Court Opinion

ID: 7619382
Source: CourtListenerOpinion
Date Created: 2022-07-29 15:00:43.287593+00
Date Added: 2024-06-11T16:25:01.458232
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 25, 2022               Decided July 29, 2022

                        No. 21-1093

    SANITARY TRUCK DRIVERS AND HELPERS LOCAL 350,
      INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
                     PETITIONER

                             v.

           NATIONAL LABOR RELATIONS BOARD,
                     RESPONDENT

 BROWNING-FERRIS INDUSTRIES OF CALIFORNIA, INC., D/B/A
            NEWBY ISLAND RECYCLERY,
                    INTERVENOR

              On Petition for Review of Orders
           of the National Labor Relations Board

    Maneesh Sharma argued the cause for petitioner. With
him on the briefs were Susan K. Garea and Harold Craig
Becker.

     Milakshmi V. Rajapakse, Attorney, National Labor
Relations Board, argued the cause for respondent. With her on
the brief were Jennifer A. Abruzzo, General Counsel, Ruth E.
Burdick, Deputy Associate General Counsel, David
                                 2
Habenstreit, Assistant General Counsel, and Julie Brock
Broido, Supervisory Attorney.

     Joshua L. Ditelberg and Stuart Newman were on the brief
for intervenor for respondent Browning-Ferris Industries of
California, Inc.

    Before: MILLETT, WILKINS, and JACKSON*, Circuit
Judges.

    Opinion for the Court filed by Circuit Judge WILKINS.

     WILKINS, Circuit Judge: Intervenor Browning-Ferris
Industries of California, Inc. (“Browning-Ferris”) operates a
recycling plant in Milpitas, California, where it employs about
60 workers. Browning-Ferris contracts with Leadpoint
Business Services (“Leadpoint”), which provides Browning-
Ferris with approximately 240 additional recyclery workers. In
July 2013, Petitioner Sanitary Truck Drivers and Helpers Local
350, International Brotherhood of Teamsters (the “Union”)
filed a petition with the National Labor Relations Board
(“NLRB” or “Board”) to represent Leadpoint’s recyclery
workers, asserting that Browning-Ferris and Leadpoint are
joint employers of Leadpoint’s workers. The rights and duties
of the various parties to this dispute have been extensively
litigated before the NLRB.

    The Union now urges us to vacate two of the NLRB’s
recent orders, in which the Board declined to hold Browning-
Ferris to be a joint employer under the National Labor
Relations Act (“NLRA” or “Act”). For the reasons set forth

*
  Circuit Judge, now Justice, Jackson was a member of the panel at
the time the case was argued but did not participate in this opinion.
                                3
below, we grant the Union’s petition and vacate the challenged
orders.

                                I.

     We previously set forth facts relevant to the instant petition
in a prior opinion. See Browning-Ferris Indus. of Cal., Inc. v.
NLRB, 911 F.3d 1195 (D.C. Cir. 2018). Assuming familiarity
with the factual and procedural history of the case, we repeat
only those details necessary to our resolution of this petition.

     As mentioned, in July 2013, the Union filed a petition with
the NLRB to represent Leadpoint’s recyclery workers,
contending that Leadpoint and Browning-Ferris are joint
employers. In August 2013, the Board’s Acting Regional
Director—applying the NLRB’s then-standard “joint
employer” test from TLI, Inc., 271 NLRB 798, 798–99 (1984),
enforced mem., 772 F.2d 894 (3d Cir. 1985), as modified by
subsequent cases—found that Leadpoint is the sole employer
of its recyclery workers at Browning-Ferris’s facility. The
Acting Regional Director reasoned that Browning-Ferris was
not a joint employer for purposes of the NLRA because it did
not exercise “direct and immediate” control over Leadpoint
workers’ essential terms and conditions of employment—such
as hiring, firing, or discipline. J.A. 263 (citing TLI, Inc., 271
NLRB at 798–99).

     The Union sought the Board’s review of the Acting
Regional Director’s decision. In August 2015, the Board
issued an order in which it overruled TLI and announced a
revised joint-employer test. Browning-Ferris Indus. of Cal.,
Inc., 362 NLRB 1599, 1613–15, (2015) (“Browning-Ferris I”).
In Browning-Ferris I, the Board reasoned that evidence of
indirect control can establish joint-employer status. Id. at 1600.
The Board also determined that a putative employer’s reserved
                               4
powers of control—even when unexercised—are “clearly
relevant to the joint-employment inquiry.” Id. To that end, the
Board determined—“based on a full assessment of the facts”—
that Browning-Ferris is a joint employer of Leadpoint’s
employees because it exercises reserved, indirect, and direct
control over them. Id. at 1614–15.

     Thereafter, the NLRB’s General Counsel issued an unfair
labor practice complaint alleging that Browning-Ferris and
Leadpoint, as joint employers, violated the NLRA by refusing
to bargain with the Union. Browning-Ferris petitioned for
judicial review of Browning-Ferris I. This Court mostly
upheld the Board’s ruling in Browning-Ferris I, but it
remanded to the Board to “rearticulat[e]” the indirect-control
element of its new joint-employer test in a way that would
conform with the common law, to “meaningfully apply” and
explain the second part of its new two-step test, and to consider
whether retroactive application of its new test was proper.
Browning-Ferris, 911 F.3d at 1221–22.

     Upon this Court’s limited remand, the Board took a
different course. In July 2020, the Board held that it was
manifestly unjust to apply its new rule in Browning-Ferris I to
these parties, affirmed the Acting Regional Director’s original
decision finding that Browning-Ferris was not a joint
employer, and dismissed the General Counsel’s unfair labor
practice complaint against Browning-Ferris. Browning-Ferris
Indus. of Cal., Inc., 369 NLRB No. 139, at *6 (2020)
(“Browning-Ferris II”). Instead, the Board issued an order in
which it announced a revised joint-employer test, held that
Browning-Ferris is not a joint employer of Leadpoint’s
employees, and dismissed the General Counsel’s unfair labor
practice complaint against Browning-Ferris. Id. at *6.
                               5
     The Union moved for reconsideration of Browning-Ferris
II, but the Board denied the motion. Browning-Ferris Indus. of
Cal., Inc., 370 NLRB No. 86, at *1 (2021) (“Browning-Ferris
III”). The Union then filed the instant petition seeking judicial
review of the Board’s rulings in Browning-Ferris II and
Browning-Ferris III. For the reasons discussed below, we
grant the Union’s petition and vacate the challenged orders.

    Prior to the 2015 Browning-Ferris I decision, the Board’s
“longstanding joint-employer standard” was one “under which
‘two or more statutory employers are joint employers of the
same statutory employees if they share or codetermine those
matters governing the essential terms and conditions of
employment.’” Browning-Ferris, 911 F.3d at 1205 (quoting
Browning-Ferris I, 362 NLRB at 1600) (some internal
quotation marks omitted). But in Browning-Ferris I, the Board
announced that it would apply that standard in a new way:

       In determining whether a putative joint
       employer meets this standard, the initial inquiry
       is whether there is a common-law employment
       relationship with the employees in question. If
       this common-law employment relationship
       exists, the inquiry then turns to whether the
       putative joint employer possesses sufficient
       control over employees’ essential terms and
       conditions of employment to permit meaningful
       collective bargaining.

362 NLRB at 1600. The Board clarified that it would not
require that “a statutory employer’s control must be exercised
directly and immediately.” Id. Rather, “[i]f otherwise
sufficient, control exercised indirectly--such as through an
intermediary--may” be sufficient to “establish joint-employer
status.” Id.
                                6

     In our 2018 ruling, we held that “[t]he Board . . . correctly
determined that the common-law inquiry is not woodenly
confined to indicia of direct and immediate control; an
employer’s indirect control over employees can be a relevant
consideration.” Browning-Ferris, 911 F.3d at 1209. But “[i]n
applying the indirect-control factor in this case . . . the Board
failed to confine it to indirect control over the essential terms
and conditions of the workers’ employment.” Id. Accordingly,
we remanded “that aspect of the decision to the Board for it to
explain and apply its test in a manner that hews to the common
law of agency.” Id.

     Importantly, before the Court issued its decision in 2018,
the Board initiated a rulemaking proceeding to establish
standards for determining joint-employer status. See The
Standard for Determining Joint-Employer Status, 83 Fed. Reg.
46,681 (Sept. 14, 2018). In February 2020, the Board issued a
final rule that reinstated a clarified version of the joint-
employer standard that was in place prior to Browning-Ferris
I. See Browning-Ferris II, 369 NLRB at *1 n.3 (citing Joint
Employer Status Under the National Labor Relations Act, 85
Fed. Reg. 11,184 (Feb. 26, 2020) (“2020 Rule”)). The 2020
Rule applied prospectively, so the Board did not apply it to this
dispute. Id.

     In July 2020, on remand from this Court, the Board issued
Browning-Ferris II, in which it held that it would be manifestly
unjust to apply the rule announced in Browning-Ferris I
retroactively to find Browning-Ferris a joint employer.
Browning-Ferris II, 369 NLRB at *5. The Board declared in
Browning-Ferris II that retroactive application of Browning-
Ferris I was improper because “for at least 30 years preceding
[Browning-Ferris I,] . . . there was a clear rule of law requiring
proof of direct and immediate control under the applicable
                                7
joint-employer test.” Browning-Ferris II, 369 NLRB at *5.
“Indeed, numerous comments filed in our recent joint-
employer rulemaking proceeding made abundantly clear that
many businesses did rely on that legal standard.” Id.
Therefore, “the new standard adopted in the 2015 decision
would substantially affect reasonable, settled expectations for
relationships established on the basis of the prior standard.” Id.

     The Board acknowledged that this Court’s remand “sought
clarification and redress of two critical shortcomings in the
Board’s discussion of its new joint-employer standard,” but the
Board concluded that “there is no variation or explanation of
that standard that would not incorporate its substantial
departure from the prior direct and immediate control legal
standard.” Id. As such, the Board was reticent to apply
Browning-Ferris I retroactively to the dispute.

     “In determining whether retroactive application will work
a manifest injustice, the Board typically considers the reliance
of the parties on preexisting law, the effect of retroactivity on
accomplishment of the purposes of the Act, and any particular
injustice arising from retroactive application.” Id. at *4 (citing
SNE Enters., 344 NLRB 673, 673 (2005)). “Retroactive
application of that new standard would mean that” Browning-
Ferris “would be suddenly confronted with the new reality that
preexisting business relationships with other entities, such as
Leadpoint—relationships formed in reliance on a decades-old
direct-and-immediate-control standard for determining joint-
employer status—thrust upon them unanticipated and
unintended duties and liabilities under the Act.” Id. at *5. The
Board reasoned that “such a change represents a substitution of
‘new law for old law that was reasonably clear,’” id. (quoting
Browning-Ferris, 911 F.3d at 1222), and therefore, “it would
be manifestly unjust to fail to give [Browning-Ferris] and
                               8
similarly affected businesses reasonable warning before
imposing such significant new duties and liabilities.” Id.

     The Board supported its conclusion by citing to a 1984
decision in which the agency held that a union election must be
re-run because two entities had been listed on the ballot as
employers, one of which the Board later found not to be a joint
employer. See id. (citing H&W Motor Express, 271 NLRB 466
(1984)). The Board found that, because only Leadpoint had
been on the ballot at the time of the union election here, H&W
Motor Express further undermined the case for retroactively
applying Browning-Ferris I.

     Thus, the Board in Browning-Ferris II declined to apply
the test from Browning-Ferris I retroactively, dismissed the
NLRB General Counsel’s unfair labor practice complaint, and
held that “[t]he joint-employer issue must be resolved under the
prior longstanding standard requiring proof of direct and
immediate control.” 369 NLRB at *6.

                              II.

    The NLRA guarantees employees “the right to self-
organization, to form, join, or assist labor organizations, to
bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for the
purpose of collective bargaining or other mutual aid or
protection. . . .” 29 U.S.C. § 157; Midwest Div.—MMC, LLC
v. NLRB, 867 F.3d 1288, 1293 (D.C. Cir. 2017). As we
previously held, the NLRA’s “test for joint-employer status is
determined by the common law of agency.” Browning-Ferris,
911 F.3d at 1206.

      We review the Board’s retroactivity decision by assessing
its factfinding for substantial evidence. “Substantial evidence
                               9
‘means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.’” NLRB v.
Ingredion Inc., 930 F.3d 509, 514 (D.C. Cir. 2019) (quoting
Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951)).
In short, we “affirm the Board’s findings unless ‘no reasonable
factfinder’ could find as it did.” Id. (quoting Alden Leeds, Inc.
v. NLRB, 812 F.3d 159, 165 (D.C. Cir. 2016)). With respect to
whether retroactive application would advance the policies of
the NLRA, we review the Board’s determination with a degree
of deference. NLRB v. Food Store Emps. Union, Loc. 347, 417
U.S. 1, 10 n.10 (1974) (“a court reviewing an agency decision
following an intervening change of policy by the agency should
remand to permit the agency to decide in the first instance
whether giving the change retrospective effect will best
effectuate the policies underlying the agency’s governing act”);
Cadillac of Naperville, Inc. v. NLRB, 14 F.4th 703, 714 (D.C.
Cir. 2021) (per curiam). Finally, we review de novo the
Board’s determination as to whether it replaced clear, settled
law with new law. See Qwest Servs. Corp. v. FCC, 509 F.3d
531, 539 (D.C. Cir. 2007).

     The Union contends that in the challenged orders the
Board defied our orders in Browning-Ferris and acted
arbitrarily in making its retroactivity decision. We need not
decide whether the Board properly heeded our remand
instructions because, as we explain below, the Board made
multiple overlapping errors in its retroactivity analysis in its
orders on remand that require vacatur of Browning-Ferris II
and Browning-Ferris III.

                              III.

    In Browning-Ferris II, the Board asserted that Browning-
Ferris I generated a sea change in the joint-employer test, for
which there had been “a clear rule of law requiring proof of
                               10
direct and immediate control” “for at least 30 years.” 369
NLRB at *5. As such, the Board held that it would be
manifestly unjust to apply any variation of Browning-Ferris I
retroactively. Id. But the Board’s own precedent belies these
assertions.

                               A.

     As we held in our 2018 decision, the Board’s precedent on
what established joint-employer status had varied in the decade
preceding Browning-Ferris I. See Browning-Ferris, 911 F.3d
at 1200–01. In other words, contrary to the Board’s declaration
in Browning-Ferris II, see 369 NLRB at *5, the Board’s
precedent on the joint-employer standard was anything but
static.

     Indeed, the Board first announced the “direct and
immediate control” standard in 2002. See In re Airborne
Freight Co., 338 NLRB 597, 597 n.1 (2002) (“The essential
element in this analysis is whether a putative joint employer’s
control over employment matters is direct and immediate.”);
see NLRB v. CNN Am., Inc., 865 F.3d 740, 749 (D.C. Cir. 2017)
(noting that the Board has acknowledged that Airborne Freight
“held that the essential element in the joint-employer analysis
is whether a putative joint employer’s control over employment
matters is direct and immediate”) (cleaned up) (citation
omitted).

     Moreover, in describing the old, assertedly settled rule, the
Board failed to consider its own recent 2020 rulemaking, which
explained that it in fact had never actually ceased considering
indirect and reserved control, even though it did not consider
those factors dispositive standing alone. See 2020 Rule, 85
Fed. Reg. at 11,227. Nor did the agency grapple with the
question of how “fact-specific” and “case-by-case” its former
                               11
“style of adjudication” had been—a factor that we told the
Board could well be important in assessing whether application
of a new law would be manifestly unjust. Browning-Ferris,
911 F.3d at 1222 (quoting AT&T v. FCC, 454 F.3d 329, 333–
34 (D.C. Cir. 2016)) (internal quotation marks omitted); cf.
2020 Rule, 85 Fed. Reg. at 11,224 (“Joint-employer
determinations have always been fact-intensive, and they will
continue to be so.”). Thus, in Browning-Ferris II—a decision
issued just five months after the Board announced the 2020
Rule—the Board inexplicably overlooked the longstanding
role of indirect control in the Board’s joint-employer inquiry.
We therefore conclude that the Board’s retroactivity analysis
in Browning-Ferris II was erroneous. The Board failed to
establish that Browning-Ferris I represented the kind of clear
departure from longstanding and settled law that the agency
said justified its retroactivity conclusion.

                               B.

     Next, the Board erred in holding that there was “no
variation or explanation” of the joint-employer test in
Browning-Ferris I that would not result in manifest injustice.
Browning-Ferris II, 369 NLRB at *5. As the Board explained
in Browning-Ferris I, and as we echoed in our 2018 opinion,
the agency’s holding that Browning-Ferris was a joint
employer rested on finding that the company had “reserved,
direct, and indirect control over Leadpoint employees.”
Browning-Ferris I, 362 NLRB at 1615; see Browning-Ferris,
911 F.3d at 1218 (“[T]he Board’s decision turned on its finding
that Browning-Ferris exercised control both directly and
indirectly.”) (internal quotation marks omitted).

     The Board failed to explain how it would be a manifest
injustice for the Board to consider all of those factors here in
light of the agency’s assertion in its 2020 rulemaking that it had
                               12
previously considered reserved and indirect control in
assessing joint-employer status. See 2020 Rule, 85 Fed. Reg.
at 11,227; Resp. Br. 47 (“Board precedent predating Browning-
Ferris I” is consistent with “finding joint-employer status
based on evidence of direct, indirect, and reserved control”).
Those two positions are in direct conflict, and the Board’s
failure to address the contradiction was arbitrary and
capricious. Gilbert v. NLRB, 56 F.3d 1438, 1445 (D.C. Cir.
1995) (“It is, of course, elementary that an agency must
conform to its prior decisions or explain the reason for its
departure from such precedent.”).

                               C.

     Furthermore, in its decisions on remand, the Board also
neglected to consider the second part of the Browning-Ferris I
test. At the second step, the Board assesses whether the
“putative joint employer possesses sufficient control over
employees’ essential terms and conditions of employment to
permit meaningful collective bargaining.” Browning-Ferris I,
362 NLRB at 1600; see also Browning-Ferris, 911 F.3d at
1221 (noting that this is the “second half to the Board’s new
test” and calling on the agency to “meaningfully apply” it if it
concludes that Browning-Ferris is a joint employer under the
common law).

     In its rulemaking, the agency observed that the second step
may significantly limit the number of parties deemed joint
employers. See 2020 Rule, 85 Fed. Reg. at 11,211. The Board
thus made clear that the second step could render Browning-
Ferris I no more than a clarification of the agency’s legal rule,
rather than “a substitution of new law for old law that was
reasonably clear,” yet it is the latter that typically justifies
refraining from applying a rule retroactively. Verizon Tel. Cos.
v. FCC, 269 F.3d 1098, 1109 (D.C. Cir. 2001) (internal
                                13
quotation marks and citation omitted). The challenged orders
have nothing to say about the second part of the test, leaving
the Board’s conclusion that it would be manifestly unjust to
apply any variant of Browning-Ferris I retroactively
unreasoned, illogical, and inconsistent with the Board’s
position in the 2020 Rule.

                                D.

     Next, the Board made no specific finding that Browning-
Ferris had itself actually relied to its detriment on the pre-
Browning-Ferris I joint-employer standard. Instead, the
agency found it would have been reasonable for the firm to
have done so and pointed to comments filed by other parties in
the 2020 rulemaking asserting that they had relied on the old
test. Browning-Ferris II, 369 NLRB at *5. Yet the Board did
not explain how it is manifestly unjust to apply a new rule
retroactively to a party that it did not find had in fact relied on
the old rule. And the Board’s retroactivity test, as well as ours,
consistently focuses on the reliance of the parties before the
tribunal. See SNE Enters., 344 NLRB at 673 (“In determining
whether the retroactive application of a Board rule will cause
manifest injustice, the Board will consider the reliance of the
parties on preexisting law, the effect of retroactivity on
accomplishment of the purposes of the [NLRA], and any
particular injustice arising from retroactive application.”);
AT&T, 454 F.3d at 332 (“AT & T does not and indeed cannot
point us to a settled rule on which it reasonably relied”); Pub.
Serv. Co. of Colorado v. FERC, 91 F.3d 1478, 1490 (D.C. Cir.
1996) (“[T]he apparent lack of detrimental reliance on the part
of the [parties] is the crucial point” supporting retroactivity);
CHARLES H. KOCH & RICHARD MURPHY, 2 ADMIN. L. & PRAC.
§ 5:67 (3d ed. 2022) (“In reviewing retroactive application of a
rule created in adjudication, the court will look to the reliance
of the parties.”). Indeed, the Board pointed to no evidence, let
                               14
alone substantial evidence, that Browning-Ferris had relied on
the joint-employer test that predated Browning-Ferris I to its
detriment. In sum, no reasonable factfinder could find as the
Board did. See Ingredion, 930 F.3d at 514.

                               E.

     Next, the Board’s invocation of its ruling in H&W Motor
Express, 271 NLRB No. 80 (1984), cannot redeem its
retroactivity decision. See Browning-Ferris II, 369 NLRB at
*5. In H&W, the Board determined that a company was not a
joint employer and ordered a re-run of a union election in which
that company had been on the ballot because
“employees . . . cast their ballots based on the Regional
Director’s finding that a joint employer relationship existed.”
271 NLRB at 468. In Browning-Ferris II, the Board reasoned
that “the reverse situation exists” here, and “the principles
stated in H&W Motor Express militate against retroactivity all
the same with respect to imposition of a bargaining obligation
on [Browning-Ferris] when the employees here cast their
ballots on the assumption that a joint-employer relationship did
not exist.” 369 NLRB at *5.

     Even assuming that H&W provides that an employer must
be on a union ballot before it can be ordered to the bargaining
table—and the Union cites contrary caselaw on this question—
H&W does not justify the Board’s decision here. See Pet’r
Reply Br. 17 (“The Board regularly adds employers through
unfair labor practice proceedings, and without an election, to
established bargaining relationships if it determines the added
employer is a joint employer.”) (citing Branch Int’l Servs., Inc.,
427 NLRB 209 (1998)). If anything, H&W would have
supported requiring another union election, not holding that
                                 15
Browning-Ferris is not a joint employer, which is what the
Board did here.

                                 F.

     Finally, the Board’s adoption of the NLRB Acting
Regional Director’s decision was erroneous in multiple
respects. To begin with, the agency was obligated to explain
how the test the Acting Regional Director applied was
consistent with the common law, or if it was not, then why its
application was nevertheless proper. Our court’s 2018 decision
made clear that “the right-to-control element of the Board’s
joint-employer standard [discussed in Browning-Ferris I] has
deep roots in the common law,” see Browning-Ferris, 911 F.3d
at 1199, and that the “common-law rule” is that “unexercised
control bears on employer status.” Id. at 1210; see id. at 1211
(“[T]hat ‘common-law element of control is the principal
guidepost’ in determining whether an entity is an employer of
another.”) (citation omitted and emphasis added). Further, we
held that “there is no sound reason that the . . . joint-employer
inquiry would give [indirect control] a cold shoulder.” Id. at
1218 (“[The] argument that the common law of agency closes
its mind to evidence of indirect control is unsupported by law
or logic.”); see id. at 1216 (a “rigid distinction between direct
and indirect control has no anchor in the common law”).

     In other words, in 2018, we held that the common law
would not countenance ignoring reserved and indirect control
in assessing joint-employer status. As such, we specifically
upheld the Board’s articulation of its legal test in Browning-
Ferris I as including consideration of reserved and indirect
control as “fully consistent with the common law.” Id. at 1222.
We remanded for a clearer articulation and application of the
indirect control factor to the facts of “this case,” id., in a manner
“that hews to the common law of agency,” id. at 1209. In sum,
                              16
given that we upheld the core components of the joint-
employer test in Browning-Ferris I; recognized that the
Board’s test at the time of the Acting Regional Director’s
decision essentially ignored both indirect and reserved control,
see id. at 1201; and made clear that the Board’s joint-employer
test must “color within the common-law lines identified by the
judiciary[,]” the Board at least had to explain in Browning-
Ferris II how it could lawfully apply a standard that we have
said was out of step with the common law. See id. at 1200,
1208–09.

     In Browning-Ferris III, the Board attempted to sidestep
this problem by insisting that “[t]he D.C. Circuit no more than
agreed that indirect and reserved control can be relevant
considerations in the common law, not that they must be given
weight independent of direct-and-immediate control.” 370
NLRB at *1 n.2 (emphasis omitted). The Board also reasoned
that “the Board’s prior standard fell within the boundaries of
the common law as applied in the particular context of the Act,”
as demonstrated by “the Board’s recent final rule.” Id. (citing
2020 Rule, 85 Fed. Reg. at 11,184).

     The Board’s position is dubious. In promulgating the 2020
Rule, the Board explained that it had previously considered
reserved and indirect control in the joint-employer inquiry, and
cited two orders, both from 2000, to justify that claim. See
2020 Rule, 85 Fed. Reg. at 11,227 (citing Le Rendezvous
Restaurant, 332 NLRB 336 (2000) and M.B. Sturgis, Inc., 331
NLRB 1298 (2000)). But the fact that the Board’s standard
comported with the common law back in 2000 says nothing
about the propriety of the Acting Regional Director’s straitened
test in 2013. See Browning-Ferris, 911 F.3d at 1201. In our
2018 decision, we took great pains to inform the Board that the
failure to consider reserved or indirect control is inconsistent
with the common law of agency. See id. at 1210–11, 1213,
                              17
1216–17, 1219. The Board needed to provide a reasoned
explanation for adopting the Acting Regional Director’s
decision wholesale. It failed to deliver.

     To make matters worse, in adopting the Acting Regional
Director’s recommendation, the Board disregarded the
Browning-Ferris I Board’s rejection of many of the Acting
Regional Director’s factual findings. In particular, the Board
“disagree[d] with the Regional Director’s factual findings that
[Browning-Ferris] does not mandate how many employees
work on the line, the speed at which they work, where they
stand, or how they pick material.” Browning-Ferris I, 362
NLRB at 1604 n.17. Instead, it concluded that there was a
“clear and direct connection between [Browning-Ferris’s]
decisions and employee work performance” because
Browning-Ferris has “unilateral control over the speed of the
[material] streams and specific productivity standards for
sorting.” Id. at 1616. Unlike the Acting Regional Director, the
Board found “multiple examples of reserved, direct, and
indirect control over Leadpoint employees.” Id. at 1615. We
also noted in our prior decision that “whether indirect control
can be dispositive is not at issue in this case because the
Board’s decision [in Browning-Ferris I] turned on its finding
that Browning-Ferris exercised control both directly and
indirectly.” Browning-Ferris, 911 F.3d at 1218 (emphasis
added) (internal quotation marks and citation omitted).

     Yet in the challenged orders the Board adopted the Acting
Regional Director’s decision without acknowledging its earlier
rejection of important aspects of his factual findings. All the
Board said was that the majority in Browning-Ferris I did not
overturn the Acting Regional Director’s holding under the old
standard. Browning-Ferris II, 369 NLRB at *6. But the Board
in Browning-Ferris I had no reason to apply the old standard
because it announced and applied a new one. The Board’s
                               18
orders on remand from this court tell us nothing about how it
would have ruled in light of its factual disagreements with the
Regional Director. And especially given the agency’s current
view of its old joint-employer test—under which a finding of
direct and immediate control is necessary to deem a party a
joint employer but reserved and indirect control can
supplement the analysis—the Board’s prior finding that
Browning-Ferris had exercised direct control seems critical.

     Nothing in today’s decision nullifies the essential principle
that the National Labor Relations Board is free to change its
mind. But the Board must acknowledge when it is doing so
and explain its reasoning, see FCC v. Fox Television Stations,
Inc., 556 U.S. 502, 515 (2009), and when defining joint-
employer status, it “must color within the common-law lines
identified by the judiciary[,]” Browning-Ferris, 911 F.3d at
1208.

     In summary, we grant the Union’s petition, vacate the
challenged orders, and remand for the Board to conduct further
proceedings consistent with this opinion.

                                                     So ordered.