(a)(6). An agency is excused from 

conducting a FRFA only if ‘‘the head of 

the agency certifies that the rule will 

not, if promulgated, have a significant 

economic impact on a substantial 

number of small entities.’’ 5 U.S.C. 

605(b). 

Although the requirements of the 

Regulatory Flexibility Act are ‘‘purely 

procedural,’’ National Telephone 

Cooperative Assn. v. FCC, 563 F.3d 536, 

540 (D.C. Cir. 2009), the Administrative 

Procedure Act, 5 U.S.C. 553, prohibits 

agency actions that are arbitrary and 

capricious, and ‘‘the APA together with 

the Regulatory Flexibility Act require 

that a rule’s impact on small businesses 

be reasonable and reasonably 

explained.’’ Id. A regulatory flexibility 

analysis is, for APA purposes, part of an 

agency’s explanation of its rule. Id. 

(citing Small Refiner Lead Phase-Down 

Task Force v. EPA, 705 F.2d 506, 539 

(D.C. Cir. 1983)); see also Thompson v. 

Clark, 741 F.2d 401, 405 (D.C. Cir. 1984) 

(‘‘[I]f data in the regulatory flexibility 

analysis—or data anywhere else in the 

rulemaking record—demonstrates that 

the rule constitutes such an 

unreasonable assessment of social costs 

and benefits as to be arbitrary and 

capricious, the rule cannot stand.’’). 

Further, the Regulatory Flexibility Act 

specifically provides for judicial review 

and authorizes a reviewing court to take 

corrective action, including remanding 

the rule to the agency and deferring 

enforcement of the rule against small 

entities (unless the court finds that 

continued enforcement of the rule is in 

the public interest). 5 U.S.C. 611(a)(4). 

According to numerous commenters, 

the Board’s initial regulatory flexibility 

analysis ignored significant direct 

compliance costs and drastically 

underestimated the costs that small 

businesses will incur to familiarize 

themselves with the rule.500 My 

colleagues fail to correct the defects 

identified by the commenters, and their 

assessment of the rule’s costs is so 

unreasonable as to render their FRFA 

arbitrary and capricious. 

In its FRFA, the majority 

acknowledges that the Regulatory 

Flexibility Act requires agencies to 

consider ‘‘direct compliance costs.’’ But 

the majority asserts that ‘‘the RFA does 

not require an agency to consider 

speculative and wholly discretionary 

responses to the rule, or the indirect 

impact on every stratum of the 

economy,’’ and it treats bargaining 

expenses as falling into this category. 

The majority is wrong on this point. The 

final rule will dramatically increase the 

number of entities that will be deemed 

joint employers by changing the status 

of entities that merely possess an 

unexercised contractual right to control 

one or more essential terms and 

conditions of employment of another 

company’s employees, as well as 

entities that have exercised some 

amorphous ‘‘indirect control,’’ a term 

the final rule neither defines nor cabins. 

Such entities, which were not joint 

employers under the 2020 Rule, now 

will be and, under Section 103.40(h), 

will be obligated to bargain with unions 

representing their business partners’ 

employees. Reviewing existing contracts 

and practices is not a ‘‘discretionary 

response’’ to the rule because a business 

must determine whether it has a duty to 

bargain. And for those that have that 

duty, placing an agent at the bargaining 

table also will not be a ‘‘discretionary 

response’’ to the rule. They will have to 

participate in collective bargaining as 

set forth in Section 103.40(h) of the final 

rule, on pain of violating Section 8(a)(5) 

if they fail to do so. Good-faith 

bargaining for a collective-bargaining 

agreement can take months, even years, 

and can entail hundreds of hours of 

negotiations.501 The cost of paying a 

representative to be at the table, 

bargaining in good faith, will be 

substantial. These compliance costs will 

be especially difficult to bear for small 

businesses that do not independently 

meet the discretionary monetary 

standards for the Board to assert 

jurisdiction but will become subject to 

its jurisdiction by virtue of the Board’s 


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502My colleagues unpersuasively attempt to 

distinguish AFL–CIO v. Chertoff on the ground that 

the agency in that case made a ‘‘procedural error’’ 

(emphasis added) by certifying the rule as not 

having a significant impact on a substantial number 

of small entities instead of conducting an initial or 

final regulatory flexibility analysis. My colleagues 

point out that they have performed that analysis. 

But they concede that, in AFL–CIO v. Chertoff, the 

agency’s error was its failure to consider certain 

direct compliance costs imposed by the rule at 

issue, and my colleagues commit the same error. 

They fail to acknowledge that their final rule 

imposes certain direct compliance costs on 

regulated entities. My colleagues incorrectly treat 

the costs of evaluating business contracts and 

practices and the expense of placing a bargaining 

representative at the table as ‘‘indirect costs’’ and 

deem them irrelevant to a regulatory flexibility 

analysis. It is immaterial whether one characterizes 

Continued 

practice of combining gross revenues of 

joint employers for jurisdictional 

purposes. My colleagues err in ignoring 

these direct compliance costs for 

purposes of their FRFA. 

In deeming these direct costs of 

compliance irrelevant, my colleagues 

cite a quartet of cases: Mid-Tex Electric 

Cooperative, Inc. v. FERC, 773 F.2d 327 

(D.C. Cir. 1985); White Eagle 

Cooperative Assn. v. Conner, 553 F.3d 

467 (7th Cir. 2009); Cement Kiln 

Recycling Coalition v. EPA, 255 F.3d 

855 (D.C. Cir. 2001); and Colorado State 

Banking Board v. Resolution Trust 

Corp., 926 F.2d 931 (10th Cir. 1991). 

These cases do not support the 

majority’s position. In three of them, the 

court held that under the Regulatory 

Flexibility Act, an agency must consider 

direct compliance costs imposed by the 

rule on small entities subject to its 

regulation but need not consider the 

costs imposed on unregulated entities. 

See Mid-Tex Electric, 773 F.2d at 342 

(holding that FERC need not consider 

indirect impact of its regulation, which 

governed electrical utilities, on those 

utilities’ small wholesale and retail 

customers because the latter were not 

subject to the rule); White Eagle 

Cooperative Assn., 553 F.3d at 478 

(holding that USDA need not consider 

the indirect impact that a rule governing 

milk handlers would have on small milk 

producers not subject to the rule); 

Cement Kiln Recycling Coalition, 255 

F.3d at 869 (rule more stringently 

regulated emissions for hazardous waste 

combustors; no need to consider 

indirect impact of the rule on generators 

of hazardous waste not subject to the 

rule). In the fourth case, Colorado State 

Banking Board, the court held that a 

federal agency had properly certified 

that the rule at issue, which authorized 

banks to operate failed savings and 

loans, imposed no direct compliance 

costs on regulated parties. 926 F.2d at 

948. Here, in contrast, it is beyond 

dispute that small businesses subject to 

the Board’s jurisdiction are governed by 

the final rule, unlike the challengers in 

Mid-Tex Electric, White Eagle 

Cooperative Association, and Cement 

Kiln Recycling Coalition. And unlike in 

Colorado State Banking Board, it is 

equally beyond dispute that the final 

rule, by converting small businesses that 

were not joint employers under the 2020 

Rule into joint employers and imposing 

a bargaining obligation on them, will 

impose direct compliance costs on those 

entities as described above. 

Unlike the inapposite cases on which 

the majority relies, AFL–CIO v. Chertoff, 

552 F. Supp. 2d 999 (N.D. Cal. 2007), 

speaks directly to the issue at hand. In 

that case, the court issued a preliminary 

injunction against the Department of 

Homeland Security (DHS) based on 

serious concerns that it had violated the 

Regulatory Flexibility Act by failing to 

consider certain costs of compliance 

imposed on small businesses. As shown 

below, AFL–CIO exposes the inadequacy 

of my colleagues’ FRFA analysis. 

Before the district court was a final 

rule promulgated by DHS that defined 

‘‘knowing’’ for purposes of the statutory 

prohibition on knowingly hiring or 

continuing to employ an unauthorized 

alien under the Immigration Reform and 

Control Act, 8 U.S.C. 1324a (IRCA). The 

rule provided that ‘‘knowing’’ includes 

constructive knowledge and that receipt 

of a no-match letter from the Social 

Security Administration could 

contribute to a finding of constructive 

knowledge. However, the rule included 

a safe-harbor provision that precluded 

DHS from relying on an employer’s 

receipt of a no-match letter to prove 

constructive knowledge where the 

employer had taken certain steps. 

Specifically, the no-match letter could 

not be used to establish constructive 

knowledge if the employer checked its 

records for error within 30 days of 

receipt of the letter and, if no error was 

found, if it asked the employee to 

confirm her information and advised the 

employee to resolve the discrepancy 

with the Social Security Administration 

within 90 days of receipt of the letter. 

The Secretary of Homeland Security 

certified that the rule would not have a 

significant economic impact on a 

substantial number of small entities, 

and therefore DHS did not conduct a 

FRFA. Id. at 1012. 

A consortium of unions and business 

groups moved for a preliminary 

injunction, contending among other 

things that the rule was promulgated in 

violation of the Regulatory Flexibility 

Act because DHS had failed to consider 

significant compliance costs that the 

rule imposed on small businesses. The 

court granted the plaintiffs’ motion, 

finding that small businesses could 

‘‘expect to incur significant costs 

associated [with] complying with the 

safe harbor rule.’’ Id. at 1013. Those 

costs included the cost of dedicating 

human resources staff to track and 

resolve mismatches within the 90-day 

time limit, of hiring ‘‘legal and 

consultancy services’’ to help employers 

comply with the safe-harbor provision, 

and of training in-house counsel and 

human resources staff. Id. The court 

rejected DHS’s claim that the safeharbor provision would impose no costs 

on small entities because compliance 

was ‘‘voluntary’’: 

It is true that the safe harbor rule does not 

mandate compliance. This Court’s ‘‘concern, 

however, is with the practical effect . . . of 

the rule, not its formal characteristics.’’ 

Chamber of Commerce of the United States 

v. United States DOL, 174 F.3d 206, 209 (D.C. 

Cir. 1999). Because failure to comply subjects 

employers to the threat of civil and criminal 

liability, the regulation is ’’the practical 

equivalent of a rule that obliges an employer 

to comply or to suffer the consequences; the 

voluntary form of the rule is but a veil for 

the threat it obscures.’’ Id at 210. The rule as 

good as mandates costly compliance with a 

new 90-day timeframe for resolving 

mismatches. Accordingly, there are serious 

questions whether DHS violated the RFA by 

refusing to conduct a final flexibility 

analysis. 

AFL–CIO v. Chertoff, 552 F. Supp. 2d at 

1013–1014. 

Here, the compliance costs imposed 

on small businesses by the majority’s 

final rule are even more direct than 

some of the compliance costs imposed 

by the safe-harbor provision of the final 

rule at issue in AFL–CIO. Under the 

DHS rule, an employer would not have 

to assign human resources staff to deal 

with no-match letters within safe-harbor 

time limits until it actually received a 

no-match letter following the effective 

date of the rule. Accordingly, the costs 

of doing so were not imposed by 

issuance of the DHS rule without more. 

Under my colleagues’ final rule, in 

contrast, the compliance costs described 

above are imposed by issuance of the 

rule without more. This is so because 

the final rule immediately makes joint 

employers of many small businesses 

that were not joint employers under the 

2020 Rule. And these new joint 

employers include some that 

immediately incur a duty to bargain and 

are immediately exposed to unfair labor 

practice liability if they fail to comply 

with that duty. The majority is simply 

wrong in suggesting that the costs of 

determining whether that duty exists 

and of complying with it if it does are 

the result of discretionary choices.502


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that error as ‘‘procedural’’ or ‘‘substantive’’ and 

equally immaterial whether an agency commits that 

error when certifying a rule as having no significant 

impact on a substantial number of small entities or 

when, as here, it conducts a FRFA and reaches the 

exact same conclusion. Simply put, by 

misclassifying direct costs as indirect costs, my 

colleagues have sidestepped their statutory 

obligation to give ‘‘a description of the steps the 

agency has taken to minimize the significant 

economic impact on small entities’’ imposed by 

their rule. 5 U.S.C. 604(a)(6). 

There is also no merit to my colleagues’ position 

that AFL–CIO v. Chertoff is distinguishable on the 

ground that the rule there exposed regulated parties 

to civil and criminal liability where here, they say, 

their rule does neither. More specifically, they say 

that ‘‘[b]eing a joint employer imposes a duty to 

bargain in good faith, but it is Sec. 8(a)(5) of the Act, 

and not the joint-employer rule, that imposes civil 

liability for refusing to bargain.’’ That may be, but 

it misses the point, which is that the final rule 

dramatically expands the universe of entities that 

are exposed to civil liability under Sec. 8(a)(5). 

Moreover, even though Sec. 8(a)(5) is the ultimate 

source of potential liability, a statute—the IRCA, 

which makes it unlawful to knowingly employ an 

unauthorized alien—was similarly the ultimate 

source of liability in AFL–CIO v. Chertoff. 

Further, my colleagues’ position finds no support 

in the Board’s statement in the 2020 Rule that 

‘‘[u]nfair labor practice liability is the cost of not 

complying with the NLRA, not the cost of 

compliance with the Board’s joint-employer rule.’’ 

85 FR 11230. The Board made that statement when 

rejecting certain public comments asserting that the 

2020 Rule imposed direct costs insofar as ‘‘liability 

and liability insurance costs may increase for small 

entities [that are undisputed employers of the 

employees at issue] because they may no longer 

have larger entities [that were joint employers 

under BFI but would no longer be under the 2020 

Rule] with which to share the cost of any NLRA 

backpay remedies ordered in unfair labor practice 

proceedings.’’ A possible increase in the cost of 

liability insurance for undisputed employers was 

plainly an indirect (not to mention speculative) cost 

of the 2020 Rule. In contrast, by imposing a duty 

to bargain on businesses that heretofore have had 

no such duty, the majority’s final rule imposes on 

those entities, necessarily and therefore directly, the 

unavoidable costs of collective bargaining. 

503For two reasons, I am unpersuaded by my 

colleagues’ attempt to justify their one-hour reading 

estimate by pointing to an estimate contained in the 

2020 Rule’s FRFA for the reading of that rule. First, 

the 2020 Rule returned Board law to the familiar 

and easy-to-understand pre-BFI standard. In 

contrast, the majority’s final rule breaks new legal 

ground—going well beyond even BFI—and injects 

significant uncertainty into the joint-employer 

analysis. Second, in the 2020 rulemaking, the Board 

received no public comments that would have 

provided a basis for departing from the estimate 

contained in the 2018 NPRM’s initial regulatory 

flexibility analysis. Here, in contrast, public 

comments indicate that my colleagues’ estimate is 

unreasonably low. 

504See Comment of Modern Economy Project. 

505The full report is available at https://

www.clio.com/wp-content/uploads/2022/09/2022-

Legal-Trends-Report-16-02-23.pdf (last visited Oct. 

19, 2023). Billable-hour rates broken down by 

practice area appear on page 72 of the report. 

506Contrary to my colleagues’ assertion, the 

Maloney article contains an adequate explanation of 

the methodology used: ‘‘ELM [i.e., ELM Solutions, 

a legal analytics company and source of the data 

used by the author] uses anonymized legal spend 

data from law firms’ e-billing and time management 

software to compile national average billing rates 

for partners, associates and paralegals, as well as 

rate data for specific markets, practices and types 

of matters. ELM said all the data in the report is 

derived ‘from the actual rates charged by law firm 

professionals as recorded on invoices submitted 

and approved for payment.’ ’’ 

Further, the majority underestimates 

the final rule’s familiarization costs. In 

its FRFA, the majority estimates that 

small businesses will take ‘‘at most one 

hour to read the text of the rule and the 

supplementary information published 

in the Federal Register,’’ and they 

unjustifiably assume that all small 

businesses have human resources or 

labor relations personnel to carry out 

this task. The majority also estimates 

that one hour will suffice for a 

consultation between a small employer 

and an attorney. Citing hourly wage 

figures from the Bureau of Labor 

Statistics (BLS), the majority assesses 

the total compliance costs to be between 

$208.60 and $227.98. 

In my view, the majority’s estimate is 

absurdly low. The length of time it 

would take an employer’s representative 

to read the rule and its accompanying 

supplemental information and 

adequately absorb it, even with the 

assistance of an attorney, will surely 

exceed the two hours the majority 

allocates to this complex endeavor. The 

final rule and its supplementary 

information is nearly 63,000 words long 

and replete with dense legal analysis 

that will challenge all but the most 

experienced specialist in traditional 

labor law, let alone non-specialist 

attorneys and small businesspersons.503

As one commenter wrote in response to 

the proposed rule: 

The Board claims businesses will only 

spend one hour reading the rulemaking and 

one hour speaking with counsel. These 

estimates are frankly astounding. The 

Proposed Rule is 70 pages long, and a final 

rule would likely be similar in length. 

[Wishful thinking.] Additionally, no legal 

counsel would require only one hour to 

analyze a contractual relationship or business 

operations and provide a legal and/or risk 

analysis for a business entity. Such analyses 

are comprehensive and do not take one hour 

whether a business has in-house counsel or 

must look to hire a firm. Risk analyses take 

several hours, if not days or weeks, to review 

a program, analyze it, and compile a report. 

Furthermore, program and/or operational 

changes may be needed to protect the 

business from any potential liability. This 

would involve even more time from counsel. 

All in all, businesses will assuredly take 

more than one hour to read the standard and 

one hour to speak with counsel.504

The majority also underestimates the 

cost to a small business of paying for a 

consultation. Citing the most recent BLS 

statistics, my colleagues say that the 

average hourly wage for an attorney is 

$78.74. But the average hourly wage 

earned by a lawyer is not the average 

rate that a client will be billed for an 

hour of a lawyer’s services. The average 

billable rate for an hour of an attorney’s 

services—i.e., the rate at which a client 

is billed—is substantially higher. 

According to Clio’s 2022 Legal Trends 

Report, the national average billable rate 

for a labor and employment attorney is 

currently $341.505 Various surveys list 

even higher average billable rates 

nationwide. See, e.g., Andrew Maloney, 

Associate Billing Rates Are Growing 

Faster Than Partner Rates, THE 

AMERICAN LAWYER (Feb. 3, 2022), 

available at https://

www.bloomberglaw.com/document/

X9IS07HG000000?jcsearch=

hdi45mllfg#jcite (last visited Oct. 19, 

2023) (indicating that as of 2021, the 

average rate billed for legal services by 

partners was $728 per hour, and for 

legal services by associates, $535 per 

hour). 506

To determine the amount to seek for 

awards of attorneys’ fees, federal 

agencies—including the Board—refer to 

the Laffey Matrix, available at http://

www.laffeymatrix.com/see.html, which 

sets forth hourly rates for attorneys 

practicing civil law in the Washington, 

DC metropolitan area. See, e.g., Newport 

News Shipbuilding & Dry Dock Co. v. 

Holiday, 591 F.3d 219, 229 (4th Cir. 

2009) (characterizing the Laffey Matrix 

as ‘‘a useful starting point to determine 

fees’’); NLRB v. Cobalt Coal, Ltd., 2018 

U.S. Dist. LEXIS 183276, at *2 (W.D. Va. 

Oct. 25, 2018) (awarding the Agency 

attorneys’ fees based on a modified 

version of the Laffey Matrix); Frankl ex 

rel. NLRB v. HGH Corp., 2012 U.S. Dist. 

LEXIS 66761, at *18 (D. Haw. Apr. 23, 

2012) (considering the Laffey Matrix but 

declining to apply it to determine rates 

for out-of-District attorneys). A cursory 

examination of the Laffey Matrix (and 

the other sources cited above) shows 

how out of sync the BLS-identified 

average wage rate for lawyers is with 

actual costs a small employer will incur 

to have an outside lawyer consult on a 

matter. For the most recent calendar 

year, the Laffey Matrix lists the hourly 

rate for an attorney with one to three 

years of legal experience as $413, and 

the hourly rate for a paralegal or law 

clerk as $225. The BLS average wage 

rate the majority relies on is just over 

one-third of the Laffey Matrix average 

billable rate for a paralegal. Even taking 

into consideration that billable-hour 

rates for attorneys who practice in the 

District of Columbia are higher than in 

many parts of the country, it is all but 

certain that the BLS wage rate of $78.74 

is far less than small businesses will 

have to pay for an hour of legal 


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507The Laffey Matrix is a useful but imperfect 

guide as it primarily focuses on the costs of civil 

rights and environmental litigation in the 

Washington, DC metropolitan area, not labor and 

employment counseling nationwide. Nevertheless, 

this database and others like it (including the 

Fitzpatrick Matrix, which the Department of Justice 

uses to calculate attorneys’ fees and is available at 

https://www.justice.gov/usao-dc/page/file/1189846/

download) provide useful data points illustrating 

the inadequacy of the majority’s estimates. 

Relatedly, the majority notes that ‘‘[w]hile some 

commenters asserted that the wage rates for an 

attorney were at least $300/hour, none of the 

comments provided any evidence to which the 

Board could cite.’’ I believe that by identifying 

relevant sources of average billable rates 

nationwide, I have refuted my colleagues’ 

contention that small businesses will be able to 

secure a lawyer for about $78.74 per hour. 

508 5 U.S.C. 601. 

509U.S. Small Business Administration (SBA) 

Office of Advocacy, A Guide for Government 

Agencies: How to Comply with the Regulatory 

Flexibility Act (SBA Guide) 18 (Aug. 2017), https:// 

www.sba.gov/sites/default/files/advocacy/How-toComply-with-the-RFA-WEB.pdf. 

510As stated in the Board’s IRFA, this minimal 

compliance cost does not increase for the small 

number of businesses that are alleged to be joint 

employers in Board proceedings. 87 FR 54661. Such 

allegations are not a consequence of the rule, but 

a consequence of members of the public filing 

charges that initiate Board investigations. In any 

event, they are rare. Between 2018 and 2021, only 

0.15% of all 6.1 million American businesses were 

alleged to be joint employers in Board proceedings. 

511Comments of Independent Bakers Association; 

Job Creators Network; Modern Economy Project; 

National Association of Convenience Stores; U.S. 

Chamber of Commerce. The U.S. Chamber of 

Commerce also asserts that large business firms will 

need even more time to read and review the rule 

and that a larger number of managers and 

professionals will be involved in the review, but the 

comment does not explain why this is so, which 

additional job classifications would be involved in 

reviewing the rule, how much more time would be 

required, or how many additional employees would 

have to read the rule. See comments of U.S. 

Chamber of Commerce. 

512Comments of Freedom Foundation. 

services.507 And it is also all but certain 

that an attorney will need far more than 

one hour to analyze, and help her client 

understand, the impact of the final rule 

on her client’s business. 

For these reasons, the majority’s 

FRFA is arbitrary and capricious. 

Conclusion 

For all the above reasons, I dissent 

from the majority’s decision to 

promulgate the final rule. 

VIII. Other Statutory Requirements 

A. The Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, 5 U.S.C. 601–612, 

requires an agency promulgating a final 

rule to prepare a Final Regulatory 

Flexibility Analysis (FRFA) when the 

regulation will have a significant impact 

on a substantial number of small 

entities. An agency is not required to 

prepare a FRFA if the Agency head 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities. 5 

U.S.C. 605(b). Although the Board 

believed that this rule would not have 

a significant economic impact on a 

substantial number of small entities, in 

the NPRM the Board issued its Initial 

Regulatory Flexibility Analysis (IRFA) 

to provide the public the fullest 

opportunity to comment on the 

proposed rule. See 87 FR 54659. The 

Board solicited comments from the 

public that would shed light on 

potential compliance costs that may 

result from the rule that it had not 

identified or anticipated. 

The RFA does not define either 

‘‘significant economic impact’’ or 

‘‘substantial number of small 

entities.’’ 508 Additionally, ‘‘[i]n the 

absence of statutory specificity, what is 

‘significant’ will vary depending on the 

economics of the industry or sector to be 

regulated. The agency is in the best 

position to gauge the small entity 

impacts of its regulations.’’ 509 After 

reviewing the comments, the Board 

continues to believe that the only cost 

of compliance with the rule is reviewing 

and understanding the substantive 

changes to the joint-employer standard. 

Given that low cost, detailed below, the 

Board finds that this final rule will not 

have a significant economic impact on 

any small entity. Nevertheless, the 

Board publishes this FRFA to 

acknowledge and respond to the 

comments received in response to the 

proposed rule. 

1. Statement of the Need for, and 

Objectives of, the Rule 

The final rule establishes the standard 

for determining, under the NLRA, 

whether a business is a joint employer 

of a group of employees directly 

employed by another employer. This 

rule is necessary to explicitly ground 

the joint-employer standard in 

established common-law agency 

principles and provide guidance to 

parties covered by the Act regarding 

their rights and responsibilities when 

more than one statutory employer 

possesses the authority to control or 

exercises the power to control 

employees’ essential terms and 

conditions of employment. 

The guidance furnished by the final 

rule will enable regulated parties to 

determine in advance whether their 

actions are likely to result in a jointemployer finding, which may result in 

a duty to bargain collectively, exposure 

to what would otherwise be unlawful 

secondary union activity, and unfair 

labor practice liability. Accordingly, a 

final rule setting forth a comprehensive 

and detailed standard is important to 

businesses covered by the NLRA, 

employees of those businesses, and 

labor organizations that represent or 

seek to represent those employees. The 

final rule accomplishes these objectives 

by defining critical elements of the 

joint-employer standard and by 

enumerating the factors that will 

determine whether an entity is a joint 

employer. 

2. Statement of the Significant Issues 

Raised by the Public Comments in 

Response to the Initial Regulatory 

Flexibility Analysis, a Statement of the 

Assessment of the Agency of Such 

Issues, and a Statement of any Changes 

Made in the Proposed Rule as a Result 

of Such Comments 

a. Response to Comments Concerning 

the Direct Cost of Compliance 

The only direct compliance cost for 

any of the 6.1 million American 

business firms (both large and small) 

with employees is reading and 

becoming familiar with the text of the 

new rule. That cost is too low to be 

considered ‘‘significant’’ within the 

meaning of the RFA. NPRM, 87 FR at 

54662 (estimating compliance costs of 

$151.51 to small employers and $99.64 

to small labor unions).510

Some commenters address the direct 

compliance costs that the Board 

estimated in its IRFA. Some of those 

comments criticize the Board’s 

assumption that reviewing the rule 

would only require one hour of reading 

time for a human resources specialist 

and that understanding the rule would 

only require a one-hour consult with an 

attorney.511 One comment argues that 

the one hour of reading time does not 

account for reviewing the materials 

referenced in the proposed rule, such as 

the Restatement of Agency, which 

would be necessary to determine 

whether an entity is a joint employer.512

Yet, without any empirical evidence to 

demonstrate that reading the text of the 

rule or meeting with an attorney to gain 

greater understanding of the rule would 

require more than one hour, the Board 

declines to change its estimates of the 

length of time it will take to do so. To 

the extent that comments are arguing 

that it will take longer than one hour for 

an attorney to analyze the application of 


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513Comments of Modern Economy Project; 

National Association of Convenience Stores; Rachel 

Greszler. 

514Comments of Independent Bakers Association; 

Job Creators Network Foundation; Modern 

Economy Project; National Association of 

Convenience Stores; U.S. Chamber of Commerce. 

515The dissent calls the assumption that all small 

businesses have human resources or labor relations 

personnel to read the rule ‘‘unjustifiable.’’ This is 

the same assumption, however, that the Board made 

in its 2018 IRFA and reaffirmed in its 2020 FRFA. 

Compare 83 FR 46695 with 85 FR 11234. The Board 

has received no public comments suggesting that 

the assumption is unreasonable. 

516Compare Occupational Employment and 

Wages, May 2022, 13–1075 Labor Relations 

Specialists, found at https://www.bls.gov/oes/ 

current/oes131075.htm (last visited Oct. 19, 2023), 

with Employer Costs for Employee Compensation— 

June 2023, found at https://www.bls.gov/ 

news.release/pdf/ecec.pdf (last visited Oct. 19, 

2023). 517Comments of Independent Bakers Association; 

Rachel Greszler; U.S. Chamber of Commerce. 518Comments of U.S. Chamber of Commerce. 

519Comment of SBA Office of Advocacy. 

520Comments of National Association of 

Convenience Stores; U.S. Chamber of Commerce. 

521Comments of Colorado Bankers Association; 

National Association of Insurance and Financial 

Advisors; RaceTrac, Inc.; Restaurant Law Center; 

Rio Grande Foundation; U.S. Black Chambers, Inc. 

the rule to an employer’s workforce,513

that is an issue of indirect cost, which 

is not considered under the RFA but 

will be discussed below. 

The dissent also disagrees with our 

estimate of one hour to read the rule, 

but it does not support its assertion that 

such a determination is arbitrary or 

unreasoned. The estimate is consistent 

with the familiarization time estimated 

in prior Board rules. In 2018, the 

Board’s IRFA estimated that a labor 

compliance employee at a small 

employer could review the rule— 

approximately 60,185 words—in ‘‘at 

most one hour.’’ 83 FR 46695. Receiving 

no evidence contradicting this estimate, 

the Board’s FRFA contained the same 

estimate. 85 FR 11234. No public 

comments have provided any empirical 

basis for an assertion that one hour 

would be insufficient to read this final 

rule (including preamble), which is 

approximately 61,476 words. Moreover, 

one hour is an average estimated 

amount of reading time for the 

approximately 6,119,657 entities the 

Board assumes would be subject to the 

rule. As discussed below, the Board has 

reason to believe that many small 

employers will not read the rule at all 

because they do not have any business 

relationships that would make this rule 

applicable to them, and others with a 

history of joint-employment 

relationships may spend more time 

reviewing the rule. One hour is simply 

a reasonable average. 

In addition to criticizing the amount 

of time the Board estimates it will take 

to read and understand the rule, several 

commenters assert that the Board’s 

estimate of the cost of a human 

resources specialist and an attorney are 

too low.514 These commenters, however, 

provide no cost estimates for a human 

resources specialist.515 The current rule 

uses the figure from the Department of 

Labor’s Bureau of Labor Statistics (BLS) 

for a labor relations specialist, even 

though some small businesses may not 

have such a credentialed and 

experienced employee, because the 

national average wage rate for that 

position is comparable to that of all 

private sector employees. The average 

hourly wage for a labor relations 

specialist was last reported at $42.05; 

the average hourly wage for a private 

industry employee was last reported at 

$41.03.516

Some commenters argue, without any 

evidence, that the cost of legal counsel 

is at least $300 per hour.517 The dissent 

attempts to buoy this argument, 

criticizing the Board for using the most 

recent data from the BLS. For each of 

the alternative methods that the dissent 

suggests, it does not explain why those 

sources are so superior to the BLS as to 

render the majority’s analysis arbitrary 

and capricious. The Bloomberg article 

claims to have compiled national 

average billing rates but only cites rates 

in atypically expensive markets—New 

York, Washington, DC, Chicago, and 

San Francisco—and provides little 

information on its survey subjects and 

research methodology. The Clio Legal 

Trends Report claims that the 1,168 

consumers surveyed are representative 

of the U.S. population but does not 

provide any evidence of that or make 

the same claim for the 1,134 legal 

professionals who responded to the 

survey. In fact, in its detailed 

methodology, it acknowledges that the 

only customers included were paid 

subscribers to Clio, not those using a 

free trial or the Academic Access 

Program. Further, the report excluded 

data from customers who opted out of 

aggregate reporting. Finally, even 

though the dissent references the Laffey 

Matrix, which is guided by ‘‘the 

reasonably hourly rate prevailing in the 

community for similar work,’’ it also 

acknowledges that the rate is only 

applicable to attorneys in the D.C. area. 

Laffey v. Nw. Airlines, Inc., 572 F. Supp. 

354, 371 (D.D.C. 1983), aff’d in part, 

rev’d in part, 746 F.2d 4 (D.C. Cir. 1984). 

It is not arbitrary or capricious for the 

Board to rely on the national average 

attorney wage rates calculated by a 

federal agency with responsibility for 

compiling data on national labor costs. 

Another commenter argues that the 

Board should have included the cost of 

hiring an unknown number of 

management consultants in order to 

comply with the rule.518 And yet 

another comment presumes that 

compliance with the proposed rule 

could require hiring a dedicated staffer, 

who would cost thousands of dollars 

per year.519 Other commenters fault the 

Board for undervaluing a small business 

owner’s time at just $151.51 per hour 

and for not taking into account the ‘‘full 

opportunity cost of lost overhead and 

profit contribution entailed by the 

diversion of labor from normal 

productive activity’’ to reading the 

rule.520

None of these comments justify 

changes to the Board’s initial 

assumptions regarding the job 

classifications that would be involved in 

reading the final rule or the cost of that 

time. None of the comments provide 

evidence that the Board could use to 

reevaluate its estimated costs, which are 

derived from wage and benefit figures 

provided by the Department of Labor’s 

BLS. 

Comments regarding the ‘‘full 

opportunity cost of lost overhead and 

profit contribution entailed by the 

diversion of labor from normal 

productive activity’’ misunderstand the 

Board’s calculus. The Board does not 

assume that these job functions are 

already being performed by a small 

business’s owner or employees. That is 

why the Board identifies the time spent 

reading and consulting about the rule as 

an additional cost of compliance rather 

than assuming that keeping abreast of 

changes in employment and labor law is 

already a part of a human resources 

specialist’s or in-house counsel’s job 

function. However, these comments 

have persuaded the Board to add to its 

assessment of direct compliance costs 

an additional hour of time for a human 

resources or labor relations specialist to 

meet with the attorney, rather than 

assuming that the one-hour consult is 

already part of that human resources or 

labor relations specialist’s job function. 

That addition is reflected in Section 

VI.A.5 below. 

Other comments generally assert that 

the Board’s estimated compliance costs 

are inaccurate, and a new assessment of 

costs is required.521 They provide no 

detail or evidence to support their 

assertions. 

b. Response to Comments Concerning 

Indirect or Speculative Cost of 

Compliance 

The remaining comments regarding 

the Board’s estimated compliance costs 


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522Comments of Elizabeth Boynton; Job Creators 

Network Foundation; Modern Economy Project; 

National Association of Convenience Stores. 523Comments of Colorado Bankers Association; 

U.S. Chamber of Commerce. 524Comments of Modern Economy Project; Rio 

Grande Foundation; SBA Office of Advocacy; U.S. 

Chamber of Commerce. 525Comments of Elizabeth Boynton; Goldwater 

Institute; Independent Electrical Contractors; One 

Energy; Reid Stores, Inc. d/b/a Crosby’s. 526Comments of NAHB. 

527Comments of IFA; Job Creators Network 

Foundation; McDonald’s USA, LLC; National 

Association of Convenience Stores; NFIB; Rachel 

Greszler; SBA Office of Advocacy; U.S. Black 

Chambers, Inc. 

528Comments of IFA; Independent Bakers 

Association; Job Creators Network Foundation; 

McDonald’s USA, LLC; Modern Economy Project; 

National Association of Convenience Stores; NFIB; 

Rachel Greszler; SBA Office of Advocacy; U.S. 

Black Chambers, Inc. 

529Comments of NFIB; SBA Office of Advocacy. 

530Comments of U.S. Black Chambers, Inc. 

531Comments of Job Creators Network 

Foundation; National Association of Convenience 

Stores; NFIB; SBA Office of Advocacy; U.S. 

Chamber of Commerce. 

532Comments of Colorado Bankers Association; 

Rio Grande Foundation; SBA Office of Advocacy. 

533Comments of Goldwater Institute; 

Independent Electrical Contractors; Independent 

Lubricant Manufacturers Association; Modern 

Economy Project; One Energy; Reid Stores Inc. d/ 

b/a Crosby’s; U.S. Chamber of Commerce. 

534Comments of IFA; Rachel Greszler. 

535Comments of Independent Lubricant 

Manufacturers Association; Modern Economy 

Project. 

536Comments of Elizabeth Boynton. 

537Comments of Elizabeth Boynton; Rachel 

Greszler. 

538Comments of NFIB. 

539Comments of Modern Economy Project. 

concern indirect or speculative costs 

that are not direct costs of the rule. 

Avoidance Costs. The majority of the 

remaining comments focus on the cost 

associated with avoiding a jointemployer relationship.522 For example, 

two commenters argue that the 

proposed rule increases the ‘‘price’’ for 

an employer to avoid joint-employer 

status because businesses that 

structured their relationships to avoid 

joint-employer liability under the 2020 

rule will have to change existing 

policies, procedures, and contracts to 

achieve the same end under this final 

rule.523 Some commenters fear that the 

proposed rule will cause larger 

businesses to cancel contracts with 

smaller entities to avoid joint-employer 

status and the liability that comes with 

it.524 Other commenters count as 

compliance costs the cost of regularly 

hiring legal counsel to ensure that any 

change in supplier or contracts does not 

inadvertently create a joint-employer 

relationship.525 In the building industry, 

one commenter notes, there are several 

potential joint-employment 

relationships between builders and a 

multitude of subcontracted businesses 

that vary by jobsite.526 The increased 

number of business relationships at 

play, the commenter states, will make it 

more costly to obtain legal counsel to 

determine which entities will be 

classified as joint employers under the 

final rule. 

Other comments focus on the 

possibility that larger companies and 

franchisors will provide less support to 

smaller companies, subcontractors, and 

franchisees to avoid liability for the 

smaller entities’ labor violations.527

These commenters predict that the 

proposed rule will result in a decrease 

in entrepreneurial opportunities for 

small businesses and contractors,528

which would result in economic 

inefficiencies as larger businesses and 

general contractors would supplant the 

work of smaller ones and no longer 

focus on their core competencies.529

Conversely, one commenter notes, the 

proposed rule could result in a 

franchisor seeking to exert more control 

over its franchises. For example, in 

response to a single franchisee 

unionizing or engaging in collective 

bargaining, the franchisor could impose 

a standardized minimum wage at all its 

franchise locations.530

Potential Legal Expenses. 

Commenters also assert that the 

proposed rule will increase an 

employer’s exposure to allegations of 

unfair labor practices, which will in 

turn increase insurance and legal costs 

for small businesses.531 Some 

commenters believe the costs will come 

from new or increased liability under 

the new rule.532 Other comments focus 

on the supposed vagueness of the 

proposed rule, arguing that it increases 

the likelihood of litigation over whether 

a business is a joint employer. 

Accordingly, these comments argue that 

the Board should have included as a 

compliance cost the cost of participating 

in a Board case.533 In support of this 

position, two comments note that, after 

Browning-Ferris issued, some 

franchisors claimed to experience a 

significant increase in joint-employer 

claims across all spectrums of the law 

and some franchisees incur increased 

costs because they were compelled to 

seek outside guidance through attorneys 

or other consultants on matters in which 

the franchisor used to assist.534 Some 

commenters also note that every 

contract their companies enter into will 

need additional legal scrutiny for its 

possible exposure to a joint-employer 

finding 535 or to determine whether they 

are required to be a party to another 

business’s collective-bargaining 

process.536

Potential Costs If Entities Are Joint 

Employers Under the New Rule. If a 

party is determined to be a joint 

employer, it will have to allocate time 

and resources to collective bargaining 

and other costs associated with 

unionization efforts and elections, some 

commenters assert.537 The dissent also 

contemplates reviewing existing 

business contracts and participating in 

collective bargaining as direct 

compliance costs. Another commenter 

adds that unions will seek to exploit 

collective bargaining with franchisors to 

impose higher wages on small business 

franchisees.538 Yet another comment 

states that the Board failed to consider 

costs associated with revising or 

outsourcing training materials, such as 

training regarding operational best 

practices, guidance on employee 

handbooks or other personnel policies, 

and sample policies or best practices 

regarding workplace civil rights 

issues.539

Respectfully, neither the dissent nor 

the foregoing comments raises direct 

economic impacts under the RFA. How 

a small entity structures its business 

relationships is discretionary. The rule 

sets forth no requirement that employers 

embrace or avoid joint-employer status. 

It merely brings the Board’s test for 

determining joint-employer status back 

in line with the common law, as 

interpreted by the District of Columbia 

Circuit in Browning-Ferris Industries of 

California, Inc. v. NLRB, 911 F.3d 1195 

(D.C. Cir. 2018). If a regulated entity 

chooses to reevaluate its contractual or 

business relationships in light of the 

rule’s return to the common-law 

standard, that is a choice within its 

discretion, but it is not a direct 

compliance cost of the rule. Similarly, if 

an entity chooses to accept or dispute an 

allegation of joint-employer status in 

litigation or elsewhere, that is a 

discretionary choice. It is not required 

to do so under the rule. Moreover, the 

implications of that choice are entirely 

speculative. No commenter provided 

any quantifiable evidence 

demonstrating that a joint-employer 

finding inevitably increases costs on 

small businesses. 

Our conclusion that the RFA requires 

agencies to consider only direct 

compliance costs finds support in the 

RFA, its caselaw, and guidance from the 

SBA’s Office of Advocacy. The RFA 

does not require an agency to consider 

speculative and wholly discretionary 

responses to the rule, or the indirect 

impact on every stratum of the 

economy. Section 603(a) of the RFA 

states that if an IRFA is required, it 

‘‘shall describe the impact of the 


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540Contrary to the dissent, it is material, if not 

dispositive, that Chertoff’s holding is limited to 

finding procedural error in DHS’s failure to conduct 

a regulatory flexibility analysis. In the context of a 

motion for a preliminary injunction, the court in 

Chertoff held only that, ‘‘there are serious questions 

whether DHS violated the RFA’’ by failing ‘‘to 

conduct a final flexibility analysis’’ that evaluated 

possible direct costs. 552 F. Supp. 2d at 1013. The 

Court never decided whether the proffered costs 

were actually direct costs under the Regulatory 

Flexibility Act. 

541Moreover, the agency’s argument in Chertoff 

that there were no compliance costs because the 

rule was voluntary is distinct from the voluntary 

nature of the joint employer rule. In that case, an 

employer’s failure to voluntarily comply with the 

regulation’s safe harbor procedure could have 

exposed the employer to criminal and civil liability. 

But the Board has no authority to impose criminal 

liability, and the joint-employer rule imposes no 

civil liability. Being a joint employer imposes a 

duty to bargain in good faith, but it is Sec. 8(a)(5) 

of the Act, and not the joint-employer rule, that 

imposes civil liability for refusing to bargain. As the 

Board noted in the 2020 joint-employer rule, 

‘‘[u]nfair labor practice liability is the cost of not 

complying with the NLRA, not a cost of compliance 

with the Board’s joint-employer rule.’’ 85 FR 11230. 

proposed rule on small entities.’’ 5 

U.S.C. 603(a). Although the term 

‘‘impact’’ is undefined, its meaning can 

be gleaned from Section 603(b), which 

recites the required elements of an 

IRFA. One such element is ‘‘a 

description of the projected reporting, 

recordkeeping and other compliance 

requirements of the proposed rule, 

including an estimate of the classes of 

small entities which will be subject to 

the requirement and the type of 

professional skills necessary for 

preparation of the report or record.’’ 5 

U.S.C. 603(b)(4) (emphasis added). 

Section 604 further corroborates the 

Board’s conclusion, as it contains an 

identical list of requirements for a FRFA 

(if one is required). 5 U.S.C. 604(b)(4). 

The courts, too, have recognized that 

the statute only requires that the 

regulatory agency consider the direct 

burden that compliance with a new 

regulation will likely impose on small 

entities. See Mid-Tex Electric 

Cooperative, Inc. v. FERC, 773 F.2d 327, 

342 (D.C. Cir. 1985) (‘‘[I]t is clear that 

Congress envisioned that the relevant 

‘economic impact’ was the impact of 

compliance with the proposed rule on 

regulated small entities.’’); accord White 

Eagle Cooperative Assn. v. Conner, 553 

F.3d 467, 478 (7th Cir. 2009); Colorado 

State Banking Board v. Resolution Trust 

Corp., 926 F.2d 931, 948 (10th Cir. 

1991). 

Additional support for confining the 

regulatory analysis to direct compliance 

costs is found in an authoritative guide 

published by the SBA Office of 

Advocacy. The SBA Guide explains that 

‘‘other compliance requirements’’ under 

section 603 include the following 

examples: 

(a) capital costs for equipment needed to 

meet the regulatory requirements; (b) costs of 

modifying existing processes and procedures 

to comply with the proposed rule; (c) lost 

sales and profits resulting from the proposed 

rule; (d) changes in market competition as a 

result of the proposed rule and its impact on 

small entities or specific submarkets of small 

entities; (e) extra costs associated with the 

payment of taxes or fees associated with the 

proposed rule; and (f) hiring employees 

dedicated to compliance with regulatory 

requirements. 

SBA Guide at 37. These are all direct, 

compliance-based costs. 

In the IRFA, the Board noted that the 

only identifiable compliance cost 

imposed by the proposed rule is 

reviewing and understanding the 

substantive changes to the jointemployer standard. 87 FR at 54659. 

Otherwise, there will be no ‘‘reporting, 

recordkeeping and other compliance 

requirements’’ for these small entities. 

See 5 U.S.C. 603(b)(4), 604(b)(4). The 

same is true of the final rule. The final 

rule imposes no mandatory capital costs 

or mandatory costs of modifying 

existing processes, results in no lost 

sales or profits, and creates no 

appreciable changes in market 

competition. See SBA Guide at 37. 

Lastly, there are no costs associated 

with taxes or fees and no costs for 

additional employees dedicated to 

compliance, as no compliance 

requirements exist. See id. 

Consistent with these principles, the 

Board rejects the view that it must 

include as direct compliance costs 

employers’ discretionary responses to 

the rule, as suggested by the comments 

discussed above. See Mid-Tex Electric 

Cooperative, 773 F.2d at 343 (‘‘Congress 

did not intend to require that every 

agency consider every indirect effect 

that any regulation might have on small 

businesses in any stratum of the 

national economy.’’). ‘‘[R]equir[ing] an 

agency to assess the impact on all of the 

nation’s small businesses possibly 

affected by a rule would be to convert 

every rulemaking process into a massive 

exercise in economic modeling, an 

approach we have already rejected.’’ 

Cement Kiln Recycling Coalition v. EPA, 

255 F.3d 855, 869 (D.C. Cir. 2001) 

(citing Mid-Tex Electric Cooperative, 

773 F.2d at 343). The rule does not 

require contracting parties to alter their 

arrangements now or in the future. It 

therefore cannot be said that actions 

taken by employers to avoid a jointemployer relationship, or any costs 

associated with those actions or passed 

on to other entities because of that 

attempt at avoidance, is a direct cost of 

compliance with the rule. 

Commenters also ask the Board to 

count as a direct compliance cost of the 

rule the cost of actions that other 

entities might take in response to the 

rule without any indication that those 

actions are required for compliance with 

the rule. These comments about what 

larger companies or franchisors might 

do to avoid joint-employer liability are 

speculative and too attenuated to be 

incorporated into the Board’s analysis of 

compliance costs with the rule. Many of 

these concerns are not even specific to 

joint-employer relationships. For 

example, the costs associated with 

opposing unionization efforts, 

participating in Board elections, and 

bargaining with employees’ duly elected 

representatives can exist even where no 

joint-employer relationship does. 

The dissent takes issue with our 

citations to four cases, which were also 

cited in the FRFA of the 2020 rule: MidTex Electric Cooperative, White Eagle 

Cooperative Assn., Cement Kiln 

Recycling Coalition, and Colorado State 

Banking Board, and instead suggests 

that AFL–CIO v. Chertoff, 552 F. Supp. 

2d 999 (N.D. Cal. 2007) is more 

instructive. The problem with the 

dissent’s objection to these cases is 

twofold. First, it mischaracterizes their 

use: the rule cites these cases because 

they hold that the RFA only requires an 

agency to consider the direct burden 

that compliance imposes on small 

entities, not every indirect effect that 

regulation might have on any other 

business, regardless of size and whether 

the entity is directly regulated by the 

rule. Compare 83 FR 46695 and 85 FR 

11229 with 87 FR 54662. 

Second, the dissent’s reliance on 

Chertoff is misplaced because, in that 

case, the agency made a procedural 

error by certifying the rule instead of 

conducting an initial or final regulatory 

flexibility analysis. 552 F. Supp. 2d at 

1013.540 The agency’s rationale was that 

the rule did not place any new burdens 

on the employer or impose any new or 

additional costs because its new safe 

harbor procedure was voluntary. Id. But 

the court took exception with the 

agency’s refusal to consider the direct 

compliance costs raised by the 

plaintiffs. Id. Here, no such procedural 

error exists because the Board has 

conducted an initial and final regulatory 

flexibility analysis, considered and 

engaged with all comments regarding 

the rule’s direct compliance costs, and 

found no evidence, only unsupported 

argument, contradicts its findings.541

c. Response to Comments Concerning 

Potential Conflicts With Other Federal 

Laws 

Some comments contend that the 

Board has failed to identify all relevant 


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542Comments of Goldwater Institute; IFA; 

National Association of Insurance and Financial 

Advisors; SBA Office of Advocacy. 

543Comments of IFA. 

544Comments of Elizabeth Boynton. 

545Comments of Goldwater Institute; SBA Office 

of Advocacy. 

546SBA Guide, at 40. 

547 Yates v. United States, 574 U.S. 528, 537 

(2015) (‘‘Ordinarily, a word’s usage accords with its 

dictionary definition. In law as in life, however, the 

same words, placed in different contexts, 

sometimes mean different things.’’); Environmental 

Defense v. Duke Energy Corp., 549 U.S. 561, 574 

(2007) (‘‘We also understand that ‘[m]ost words 

have different shades of meaning and consequently 

may be variously construed, not only when they 

occur in different statutes, but when used more 

than once in the same statute or even in the same 

section.’ ’’) (quoting Atlantic Cleaners & Dyers, Inc. 

v. United States, 286 U.S. 427, 433 (1932)). For 

example, the term ‘‘employee’’ has different 

meanings under the NLRA and the Fair Labor 

Standards Act. See supra fn. 338. 548See supra fn. 340. 

549Press Release, The White House, Statements 

and Releases, FACT SHEET: Biden-Harris 

Administration Announces Reforms to Increase 

Equity and Level the Playing Field for Underserved 

Small Business Owners, (Dec. 2, 2021). 

rules and regulations that may ‘‘conflict 

with the proposed rule,’’ as section 

603(b)(5) of the RFA requires, but those 

comments do not specifically identify 

any potential conflicts.542 One 

commenter argues that the proposed 

rule directly undermines the Lanham 

Act’s requirements that franchisors 

maintain control over the use of their 

marks and would penalize franchisors 

who maintain that control by labeling 

them joint employers.543 Another 

asserts that businesses will now need to 

reconcile the differences between how 

the Board and the Internal Revenue 

Service view employer relationships.544

And other comments argue that the 

proposed rule conflicts with the federal 

law requiring prime contractors to have 

indirect and reserved control over their 

subcontractors’ compliance with federal 

laws such as the Occupational Safety 

and Health Act, the Fair Labor 

Standards Act, the Davis-Bacon Act, and 

the prohibition of discrimination in 

hiring administered by the Department 

of Labor’s Office of Federal Contract 

Compliance Programs.545 These 

comments further argue that these 

required terms, which are also present 

in many third-party contracts, should be 

considered routine and not indicative of 

a joint-employer relationship. 

According to the SBA Guide, at 40, 

rules are conflicting when they impose 

two conflicting regulatory requirements 

on the same classes of industry.546 None 

of the comments demonstrate a conflict 

under this definition. The comments do 

not cite the purportedly conflicting 

authorities (such as the Federal 

Acquisition Regulation or the Internal 

Revenue Code). In any event, it is 

axiomatic that the same term may have 

different meanings in different statutes, 

based on each law’s text, purpose, and 

legislative history.547 As we state above, 

the rule applies only to the NLRA,548

and commenters have not shown that, to 

the extent they exist, any dissimilar 

requirements would not be workable. 

Finally, because the final rule does not 

mandate that employers structure their 

business relationships in any particular 

manner, the final rule does not directly 

expose regulated entities to conflicting 

obligations. While entities may choose 

to rearrange their business relationships 

to avoid joint-employer status, that is 

distinct from a regulation obligating 

entities to engage in a particular 

business relationship. 

3. Response of the Agency to any 

Comments Filed by the Chief Counsel 

for Advocacy of the Small Business 

Administration in Response to the 

Proposed Rule, and a Detailed 

Statement of any Change Made to the 

Proposed Rule in the Final Rule as a 

Result of the Comments 

The SBA Office of Advocacy 

submitted a comment that expresses 

four main concerns: that the proposed 

rule is so ambiguous and broad that it 

does not provide guidance on how to 

comply or avoid joint-employer 

liability, and that the Board should 

resolve purported conflicts with existing 

federal requirements, reassess the cost 

of compliance with the proposed rule, 

and consider significant alternatives 

that would accomplish the objectives of 

the NLRA while minimizing the 

economic impacts to small entities as 

required by the RFA. 

As discussed in Section II.B above, 

the final rule heeds the SBA Office of 

Advocacy’s request for more specific 

guidance in three ways: (1) § 103.40(d) 

of the final rule provides an exhaustive 

list of the seven categories of terms and 

conditions of employment that will be 

considered essential for the jointemployer inquiry; (2) § 103.40(e) of the 

final rule clarifies that, to establish 

joint-employer status, the common-law 

employer must possess exercised or 

unexercised authority to control, or 

exercise the power to control indirectly, 

such as through an intermediary, an 

essential term or condition of 

employment; and (3) § 103.40(f) of the 

final rule clarifies that evidence of an 

entity’s control over matters that are 

immaterial to the existence of an 

employment relationship under 

common-law agency principles and that 

do not bear on the employees’ essential 

terms and conditions of employment is 

not relevant to the determination of 

joint-employer status. 

Contrary to the SBA Office of 

Advocacy’s second criticism, the final 

rule does not contain any conflicts with 

existing federal requirements. The SBA 

Office of Advocacy’s first asserted 

conflict is with federal requirements 

that require prime contractors to have 

indirect and reserved control over their 

subcontractor’s terms and conditions of 

employment, such as wages, safety, 

hiring, and firing, which is discussed in 

Section VI.A.2.c. above. The SBA Office 

of Advocacy’s second asserted conflict 

is that the proposed rule may conflict 

with a recent Presidential initiative to 

bolster the ranks of underserved small 

business contractors by discouraging 

mentorship and guidance from larger 

prime contractors.549 The NLRB 

strongly supports efforts to increase 

diversity and inclusion in federal 

contracting. The SBA Office of 

Advocacy’s comment, however, does 

not identify any way in which the final 

rule would prohibit larger contractors 

from offering mentorship and guidance 

to smaller contractors from underserved 

populations. Nor does its comment 

explain, as it implicitly suggests, how a 

larger contractor’s provision of 

mentorship and guidance to a smaller 

contractor could create a joint-employer 

relationship under the rule. 

The SBA Office of Advocacy’s 

comment also asserts that the Board has 

underestimated the compliance costs of 

the final rule. However, the comment 

did not identify any direct compliance 

costs that the Board has overlooked and 

only mentioned indirect or speculative 

costs, which were raised by other 

commenters and addressed by the Board 

in Section VI.A.2.b above. 

Finally, the comment twice 

encourages the Board to consider 

significant alternatives that would 

accomplish the objectives of the statute 

while minimizing the economic impacts 

on small entities, as required by the 

RFA, but provides no suggestions to that 

end. Consistent with the RFA’s 

mandate, the Board has considered such 

alternatives in Section VI.6 below. 

4. Description and Estimate of Number 

of Small Entities to Which the Rule 

Applies 

In order to evaluate the impact of the 

proposed rule, the Board first identified 

the entire universe of businesses that 

could be impacted by a change in the 

joint-employer standard. According to 

the United States Census Bureau, there 

were 6,140,612 business firms with 


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550U.S. Department of Commerce, Bureau of 

Census, 2020 Statistics of U.S. Businesses (‘‘SUSB’’) 

Annual Data Tables by Enterprise Employment 

Size, https://www.census.gov/data/tables/2020/ 

econ/susb/2020-susb-annual.html (from 

downloaded Excel Table entitled ‘‘U.S. & States, 6- 

digit NAICS’’ found at https://www2.census.gov/ 

programs-surveys/susb/tables/2020/us_state_

6digitnaics_2020.xlsx. ‘‘Establishments’’ refer to 

single location entities—an individual ‘‘firm’’ can 

have one or more establishments in its network. 

The Board has used firm-level data for this IRFA 

because establishment data is not available for 

certain types of employers discussed below. Census 

Bureau definitions of ‘‘establishment’’ and ‘‘firm’’ 

can be found at https://www.census.gov/programssurveys/susb/about/glossary.html (last visited June 

2, 2023). 

The proposed rule references the Census Bureau’s 

2019 Statistics of U.S. Businesses (‘‘SUSB’’) data 

tables, the most recent data available at the time of 

publication. Because the 2020 SUSB data tables are 

now available, the FRFA uses that updated data. 

However, the changes are not statistically 

significant, as the joint-employer standard will 

continue to most directly impact the same 

percentage of businesses large and small. 

551The Census Bureau does not specifically 

define small business but does break down its data 

into firms with 500 or more employees and those 

with fewer than 500 employees. See U.S 

Department of Commerce, Bureau of Census, 2020 

SUSB Annual Data Tables by Enterprise 

Employment Size, https://www.census.gov/data/ 

tables/2020/econ/susb/2020-susb-annual.html 

(from downloaded Excel Table entitled ‘‘U.S. & 

States, 6-digit NAICS’’), found at https://

www2.census.gov/programs-surveys/susb/tables/ 

2020/us_state_6digitnaics_2020.xlsx. Consequently, 

the 500-employee threshold is commonly used to 

describe the universe of small employers. For 

defining small businesses among specific 

industries, the standards are defined by the North 

American Industry Classification System (NAICS), 

which we set forth below. 

552Pursuant to 29 U.S.C. 152(6) and (7), the Board 

has statutory jurisdiction over private sector 

employers whose activity in interstate commerce 

exceeds a minimal level. NLRB v. Fainblatt, 306 

U.S. 601, 606–607 (1939). To this end, the Board 

has adopted monetary standards for the assertion of 

jurisdiction that are based on the volume and 

character of the business of the employer. In 

general, the Board asserts jurisdiction over 

employers in the retail business industry if they 

have a gross annual volume of business of $500,000 

or more. Carolina Supplies Cement Co., 122 NLRB 

88 (1959). But shopping center and office building 

retailers have a lower threshold of $100,000 per 

year. Carol Management Corp., 133 NLRB 1126 

(1961). The Board asserts jurisdiction over 

nonretailers generally where the value of goods and 

services purchased from entities in other states is 

at least $50,000. Siemons Mailing Service, 122 

NLRB 81 (1959). See also supra fn. 104. 

The following employers are excluded from the 

NLRB’s jurisdiction by statute: federal, state and 

local governments, including public schools, 

libraries, and parks; Federal Reserve banks, and 

wholly owned government corporations, 29 U.S.C. 

152(2); employers that employ only agricultural 

laborers, those engaged in farming operations that 

cultivate or harvest agricultural commodities or 

prepare commodities for delivery, 29 U.S.C. 152(3); 

and employers subject to the Railway Labor Act, 

such as interstate railroads and airlines, 29 U.S.C. 

152(2). 553This includes initial representation case 

petitions (RC petitions) and unfair labor practice 

charges (CA cases) filed against employers. 554Since a joint-employer relationship requires at 

least two employers, we have estimated the number 

of employers by multiplying the number of asserted 

joint-employer relationships by two. Some of these 

filings assert more than two joint employers, but, 

on the other hand, some of the same employers are 

named multiple times in these filings. Additionally, 

this number is certainly inflated because the data 

do not reveal those cases where a joint-employer 

relationship exists but the parties’ joint-employer 

status is not in dispute. 

555The Board acknowledges that there are other 

types of entities and/or relationships between 

entities that may be affected by this change in the 

joint-employer rule. Such relationships include but 

are not limited to lessor/lessee and parent/ 

subsidiary. However, the Board does not believe 

that entities involved in these relationships would 

be impacted more than the entities discussed 

below. 

556Comments received in response to the 2022 

IRFA did not reveal any other categories of small 

entities that would likely take a special interest in 

a change in the standard for determining jointemployer status under the Act or indicate that there 

is a unique burden for entities in these categories. 

85 FR 11234. 

employees in 2020.550 Of those, the 

Census Bureau estimates that about 

6,119,657 were firms with fewer than 

500 employees.551 While this final rule 

does not apply to employers that do not 

meet the Board’s jurisdictional 

requirements, the Board does not have 

the data to determine the number of 

excluded entities (nor were data or 

comments received on this particular 

issue).552

The final rule will only be applied as 

a matter of law when businesses are 

alleged to be joint employers in a Board 

proceeding. Therefore, the frequency 

with which the issue comes before the 

Board is indicative of the number of 

entities of any size most directly 

impacted by the final rule. A review of 

the Board’s representation petitions and 

unfair labor practice charges provides a 

basis for estimating the frequency with 

which the joint-employer issue comes 

before the Agency. Between January 1, 

2013, and December 31, 2017, the fiveyear period before the Board began 

rulemaking on this issue, joint-employer 

relationships were only alleged in 

1.39% of the Board’s cases. 83 FR 

46693; 85 FR 11232. Accounting for 

repetitively alleged joint-employer 

relationships in these cases, the Board 

identified 823 separate joint-employer 

relationships involving an estimated 

1,646 employers, .028% of all 5.9 

million business firms, large and small, 

83 FR 46693, which the Board deemed 

‘‘very few employers,’’ 83 FR 46695. 

Using the same methodology, the 

current majority found that, during the 

four-year period between January 1, 

2018 and December 31, 2021, a total of 

75,343 representation and unfair labor 

practice cases were initiated with the 

Agency. In 772 of those filings, the 

representation petition or unfair labor 

practice charge asserted a jointemployer relationship between at least 

two employers, which accounts for 

1.02% of the Board’s cases.553

Accounting for repetitively alleged 

joint-employer relationships in these 

filings, the Board has identified 467 

separate alleged joint-employer 

relationships involving an estimated 

934 employers.554 Accordingly, the 

joint-employer standard most directly 

impacted approximately .015% of all 

6,140,612 business firms (including 

both large and small businesses) over 

the four-year period. And, the Board is 

unaware of any cases between 2018 and 

2021 that were determined by 

contractually reserved or indirectly 

exercised control, and no public 

comments have directed us to one. 

This data belies the dissent’s assertion 

that this rule will make ‘‘many’’ small 

businesses joint employers for the first 

time or ‘‘dramatically increase’’ the 

number of entities deemed joint 

employer since the new standard is so 

closely aligned with the pre-rulemaking 

standard, under which a similar number 

of employers were alleged as joint 

employers. In fact, since a large share of 

our joint-employer cases involve two 

large employers, the Board expects that 

an even lower percentage of small 

businesses have been and will be most 

directly impacted by the Board’s 

application of the rule. 

As discussed in the NPRM, 

irrespective of an Agency proceeding, 

the rule may be more relevant to certain 

types of small employers because their 

business relationships involve the 

exchange of employees or operational 

control.555 87 FR at 54660. In addition, 

labor unions, as organizations 

representing or seeking to represent 

employees, will be impacted by the 

Board’s change in its joint-employer 

standard. Thus, the Board identified the 

following five types of small businesses 

or entities as those most likely to be 

impacted by the rule: contractors/ 

subcontractors; temporary help service 

suppliers; temporary help service users; 

franchisees; and labor unions.556

(1) Businesses commonly contract 

with vendors to receive a wide range of 

services that may satisfy their primary 

business objectives or solve discrete 

problems they are not qualified to 

address. And there are seemingly 

unlimited types of vendors that provide 

these types of contract services. 

Businesses may also subcontract work 

to vendors to satisfy their own 

contractual obligations—an arrangement 

common to the construction industry. 

Businesses that contract to receive or 

provide services often share workspaces 

and sometimes share control over 

workers, rendering their relationships 

subject to application of the Board’s 


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557Though the Board has previously solicited 

input on the number of contractors and 

subcontractors that qualify as small businesses, 83 

FR 46694 fn. 56, 85 FR 11234, 87 FR 54660, it has 

received no responsive comments. 

558 13 CFR 121.201. Between the publication of 

the NPRM and the final rule, changes in the Small 

Business Size Regulations increased the total 

number of potentially affected entities by 166 firms 

across all five categories. Though that change is 

statistically insignificant, the Board chose to 

include the most updated figures in this FRFA. 

559The Census Bureau only provides data about 

receipts in years ending in 2 or 7, so the 2017 data 

is the most recent available information regarding 

receipts. See U.S Department of Commerce, Bureau 

of Census, 2017 SUSB Annual Data Tables by 

Establishment Industry, NAICS classification 

#561320, https://www2.census.gov/programssurveys/susb/tables/2017/us_6digitnaics_rcptsize_

2017.xlsx. 

560U.S. Department of Commerce, Bureau of 

Census, 2020 Annual Business Survey— 

Characteristics of Businesses, https://

www.census.gov/data/tables/2020/econ/abs/2020- 

abs-characteristics-of-businesses.html (from 

downloaded Excel Table entitled ‘‘Type(s) of 

Workers Employed by Sector, Sex, Ethnicity, Race, 

and Veteran Status,’’ found at https://

data.census.gov/cedsci/table?q=ab1900%2a&

tid=ABSCB2019.AB1900CSCB01&hidePreview=

true&nkd=QDESC∼B20). 

561See International Franchising Establishments 

FAQs, found at https://www.franchise.org/faqsabout-franchising. 

562U.S. Department of Commerce, Bureau of 

Census, 2020 Annual Business Survey— 

Characteristics of Businesses, https://

www.census.gov/data/tables/2020/econ/abs/2020- 

abs-characteristics-of-businesses.html (from 

downloaded Excel Table entitled ‘‘Businesses 

Operated as a Franchise by Sex, Ethnicity, Race, 

Veteran Status, and Employment Size of Firm,’’ 

found at https://data.census.gov/cedsci/ 

table?q=ab1900%2a&tid=ABSCB2019.

AB1900CSCB04&hidePreview=true

&nkd=QDESC∼B06). 

563 29 U.S.C. 152(5). 

564 13 CFR 121.201. 

565See U.S Department of Commerce, Bureau of 

Census, 2017 SUSB Annual Data Tables by 

Establishment Industry, NAICS classification 

#722513, https://www2.census.gov/programssurveys/susb/tables/2017/us_6digitnaics_rcptsize_

2017.xlsx. 

566 Job Creators Network Foundation argues that 

the proposed rule is so vague and amorphous that 

the Board could not possibly identify all business 

that would be impacted. Rachel Greszler objects to 

the Board’s determination that the issue of whether 

two entities were joint employers only involved 934 

employers, or 0.15% of all business firms, over the 

four-year period. However, neither commenter 

provided any concrete data for the Board to 

consider. 

joint-employer standard. The Board 

does not have the means to identify 

precisely how many businesses are 

impacted by contracting and 

subcontracting within the United States 

or how many contractors and 

subcontractors would be small 

businesses as defined by the SBA.557

(2) Temporary help service suppliers 

(NAICS #561320) are primarily engaged 

in supplying workers to supplement a 

client employer’s workforce. To be 

defined as a small business temporary 

help service supplier by the SBA, the 

entity must generate receipts of less 

than $34 million annually.558 In 2017, 

there were 14,343 temporary service 

supplier firms in the United States.559

Of these temporary service supplier 

firms, 13,384 had receipts of 

$29,999,999 or less. Since the Board 

cannot determine how many of the 117 

firms with receipts between $30 million 

and $34,999,000 fall below the $34 

million annual receipt threshold, it 

assumes that these are all small 

businesses as defined by the SBA. 

Therefore, for purposes of this FRFA, 

the Board assumes that 13,501 

temporary help service supplier firms 

(94.1% of total) are small businesses. 

(3) Entities that use temporary help 

services to staff their businesses are 

widespread throughout many 

industries. The Census Bureau’s 2020 

Annual Business Survey revealed that of 

the 2,687,205 respondent firms with 

paid employees, 94,930 of those firms 

obtained staffing from temporary help 

services in that calendar year.560 This 

survey provides the only gauge of 

employers that obtain staffing from 

temporary help services, and the Board 

is without the means to estimate what 

portion of those are small businesses as 

defined by the NAICS. For that reason, 

and because no other comments were 

received on this topic, the Board 

assumes for purposes of this FRFA that 

all users of temporary services are small 

businesses. 

(4) Franchising is a method of 

distributing products or services in 

which a franchisor lends its trademark 

or trade name and a business system to 

a franchisee, which pays a royalty and 

often an initial fee for the right to 

conduct business under the franchisor’s 

name and system.561 Franchisors 

generally exercise some operational 

control over their franchisees, which 

potentially renders the relationship 

subject to application of the Board’s 

joint-employer standard. The Board 

explained in the NPRM that it does not 

have the means to identify precisely 

how many franchisees operate within 

the United States or how many are small 

businesses as defined by the SBA. The 

Census Bureau’s 2020 Annual Business 

Survey revealed that, of the 130,492 

firms that operated a portion of their 

business as a franchise, 125,989 had 

fewer than 500 paid employees.562

Based on this available data and the fact 

that the 500-employee threshold is 

commonly used to describe the universe 

of small employers, we assume that 

125,989 (96.5% of total) are small 

businesses. 

(5) Labor unions, as defined by the 

NLRA, are entities ‘‘in which employees 

participate and which exist for the 

purpose . . . of dealing with employers 

concerning grievances, labor disputes, 

wages, rates of pay, hours of 

employment, or conditions of work.’’ 563

By defining which employers are joint 

employers under the NLRA, the final 

rule impacts labor unions generally, and 

more directly impacts those labor 

unions that organize in the specific 

business sectors discussed above. The 

SBA’s small business standard for 

‘‘Labor Unions and Similar Labor 

Organizations’’ (NAICS #813930) is 

$16.5 million in annual receipts.564 In 

2017, there were 13,137 labor union 

firms in the U.S.565 Of these firms, at 

least 12,964 labor union firms (98.6% of 

total) had receipts of under $15 million 

and are definitely small businesses 

according to SBA standards. Since the 

Board cannot determine how many of 

the 49 labor union firms with receipts 

between $15 million and $19,999,999 

fall below the $16.5 million annual 

receipt threshold, it assumes that these 

are all small businesses as defined by 

the SBA. For the purposes of the IRFA, 

the Board assumes that 13,013 labor 

union firms (99% of total) are small 

businesses. 

Based on the foregoing, the Board 

assumes that 13,501 temporary help 

supplier firms, 125,989 franchise firms, 

and 13,013 union firms are small 

businesses; and it further assumes that 

all 94,930 temporary help user firms are 

small businesses. Therefore, among 

these four categories of employers that 

are most interested in the final rule, 

247,433 business firms are assumed to 

be small businesses as defined by the 

SBA. The Board believes that all these 

small businesses, and also those 

businesses regularly engaged in 

contracting/subcontracting, have a 

general interest in the rule and would be 

impacted by the compliance costs, 

discussed below, related to reviewing 

and understanding the rule. But, as 

previously noted, employers will only 

be most directly impacted when they 

are alleged to be a joint employer in a 

Board proceeding. Given the Board’s 

historic filing data, this number is very 

small relative to the number of small 

employers in these five categories. 

Throughout the IRFA, the Board 

requested comments or data that might 

improve its analysis, 87 FR at 54659–61, 

but no additional data was received 

regarding the number of small entities to 

which the rule will apply.566


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567See Mid-Tex Electric Cooperative, 773 F.2d at 

342 (‘‘[I]t is clear that Congress envisioned that the 

relevant ‘economic impact’ was the impact of 

compliance with the proposed rule on regulated 

small entities.’’). 

568See 5 U.S.C. 604(a)(4). 

569 5 U.S.C. 607. 

570See SBA Guide at 37. 

571 Data from the BLS indicates that employers 

are more likely to have a human resources specialist 

(BLS #13–1071) than to have a labor relations 

specialist (BLS #13–1075). Compare Occupational 

Employment and Wages, May 2022, 13–1075 Labor 

Relations Specialists, found at https://www.bls.gov/ 

oes/current/oes131075.htm, with Occupational 

Employment and Wages, May 2022, 13–1071 

Human Resources Specialists, found at https://

www.bls.gov/oes/current/oes131071.htm (last 

accessed July 3, 2023). 

572 In the NPRM, the Board asserted that an 

experienced labor relations specialist or labor 

relations attorney would not expend more than an 

hour to read and understand the rule, which returns 

to the pre-2020 rule standard and incorporates the 

common-law definition of ‘‘employer’’ that already 

applies in most jurisdictions throughout the nation. 

Therefore, the Board’s initial direct compliance 

costs were one hour of time for the human 

resources or labor relations specialist to read the 

rule and one hour of an attorney’s time for a 

consultation. The Board did not receive any 

comments that provided evidence or support for the 

assertion that employers or labor relations attorneys 

would need any additional time to read and 

understand the final rule. However, the comments 

persuaded the Board to add an additional hour of 

time for an employer’s human resources or labor 

relations specialist to attend the attorney’s 

consultation. 

573For wage figures, see May 2021 National 

Occupancy Employment and Wage Estimates, 

found at https://www.bls.gov/oes/current/oes_

nat.htm. The Board has been administratively 

informed that BLS estimates that fringe benefits are 

approximately equal to 40 percent of hourly wages. 

Thus, to calculate total average hourly earnings, 

BLS multiplies average hourly wages by 1.4. In May 

2021, average hourly wages for labor relations 

specialists (BLS #13–1075) were $42.05. The same 

figure for a lawyer (BLS #23–1011) is $78.74. 

Accordingly, the Board multiplied each of those 

wage figures by 1.4 and added two hours for the 

labor relations specialist and one hour for the 

lawyer to arrive at its estimate. 

These average hourly wages, which are based on 

the BLS’s May 2022 figures released on April 25, 

2023, are $5 to $7 higher than those reported in the 

IRFA when the most updated BLS figures were from 

May 2020. See 83 FR 54662. The increase is not 

statistically significant. While some commenters 

asserted that the wage rates for an attorney were at 

least $300/hour, none of the comments provided 

any evidence to which the Board could cite. 

Therefore, the Board continues to rely on the BLS 

wage figures. 

574The Board’s revised compliance cost for 

unions covers the cost of a one-hour consultation 

between the union’s labor relations specialist and 

legal counsel, which totals $169.11 per the formula 

described in fn. 573 above. 

575See SBA Guide at 18. 

576 Id. at 19. 

577Comments of McDonald’s USA, LLC; SBA 

Office of Advocacy. 

5. Description of the Projected 

Reporting, Recordkeeping and Other 

Compliance Requirements of the Rule, 

Including an Estimate of the Classes of 

Small Entities That Will be Subject to 

the Requirement and the Type of 

Professional Skills Necessary for 

Preparation of the Report or Record 

The RFA requires an agency to 

consider the direct burden that 

compliance with a new regulation will 

likely impose on small entities.567 Thus, 

the RFA requires the Agency to 

determine the amount of ‘‘reporting, 

recordkeeping and other compliance 

requirements’’ imposed on small 

entities.568 In providing its FRFA, an 

agency may provide either a 

quantifiable or numerical description of 

the effects of a rule or alternatives to the 

rule, or ‘‘more general descriptive 

statements if quantification is not 

practicable or reliable.’’ 569

The Board concludes that the final 

rule imposes no capital costs for 

equipment needed to meet the 

regulatory requirements; no direct costs 

of modifying existing processes and 

procedures to comply with the final 

rule; no lost sales and profits resulting 

from the final rule; no changes in 

market competition as a result of the 

final rule and its impact on small 

entities or specific submarkets of small 

entities; no extra costs associated with 

the payment of taxes or fees associated 

with the final rule; and no direct costs 

of hiring employees dedicated to 

compliance with regulatory 

requirements.570 The final rule also does 

not impose any new information 

collection or reporting requirements on 

small entities. 

Small entities, with a particular 

emphasis on those small entities in the 

five categories with special interest in 

the final rule, will be interested in 

reviewing the rule to understand the 

restored common-law joint-employer 

standard. We estimate that a human 

resources or labor relations specialist at 

a small employer who undertook to 

become generally familiar with the 

proposed changes may take at most one 

hour to read the text of the rule and the 

supplementary information published 

in the Federal Register.571 It is also 

possible that a small employer may 

wish to consult with an attorney, which 

we estimated to require one hour as 

well.572 Using the Bureau of Labor 

Statistics’ estimated wage and benefit 

costs, we have assessed these labor costs 

to be between $208.60 and $227.98.573

As to the impact on unions, the Board 

anticipates they may also incur costs 

from reviewing the rule. The Board 

believes a union would consult with an 

attorney, which is estimated to require 

no more than one hour of attorney time 

costing $169.11 because, like labor 

compliance professionals or employer 

labor-management attorneys, union 

counsels would already be familiar with 

the pre-2020 standard for determining 

joint-employer status under the Act and 

common-law principles.574

The Board does not find the estimated 

$227.98 cost to small employers and the 

estimated $169.11 cost to unions to 

review and understand the rule to be 

significant within the meaning of the 

RFA. In making this finding, one 

important indicator is the cost of 

compliance in relation to the revenue of 

the entity or the percentage of profits 

affected.575 Other criteria to be 

considered are the following: 

—Whether the rule will cause long-term 

insolvency, i.e., regulatory costs that may 

reduce the ability of the firm to make 

future capital investment, thereby severely 

harming its competitive ability, 

particularly against larger firms; 

—Whether the cost of the proposed 

regulation will (a) eliminate more than 10 

percent of the businesses’ profits; (b) 

exceed one percent of the gross revenues 

of the entities in a particular sector, or (c) 

exceed five percent of the labor costs of the 

entities in the sector.576

The minimal cost to read and 

understand the rule, $227.98 for small 

employers and $169.11 for small 

unions, will not generate any such 

significant economic impacts. 

In the NPRM, the Board requested 

comments from the public that would 

shed light on any potential compliance 

costs, 87 FR 54659, and considered 

those responses in the comments 

section above. 

6. Description of the Steps the Agency 

Has Taken To Minimize the Significant 

Economic Impact on Small Entities 

Consistent With the Stated Objectives of 

Applicable Statutes, Including a 

Statement of the Factual, Policy, and 

Legal Reasons for Selecting the 

Alternative Adopted in the Final Rule 

and Why Each One of the Other 

Significant Alternatives to the Rule 

Considered by the Agency Which Affect 

the Impact on Small Entities was 

Rejected 

Pursuant to 5 U.S.C. 604(a)(6), 

agencies are directed to examine ‘‘why 

each one of the other significant 

alternatives to the rule considered by 

the agency which affect the impact on 

small entities was rejected.’’ In the 

NPRM, the Board requested comments 

identifying any other issues and 

alternatives that it had not considered. 

See 87 FR 54651, 54662. Two 

commenters suggest that the Board 

consider alternatives but do not provide 

any suggestions.577 Several comments 

suggest that the Board withdraw the 

proposed rule and leave in place the 

2020 rule, an alternative that the Board 


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578See, e.g., comments of U.S. Chamber of 

Commerce. 579Comments of U.S. Chamber of Commerce. 580 Id. 581 87 FR 54662. 582Comments of IFA; Rachel Greszler. 583However, as mentioned above, there are 

standards that prevent the Board from asserting 

authority over entities that fall below certain 

jurisdictional thresholds. This means that extremely 

small entities outside of the Board’s jurisdiction 

will not be affected by the final rule. See 29 CFR 

104.204. 

584NLRB v. National Gas Utility District of 

Hawkins County, Tennessee, 402 U.S. 600, 603–604 

(1971) (quotation omitted). 

585Several comments note that the proposed rule 

did not include a CRA analysis. See comments of 

Colorado Bankers Association; Elizabeth Boynton; 

National Association of Convenience Stores; U.S. 

Chamber of Commerce. Such an analysis is 

included in final rules rather than in proposed 

ones. See 5 U.S.C. 801–808. 

considered and rejected for reasons 

stated in the NPRM and reiterated 

above.578 One comment suggests simply 

modifying the 2020 rule by, for 

example, broadening the list of terms 

and conditions of employment that may 

demonstrate joint-employer status.579

Or, in the alternative, the comment 

suggests that the Board could leave the 

rule untouched and examine its 

application through subsequent 

caselaw, which would reveal any 

deficiencies in the standard.580 As 

discussed in Section IV.K above, the 

Board has considered each of these 

alternatives, and several others, and has 

provided a detailed rationale for 

rejecting the status quo and revising the 

joint-employer standard through the 

rulemaking process. 

In the NPRM, the Board considered 

exempting certain small entities and 

explained why such an exemption 

would be contrary to judicial precedent 

and impracticable.581 Two commenters 

suggested that the Board reconsider an 

exemption but did not address the 

Board’s previously stated concerns with 

such an exemption or provide any 

further detail on how such an 

exemption would function.582

Accordingly, the Board again rejects this 

exemption as impractical because such 

a large percentage of employers and 

unions would be exempt under the SBA 

definitions, thereby substantially 

undermining the purpose of the final 

rule. Moreover, as this rule often applies 

to relationships involving a small entity 

(such as a franchisee) and a large 

enterprise (such as a franchisor), 

exemptions for small businesses would 

decrease the application of the rule to 

larger businesses as well, potentially 

undermining the policy behind this 

rule. Additionally, given the very small 

direct cost of compliance, it is likely 

that the burden on a small business of 

determining whether it fell within a 

particular exempt category would 

exceed the burden of compliance. 

Further, Congress gave the Board very 

broad jurisdiction, with no suggestion 

that it wanted to limit coverage of any 

part of the Act to only larger 

employers.583 As the Supreme Court has 

noted, ‘‘[t]he [NLRA] is federal 

legislation, administered by a national 

agency, intended to solve a national 

problem on a national scale.’’ 584 As 

such, this alternative is contrary to the 

objectives of this rulemaking and of the 

NLRA. 

The purpose of considering 

alternatives is to determine whether 

they could minimize the compliance 

burdens on small businesses. SBA 

Guide at 36. But an agency may select 

a course that is more economically 

burdensome than a proposed alternative 

if there is evidence that the proposed 

alternative would not accomplish the 

objectives of the statute. See AML 

International v. Daley, 107 F. Supp. 2d 

90, 105 (D. Mass. 2000). None of the 

alternatives proffered and considered 

accomplish the objectives of issuing this 

rule while minimizing the 

familiarization cost on small businesses. 

Accordingly, the Board believes that 

promulgating this final rule is the best 

regulatory course of action. 

B. Paperwork Reduction Act 

In the NPRM, the Board explained 

that the proposed rule would not 

impose any information collection 

requirements. Accordingly, the 

proposed rule is not subject to the 

Paperwork Reduction Act (PRA), 44 

U.S.C. 3501–3521. See 87 FR 54662–63. 

No substantive comments were received 

relevant to the Board’s analysis of its 

obligations under the PRA. 

C. Congressional Review Act 

The provisions of this rule are 

substantive. Therefore, the Board will 

submit this rule and required 

accompanying information to the 

Senate, the House of Representatives, 

and the Comptroller General as required 

by the Small Business Regulatory 

Enforcement Fairness Act 

(Congressional Review Act or CRA), 5 

U.S.C. 801–808.585

Pursuant to the CRA, the Office of 

Information and Regulatory Affairs will 

designate this rule as a ‘‘major rule’’ 

because it will have an effect on the 

economy of more than $100 million 

during the year it takes effect. 5 U.S.C. 

804(2)(A). Accordingly, the rule will 

become effective no earlier than 60 days 

after its publication in the Federal 

Register. 

Final Rule 

This rule is published as a final rule. 

List of Subjects in 29 CFR Part 103 

Jurisdictional standards, Election 

procedures, Appropriate bargaining 

units, Joint Employers, Remedial 

Orders. 

For the reasons stated in the 

preamble, the National Labor Relations 

Board amends 29 CFR part 103 as 

follows: 

PART 103—OTHER RULES 

■ 1. The authority citation for part 103 

continues to read as follows: 

Authority: 29 U.S.C. 156, in accordance 

with the procedure set forth in 5 U.S.C. 553. 

Subpart D—[Removed and Reserved] 

■ 2. Remove and reserve subpart D, 

consisting of § 103.40. 

■ 3. Add subpart E, consisting of 

§ 103.40, to read as follows: 

Subpart E—Joint Employers 

§ 103.40 Joint employers. 

(a) An employer, as defined by section 

2(2) of the National Labor Relations Act 

(the Act), is an employer of particular 

employees, as defined by section 2(3) of 

the Act, if the employer has an 

employment relationship with those 

employees under common-law agency 

principles. 

(b) For all purposes under the Act, 

two or more employers of the same 

particular employees are joint 

employers of those employees if the 

employers share or codetermine those 

matters governing employees’ essential 

terms and conditions of employment. 

(c) To ‘‘share or codetermine those 

matters governing employees’ essential 

terms and conditions of employment’’ 

means for an employer to possess the 

authority to control (whether directly, 

indirectly, or both), or to exercise the 

power to control (whether directly, 

indirectly, or both), one or more of the 

employees’ essential terms and 

conditions of employment. 

(d) ‘‘Essential terms and conditions of 

employment’’ are 

(1) Wages, benefits, and other 

compensation; 

(2) Hours of work and scheduling; 

(3) The assignment of duties to be 

performed; 

(4) The supervision of the 

performance of duties; 

(5) Work rules and directions 

governing the manner, means, and 

methods of the performance of duties 

and the grounds for discipline; 

(6) The tenure of employment, 

including hiring and discharge; and 


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(7) Working conditions related to the 

safety and health of employees. 

(e) Whether an employer possesses 

the authority to control or exercises the 

power to control one or more of the 

employees’ essential terms and 

conditions of employment is 

determined under common-law agency 

principles. For the purposes of this 

section: 

(1) Possessing the authority to control 

one or more essential terms and 

conditions of employment is sufficient 

to establish status as a joint employer, 

regardless of whether control is 

exercised. 

(2) Exercising the power to control 

indirectly (including through an 

intermediary) one or more essential 

terms and conditions of employment is 

sufficient to establish status as a joint 

employer, regardless of whether the 

power is exercised directly. 

(f) Evidence of an entity’s control over 

matters that are immaterial to the 

existence of an employment 

relationship under common-law agency 

principles and that do not bear on the 

employees’ essential terms and 

conditions of employment is not 

relevant to the determination of whether 

the entity is a joint employer. 

(g) A party asserting that an employer 

is a joint employer of particular 

employees has the burden of 

establishing, by a preponderance of the 

evidence, that the entity meets the 

requirements set forth in paragraphs (a) 

through (f) of this section. 

(h) A joint employer of particular 

employees 

(1) Must bargain collectively with the 

representative of those employees with 

respect to any term and condition of 

employment that it possesses the 

authority to control or exercises the 

power to control, regardless of whether 

that term or condition is deemed to be 

an essential term and condition of 

employment under this section for the 

purposes of establishing joint-employer 

status; but 

(2) Is not required to bargain with 

respect to any term and condition of 

employment that it does not possess the 

authority to control or exercise the 

power to control. 

(i) The provisions of this section are 

intended to be severable. If any 

paragraph of this section is held to be 

unlawful, the remaining paragraphs of 

this section not deemed unlawful are 

intended to remain in effect to the 

fullest extent permitted by law. 

Dated: October 20, 2023. 

Roxanne L. Rothschild, 

Executive Secretary, National Labor Relations 

Board. 

[FR Doc. 2023–23573 Filed 10–26–23; 8:45 am] 

BILLING CODE 7545–01–P 


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