1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

TYLER DIVISION

CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA, et al.,

Plaintiffs,

v.

NATIONAL LABOR RELATIONS BOARD, et al.,

Defendants.

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) Civil Case No. 6:23-cv-00553-JCB

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DEFENDANTS’ CROSS-MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO 

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT 

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Table of Contents

INTRODUCTION...........................................................................................................................................9

STATEMENT OF UNDISPUTED MATERIAL FACTS .....................................................................10

LEGAL STANDARDS..................................................................................................................................17

ARGUMENT...................................................................................................................................................18

I. The Rule is based on the NLRA’s common-law based test to determine whether an entity is 

an “employer.”.............................................................................................................................................18

A. The Rule is grounded on the threshold common-law inquiry of whether an entity is an 

employer or a contractor, which Plaintiffs ignore entirely. ..............................................................19

B. Reserved control has historically been considered sufficient to establish a common-law 

employment relationship. ......................................................................................................................24

C. Indirect control has historically been considered sufficient to establish a common-law 

employment relationship. ......................................................................................................................31

D. The Board adequately justified its rescission of the 2020 Rule, which conflicted with the 

common law and did not serve the purposes of the Act..................................................................34

II. The Final Rule facilitates meaningful collective bargaining. .........................................................36

III. The Board acted lawfully under the APA by properly balancing the competing interests and 

statutory rights of employees, employers, and labor organizations. ....................................................41

CONCLUSION...............................................................................................................................................43

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Table of Authorities

Cases

ACA International v. FCC,

885 F.3d 687 (D.C. Cir. 2018) ...................................................................................................................43

Adams & Associates Inc. v. NLRB,

871 F.3d 358 (5th Cir. 2017)......................................................................................................................30

Airborne Freight Co.,

338 NLRB 597 (2002).................................................................................................................................13

Allied Chem. & Alkali Workers, Loc. 1 v. Pittsburgh Plate Glass Co.,

404 U.S. 157 (1971).............................................................................................................................. 18, 28

Am. Prop. Holding Corp.,

350 NLRB 998 (2007), enforced in rel. part sub nom. SEIU Local 32BJ v. NLRB, 

647 F.3d 435 (2d Cir. 2011).......................................................................................................................13

Anderson v. Liberty Lobby, Inc.,

477 U.S. 242 (1986).....................................................................................................................................17

Bannum Place of Saginaw, LLC v. NLRB,

41 F.4th 518 (6th Cir. 2022).......................................................................................................................40

Beth Israel Hosp. v. NLRB,

437 U.S. 483 (1978).....................................................................................................................................24

Boire v. Greyhound Corp.,

376 U.S. 473 (1964)........................................................................................................................11, 12, 20

Browning-Ferris Indus. of Cal. (“BFI 2015”)

362 NLRB 1599 (2015), enforcement denied and remanded, 911 F.3d 1195 (D.C. Cir. 2018)..................13

Browning-Ferris Indus. of Cal., Inc.,

369 NLRB No. 139 (July 29, 2020) ..........................................................................................................15

Browning-Ferris Industries of California, Inc. v. NLRB (“BFI 2018”),

911 F.3d 1195 (D.C. Cir. 2018).........................................................................................................passim

Butler v. Drive Automotive Industries of America, Inc.,

793 F.3d 404 (4th Cir. 2015)......................................................................................................................31

Capehardt v. Murta,

145 S.W. 827 (Mo. Ct. App. 1912)............................................................................................................27

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Cellnet Comms., Inc. v. FCC,

149 F.3d 429 (6th Cir. 1998)......................................................................................................................43

Duffy Tool & Stamping, LLC v. NLRB,

233 F.3d 995 (7th Cir. 2000)......................................................................................................................39

EEOC v. Global Horizons, Inc.,

915 F.3d 631 (9th Cir. 2019)......................................................................................................................34

E.I. Du Pont de Nemours & Co. v. NLRB,

489 F.3d 1310 (D.C. Cir. 2007).................................................................................................................39

First National Maintenance Corp. v. NLRB,

452 U.S. 666 (1971).....................................................................................................................................39

Flagstaff Med. Ctr.,

357 NLRB 659 (2011), enforced on other grounds, 715 F.3d 928 (D.C. Cir. 2013) .................................13

Ford Motor Co. v. NLRB,

441 U.S. 488 (1979).....................................................................................................................................18

Goodman v. Wilson,

166 S.W. 752 (Tenn. 1914).........................................................................................................................27

Greyhound Corp.,

153 NLRB 1488 (1965), enforced, 368 F.2d 778 (5th Cir. 1966).............................................................12

Hayward v. U.S. Dep’t of Lab.,

536 F.3d 376 (5th Cir. 2008)......................................................................................................................17

Herbert Harvey, Inc. v. NLRB, 

424 F.2d 770 (D.C. Cir. 1969) ...................................................................................................................38

Hy-Brand Industrial Contractors, Ltd.,

365 NLRB No. 156 (Dec. 14, 2017).........................................................................................................14

Hy-Brand Industrial Contractors, Ltd.,

366 NLRB No. 26 (Feb. 26, 2018) ...........................................................................................................14

Laerco Transportation,

269 NLRB 324 (1984).................................................................................................................................13

Maltz v. Jackoway-Katz Cap Co.,

82 SW2d 909 (Mo. 1934)............................................................................................................................25

Management Training Corp.,

317 NLRB 1355 (1995) ..............................................................................................................................40

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Motor Vehicles Mfrs. Ass’n of U.S., Inc., v. State Farm Mut. Ins. Co.,

463 U.S. 29 (1983)................................................................................................................................ 17, 42

N. Am. Soccer League v. NLRB,

613 F.2d 1379 (5th Cir. 1980).......................................................................................................30, 35, 43

Nationwide Mut. Ins. Co. v. Darden,

503 U.S. 318 (1992).....................................................................................................................................11

Nat'l Fed'n of Fed. Emps., Loc. 1309 v. Dep’t of Interior,

526 U.S. 86 (1999).......................................................................................................................................18

New Jersey v. New York,

523 U.S. 767 (1998).....................................................................................................................................43

New York Indemnification Co. v. Industrial Accident Commission,

14 P.2d 160 (Cal. Dist. Ct. App. 1932)....................................................................................................27

NLRB v. Browning-Ferris Industries of Pennsylvania, Inc. (“BFI 1982”),

691 F.2d 1117 (3d Cir. 1982).............................................................................................................. 12, 29

NLRB v. Deaton, Inc.,

502 F.2d 1221 (5th Cir. 1974)............................................................................................................passim

NLRB v. Steinberg,

182 F.2d 850 (5th Cir. 1950)......................................................................................................................29

NLRB v. Town & Country Elec., Inc.,

516 U.S. 85 (1995)..........................................................................................................................11, 18, 33

NLRB v. Wooster Div. of Borg-Warner Corp.,

356 U.S. 342 (1958).....................................................................................................................................39

NLRB v. Zayre Corp.,

424 F.2d 1159 (5th Cir. 1970)....................................................................................................................30

Poly-Am., Inc. v. NLRB,

260 F.3d 465 (5th Cir. 2001)......................................................................................................................17

Rhoades v. Varney,

39 A. 552 (Me. 1898)...................................................................................................................................27

Richard v. Ill. Bell Tel. Co.,

383 N.E.2d 1242 (Ill. 1978)........................................................................................................................28

Rush Univ. Med. Ctr. v. NLRB,

833 F.3d 202 (D.C. Cir. 2016) ...................................................................................................................24

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Sanitary Truck Drivers & Helpers Loc. 350 v. NLRB,

45 F.4th 38 (D.C. Cir. 2022).........................................................................................................15, 30, 31

Sebelius v. Auburn Reg’l Med. Ctr.,

568 U.S. 145 (2013) ....................................................................................................................................17

Singer Mfg. Co. v. Rahn,

132 U.S. 518 (1889).............................................................................................................................. 12, 25

Squyres v. Heico Cos., LLC,

782 F.3d 224 (5th Cir. 2015)......................................................................................................................43

Sure-Tan, Inc. v. NLRB,

467 U.S. 883 (1984).....................................................................................................................................18

Tex. Clinical Labs, Inc. v. Sebelius,

612 F.3d 771 (5th Cir. 2010)......................................................................................................................17

Tex. World Serv. Co. v. NLRB,

928 F.2d 1426 (5th Cir. 1991).......................................................................................................30, 35, 43

TLI, Inc.,

271 NLRB 798 (1984).................................................................................................................................13

NLRB v. United Insurance Co. of America,

390 U.S. 254 (1968).....................................................................................................................................20

Vaughn Bros.,

94 NLRB 382 (1951)...................................................................................................................................12

Visiting Nurse Servs. of W. Mass. v. NLRB,

177 F.3d 52 (1st Cir. 1999).........................................................................................................................39

White v. Morris,

152 S.E.2d 417 (Ga. Ct. App. 1966).........................................................................................................32

Williams v. Shell Oil Co.,

18 F.3d 396 (7th Cir. 1994)........................................................................................................................28

Statutes

5 U.S.C. § 706(2)(A)-(C)..................................................................................................................................17

29 U.S.C. § 151.................................................................................................................................................10

29 U.S.C. § 152(2)............................................................................................................................................11

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29 U.S.C. § 152(3)..................................................................................................................................... 11, 28

29 U.S.C. § 156.................................................................................................................................................11

29 U.S.C. § 157.................................................................................................................................................11

29 U.S.C. § 158.................................................................................................................................................11

29 U.S.C. § 159.................................................................................................................................................11

29 U.S.C. § 160.................................................................................................................................................11

Rules

Fed. R. Civ. P. 56 ...............................................................................................................................................8

Regulations

29 C.F.R. § 103.40..................................................................................................................................... 16, 34

Federal Register

Joint Employer Status Under the National Labor Relations Act,

85 Fed. Reg. 11,184 (Feb. 26, 2020) .................................................................................................. 15, 34

Proposed Rule, Standard for Determining Joint-Employer Status,

87 Fed. Reg. 54,641 (Sept. 7, 2022).................................................................................................... 12, 16

Proposed Rule, The Standard for Determining Joint-Employer Status,

83 Fed. Reg. 46,681 (Sept. 14, 2018) ........................................................................................................14

Standard for Determining Joint Employer Status,

88 Fed. Reg. 73,946 (Oct. 27, 2023) .................................................................................................passim

Other Authorities

30 A.L.R. 1000 (1924) .....................................................................................................................................28

Restatement (First) of Agency § 2.................................................................................................................26

Restatement (Second) of Agency § 227........................................................................................................28

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Restatement (Second) of Agency § 220........................................................................................................28

Restatement (Second) of Agency § 5 ............................................................................................................32

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Defendants National Labor Relations Board, et al. (Board) are entitled to summary judgment 

pursuant to Local Rule CV-56 and Federal Rule of Civil Procedure 56, as there are no genuine issues

of material fact concerning the Board’s promulgation of a lawful Final Rule, Standard for Determining 

Joint Employer Status, 88 Fed. Reg. 73,946 (Oct. 27, 2023) (Rule or Final Rule) (Exhibit 1 attached),

under the National Labor Relations Act (NLRA or Act) and the Administrative Procedure Act

(APA). Plaintiffs Chamber of Commerce, et al.’s motion for summary judgment should be denied.

INTRODUCTION

The Final Rule represents the culmination of an extensive effort by the Board to apply

common-law employment concepts to the National Labor Relations Act’s joint-employer standard. 

Adhering to guidance provided by the judiciary, and after drafting an extensive notice of proposed 

rulemaking and considering nearly 13,000 comments, the Board devised a carefully crafted

architecture for determining when two or more entities qualify as joint employers under the NLRA. 

The new regulatory framework involves two steps. First, as a threshold matter, the entity in question 

must qualify as a common-law employer of the disputed employees (as opposed to, for instance, an 

independent contractor). Second, if and only if the entity is a common-law employer, then it must also 

have control over one or more essential terms and conditions of employment, as those are defined 

in the Rule, to qualify as a joint employer. At either step, the evidence of the entity’s control can be 

in any form recognized at common law.

Plaintiffs claim that this Rule causes a parade of horribles that jeopardizes the very existence

of shared employment in the United States. Their arguments, however, rest on a fundamental 

misunderstanding of the Rule—one that blatantly elides the threshold inquiry and incorrectly

assumes that any reserved or indirect control will automatically create a joint-employment 

relationship. By misrepresenting what the Rule does and does not do, Plaintiffs obfuscate the legal 

issues and implications that are at stake. Two points clarify what Plaintiffs conceal:

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1. What the Rule does do is remove the fabricated requirement that control must always 

be direct, immediate, and substantial, and therefore cannot be contractually reserved or channeled 

via an intermediary. Such a stringent requirement is inconsistent with the common law and 

antithetical to the Act’s purpose. 

2. What the Rule does not do is mandate that any exercise of reserved or indirect control 

is sufficient for a joint-employer finding. Rather, the inquiry takes full account of who is exercising 

control, when, and over what objects, to determine, in fidelity to the common law, whether an 

employment relationship exists. Only after this threshold showing is satisfied does the Rule’s second 

step kick in—to assess whether control is levied over an essential term and condition of 

employment so as to confer joint-employer status and permit meaningful collective bargaining. 

Plaintiffs’ neglect of this threshold inquiry and distortion of the common law on control

explain why its NLRA claims fail. Plaintiffs fare no better in attacking the rule on APA grounds, as 

the Board responded to the comments raised by Plaintiffs in the Rule and provided meaningful 

guidance to regulated parties. As such, the Board is entitled to judgment in its favor.

STATEMENT OF UNDISPUTED MATERIAL FACTS1

The NLRA effectuates the “policy of the United States . . . by encouraging the practice and 

procedure of collective bargaining.”2 The core substantive right of the Act lies in Section 7, which 

guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to 

1 Pursuant to LRCv 56(b) and the Court’s order dated Nov. 17, 2023 [ECF No. 23, at 2], the Board

agrees that fact-finding is not required. However, Plaintiffs have already filed a Statement of 

Undisputed Material Facts (SUMF) [Pls.’ MSJ, ECF No. 10, 10-13], which the Board disputes on 

two grounds: (1) it distorts the historical development of Board law through myriad omissions and 

inaccurate statements; the NLRB responds to and corrects these misstatements through this SUMF;

and (2) it contains improper legal arguments on whether the Board’s joint-employer tests are

consistent with the common law [see Pls.’ MSJ 11-12, 14]; these are not statements of fact.

The Board, however, does not dispute Plaintiffs’ Statement of the Issues.

2 29 U.S.C. § 151.

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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.”3 Section 8, in 

turn, defines certain prohibited unfair labor practices for employers and unions; specifically relevant 

to this case, Section 8(a)(5) makes it unlawful for an employer “to refuse to bargain collectively with 

the representatives of his employees.”4 The duty to bargain collectively is outlined in Section 8(d) of 

the Act, which establishes parties’ obligations “to meet at reasonable times and confer in good faith 

with respect to wages, hours, and other terms and conditions of employment.”5

These rights and prohibitions are enforced by the Board. The NLRA assigns the Board two 

principal responsibilities: preventing unfair labor practices,

6 and resolving questions concerning 

representation.7 The Board typically carries out these responsibilities through case-by-case 

adjudication, but sometimes the Board has done so by rulemaking.8

In interpreting and applying the Act, courts and the Board have long recognized that two or 

more entities can serve as joint employers of a group of employees for purposes of the Act.

9

Because the NLRA’s definitions of “employer” and “employee” are terse and unspecific,10 the 

Board, with Supreme Court approval, relies on the common law of agency to guide its analysis of

when a joint-employment relationship exists.

11 Throughout most of the NLRA’s existence, the 

3 Id. § 157.

4 Id. § 158(a)(5).

5 Id. § 158(d).

6 Id. § 160.

7 Id. § 159.

8 Id. § 156.

9 E.g., Boire v. Greyhound Corp., 376 U.S. 473, 481 (1964); cf. 29 U.S.C. § 152(3) (“The term ‘employee’ 

... shall not be limited to the employees of a particular employer ....”).

10 See 29 U.S.C. § 152(2), 152(3).

11 NLRB v. Town & Country Elec., Inc., 516 U.S. 85, 92-95 (1995); see Nationwide Mut. Ins. Co. v. Darden,

503 U.S. 318, 322–323 (1992) (recognizing that where Congress has used the bare statutory term 

“employee,” courts should apply common-law concepts).

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Board has consistently found that evidence of an entity’s right to control a group of employees’ 

terms and conditions of employment—whether exercised or reserved, and whether direct or 

indirect—was generally sufficient to demonstrate an employment relationship.

12

In 1964, the Supreme Court issued Boire v. Greyhound Corp.,

13 its singular decision passing 

upon the Board’s joint-employer jurisprudence. There, the Court explained that, under the Act, the 

issue of joint-employer status turns on whether an entity “possesse[s] sufficient control over the 

work of the employees to qualify as a joint employer,” without speaking to any particular form that 

control may take.

14 The Court further noted a joint-employment determination is “essentially a 

factual issue” for the Board to decide.

15

Over the next two decades, the Board’s joint-employer test had not yet solidified, but it

generally regarded an employer’s right to control employees’ terms or conditions of employment as

relevant to—and in some cases determinative of—joint-employer status; the same was true for 

indirect control.16 Then, in 1982, the Third Circuit’s decision in NLRB v. Browning-Ferris Industries of 

Pennsylvania, Inc. (“BFI 1982”), held that the joint-employer standard turns on whether two or more 

employers “share or co-determine those matters governing essential terms and conditions of 

employment.”17 Importantly, the Third Circuit explicitly recognized the importance of reserved 

12 See 88 Fed. Reg. at 73,946-47, nn.2-3 (citing and discussing case law); e.g., Vaughn Bros., 94 NLRB 

382, 383 (1951) (citing Singer Mfg. Co. v. Rahn, 132 U.S. 518 (1889)).

13 376 U.S. 473 (1964).

14 Id. at 481.

15 Id. On remand, the Board concluded, and the Fifth Circuit affirmed, that a joint-employer finding 

depends on a showing that the entity “share[d], or codetermine[d], those matters governing essential 

terms and conditions of employment.” Greyhound Corp., 153 NLRB 1488, 1495 (1965), enforced, 368 

F.2d 778 (5th Cir. 1966).

16 See 88 Fed. Reg. at 73,946-47 & nn.2-3; Proposed Rule, Standard for Determining Joint-Employer Status, 

87 Fed. Reg. at 54,642-43 & nn.2-9, 11-14 (Sept. 7, 2022); see Browning-Ferris Indus. of Cal., 362 NLRB 

1599, 1607 (2015), enforcement denied and remanded, 911 F.3d 1195 (D.C. Cir. 2018).

17 691 F.2d 1117, 1123 (3d Cir. 1982) (emphasis removed).

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control, emphasizing that the joint-employer inquiry turns on whether “one employer . . . has retained 

for itself sufficient control of the terms and conditions of employment of the employees who are 

employed by the other employer.”18 

In Laerco Transportation19 and TLI, Inc.,

20 two 1984 decisions, the Board adopted the Third 

Circuit’s standard, and further held that “there must be a showing that the employer meaningfully 

affects matters relating to the employment relationship such as hiring, firing, discipline, supervision 

and direction.”21 But then, the Board began introducing additional constraints, going well beyond 

the BFI 1982 standard. For example, in 2002, the Board held without explanation that control must 

be “direct and immediate”—thereby removing consideration of indirect control.22 And in 2007, the 

Board eliminated consideration of reserved control, tersely holding that it “does not rely merely on 

the existence of such contractual provisions, but rather looks to the actual practice of the parties”—

again, without reconciling its position with the common law.23 Then, in 2011, the Board emphasized 

that even exercised control would be insufficient if “limited and routine.”24

In the 2015 decision, Browing-Ferris Industries of California, Inc. (“BFI 2015”),

25 for the first time, 

the Board engaged in a detailed analysis of the common-law doctrine underpinning the joint18 Id. (emphasis added).

19 269 NLRB 324 (1984).

20 271 NLRB 798 (1984).

21 Id. at 798.

22 Airborne Freight Co., 338 NLRB 597, 597 n.1 (2002).

23 Am. Prop. Holding Corp., 350 NLRB 998, 1000 (2007), enforced in rel. part sub nom. SEIU Local 32BJ v. 

NLRB, 647 F.3d 435 (2d Cir. 2011). 

24 Flagstaff Med. Ctr., 357 NLRB 659, 667 (2011), enforced on other grounds, 715 F.3d 928 (D.C. Cir. 

2013). 

25 362 NLRB 1599 (2015), enforcement denied and remanded, 911 F.3d 1195 (D.C. Cir. 2018).

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employer analysis.26 The Board determined that a two-part inquiry should apply, specifically: “The 

Board may find that two or more entities are joint employers of a single workforce if they are both 

employers within the meaning of the common law, and if they share or codetermine those matters 

governing the essential terms and conditions of employment.”27 The Board rejected control-based, 

actual-exercise restrictions rooted, without explicit explanation, in the previous three decades of its 

case law and emphasized that it is “[t]he right to control, in the common-law sense, [that] is 

probative of joint-employer status, as is the actual exercise of control, whether direct or indirect.”28

While BFI 2015 was on review in the D.C. Circuit, in September 2018, the newly constituted

Board issued a notice of proposed rulemaking regarding the joint-employer standard.

29 In an aboutface from the BFI 2015 standard, the Board proposed requiring a putative joint employer to 

“possess and actually exercise substantial direct and immediate control over the employees’ essential 

terms and conditions of employment in a manner that is not limited and routine.”30 

About two months later, the D.C. Circuit issued Browning-Ferris Industries of California, Inc. v. 

NLRB (“BFI 2018”),

31 which “uph[e]ld as fully consistent with the common law the Board’s 

determination [in BFI 2015] that both reserved authority to control and indirect control can be 

relevant factors in the joint-employer analysis.”32 While the Court upheld the core components of 

26 Id. at 1611 (“The Board has never looked to the common law to justify the requirements that a 

putative joint employer’s control be exercised and that the exercise be direct and immediate, not 

‘limited and routine.’”).

27 Id. at 1613 (emphasis added). 

28 Id. at 1614. In 2017, a new Board initially overruled BFI 2015 in Hy-Brand Industrial Contractors, Ltd., 

365 NLRB No. 156 (Dec. 14, 2017). Two months later, it vacated the decision for ethical reasons 

related to recusal. 366 NLRB No. 26 (Feb. 26, 2018).

29 Proposed Rule, The Standard for Determining Joint-Employer Status, 83 Fed. Reg. 46,681 (Sept. 14, 2018).

30 Id. at 46,686.

31 911 F.3d 1195 (D.C. Cir. 2018). 

32 Id. at 1222. 

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the Board’s joint-employer test, it remanded the case to the Board, with instructions to clarify and 

apply the indirect-control and essential-terms portions of its new standard.33

On February 26, 2020, the Board issued its first-ever final regulation to determine when two 

employers are joint employers under the NLRA (“2020 rule”).34 This regulation provided that a 

joint-employer finding required “substantial direct and immediate control over one or more essential 

terms and conditions of employment.”35 But in light of the intervening D.C. Circuit decision, BFI

2018, the Board slightly modified its proposed rule to “factor in” reserved and indirect control, 

though only to the extent those forms of control “supplement[] and reinforce[]” evidence of 

substantial, direct, and immediate control over essential terms and conditions of employment.36

Meanwhile, taking up the D.C. Circuit’s remand in BFI 2018, the Board determined it would 

be “manifestly unjust” to apply its own BFI 2015 standard retroactively to the parties in the case and 

declined to otherwise pass on the substantive joint-employer standard;

37 the union then petitioned 

for review of that determination.

38 On review, the D.C. Circuit held that the BFI 2015 standard did 

not “represent[] the kind of clear departure from longstanding and settled law” that could justify the 

Board’s retroactivity conclusion.

39 The court then reiterated that the Board could not resolve the 

joint-employer issue presented without explaining how, consistent with the common law, indirect 

control weighed in the context of the case.40 The D.C. Circuit again remanded the case for the Board 

33 Id. at 1222-23.

34 Joint Employer Status Under the National Labor Relations Act, 85 Fed. Reg. 11,184 (Feb. 26, 2020).

35 Id. at 11,186.

36 Id. at 11,186, 11,224.

37 See Browning-Ferris Indus. of Cal., Inc., 369 NLRB No. 139, slip op. at 1 (July 29, 2020).

38 Sanitary Truck Drivers & Helpers Loc. 350 v. NLRB, 45 F.4th 38 (D.C. Cir. 2022).

39 Id. at 44.

40 Id. at 47.

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to analyze the joint-employer issue, bearing in mind the court’s holdings on the contours of the 

common law.

Then, on September 7, 2022, the Board issued the notice of proposed rulemaking for the 

Final Rule under review here.

41 In it, the Board proposed rescinding the 2020 rule and replacing it 

with one consistent with common-law agency principles, such that joint-employer status could be 

established “with evidence of indirect and reserved forms of control, so long as those forms of 

control bear on employees’ essential terms and conditions of employment”—a position supported 

by the D.C. Circuit’s BFI decisions and the common law.42

Following an extended comment period, on October 27, 2023, the Board published the final 

rule to be codified at 29 C.F.R. § 103.40 (“Rule” or “Final Rule”).

43 The Rule provides that to be a 

joint employer, the entity must, as a threshold matter, “ha[ve] an employment relationship . . . under 

common-law agency principles” with a particular group of employees.

44 If such a relationship exists, 

the inquiry proceeds to whether two or more entities “share or codetermine those matters governing 

employees’ essential terms and conditions of employment,”45 which means that the employer must

“possess the authority to control (whether directly, indirectly, or both) or . . . exercise the power to 

control (whether directly, indirectly, or both) one or more of the employees’ essential terms and 

conditions of employment.”46 The Rule then sets forth an exhaustive, closed list of seven categories 

of essential terms and conditions of employment.47 As a separate matter, the Board found that the 

41 87 Fed. Reg. at 54,641.

42 Id. at 54,645. 

43 See Standard for Determining Joint Employer Status, 88 Fed. Reg. at 73,946.

44 Id. at 74,017 (to be codified at § 103.40(a)).

45 Id. (to be codified at § 103.40(b)).

46 Id. (to be codified at § 103.40(c)).

47 Id. at 74,017-18 (to be codified at § 103.40(d)(1)-(7) (listing categories)).

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2020 rule contravened common-law agency principles by imposing severe limitations on the types of 

control that count in finding a joint employer. Thus, the 2020 rule was “not a permissible 

interpretation of the Act,” but instead “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.”48 For these reasons, the Board rescinded the 2020 rule.

49

LEGAL STANDARDS

Summary judgment is appropriate when the movant “show[s] that there is no genuine issue

as to any material fact and [it] is entitled to judgment as a matter of law.”50 Under the APA, a court 

may set aside a rule only where it is “arbitrary, capricious, or manifestly contrary to the statute.”51

Review of agency action is both narrow and “highly deferential to the administrative agency whose 

final decision is being reviewed.”52

The Fifth Circuit “review[s] questions of law de novo,” but “defer[s] to the legal conclusions 

of the Board if reasonably grounded in the law and not inconsistent with the Act.”53 For those

portions of the Rule concerning purely the Section 2(2) definition of “employer” under the Board’s

distillation of common-law principles, de novo review applies. However, the Board exercised its 

expertise in collective bargaining to define a joint employer’s bargaining obligation in Section 

48 Id. at 73,948, 73,974.

49 Id. at 73,984 (noting severability of decision to rescind the 2020 rule, such 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.”).

50 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986) (quoting Fed. R. Civ. P. 56(C)).

51 Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145, 157 (2013) (quotation omitted); 5 U.S.C. 

§ 706(2)(A)-(C); see also Hayward v. U.S. Dep’t of Lab., 536 F.3d 376, 379 (5th Cir. 2008).

52 Tex. Clinical Labs, Inc. v. Sebelius, 612 F.3d 771, 775 (5th Cir. 2010); Motor Vehicles Mfrs. Ass’n of U.S., 

Inc., v. State Farm Mut. Ins. Co., 463 U.S. 29, 43 (1983) (given “narrow” scope of review under 

arbitrary-and-capricious standard, “a court is not to substitute its judgment for that of the agency”); 

id. (agency’s rule survives arbitrary-and-capricious review if “rational, based on consideration of the 

relevant factors, and within the scope of the authority delegated to the agency by the statute”).

53 Poly-Am., Inc. v. NLRB, 260 F.3d 465, 476 (5th Cir. 2001).

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104.30(h) of the Rule. This subsection reflects a policy judgment on how to apply NLRA Sections 

8(d) and 8(a)(5) to “employers,” consistent with Section 1’s policy of protecting collective workplace 

rights and encouraging collective bargaining. Because this portion of the Rule does not turn on pure 

questions of common law, the Board’s view is entitled to deference.54

ARGUMENT

I. The Rule is based on the NLRA’s common-law based test to determine whether an 

entity is an “employer.”

Plaintiffs readily accept the Rule’s foundational premise that the definition of “employer”

under Section 2(2) of the NLRA is governed by common-law principles, and that those same 

principles apply in determining whether an entity is a joint employer under the NLRA.

55 To 

determine the types of control sufficient to establish joint-employer status, the Rule focuses “first 

and foremost [on] the ‘established’ common-law definitions at the time Congress enacted the 

National Labor Relations Act in 1935 and the Taft-Hartley Amendments in 1947.”56

Plaintiffs claim that the Rule fails to distinguish common-law employment relationships 

from independent contractors, and that the common law requires direct and immediate control to 

54 See Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 891 (1984) (as Congress assigned the task of defining 

“employee” under the Act to the Board, “[its] construction of that term is entitled to considerable 

deference, and we will uphold any interpretation that is reasonably defensible”); NLRB v. Town & 

Country Elec., Inc., 516 U.S. at 94 (same); Ford Motor Co. v. NLRB, 441 U.S. 488, 495 (1979) (Board’s 

“judgment as to what is a mandatory bargaining subject is entitled to considerable deference”); Allied 

Chem. & Alkali Workers, Loc. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 168 (1971) (“In doubtful 

cases resort must still be had to economic and policy considerations to infuse § 2(3)”—which 

defines ‘employee’—“with meaning.”); see also BFI 2018, 911 F.3d at 1208, n.2 (deference afforded to

Board under Sure-Tan extends “to broader policy questions about promoting effective collective 

bargaining”); cf. Nat'l Fed'n of Fed. Emps., Loc. 1309 v. Dep’t of Interior, 526 U.S. 86, 99 (1999) 

(affording deference to Federal Labor Relations Authority on “matters of whether, when, and 

where” collective bargaining is required under statute).

55 See Pls.’ MSJ 17-18; 88 Fed. Reg. at 73,948.

56 88 Fed. Reg. at 73,948 (quoting BFI 2018, 911 F.3d at 1209); cf. Town & Country Elec., Inc., 516 U.S. 

at 92–95 (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 common-law agency doctrine”).

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form an employment relationship. Contrary to Plaintiffs’ claims, however, the Rule respects the 

nuanced, varied differences that exist between employment-related controls and routine companyto-company contractual controls or independent-contractor relationships. These distinctions are 

drawn under the Rule’s threshold step, which Plaintiffs ignore. And, as the Board exhaustively 

demonstrates in the Rule, Plaintiffs are wrong to argue that the common law deems an entity an 

employer only if it actually exercises direct and immediate control over employees’ terms and 

conditions of employment. The common law does not support that restrictive approach; instead, it

has long regarded both reserved and indirect control as probative of an employment relationship. 

A. The Rule is grounded on the threshold common-law inquiry of whether an entity 

is an employer or a contractor, which Plaintiffs ignore entirely. 

In the Final Rule, the Board honored the important distinction between joint-employment 

relationships and true independent-contractor (or non-employment) relationships. Subsection (a) 

codifies the Board’s analytical approach and provides that an entity can only be “an employer of 

particular employees” within the meaning of NLRA Section 2(2) “if the employer has an 

employment relationship with those employees under common-law agency principles.”57 This 

subsection, which functions as the Rule’s critical, threshold analytical step, explicitly requires a 

common-law inquiry and accords with Supreme Court and Fifth Circuit precedent. Plaintiffs, 

however, fail to discuss the threshold step in their briefing at all.58

The Board explained that applying the Rule requires “seeking guidance from common law 

material bearing on the independent-contractor determination to examine, as a threshold matter under 

57 88 Fed. Reg. at 74,017 (to be codified at § 103.40(a)).

58 By this and other means, Plaintiffs misrepresent what the Rule is and what it allows. Pls.’ MSJ 9 

(mischaracterizing the Rule), at 22 (misrepresenting what the rule “mandates”), at 24 

(misrepresenting what the Rule “allows”). Plaintiffs also obscure what the Rule states and how it 

functions by re-advancing arguments made by the dissenting Board member e.g., 88 Fed. Reg. at 

73,991, and wholly ignoring the majority’s response that the dissent “elides the threshold 

significance of § 103.40(a).” Id. at 73,986.

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Section 103.40(a), whether a common-law employer-employee relationship exists between a putative 

joint employer and particular employees.”59 The Rule states that the Board will not give weight to 

evidence of indirect control that is indicative of either a true independent-contractor relationship60

or “a kind of control that is an ordinary incident of company-to-company contracting.”61

The Rule thus facilitates a notoriously difficult and fact-dependent starting inquiry into 

whether a particular relationship is one of employment or not. Through iterative applications of the 

Rule in individual cases, non-employment relationships will be identified and moored off from jointemployer findings. That overarching approach squares perfectly with the existing common-law test 

for employment used by federal courts in independent-contractor cases. As the Supreme Court 

recognized long ago in NLRB v. United Insurance Co. of America: 

There are innumerable situations which arise in the common law where it is difficult to say 

whether a particular individual is an employee or an independent contractor . . . . [T]here is no 

shorthand formula or magic phrase that can be applied to find the answer, but all of the 

incidents of the relationship must be assessed and weighed with no one factor being decisive.62

Fifth Circuit precedent likewise recognizes as axiomatic that “the employee-independent contractor 

dichotomy” is “an area as fraught with technical distinctions and . . . dependent on factfindings.”63

59 Id. at 73,951 (emphasis added). The familiar and settled caselaw fulcrum for that “threshold” 

determination is set forth in footnote 392 of the Rule, in addition to the sources cited and discussed 

throughout the Rule, particularly in footnotes 17-19, and the accompanying text. 

60 Id. at 73,955; see also id. at 73,955 n.52 (citing D.C. Circuit’s statement in BFI 2018, 911 F.3d at 

1221, that a joint employer’s control must “bear on the essential terms and conditions of 

employment and not on the routine components of a company-to-company contract”).

61 Id. at 73,955.

62 390 U.S. 254, 258 (1968); see Boire v. Greyhound Corp., 376 U.S. at 481 (whether a joint-employer 

relationship exists is “essentially a factual question”).

63 NLRB v. Deaton, Inc., 502 F.2d 1221, 1228 (5th Cir. 1974). The court in Deaton further noted that it 

is not the court’s “province to insure an abstract and academic consistency in Board decisions” and 

will “decline to interfere with a Board decision reached through orderly processes under proper legal 

standards and supported by substantial evidence.” Id.

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An equally fact-dependent and varied inquiry is required to determine whether an entity’s 

control over workers is grounded in routine, company-to-company contractual provisions or 

otherwise insufficient to give rise to an employment relationship. Without apparent regard for these 

complicated realities or the necessity of viewing all the incidents of a relationship to decide if it 

indicates common-law employment, Plaintiffs complain that “[t]he Rule provides no rubric for 

distinguishing” between a true independent-contractor relationship and an employment 

relationship.

64Noticeably lacking from their argument, though, is any recognition of the Board’s 

head-on responses to this very concern. The Board concluded that distinctions among different 

types of contracting relationships are best rendered through case-by-case adjudication:

[T]he 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-to-company or true independent-contractor relationship or as evidence of the 

existence of a common-law employer-employee relationship.65

The Board found that the “innumerable variations in the ways that companies interact with each 

other, and with each other’s employees” make it “impossible for the Board to provide a usefully 

comprehensive and detailed set of examples” ex ante.66 Nevertheless, the Board was unequivocal 

that “control, as a normal incident of a third-party contract, does not establish the common-law 

64 Pls.’ MSJ 30.

65 88 Fed. Reg. at 73,955. The Board responded to commenters who, foreshadowing Plaintiffs’ 

position here, sought “more definitive guidance” and “suggest[ed] the common law is too vast or 

amorphous.” Id. at 73,958. The Board explained that it was persuaded as to the correctness of its 

approach, given 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.” Id.; see also id. at 73,977 (addressing vagueness concerns).

66 Id. at 73,955; id. at 73,955 n.55 (collecting authority for decision to use case-by-case adjudication), 

id. at 73,970 (“case-by-case adjudication . . . is the better approach”) & n.244.

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employment relationship,”67 and gave valuable guidance as to how the test would be applied to 

confine all joint-employment findings within the borders of the common law.68 This might not be 

the exact “rubric” Plaintiffs desire, but that does not make the Rule unlawful.69

As a further aid to distinguish routine contracting from joint-employment relationships, 

Section 103.40(f) provides guidance on evidence “not relevant” to the joint-employer inquiry.70 The 

Board explained that “[m]any common steps franchisors take to protect their brands have no 

connection to essential terms and conditions of employment,” rendering such evidence irrelevant.71

Further, given the wide variation of company-to-company contractual provisions noted by 

commenters, the “most prudent path forward” is to analyze actual contracts in “case-by-case 

adjudication applying the joint-employer standard.”72 “To do otherwise might risk problems of both 

over- and under-inclusion and overlook important context . . . .”73

Plaintiffs strongly suggest that the Board’s Final Rule would require a finding of jointemployer status based on de minimis, sporadic, or isolated instances of control.74 This argument is 

67 Id. at 73,968 (discussing control that is immaterial to joint-employer status, 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”).

68 See, e.g., id. (discussing contracts that memorialize pre-set legal requirements and governmentcontractor issues); id. at 73,970 (discussing construction-industry issues); id. at 73,971 (discussing 

franchise-specific concerns); id. at 73,949 n.17 & 73,951 n.30 (discussing contract terms on engaging 

workers and setting price terms).

69 See also pp. 41-43, below (addressing sufficiency of Rule’s guidance under APA principles).

70 Specifically, “evidence of an entity’s control over matters [1] that are immaterial to the existence of 

an employment relationship under common-law agency principles and [2] that do not bear on the 

employees essential terms and conditions of employment.” Id. at 74,018 (to be codified at §

103.40(f)).

71 Id. at 73,971 (“[W]e 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 décor, or product 

uniformity) will typically not be indicative of a common-law employment relationship.”).

72 Id. at 73,970.

73 Id.

74 Pls.’ MSJ 24-27.

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misplaced. The Rule never indicates that a joint-employer relationship will categorically be found 

based on an isolated instance of reserved or indirect control. By the same token, it does not rule out 

joint-employer status simply because only a single form or instance of control has been shown. 

Rather, a throughline of the Rule is the principle that business relationships are “innumerable” and 

application of the Rule will be defined through “specific factual records.”75 This choice is logical 

because, for example, where an entity contractually reserves unilateral control over wages, that 

control could be dispositive, yet the contractual reservation happens only once.76

Subsections (b), (c), and (d) serve a different purpose than subsection (a); they are tailored to 

ensure that employers will only be considered joint employers under the NLRA if they can engage in 

meaningful collective bargaining. Per these subsections, an employer must “share or codetermine”

one or more “essential terms and conditions of employment,” which is cabined to seven exhaustive 

categories of core working conditions. Then, Subsection (f) clarifies the import of this list, noting

that any “control over matters that do not bear on” those specific categories, is “not relevant to” 

joint-employer status.77 In this way, the Rule ensures that entities that have a common-law 

employment relationship with a group of employees will be considered joint employers under the 

NLRA only if their ability to participate in meaningful bargaining is evident. Although Plaintiffs 

express concern that “routine components of company-to-company contracts may indirectly impact 

essential terms,”78 the concern is unfounded. Under the threshold step of the Rule that Plaintiffs 

75 88 Fed. Reg. at 73,955 & n.55.

76 See id. at 73,961. 

77 Id. at 74,983. It is important to note that control over such “non-essential” matters would be 

relevant to “whether a common-law employment relationship exists” under Section 102.30(a), id. at 

73,981-82, which considers “all of the incidents of the relationship.” Id. at 73,955 (cleaned up).

78 Pls.’ MSJ 30-31.

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largely ignore, routine contractual relationships would be distinguished from joint-employment 

relationships from the outset. 

In any event, Plaintiffs merely beg the questions—what is a “routine component” of 

company contracting and what is an “indirect impact”? In agreement with overwhelming judicial 

consensus that such questions are nettlesome, the Board concluded that it could not answer them

with a bright-line test.

79 This choice was lawful.80 Indeed, nothing requires the Board to definitively 

state who is and is not an independent contractor, or what is or is not a routine companycontracting provision, in absolute, unequivocal terms. Here, the Board reasonably concluded that it 

would be “impossible” to definitively answer those questions through rulemaking, given the “infinite 

combinations of events”81 and contractual terms that may arise.

82

In sum, the Rule provides the “legal scaffolding . . . within traditional common-law bounds” 

that Plaintiffs decry as absent.83 At its core, Plaintiffs’ argument that the Rule fails to distinguish joint 

employers from independent-contractor relationships proceeds from a flawed premise: i.e., that an 

employment relationship exists only if there is direct, immediate, and substantial control over 

employees’ terms and conditions of employment. That is not so, as shown below.

B. Reserved control has historically been considered sufficient to establish a 

common-law employment relationship. 

 

The 2023 Rule includes an encyclopedic survey of the common law of agency as it relates to 

reserved control at the time of the Act’s Taft-Hartley amendments. That survey leaves no room for 

79 The Board made clear it “does not presuppose the ‘employer’ status of an entity—such as the 

principal in a true independent-contractor relationship—that possesses or exercises only such 

immaterial forms of control.” 88 Fed. Reg. at 73,956.

80 See also Rush Univ. Med. Ctr. v. NLRB, 833 F.3d 202, 206–07 (D.C. Cir. 2016) (affirming Board’s 

interpretation of its final rule on healthcare bargaining units through adjudication).

81 Beth Israel Hosp. v. NLRB, 437 U.S. 483, 500 (1978) (internal quotation marks and citation omitted).

82 88 Fed. Reg. at 73,955.

83 BFI 2018, 911 F.3d at 1220.

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doubt that reserved control has deep roots in the common law. For example, in finding that a 

worker was an employee (as opposed to independent contractor), the Supreme Court explained in 

Singer Manufacturing. Co. v. Rahn 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.”84 Consistent with this principle, the Court did not look to the actual practice of 

the parties under the contract for work; rather, as the Board explained in the Final Rule, “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.”85 This position, as the Board explained further, was consistently adopted by 

courts throughout the country in the time between Singer and the passage of the Taft-Hartley 

Amendments in 1947.86

The Board also pointed to over twenty contemporaneous cases in both state and federal 

courts—again, all ignored by Plaintiffs—supporting the primacy of reserved control in the 

employment inquiry.87 The Board highlighted, for example, Maltz v. Jackoway-Katz Cap Co., where the 

Missouri Supreme Court found that two employers jointly employed an employee under the 

common law, posing “the essential question” as “not what the companies did when the work was 

being done, but whether they had a right to assert or exercise control.”88 The Board also pointed out 

84 132 U.S. 518, 523 (1889) (emphasis added).

85 88 Fed. Reg. at 73,949. Similarly, in two other decisions cited by the Board around the turn of the 

century, the Supreme Court focused on the “right of control,” not its exercise, in determining 

whether a worker qualified as an employee. Id. at 73,949 n.17 (citing Chicago Rock Island & Pac. Ry. 

Co. v. Bond, 240 U.S. 449, 456 (1916) and Little v. Hackett, 116 U.S. 366, 376 (1886)).

86 Id. at 73,949.

87 Id. at 73,949 & nn.18-19 and cases cited therein. 

88 Id. (citing Maltz v. Jackoway-Katz Cap Co., 82 S.W.2d 909, 912, 918 (Mo. 1934) (emphasis added)). 

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D.C. Circuit precedent from 1945 plainly stating “it is the right to control, not control or supervision 

itself, which is most important.”89

Secondary compendiums also fully support that the right to control, not the exercise thereof, 

was the common law’s focus in 1947. For example, the Restatement (First) of Agency defined a 

“master” as 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,” and a 

servant as “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.”90 Other 

secondary sources similarly emphasize that it is the “right of control”—not its exercise—that was 

considered determinative under common law.91 Accordingly, the Board correctly determined that 

“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 employeremployee relationship without regard to whether or in what manner such control was exercised.”92 

Reliance on reserved control serves the interests of employers and employees. As the Board 

explained, employers are empowered to “control their potential status as joint employers under the 

Act, ex ante, based on their freely chosen contractual arrangements.”93 After all, contractual language 

carries “legal force and effect without respect to whether or not contractually reserved authority is 

ever exercised.”94 Meanwhile, employees’ interests are also served because they gain certainty that 

89 Id. (quoting Grace v. Magruder, 148 F.2d 679, 681 (D.C. Cir. 1945)). 

90 Id. at 73,950 (quoting RESTATEMENT (FIRST) OF AGENCY § 2 (1933)). 

91 Id. at 73,949-50 (citing General discussion of the nature of the relationship of employer and independent 

contractor, 19 A.L.R. 226, § 7 & n.1 (1922) and 35 Am. Jur. Master and Servant § 3 (1st ed. 1941)). 

92 Id. at 73,950.

93 Id. at 73,961.

94 Id. 

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those who possess the authority to determine their terms and conditions of employment—and may 

exercise such authority in the future—will be present at the bargaining table.

Rather than addressing any of the reserved control precedent cited in the Rule, Plaintiffs

point to a series of state court cases that, far from supporting their arguments, confirm the common 

law’s recognition of reserved control.95 Rhoades v. Varney found that the duty-of-care standard for 

employers was “implied from the contract of employment,” not necessarily the actual practices of the 

parties.96 New York Indemnification Co. v. Industrial Accident Commission phrased the standard as the “right 

to exercise control” over the employees’ work—not its actual exercise.97 Goodman v. Wilson similarly

held that the master-servant relationship “is founded on the power of control which the superior has 

a right to exercise.”98 And in Capehardt v. Murta, the Missouri Court of Appeals characterized the “most 

important question” as negligence, not joint employment. Moreover, the court found a jointemployment relationship when the disputed principal merely “engaged himself in looking over the 

farm” and employee paychecks were signed by both purported joint employers. But neither fact

alone would satisfy the “substantial and direct” standard that Plaintiffs claim was “widely 

understood” to be the common law.99 How can these cases conclusively prove that “direct and 

immediate control” is required under the common law, as Plaintiffs argue, when each one

incorporates reserved control as an essential part of the master-servant test?

95 Pls.’ MSJ 18.

96 39 A. 552, 553 (Me. 1898) (emphasis added).

97 14 P.2d 160, 162 (Cal. Dist. Ct. App. 1932) (emphasis added).

98 166 S.W. 752, 753 (Tenn. 1914) (emphasis added).

99 145 S.W. 827, 829 (Mo. Ct. App. 1912).

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The chief secondary source cited by Plaintiffs, Restatement (Second) of Agency Section 227,

“Servant Lent to Another Master,”100 similarly fails to support requiring direct and immediate 

control.

101 Section 227 clarifies that “[w]hether or not the person lent . . . becomes the servant of the 

one whose immediate purposes he serves depends in general upon the factors stated in Section 

220(2).”102 The Section 220(2) factors, in turn, focus primarily on “the extent of control which, by the 

agreement, the master may exercise over the details of the work.”103

Plaintiffs’ attempt to leverage legislative history also falls flat.104 While the Taft-Hartley 

Congress may have mentioned “direct supervision” in the context of a House Report discussing the 

definition of “employee” under the Act, the definition on which Congress ultimately settled did not 

codify any understanding that a statutory employee can only be “directly” supervised.105 And even 

100 Plaintiffs wrongly claim that the Restatement (Second) of Agency was in effect “about 15 years 

before the Taft-Hartley Amendments” [Pls.’ MSJ 18]. At the time of Taft Hartley’s passage, 

however, 1933’s Restatement (First) of Agency was in effect. See BFI 2018, 911 F.3d at 1213

(discussing First and Second Restatements).

101 Plaintiffs’ reliance on the related “loaned servant” common-law doctrine (Pls. MSJ 20) is 

misplaced. The loaned servant doctrine turns on whether an employee “is wholly free from the 

control of the first employer and wholly subject to the control of the second employer.” Williams v. 

Shell Oil Co., 18 F.3d 396, 400 (7th Cir. 1994) (quotation omitted). Importantly, under that doctrine, 

“the second employer, not the first, would be liable for the employee’s negligence.” Richard v. Ill. Bell 

Tel. Co., 383 N.E.2d 1242, 1249 (Ill. 1978). Thus, this doctrine sheds no light on the level of control 

required under the joint-employer doctrine, in which both control and liability are shared between 

two entities. 

102 RESTATEMENT (SECOND) OF AGENCY § 220, cmt. a (1958).

103 Id. § 220(2) (emphasis added). Plaintiffs, in passing, cite to another secondary source, 30 A.L.R. 

1000 (1924) (Pls.’ MSJ 18), but to no avail as it “presupposes the relation of master and servant . . . and 

. . . is not concerned with cases which turn on the question whether the relation was that of master 

and servant or of independent contractor and contractee.”

104 Pls. MSJ 19.

105 See 29 U.S.C. § 152(3). Allied Chemical similarly dealt with the definition of employee, not 

employer, in finding that retired workers were not employees under the Act because “the ordinary 

meaning of ‘employee’ does not include retired workers; retired workers have ceased to work for 

another for hire.” 404 U.S. 157, 168 (1971). This holding sheds no light on the question presented 

here, whether individuals who are currently working for multiple entities are jointly employed.

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more relevant to the present discussion of joint-employer status, the statutory definition of 

“employer” does not limit that category to those who directly supervise employees. Indeed, if 

anything, the statutory language “textually indicates that the statute looks at all probative indicia of 

employer status, whether exercised ‘directly or indirectly.’”106

Nor is there any conflict between the Final Rule’s treatment of reserved control and the 

standard adopted by the Third Circuit in BFI 1982, where the court found joint employment exists 

when “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.”107 There, the Third Circuit characterized the inquiry as whether one 

employer “has retained for itself sufficient control of the terms and conditions of employment of the 

employees who are employed by the other employer.”108 The D.C. Circuit in BFI 2018 similarly saw 

no conflict between the BFI 1982 standard (which it endorsed) and consideration of reserved and 

indirect control, which it unequivocally held is required by the common law.109

Contrary to Plaintiffs’ claims, the Fifth Circuit has not ignored reserved control in 

determining whether a common-law employment relationship exists. In discussing the right to 

control in the context of an independent-contractor issue, the Court stated in NLRB v. Deaton, Inc.

that “[i]t is the right and not the exercise of control which is the determining element,” and indeed,

“numerous decisions have stressed that a company’s right to control, even if not exercised, makes 

workers employees.”110 And in the context of joint-employer issues, this Circuit has recognized that 

106 BFI 2018, 911 F.3d at 1216 (quoting 29 U.S.C. § 152(2)). 

107 BFI 1982, 691 F.2d at 1124; contra Pls.’ MSJ 21.

108 Id. at 1123.

109 BFI 2018, 911 F.3d at 1209.

110 502 F.2d at 1224 (citing Deaton Truck Line, Inc. v. NLRB, 337 F.2d 697 (5th Cir. 1964)); see NLRB 

v. Steinberg, 182 F.2d 850, 857 (5th Cir. 1950) (“It is the right and not the exercise of control which is 

the determining element.”).

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“[t]he existence of a joint employer relationship depends on the control which one employer 

exercises, or potentially exercises, over the labor relations policy of the other.”111 Plaintiffs themselves

quote language from another Fifth Circuit case, NLRB v. Zayre Corp., stating that an employer who 

“exercised or had the potential to exercise substantial control over the employment practices of 

[employees] was in practical effect a joint-employer.”112 And the language cited by Plaintiffs from

Adams & Associates Inc. v. NLRB, suggesting that reserved control is insufficient to establish a jointemployer relationship, notably does not follow from any new or different understanding of the 

common law.113 Rather, Adams & Associates was based on the Fifth Circuit’s understanding of thencurrent Board law, which required a showing of direct and immediate control for an entity to be 

deemed a joint employer under the Act. Importantly, the Court of Appeals had no occasion to 

grapple with the inconsistency between the Board’s then-current joint-employer standard and the 

common law, because no party challenged the standard.

Any doubts regarding whether reserved control is part of the established common law are 

laid to rest by the D.C. Circuit’s decisions in BFI 2018 and Sanitary Truck Drivers.

114 In BFI 2018, the 

court carefully examined the common law and determined that precedent in the Supreme Court, the 

D.C. Circuit, and state courts all consistently recognized that “unexercised control bears on 

employer status.”115 The court further observed that as “the right to control runs like a leitmotif

through the Restatement (Second) of Agency,”116 this “element of the Board’s joint employer 

111 N. Am. Soccer League v. NLRB, 613 F.2d 1379, 1382 (5thCir. 1980) (emphasis added); see Tex. 

World Serv. Co. v. NLRB, 928 F.2d 1426, 1432 (5th Cir. 1991) (citing same standard).

112 Pls.’ MSJ 26 (quoting NLRB v. Zayre Corp., 424 F.2d 1159, 1165 (5th Cir. 1970)) (emphasis added).

113 871 F.3d 358, 378 (5th Cir. 2017).

114 45 F.4th 38 (D.C. Cir. 2022).

115 911 F.3d at 1210.

116 Id. at 1211.

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standard has deep roots in the common law.”117 Several years later, in Sanitary Truck Drivers, the court

even criticized the Board for its failure to consider reserved control.

118 In short, Plaintiffs get it 

exactly backwards as to the common law, which has consistently relied on reserved control, without 

demanding that it be exercised, let alone exercised in a direct and immediate fashion. 

C. Indirect control has historically been considered sufficient to establish a 

common-law employment relationship. 

 

Consideration of indirect control is equally grounded in the Act and the common law. 

Starting with the Act itself, as the Board explained, “the definition of ‘employer’ set forth in Section 

2(2) 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.”119

The common law likewise supports consideration of indirect control. Indeed, in BFI 2018,

the D.C. Circuit “uph[e]ld as fully consistent with the common law the Board’s determination 

that . . . indirect control can be [a] relevant factor[] in the joint employer analysis.”120 The Fourth 

Circuit’s decision in Butler v. Drive Automotive Industries of America, Inc. further confirms the point.121

There, as the Board noted, the court found a joint-employer relationship “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.”122

Likewise, the Fifth Circuit has long recognized that indirect control is a factor—potentially 

117 Id. at 1199.

118 45 F.4th at 47. 

119 88 Fed. Reg. at 73,954 (quoting BFI 2018, 911 F.3d at 1216) (cleaned up).

120 911 F.3d at 1222.

121 793 F.3d 404 (4th Cir. 2015).

122 88 Fed. Reg. at 73,954 (citing Butler, 793 F.3d at 415).

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determinative—in evaluating whether a common-law employment relationship exists. Thus, it held 

in NLRB v. Deaton, Inc. that because a trucking company had “indirect control over nonowner 

drivers” employed by separate entities, those drivers “were sufficiently under Deaton’s control to 

make them Deaton’s employees under common law agency principles.”123 State court decisions 

interpreting the common law have similarly recognized the importance of indirect control in the 

employer analysis.124 

The common law’s inclusion of indirect control in the employer analysis is logical and 

necessary to prevent parties from evading joint-employer liability by funneling control through an 

intermediary. For example, a contractor’s demand that its subcontractor discharge an employee or 

face termination of the contractual relationship carries the same force regardless of whether the

message is ultimately conveyed to the employee by the contractor itself or the subcontractor.125 With 

good reason, “the common law has never countenanced the use of intermediaries or controlled third 

parties to avoid the creation of a master-servant relationship.”126 To hold otherwise “would allow 

manipulated form to flout reality.”127

Plaintiffs’ primary argument to the contrary rests not on any specific challenge to these 

common-law holdings regarding indirect control, but rather on the Board’s use of the “sub-servant” 

doctrine set forth in Restatement Section 5.128 The Board, however, merely followed the D.C. 

123 502 F.2d at 1223 n.3, 1226-27.

124 See 88 Fed. Reg. at 73,963 (citing BFI 2018, 911 F.3d at 1216-17); e.g., White v. Morris, 152 S.E.2d

417, 419 (Ga. Ct. App. 1966) (“[E]vidence and inferences therefrom indicating [an employer’s] 

indirect control of [another employee’s] work are relevant for consideration” because “alleged 

relationship can exist by virtue of indirect control of the servant’s performance as well as by direct 

control.”).

125 The Fifth Circuit relied, in part, on a similar fact pattern in finding an employment relationship in 

Deaton, Inc. v. NLRB. 502 F.2d at 1227.

126 BFI 2018, 911 F.3d at 1217 (collecting sources).

127 Id. at 1219.

128 RESTATEMENT (SECOND) OF AGENCY § 5 (1958).

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Circuit’s lead in discussing the sub-servant doctrine as another indication of the common law’s 

preoccupation with indirect control. As the court explained:

Control that is exercised through an intermediary is a defining feature of the subservant 

doctrine. Much as the joint-employer inquiry arises in situations in which an employee has 

multiple masters at the same time, the subservant doctrine analogously governs 

arrangements in which an employee has, as simultaneous masters, both ‘his immediate 

employer and his immediate employer’s master.’ Given the central role that indirect control 

plays in the subservant doctrine, there is no sound reason that the related joint-employer 

inquiry would give that factor the cold shoulder.129

The fact that one employer may not control another in every joint-employer situation, as Plaintiffs

argue,130 is irrelevant because the focus is on control exercised over employees’ means and method 

of work. In both the sub-servant and joint-employment doctrines under the Act, control is relevant 

whether it is exercised directly by the purported joint employer or indirectly through an 

intermediary.131 

Plaintiffs’ overall argument is that indirect and reserved control have never been enough, 

standing alone, to establish a joint-employer relationship. This is simply untrue, as the Board 

demonstrated in the Rule’s preamble. For example, the Board pointed to EEOC v. Global Horizons,

Inc., in which the Ninth Circuit based its joint-employer finding on the fact that the purported joint 

employer possessed the “power to control the manner in which housing, meals, transportation, and 

129 BFI 2018, 911 F.3d at 1217-18 (cleaned up).

130 Pls. MSJ 24.

131 Plaintiffs further contend (Pls.’ MSJ 23) that the Restatement (Second) of Agency, in particular 

the definitions of “master” and servant” contained in Section 2 and 220, respectively, are not 

relevant sources of authority. This argument is flatly contradicted by Supreme Court precedent, as 

recognized by the D.C. Circuit in BFI. 911 F.3d at 1213 (“[T]he Supreme Court has repeatedly relied 

on the Restatement (Second) to answer questions of employment under the common law of 

agency.”) (citing Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 752 & n.31 (1989), and Town & 

Country, 516 U.S. at 94-95). 

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wages were provided to the Thai workers, even if never exercised.”132 This case is not an anomaly.

133

Moreover, as explained above, nothing in the Rule mandates that the Agency find in a particular case 

that an entity is a joint employer based on any one type of control, however wielded. The portion of 

the rule allowing for joint-employer status under the Act based on reserved or indirect control alone

comes into force only after a common-law employment relationship is established. 

D. The Board adequately justified its rescission of the 2020 rule, which conflicted 

with the common law and did not serve the purposes of the Act. 

 

The Board’s decision to rescind the 2020 rule and its attendant control-based restrictions is 

driven by the same common-law considerations that support the 2023 Rule.134 As the Board

correctly noted, the 2020 rule’s extreme marginalization of reserved and indirect control runs 

directly counter to the common law, as described by the D.C. Circuit’s BFI 2018 decision, among 

other cases, and furthermore, “undermines the goals of Federal labor law.”135 

Under the 2020 rule’s logic, the record could show that an entity had just signed an 

agreement reserving for itself the power to unilaterally determine all the terms and conditions of a 

sub-entity’s employees, but unless such power has been exercised, the entity would not be 

considered a joint employer. That same entity could instruct supervisors of its sub-entity to 

132 915 F.3d 631, 641 (9th Cir. 2019) (emphasis added).

133 88 Fed. Reg. at 73,953-54 & n.45 (citing cases where courts have found employment relationship 

based solely on reserved control); see also Deaton, Inc., 502 F.2d at 1226-28 (relying primarily on 

evidence of indirect control to find employment relationship).

134 As noted above, the 2020 rule requires “an entity to exercise direct substantial and immediate control 

over one or more essential terms or conditions” in order to qualify as a joint employer. 29 C.F.R. § 

103.40(a) (emphasis added). Evidence of reserved and indirect control, under this standard, “is 

probative . . . only to the extent that it supplements and reinforces evidence of the entity’s possession 

or exercise of direct and immediate control over a particular essential term and condition of 

employment.” Id. (emphasis added); see also 85 Fed. Reg. at 11,235.

135 88 Fed. Reg. at 73,957.

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terminate the employees, but without additional evidence of direct control, this too would be 

irrelevant.136 Such results cannot be squared with the common law discussed above.137

Any doubt on this score is dispelled by the D.C. Circuit’s decision in Sanitary Truck Drivers, 

which made clear that both reserved and indirect control are features of the common-law agency 

analysis and accordingly must form a part of the Board’s joint-employer analysis.138 Indeed, the court 

“took great pains to inform the Board [in BFI 2018] that the failure to consider reserved or indirect 

control is inconsistent with the common law of agency.”139 The Fifth Circuit has likewise required 

the Board to consider not only exercised, but reserved and indirect control, in prior joint-employer 

cases.140 The Board was therefore correct as a matter of law in finding “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 a joint employer.”141

The Board’s decision to rescind the 2020 rule also rested on the compelling policy 

considerations embedded in Section 1 of the Act. In the Board’s view, the narrow joint-employer 

standard in 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 and conditions of 

employment.”142 By broadening the standard within common-law bounds, the Board sought “to 

ensure uniform enforcement of the Act in all industries,” and to “particularly benefit vulnerable 

136 Id. at 73,954 n.47 (discussing how this scenario demonstrates indirect control).

137 As noted by the Board, the rescission of the 2020 rule is independent of the 2023 Rule. Id. at 

73,973. Should the Court find the 2023 Rule unlawful, the Court should affirm the Board’s 

independent decision to rescind the 2020 rule because it is inconsistent with the common law.

138 45 F.4th at 46.

139 Id. at 47.

140 N. Am. Soccer League, 613 F.2d at 1382; Tex. World Serv. Co., 928 F.2d at 1432; Deaton, Inc., 502 

F.2d at 1225, 1227-28.

141 88 Fed. Reg. at 73,986.

142 Id. at 73,974. 

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employees who are overly represented in workplaces where multiple firms possess or exercise 

control, including immigrants and migrant guestworkers, disabled employees, and Black employees 

and other employees of color.”143 The Board is permitted to adopt “new interpretations of the Act 

so long as it demonstrates good reasons for the policy.”144 It has done so here.

II. The Final Rule facilitates meaningful collective bargaining.

The NLRA imposes an obligation on employers and unions under Section 8(d) of the Act, 

“to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms 

and conditions of employment.”145 The NLRA does not otherwise define with greater specificity 

whether, when, how, or over what topics the parties are to bargain. As the Fifth Circuit has 

recognized, “the mechanics of the bargaining process or the form that an agreement ultimately 

might take” are matters over which the Board and courts need not speculate as they “depend upon 

what each party offers and what each party is able to secure in the way of concessions.”146

Consistent with these principles, the Rule ensures that any joint employer will be able to 

participate in meaningful collective bargaining with its employees’ chosen bargaining representative. 

The Rule does so by first requiring that an employment relationship exist under Section 104.30(a), 

and then, enumerating a closed list of “essential terms and conditions of employment” that are 

central to employees’ working lives in Section 104.30(d)147—one or more of these must be the under

143 Id.

144 Id. at 73,976 & n.324 (citing Encino Motorcars LLC v. Navarro, 579 U.S. 211, 221 (2016); FCC v. Fox 

Television Stations, 556 U.S. 502, 515 (2009)). 

145 29 U.S.C. § 158(d).

146 Deaton, Inc., 502 F.2d at 1229 n.14 (rejecting the employer’s “sense of the incongruity of making 

an employer bargain about matters over which in the past it has lacked the usual type of full 

control.”)

147 The Rule defines essential terms and condition of employment as follows: (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 

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the employer’s control for joint-employer status to attach. Further, once a bargaining obligation is 

found, the Rule makes clear that a joint employer is only obligated to bargain over those subjects it 

controls.

148

The Board explained that because the enumerated essential terms and conditions of 

employment “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.”149 This policy advances employees’ statutory right to bargain collectively through 

representatives of their own choosing, by ensuring that all parties with the ability to change working 

conditions or implement workplace policies are present at the bargaining table. The presence of such 

parties, in turn, will “help to avoid fruitless negotiations” and “lead to better outcomes overall.”150

And, by “limiting the list of essential terms and conditions of employment” to a discrete list, the 

Rule “helps provide clear guidance and a more predictable standard to parties covered by the 

Act.”151 In fact, it allows employers to “formalize their responsibilities and protect their interests in 

collective bargaining agreements they also negotiate and sign.”152

Plaintiffs’ disagreement with the Board’s approach boils down to a mere restatement of their 

primary argument concerning the common-law standard of control, with the added reproach that an 

entity lacking sufficient control cannot meaningfully bargain.153 But the Rule is not unlawful on this 

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. 88 Fed. Reg. at 74,017-18 (to be codified at § 103.40(d)).

148 Id. at 74,018 (to be codified at § 103.40(h)(1)-(2)).

149 Id. at 73,972.

150 Id. at 73,986.

151 Id. at 73,972.

152 Id. at 73,986.

153 Plaintiffs do not specifically challenge the Rule’s enactment of 103.40(h)(1), which defines the 

scope of a joint employer’s bargaining obligation; they just echo their central contention that the

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ground because, as explained, it properly defines and analyzes control in connection with employer 

status. Claiming otherwise, Plaintiffs advance a series of fallacious arguments. 

Initially, Plaintiffs are mistaken that the Rule “makes irrelevant the extent of control 

necessary to make informed decisions and tradeoffs at the bargaining table.”154As the D.C. Circuit 

observed in Herbert Harvey, Inc. v. NLRB, it is beyond dispute that employers (joint or not) “may face 

practical limitations” in bargaining over conditions of employment.”155 Rarely, if ever, will any 

employer (joint or not) have total control over all relevant topics. “Absolute freedom to regulate the 

rewards and conditions of employment is perhaps a relatively scarce commodity, for adjustments as 

to either will ordinarily be reflected in the market price for the employer's product or service.”156

So too for a joint employer, who holds sway over one or more essential terms. To be sure, 

Plaintiffs’ concerns over the dynamics of bargaining are not unique to, or created by, this Rule. 

These uncertainties are endemic to employment situations where multiple entities share or 

codetermine matters affecting the same group of employees. After surveying myriad comments from 

diverse sectors of the economy,

157 the Board declined to give prescriptive instructions on bargaining 

mechanics, noting that “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.”158

Rule imposes a statutory duty to bargain on entities that have “limited control” and lack “sufficient 

control over all or most traditional mandatory subjects of bargaining.” Pls.’ MSJ 31-34.

154 Pls.’ MSJ 33-34.

155 424 F.2d 770, 779 (D.C. Cir. 1969).

156 Id. at n.64.

157 88 Fed. Reg. at 73,980-81.

158 Id. at 73,980 n.375. This is particularly sensible given that joint employment involves an 

incalculable array of possibilities for how entities may control terms and conditions of employment 

by either sharing in the decisionmaking, controlling separate aspects without overlap, or some 

combination, as these circumstances may dictate the structure of the bargaining relationship.

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Plaintiffs’ reference to “piecemeal bargaining” is similarly misdirected.

159 “Piecemeal 

bargaining” is a term of art describing a bad-faith tactic where a party (typically an employer) insists

on siphoning certain issues away from the bargaining table, one by one, to separately negotiate 

before reaching an overall collective-bargaining agreement.

160 Courts recognize the tactic’s twofold 

vices: it undermines the union’s negotiating power by casting it as a “paper tiger”161 and “impair[s] 

the ability to reach an overall agreement through compromise on particular items.”162 Joint-employer 

bargaining does not implicate these concerns. An employer’s inability to bargain the full range of 

issues, and the possibility that fragmented bargaining will ensue, are not consequences of the divisive 

tactics of another, as in so-called piecemeal-bargaining situations. Such challenges are an inescapable 

reality under any joint employer standard—including the 2020 rule and the standards that preceded 

it. And the Rule, if anything, lends clarity and forestalls problems by explicitly providing that each 

joint employer is only required to bargain over those mandatory subjects of bargaining it controls.163

159 Pls.’ MSJ 34. Plaintiffs commit a similar error by relying on First National Maintenance Corp. v. 

NLRB, 452 U.S. 666 (1971). That decision addressed whether certain business decisions—namely, 

core entrepreneurial actions such as whether to close a portion of a business—were amenable to 

collective bargaining. Id. at 667. The Court said nothing about how to allocate bargaining 

responsibilities between joint employers. The Board nevertheless acknowledged First National in the 

Rule as binding precedent as to bargaining obligations. See 88 Fed. Reg. at 73,971 & n.257.

160 See, e.g., Duffy Tool & Stamping, LLC v. NLRB, 233 F.3d 995, 997–99 (7th Cir. 2000) (allowing 

piecemeal bargaining and piecemeal implementation “would empty the duty to bargain of 

meaning”); see generally E.I. Du Pont de Nemours & Co. v. NLRB, 489 F.3d 1310, 1317 (D.C. Cir. 2007); 

Visiting Nurse Servs. of W. Mass. v. NLRB, 177 F.3d 52, 58 (1st Cir. 1999).

161 Duffy Tool, 233 F.3d at 998 (“by enabling the employer to paint the union as impotent, it would 

embolden him to hold out for a deal so unfavorable to the union as to preclude agreement.”).

162 Visiting Nurse Servs., 177 F.3d at 59; Duffy Tool, 233 F.3d at 998.

163 88 Fed. Reg. at 73,968, 73,983. Subsections 103.40(h)(1) and (2) codify the requirement. See 

generally NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 349 (1958) (mandatory subjects are

those pertaining to wages, hours, and other terms and conditions of employment).

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In the Rule, the Board squarely rejected the premise of Plaintiffs’ argument that bargaining 

under the Rule is unworkable. In Management Training Corp.164—a case on which the Board relied 

heavily,

165 but Plaintiffs ignore—the Board considered what NLRA bargaining obligations should 

attach to a private-sector entity with close ties to an NLRA-exempt governmental entity. The Board 

held that if a private entity meets the statutory definition of “employer,” the Board would assert 

jurisdiction, regardless of whether the daily work of the employees or other employment terms were 

determined by the governmental entity. Thus, the Board rejected the view that the private entity 

could not be a statutory employer if “the Government controls most of the employee’s terms and 

conditions,” and also rejected the argument “that bargaining is meaningless unless it includes the 

entire range of economic issues.”166

The settled Management Training test does not require an employer to control all or most 

employment terms, but only enough to bargain effectively. The Rule captures that same sensible 

precept—if an entity “has an employment relationship” with employees and shares or codetermines 

“one or more of the employees’ essential terms,” it “[m]ust bargain collectively with the 

representative of those employees.”167 Put simply, an employer wielding important influence over 

employees’ working lives will have an NLRA obligation to bargain over the terms and conditions 

that it controls. As the Board explained, those standards produce “no risk that the final rule will be 

applied broadly to encompass entities whose relationship to the performance of the work is clearly 

164 317 NLRB 1355 (1995). Multiple circuit courts have since adopted the Board’s general approach 

in this regard. See Bannum Place of Saginaw, LLC v. NLRB, 41 F.4th 518, 529 (6th Cir. 2022)

(collecting precedent from four other circuits).

165 See, e.g., 88 Fed. Reg. at 73,964, 73,968, 73,983 & n.401.

166 Mgmt. Training Corp., 317 NLRB at 1357.

167 88 Fed. Reg. at 74,017-18 (to be codified at § 103.40(a)-(h)).

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too attenuated to support finding that they are common-law employers.”168 The Rule, in short, 

responds to the bargaining-dynamics concerns that Plaintiffs raise and is a reasonable effectuation of 

Sections 1, 8(a)(5), and 8(d) of the Act.

III. The Board acted lawfully under the APA by properly balancing the competing 

interests and statutory rights of employees, employers, and labor organizations. 

Plaintiffs first argue that the Board overlooked “the dilemma” for employers who wish to 

“adopt general safety protocols on their property.”169 The Board did no such thing. Instead, the 

Board reasoned that control over workers’ health and safety is an important aspect of determining 

whether an employment relationship exists, because the entity exercising control over health and 

safety may have “control over ‘the physical conduct’ of an employee ‘in the performance of the 

service to the employer.’”170 The Board, however, also noted that it “d[id] not seek to displace or 

interfere with those [existing health and safety] regulatory schemes,” and that “contractual terms that 

do nothing more than incorporate regulatory requirements” would not create joint-employer 

liability.171 Nothing about the Rule should incentivize rational employers to avoid protecting

workplace safety, as Plaintiffs surmise. Instead, the Rule balances the right of employees to have 

168 88 Fed. Reg. at 73,986; see also id. at n.273 (noting that the “vital second step” under BFI 2015 and 

BFI 2018, which looks at how to permit meaningful collective bargaining, “is self-imposed” and not 

legally mandated; finding that “examination of whether the character and objects of a purported 

employer’s control extend to essential terms and conditions of employment” satisfied BFI 2018).

169 Pls. MSJ 35. Lifting a hypothetical from the dissent, Plaintiffs describe a cleaning company 

(CleanCo) that sends employees to clients under a contract that allows clients to stop employees 

from using certain supplies for safety reasons. Plaintiffs speculate that the Rule would compel 

CleanCo’s clients to bargain with the employees’ union. But from the sparse details provided, it is 

not possible to determine whether under Rule Subsection (a), the clients sufficiently control the 

manner of the employees’ work or just the ends. Accordingly, whether the clients are common-law 

employers of CleanCo’s employees is unknown, as the Board explained. See 88 Fed. Reg. at 73,986 

(noting, inter alia, that “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 common-law employer.”).

170 88 Fed. Reg. at 73,965 (quoting RESTATEMENT (SECOND) OF AGENCY § 2).

171 88 Fed. Reg. at 73,965; see also Deaton, Inc., 502 F.2d at 1225.

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present at the bargaining table those entities that control the means and manner of their work while 

accommodating employer compliance with other health and safety regulations. The Board’s choice 

to weigh these competing interests as it does, does not contravene the APA as “a clear error of 

judgment,” nor does it amount to improper reliance “on factors which Congress has not intended it 

to consider.”172

Despite Plaintiffs’ contention otherwise, the Board considered and responded to concerns 

raised by commenters regarding the Rule’s impact on various industries, including franchisors, 

construction, and hospitals. Regarding franchisors, the Board recognized commenters’ concerns 

about trademark and branding, and noted that “[m]any 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.”173 The Board also 

responded to concerns from the construction industry, explaining that settled precedent “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 that the 

focus of its inquiry would remain on control of essential terms and conditions of employment.174 As

to hospitals, the Board declined (as it did with all other industries) to adopt any industry-specific

standards or carveouts, instead explaining that it would “consider all relevant evidence regarding the 

surrounding context” in determining whether the joint-employer standard was met in particular

cases.

175

172 Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) 

(internal quotations omitted).

173 88 Fed. Reg. at 73,971.

174 Id. at 73,970.

175 Id. at 73,960. The court should reject the American Hospital Association (AHA)’s proposed brief

as it raises novel arguments beyond the scope of the issues raised by Plaintiffs. AHA claims that the 

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Plaintiffs’ remaining APA claims—that the Rule fails to provide any meaningful guidance 

and that the Board is foreclosed from deferring the fact-intensive common-law inquiry to 

adjudication176 —are meritless. To pick just two examples of meaningful guidance, the Rule provides 

clarity to regulated parties by (1) moving from an open-ended list to “specifically enumerating the 

essential terms and conditions of employment,”177 and (2) defining the scope of bargaining 

obligations in the event a joint-employer relationship is found.178 The Rule thus easily withstands the

“no meaningful guidance” inquiry of ACA International v. FCC.

179 Further, the Board’s reasoned 

decision to defer issues of joint employment to case-by-case adjudication is necessary due to the

fact-intensive nature of the common-law employment examination, in line with relevant precedent.

If, as the Fifth Circuit has recognized, “minor differences in the underlying facts might justify 

different findings on the joint employer issue,” any attempt to resolve all conceivable variations 

through rulemaking would be a Sisyphean task.180

CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion for Summary Judgment should be denied and 

the Board’s Cross-Motion for Summary Judgment should be granted in its entirety.

Board did not meaningfully address its comments and that the Rule disproportionately harms 

hospitals. Both arguments are distinct from Plaintiffs’ arguments, and courts may not consider 

amicus issues or arguments outside those properly raised by parties. New Jersey v. New York, 523 U.S. 

767, 781 n.3 (1998); Cellnet Comms., Inc. v. FCC, 149 F.3d 429, 443 (6th Cir. 1998); see also Squyres v. 

Heico Cos., LLC, 782 F.3d 224, 233 n.5 (5th Cir. 2015). In any event, the Board fully considered and 

responded to the AHA’s comments in the Final Rule. See 88 Fed. Reg. at 73,960. 

176 Pls.’ MSJ 38.

177 88 Fed. Reg. at 73,964; see also id. at 73,986 (“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 joint-employer status”); see also id. at 74,017-18 (to be 

codified at § 103.40(d)).

178 Id. at 73,964.

179 885 F.3d 687, 700 (D.C. Cir. 2018) (quoting U.S.P.S. v. Postal Regulatory Comm’n, 785 F.3d 740, 754 

(D.C. Cir. 2015)).

180 Texas World Serv. Co., 928 F.2d at 1432 (quoting N. Am. Soccer League, 613 F.2d at 1382-83).

Case 6:23-cv-00553-JCB Document 34 Filed 12/18/23 Page 43 of 45 PageID #: 632
44

Respectfully submitted,

/s/ Tyler Wiese 

TYLER WIESE

Senior Attorney

Minnesota Bar No. 0329601

Tel: (952) 703-2891

tyler.wiese@nlrb.gov

KEVIN P. FLANAGAN

Deputy Assistant General Counsel

(No official bar number in Maryland)

Tel: (202) 273-2938

kevin.flanagan@nlrb.gov

CHRISTINE FLACK

Supervisory Attorney

(No official bar number in Maryland)

Tel: (202) 273-2842

Fax: (202) 273-4244

christine.flack@nlrb.gov

SHAWNNELL T. BARNETT

Attorney 

DC Bar No. 1531575

Tel: (202) 316-6397

shawnnell.barnett@nlrb.gov 

National Labor Relations Board

Contempt, Compliance, and Special Litigation Branch 

1015 Half St. SE 

Washington, DC 20003

Fax: (202) 273-4244

Attorneys for Defendants

Dated: December 18, 2023

Case 6:23-cv-00553-JCB Document 34 Filed 12/18/23 Page 44 of 45 PageID #: 633
45

CERTIFICATE OF SERVICE

I certify that on December 18, 2023, I filed the foregoing document, Defendants’ CrossMotion for Summary Judgment and Opposition to Plaintiffs’ Motion for Summary Judgment, with 

this Court using the CM/ECF filing system, and a copy is being served on the ECF Filers 

electronically by the Notice of Docket activity.

/s/ Tyler Wiese 

TYLER WIESE

Senior Attorney

Minnesota Bar No. 0329601

Tel: (952) 703-2891

tyler.wiese@nlrb.gov

Case 6:23-cv-00553-JCB Document 34 Filed 12/18/23 Page 45 of 45 PageID #: 634