AGENCY:

National Labor Relations Board.

ACTION:

Notice of proposed rulemaking; request for comments.

SUMMARY:

This notice of proposed rulemaking (NPRM) proposes to rescind and replace the final rule entitled “Joint Employer Status Under the National Labor Relations Act,” which was published on February 26, 2020 and took effect on April 27, 2020. The proposed rule would revise the standard for determining whether two employers, as defined in section 2(2) of the National Labor Relations Act (NLRA or Act), are joint employers of particular employees within the meaning of section 2(3) of the Act. The proposed changes are designed to explicitly ground the joint-employer standard in established common-law agency principles and provide relevant guidance to parties covered by the Act regarding their rights and responsibilities when more than one statutory employer possesses the authority to control or exercises the power to control particular employees' essential terms and conditions of employment.

DATES:

Comments regarding this proposed rule must be received by the National Labor Relations Board (NLRB or Board) on or before November 7, 2022. Comments replying to comments submitted during the initial comment period must be received by the Board on or before November 21, 2002. Reply comments should be limited to replying to comments previously filed by other parties. No late comments will be accepted. Requests for extensions of time will be granted only for good cause shown.

ADDRESSES:

Internet —Federal eRulemaking Portal. Electronic comments may be submitted through http://www.regulations.gov. Follow the instructions for submitting comments.

Delivery —Comments may be submitted by mail or hand delivery to: Roxanne L. Rothschild, Executive Secretary, National Labor Relations Board, 1015 Half Street SE, Washington, DC 20570-0001.

For important information concerning the submission of comments and their treatment, see SUPPLEMENTARY INFORMATION .

FOR FURTHER INFORMATION CONTACT:

Roxanne L. Rothschild, Executive Secretary, National Labor Relations Board, 1015 Half Street SE, Washington, DC 20570-0001, (202) 273-1940 (this is not a toll-free number), 1-866-315-6572 (TTY/TDD).

SUPPLEMENTARY INFORMATION:

I. Submission of Comments

Because of security precautions, the Board continues to experience delays in U.S. mail delivery. You should take this into consideration when preparing to meet the deadline for submitting comments. It is not necessary to mail comments if they have been filed electronically with regulations.gov. If you mail comments, the Board recommends that you confirm receipt of your delivered comments by contacting (202) 273-1940 (this is not a toll-free number). Individuals with hearing impairments may call 1-866-315-6572 (TTY/TDD). Because of precautions in place due to COVID-19, the Board recommends that comments be submitted electronically or by mail rather than by hand delivery. If you feel you must hand deliver comments to the Board, hand delivery will be accepted by appointment only. Please call (202) 273-1940 to arrange for hand delivery of comments. Please note that there may be a delay in the electronic posting of hand-delivered and mail comments due to the needs for safe handling and manual scanning of the comments. The Board strongly encourages electronic filing over mail or hand delivery of comments.

Only comments submitted through http://www.regulations.gov, mailed or hand delivered per the procedure described above will be accepted; ex parte communications received by the Board will be made part of the rulemaking record and will be treated as comments only insofar as appropriate. Comments will be available for public inspection at http://www.regulations.gov and during normal business hours (8:30 a.m. to 5 p.m. EST) at the above address.

As soon as practicable, the Board will post all comments received on http://www.regulations.gov. The website http://www.regulations.gov is the Federal eRulemaking portal, and all comments posted there are available and accessible to the public. The Board requests that comments include full citations or internet links to any authority relied upon. If a comment cites a source that is not publicly available, the Board requests that the commenter submit a copy of that source along with its comment.

The Board will not make any changes to the comments, including any personal information provided therein. The Board cautions commenters not to include personal information such as Social Security numbers, personal addresses, telephone numbers, and email addresses in their comments, as such submitted information will become viewable by the public via the http://www.regulations.gov website. It is a commenter's responsibility to safeguard their information. Comments submitted through http://www.regulations.gov will not include the commenter's email address unless the commenter chooses to include that information as part of their comment.

II. Background

As described more fully below, in 2015, the Board restored and clarified its traditional, common-law based standard for determining whether two employers, as defined in section 2(2) of the Act, are joint employers of particular employees within the meaning of section 2(3) of the Act. See Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, 362 NLRB 1599 (2015) ( BFI). Consistent with established common-law agency principles, and rejecting prior limitations established without explanation, the Board announced that it would consider evidence of reserved and indirect control over employees' essential terms and conditions of employment when analyzing joint-employer status.

While BFI was pending on review before the United States Court of Appeals for the District of Columbia Circuit, and following a change in the Board's composition, the Board issued a notice of proposed rulemaking with the goal of establishing a joint-employer standard that departed in significant respects from BFI. During the comment period, the District of Columbia Circuit issued its decision in Browning-Ferris Industries of California, Inc. v. NLRB, 911 F.3d 1195, 1222 (D.C. Cir. 2018), upholding “as fully consistent with the common law the Board's determination that both reserved authority to control and indirect control can be relevant factors in the joint-employer analysis,” and remanding the case to the Board to refine the new standard. Thereafter, the Board issued a final rule that again constrained the joint-employer standard. Because the Board believes, contrary to our dissenting colleagues and subject to comments, that the 2020 final rule (2020 Rule) repeats the errors that the Board corrected in BFI, it proposes to rescind that standard and replace it with a new rule that incorporates the BFI standard and responds to the District of Columbia Circuit's invitation for the Board to refine that standard in its 2018 decision on review.

A. Statutory Background

Section 2(2) of the National Labor Relations Act defines an “employer” to include “any person acting as an agent of an employer, directly or indirectly.” 29 U.S.C. 152(2) (emphasis added). In turn, the Act provides that the “term `employee' shall include any employee, and shall not be limited to the employees of a particular employer, unless [the Act] explicitly states otherwise . . . .” Id. 152(3).

Section 7 of the Act provides that employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection and to refrain from any or all such activities. 29 U.S.C. 157. Section 9(c) of the Act authorizes the Board to process a representation petition when employees wish to be represented for collective bargaining and their employer declines to recognize their representative. 29 U.S.C. 159(c). And section 8(a)(5) makes it an unfair labor practice for an employer to refuse to bargain collectively with the representatives of his employees. 29 U.S.C. 158(a)(5).

The Act does not specifically address situations in which statutory employees are employed jointly by two or more statutory employers ( i.e., it is silent as to the definition of “joint employer”), but, as discussed below, the Board, with court approval, has long applied common-law agency principles to determine when one or more entities share or codetermine the essential terms and conditions of employment of a particular group of employees.

B. The Development of Joint-Employer Law Under the National Labor Relations Act

In Boire v. Greyhound Corp., 376 U.S. 473, 481 (1964), a representation case involving the relationship between a company operating a bus terminal and its cleaning contractor, the Supreme Court explained that the question of whether Greyhound “possessed sufficient control over the work of the employees to qualify as a joint employer” was “essentially a factual question” for the Board to determine.^[1] The Board's subsequent decision in Greyhound Corp., 153 NLRB 1488 (1965), enfd. 368 F.2d 776 (5th Cir. 1966), completed that task. Specifically, the Board found, and the Fifth Circuit affirmed, that Greyhound and the cleaning contractor were joint employers of the employees at issue because they “share[d], or codetermine[d], those matters governing essential terms and conditions of employment.” Greyhound Corp., 153 NLRB at 1495.

For nearly two decades after Greyhound, the Board treated the right to control employees' work and their terms and conditions of employment as determinative in the joint-employer analysis. During this period, the Board's joint-employer analysis generally did not turn on whether both putative joint employers actually or directly exercised control. In cases involving reserved control, the Board found it probative when a putative joint employer retained the contractual power to reject or terminate workers,^[2] establish or approve wage rates,^[3] set working hours and schedules,^[4] approve overtime,^[5] dictate the number of workers to be supplied,^[6] determine “the manner and method of work performance,” ^[7] “inspect and approve work,” ^[8] and terminate the contractual agreement itself at will.^[9] Reviewing courts endorsed the Board's consideration of reserved control as probative in the joint-employer analysis.^[10]

Similarly, the Board found a putative joint employer's indirect exercise of control over employees' essential terms and conditions of employment probative in the joint-employer analysis during this period.^[11] The Board found evidence of joint-employer status where a putative joint employer inspected another firm's employees' work, communicated work directives through the other firm's supervisors, and exercised the power to open and close the facility based on production needs.^[12] The Board also found evidence of joint-employer status where a putative joint employer held “day-to-day responsibility for the overall operations” at a facility and determined the nature of work assignments, even though that entity “did not exercise direct supervisory authority” over the employees.^[13] And, the Board assigned weight to evidence showing that a putative joint employer wielded indirect control over wages through a variety of contractual arrangements.^[14]

In 1981, the Third Circuit endorsed the Board's “share or codetermine” formulation of the joint-employer standard. NLRB v. Browning-Ferris Industries of Pennsylvania, Inc., 691 F.2d 1117, 1123 (3d Cir. 1982), enfg. 259 NLRB 148 (1981). Although subsequent Board decisions cited the Third Circuit's decision as a correct statement of law, those decisions also began imposing additional requirements that, the Board now believes, lacked a clear basis in established common-law agency principles or prior Board or court decisions. See TLI, Inc., 271 NLRB 798 (1984), and Laerco Transportation, 269 NLRB 324 (1984). Specifically, subsequent Board decisions introduced three control-related restrictions requiring (1) that a putative joint employer “actually” exercise control, (2) that such control be “direct and immediate,” and (3) that such control not be “limited and routine.” See, e.g., AM Property Holding Corp., 350 NLRB 998, 999-1003 (2007), enfd. in relevant part sub nom. Service Employees International Union, Local 32BJ v. NLRB, 647 F.3d 435 (2d Cir. 2011); Airborne Express, 338 NLRB 597, 597 (2002); Flagstaff Medical Center, 357 NLRB 659, 666-667 (2011).^[15] By introducing these additional requirements, TLI / Laerco and their progeny departed, without explanation, from the Board's longstanding approach, which the Board is inclined to believe was consistent with the common law.

In 2015, the Board clarified its joint-employer standard in Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, 362 NLRB 1599 (2015) ( BFI), a representation case, and applied that standard retroactively to find that two employers jointly employed the employees in the petitioned-for unit. Consistent with Supreme Court decisions and pre-1984 Board precedent, BFI sought to firmly ground the joint-employer standard in established common-law agency principles.^[16] As the BFI Board explained, under the new joint-employer standard:

[T]he Board may find that 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.” 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.

362 NLRB at 1600 (emphasis added) (quoting NLRB v. Browning-Ferris Industries of Pennsylvania, Inc., 691 F.2d 1117, 1123 (3d Cir. 1982), enfg. 259 NLRB 148 (1981)).^[17]

The BFI Board also addressed an important element of the “share or codetermine” test: the definition of “the essential terms and conditions of employment” that a joint employer must control. The BFI Board, in keeping with the Board's longstanding practice, took “an inclusive approach in defining `essential terms and conditions of employment.' ” 362 NLRB at 1613. Citing prior Board and judicial decisions, the Board identified a “non-exhaustive list of bargaining subjects,” which included: hiring, firing, discipline, supervision, direction, wages, hours, dictating the number of workers to be supplied, scheduling, seniority, overtime, assigning work, and determining the manner and method of work performance. Id.

The BFI Board also eliminated the restrictive requirements that had been introduced into Board law after the Third Circuit's 1982 Browning-Ferris decision. BFI explained that these control-related restrictions were contrary to common-law agency principles and that the Board would “no longer require that a joint employer not only possess the authority to control employees' terms and conditions of employment, but must also exercise that authority, and do so directly, immediately, and not in a `limited and routine' manner.” Id. at 1600, 1613-1614. Instead, it held that the “right to control, in the common-law sense, is probative of joint-employer status, as is the actual exercise of control, whether direct or indirect.” Id. at 1614. The Board overruled contrary precedent.^[18]

On September 14, 2018, while BFI was pending before the U.S. Court of Appeals for the District of Columbia Circuit on review,^[19] a divided Board issued a notice of proposed rulemaking to establish a new joint-employer standard.^[20] The 2018 NPRM proposed to return to the more restrictive pre- BFI approach to determining joint-employer status. Specifically, the proposed rule provided that a “putative joint employer must possess and actually exercise substantial direct and immediate control over the employees' terms and conditions of employment in a manner that is not limited and routine.” Id. at 46696-46697.

On December 28, 2018, the U.S. Court of Appeals for the District of Columbia Circuit issued its decision in BFI. Browning-Ferris Industries of California, Inc. v. NLRB (BFI), 911 F.3d 1195 (D.C. Cir. 2018). The District of Columbia Circuit “uph[e]ld as fully consistent with the common law the Board's determination that both reserved authority to control and indirect control can be relevant factors in the joint-employer analysis.” Id. at 1222. The court affirmed that “under Supreme Court and circuit precedent, the National Labor Relations Act's test for joint-employer status is determined by the common law of agency.” Id. at 1206. In addition, the court agreed that the “Board's conclusion that an employer's authorized or reserved right to control is relevant evidence of a joint-employer relationship wholly accords with traditional common-law principles of agency.” Id. at 1213. The court found that the Board “correctly discerned” that under the common law, “indirect control can be a relevant factor in the joint-employer inquiry.” Id. at 1216.

Despite broadly upholding the Board's BFI joint-employer standard, the District of Columbia Circuit reversed the Board's “articulation and application of the indirect-control element” to the extent that the Board did not “distinguish between indirect control that the common law of agency considers intrinsic to ordinary third-party contracting relationships, and indirect control over the essential terms and conditions of employment.” Id. at 1222-1223. In remanding the case to the Board, the court identified as key the “common-law principle that a joint employer's control—whether direct or indirect, exercised or reserved—must bear on the `essential terms and conditions of employment' . . . and not on the routine components of a company-to-company contract.” Id. at 1221 (citation omitted).^[21]

[After describing the statutory language and the history of NLRB decisions on Joint Employer through BFI, the Board then summarized the 2020 Joint Employer Rule:]

On February 26, 2020, the Board promulgated its final joint-employer rule.^[22] Although the Board acknowledged the District of Columbia Circuit's approval of the BFI Board's use of common-law agency principles in fashioning its joint-employer standard, the Board emphasized that “the court recognized that [ BFI] did not present the issue of whether either indirect control or a contractually reserved but unexercised right to control can be dispositive of joint-employer status absent evidence of exercised direct and immediate control.” Id. at 11185. As a result, the Board explained that it modified the proposed rule to “factor in” an entity's indirect and reserved control over essential terms and conditions of employment or mandatory subjects of bargaining, but only to the extent that such indirect and/or reserved control “supplements and reinforces” evidence that the entity also possesses or exercises direct and immediate control over essential terms and conditions of employment. Id. at 11185-11186, 11194-11198, and 11236.

The Board also included several additional definitions in the final rule. Id. at 11192-11193. The final rule specifically explained that to show that an entity “shares or codetermines” the essential terms and conditions of another employer's employees, “the entity must possess and exercise such substantial direct and immediate control over one or more essential terms or conditions of their employment as would warrant finding that the entity meaningfully affects matters relating to the employment relationship with those employees.' ” Id. at 11186 and 11236. The Board also retained the requirement that a joint employer exercise “substantial direct and immediate control” and defined that term to mean “direct and immediate control that has a regular or continuous consequential effect on an essential term or condition of employment of another employer's employees.” Id. at 11203-11205 and 11236. The final rule also specified that control is not “substantial” if it is “only exercised on a sporadic, isolated, or de minimis basis.” Id. at 11236. The final rule also defined “indirect control” as “indirect control over essential terms and conditions of employment of another employer's employees but not control or influence over setting the objectives, basic ground rules, or expectations for another entity's performance under a contract.” Id. at 11236. The Board provided an “exhaustive” list of essential terms and conditions of employment that included “wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction” and which the Board noted was “expanded and made exclusive.” Id. at 11186, 11205 and 11235-11236.^[23]

III. Validity and Desirability of Rulemaking

Section 6 of the Act provides that “[t]he Board shall have authority from time to time to make, amend, and rescind, in the manner prescribed by the Administrative Procedure Act, such rules and regulations as may be necessary to carry out the provisions of this Act.” 29 U.S.C. 156. See also American Hospital Assn. v. NLRB, 499 U.S. 606 (1991); NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974) (“[T]he choice between rulemaking and adjudication lies in the first instance within the Board's discretion.”); NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969).

For nearly the entirety of the Act's history, the Board has developed its joint-employer jurisprudence through case-by-case adjudication. The Board's 2020 Rule represented a significant departure from this precedent, for the first time formulating a joint-employer standard through the Board's rulemaking authority. In comparison to rulemaking, adjudication possesses a number of benefits when determining joint-employer relationships. The issue of common-law joint-employer status is a highly fact-specific one, which may be better suited to individualized determination on a case-by-case basis.^[24] Further, an exhaustive, “one-size-fits-all” rule may be an inappropriate mechanism to address the complex and fact-specific scenarios presented by sophisticated contracting arrangements in the modern workplace.

Subject to comments, the Board nevertheless believes that rescinding the 2020 Rule and setting forth a revised joint-employer standard through rulemaking is desirable for several reasons. First, the Board believes, subject to comments, that the 2020 Rule's approach to defining joint- employer status wrongly departs from common-law agency principles, which the National Labor Relations Act makes applicable in this context. In the Board's view, the 2020 Rule again incorporates control-based restrictions that unnecessarily narrow the common law and which threaten to undermine the goals of Federal labor law. By expressly grounding the joint-employer standard in the common law, the proposed rule would avoid repeating the errors the Board made beginning in the mid-1980s and incorporated again in the 2020 Rule. Instead, the proposed rule would restore the Board's focus on whether a putative joint employer possesses the authority to control or exercises the power to control particular employees' essential terms and conditions of employment, consistent with the common law and relevant court decisions. Finally, the proposed rule responds to the District of Columbia Circuit's invitation for the Board to “erect some legal scaffolding” to ensure that the joint-employer standard appropriately focuses on forms of reserved and indirect control that bear on employees' essential terms and conditions of employment.^[25]

Moreover, the Board believes that establishing a definite, readily available standard will assist employers and labor organizations in complying with the Act. In addition, because the joint-employer standard has changed several times in the past decade, the Board sees a heightened need to seek public comment on this important area of labor law. The Board also seeks to establish a rule regarding joint employers' bargaining obligations and potential unfair labor practice liability that correctly reflects both background legal principles and the National Labor Relations Act's public policy of “encouraging the practice and procedure of collective bargaining” and maximizing employees' “full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.” 29 U.S.C. 151. While no rule can eliminate the prospect of all litigation in this fact-intensive area of law, it is the Board's hope that the proposed rule, codifying what we view as the essential elements of a joint employer relationship, will reduce uncertainty and litigation over the basic parameters of joint-employer status. The Board therefore tentatively believes rulemaking to have determinate advantages over addressing joint-employer issues purely through adjudication.

IV. The Proposed Rule

The proposed rule would codify the Board's longstanding joint-employer standard, approved by the Third Circuit and the District of Columbia Circuit Court of Appeals, which provides that an employer is a joint employer of particular employees if the employer has an employment relationship with those employees under established common-law agency principles and the employer shares or codetermines those matters governing at least one of the employees' essential terms and conditions of employment. Consistent with common-law agency principles and the District of Columbia Circuit's decision in BFI, the Board believes, subject to comments, that a party asserting a joint-employment relationship may establish joint-employer status 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. The proposed rule reflects the Board's preliminary view, subject to comments, that the Act's purposes of promoting collective bargaining and stabilizing labor relations are best served when two or more statutory employers that each possess some authority to control or exercise the power to control employees' essential terms and conditions of employment are parties to bargaining over those employees' working conditions.^[26]

A. Proposal To Clarify That an Employer Is an Employer of Particular Employees if the Employer Has an Employment Relationship With Those Employees Under Common-Law Agency Principles

Proposed § 103.40(a) provides that an employer, as defined by section 2(2) of the National Labor Relations Act, is an employer of particular employees, as defined by section 2(3) of the Act, if the employer has an employment relationship with those employees under common-law agency principles. Proposed § 103.40(a) would explicitly ground the Board's joint-employer analysis in common-law agency principles, consistent with the Board and District of Columbia Circuit decisions in BFI . As the Supreme Court has explained, common-law agency principles apply when construing Federal statutes whose terms are interpreted under the common law.^[27] Relevant sources of common-law agency principles are not hard to find. Subject to comments and as set forth further below, the Board believes that such sources include primary articulations of these principles by common-law judges as well compendiums, reports, and restatements of common law decisions such as the Restatement (Second) of Agency (1958), and early court decisions addressing “master-servant relations.” ^[28]

As the District of Columbia Circuit has recognized, both the first Restatement of Agency and the Restatement (Third) of Agency “identify the `right to control' as a relevant factor in establishing [an] . . . employment relationship.” BFI, 911 F.3d at 1213. Going farther, the Restatement (Second) of Agency (1958) makes clear that the right to control is the touchstone of the common-law employment relationship. Thus, as the District of Columbia Circuit explained in BFI, “the `right to control' runs like a leitmotif through the Restatement (Second) of Agency.” 911 F.3d at 1211. The Restatement' s definitions of “master” and “servant” confirm that the right to control is sufficient to establish an employment relationship. The Restatement defines “master” as “a principal who employs an agent 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.” Restatement (Second) of Agency, sec. 2(1). In turn, the Restatement defines “servant” as “a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control.” Id. sec. 220(1).

The Board believes, subject to comments, that making the common-law employer-employee relationship foundational to the joint-employer analysis is consistent with the District of Columbia Circuit's statement that the Board must apply the NLRA in a manner that “is bounded by the common-law's definition of a joint employer” and “color within the common-law lines identified by the judiciary.” 911 F.3d at 1208.

B. Proposal To Establish That Two or More Employers of the Same Particular Employees Are Joint Employers of Those Employees if the Employers Share or Codetermine Those Matters Governing Employees' Essential Terms and Conditions of Employment

Proposed § 103.40(b) first recognizes, as did the 2020 Rule, that the joint-employer issue arises (and the same test applies) in all contexts under the Act, including both representation and unfair labor practice case contexts. Cf. BFI of Pennsylvania, 691 F.2d at 1119, 1125 (enforcing a Board order holding joint employers jointly responsible for remedying discharges that violated section 8(a)(3) and (1) of the Act).

Proposed § 103.40(b) also incorporates the principle from BFI that “the existence of a common-law employment relationship is necessary, but not sufficient, to find joint-employer status.” 362 NLRB at 1610. The proposed rule states that “two or more employers of the same particular employees are joint employers of those employees if the employers share or codetermine those matters governing employees' essential terms and conditions of employment.” By including this language, proposed § 103.40(b) codifies the longstanding core of the joint-employer test, consistent with the formulation of the standard that several Courts of Appeals (notably, the Third Circuit and the District of Columbia Circuit) have endorsed. See BFI, 911 F.3d at 1209 (citing Dunkin' Donuts Mid-Atlantic Distribution Center v. NLRB, 363 F.3d 437, 440 (D.C. Cir. 2004)); NLRB v. Browning-Ferris Industries of Pennsylvania, Inc., 691 F.2d 1117, 1124 (3d Cir. 1982). See also 3750 Orange Place Limited Partnership v. NLRB, 333 F.3d 646, 660 (6th Cir. 2003); Holyoke Visiting Nurses Assn. v. NLRB, 11 F.3d 302, 306 (1st Cir. 1993).

C. Proposal To Define “Share or Codetermine Those Matters Governing Employees' Essential Terms and Conditions of Employment” to Mean for an Employer To Possess the Authority To Control (Whether Directly, Indirectly, or Both), or To Exercise the Power To Control (Whether Directly, Indirectly, or Both), One or More of the Employees' Essential Terms and Conditions of Employment

Proposed § 103.40(c) seeks to define the terms “share or codetermine those matters governing employees' essential terms and conditions of employment” that appear in proposed § 103.40(b). The proposed rule would define “share or codetermine” to mean “for an employer to possess the authority to control (whether directly, indirectly, or both), or to exercise the power to control (whether directly, indirectly, or both), one or more of the employees' essential terms and conditions of employment.” Proposed § 103.40(c) incorporates the view of the BFI Board and the District of Columbia Circuit that evidence of the authorized or reserved right to control, as well as evidence of the exercise of control (whether direct or indirect, including control through an intermediary, as discussed further below) is probative evidence of the type of control over employees' essential terms and conditions of employment that is necessary to establish joint-employer status.

The Board believes, subject to comments, that this definition of “share or codetermine” is consistent with common-law agency principles and avoids one of the key errors of the 2020 Rule. Thus, proposed § 103.40(c) clarifies that evidence that a putative joint employer possesses the authority or exercises the power to control one or more of the employees' essential terms and conditions of employment is relevant to the joint-employer inquiry, regardless of whether such control is direct or indirect. By contrast, § 103.40(a) of the 2020 Rule required a putative joint employer to “possess and exercise substantial direct and immediate control over essential terms and conditions of employment,” and, in turn, § 103.40(d) defined “substantial direct and immediate control” as “direct and immediate control that has a regular or continuous consequential effect on an essential term or condition of employment of another employer's employees.” ^[29] Like the additional control-related restrictions the Board began introducing in the mid-1980's in TLI/Laerco and their progeny,^[30] these definitions in the 2020 Rule wrongly depart from the common law, in the Board's preliminary view subject to comments, as set forth in greater detail below.

D. Proposal To Define “Essential Terms and Conditions of Employment” To Generally Include Wages, Benefits, and Other Compensation; Hours of Work and Scheduling; Hiring and Discharge; Discipline; Workplace Health and Safety; Supervision; Assignment; and Work Rules and Directions Governing the Manner, Means, or Methods of Work Performance

Pursuant to proposed § 103.40(d), “essential terms and conditions of employment” will “generally include, but are not limited to: wages, benefits, and other compensation; hours of work and scheduling; hiring and discharge; discipline; workplace health and safety; supervision; assignment; and work rules and directions governing the manner, means, or methods of work performance.” The Board believes, subject to comments, that this definition is consistent with the broad, inclusive approach to defining the set of essential terms and conditions of employment the Board took prior to the 2020 Rule, with court approval. See, e.g., Aldworth Co., 338 NLRB 137, 139 (2002) (“The relevant facts involved in th[e] determination [of shared or co-determined essential terms and conditions of employment] extend to nearly every aspect of employees' terms and conditions of employment and must be given weight commensurate with their significance to employees' work life.”), enfd. sub nom. Dunkin' Donuts Mid-Atlantic Distribution Center v. NLRB, 363 F.3d 437 (D.C. Cir. 2004).

The Board believes, subject to comments, that in most workplaces, the proposed rule offers a set of useful benchmarks for identifying essential terms and conditions of employment. In addition, both the Act and the common law offer support for generally treating these terms and conditions of employment as essential. Proposed § 103.40(d) includes “wages, benefits, and other compensation” and “hours of work and scheduling.” ^[31] The structure and text of the Act provide significant support for anticipating that in most employment relationships these terms and conditions of employment will be considered “essential.” Section 8(d), defining the duty to bargain, refers to “wages, hours, and other terms and conditions of employment.” 29 U.S.C. 158(d). And, section 9(a) refers to a chosen union as the exclusive representative of employees “for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment.” 29 U.S.C. 159(a).

Section 2 and section 220 of the Restatement (Second) of Agency —which the courts have acknowledged as persuasive authority for construing the common-law definition of “employer”—provide further guidance that the Board believes, subject to comments, warrants treating additional terms and conditions of employment as essential. As set forth above, section 2 of the Restatement emphasizes the importance of a putative employer's control of the “physical conduct” of an employee “in the performance of the service” to the employer. It is the Board's view, subject to comments, that section 2 justifies in most cases treating discipline, workplace health and safety, supervision, assignment, and certain work rules and directions as essential terms and conditions of employment.^[32] Section 220 of the Restatement likewise supports the usual inclusion of other work rules and directions related to determining the manner, means, or methods of work performance as essential terms and conditions of employment, as it emphasizes the “extent of control” an employer “may exercise over the details of the work” in identifying what distinguishes an employee from an independent contractor. And, section 220 supports including hiring and discharge as essential terms and conditions of employment, as that section treats employment tenure and the “length of time for which the person is employed” as relevant.

The Board proposes an inclusive approach to defining the set of essential terms and conditions of employment to ensure that the joint-employer standard can encompass changing circumstances in the workplace over time, as well as the particularities of certain industries or occupations. Thus, while the proposed rule identifies terms and conditions that would generally be considered essential, the Board anticipates that comments will permit it to refine the list of essential terms and conditions of employment. The Board observes that, over time and through its adjudicatory processes, the Board's case law has developed a non-exhaustive list of “mandatory subjects” of collective bargaining, i.e. subjects that implicate wages, hours and other terms and conditions of employment as delineated by sections 9(a), 8(a)(5) and 8(d) of the Act.^[33] The Board has found mandatory subjects of bargaining to include, inter alia: overtime pay; ^[34] paid vacations; ^[35] the provision of group health insurance plans; ^[36] the scheduling of employee breaks; ^[37] paid lunch periods; ^[38] employee parking; ^[39] grievance ^[40] and arbitration ^[41] procedures; work rules; ^[42] employee dress codes; ^[43] health and safety issues; ^[44] and workplace meal prices.^[45]

The shortcomings of the 2020 Rule's exhaustive list of essential terms and conditions of employment (which did not include workplace health and safety) were revealed during the COVID-19 pandemic. This experience has persuaded the Board, subject to comments, that other similarly unforeseen circumstances may arise in the future and so the joint-employer standard should not adopt an exhaustive list of essential terms and conditions of employment in given workplaces, but instead leave some flexibility for the Board in future adjudication under a final rule. Proposed § 103.40(d) likewise aims to ensure that the Board's approach to defining essential terms and conditions of employment is not needlessly overinclusive. For example, the Board is inclined to believe that, while workplace health and safety likely constitutes an essential condition of employment in healthcare, mining, and construction industry workplaces, there may be other workplaces in which health and safety concerns are less acute. We note, as well, that because the proposed rule requires the existence of a common-law employment relationship between a joint employer and particular employees, a joint employer necessarily will control those terms and conditions of employment sufficient to establish an employment relationship, regardless of which terms and conditions it does not control. The Board invites comment on all aspects of its approach to essential terms and conditions of employment, including the specific terms and conditions of employment it should (or should not) generally consider “essential.” ^[46]

E. Proposal to Specify That Whether an Employer Possesses the Authority To Control or Exercises the Power To Control One or More of the Employees' Terms and Conditions of Employment Is Determined Under Common-Law Agency Principles and That Evidence of Reserved or Indirect Control Is Sufficient To Establish Status as a Joint Employer

Proposed § 103.40(e) provides that common-law agency principles govern the determination of whether an employer possesses the authority to control or exercises the power to control one or more of the essential terms and conditions of employment of the employees at issue. As discussed above, the Board acknowledges that “Congress has tasked the courts, and not the Board, with defining the common-law scope of `employer' ” and that “the common-law lines identified by the judiciary” thus delineate the boundaries of the “policy expertise that the Board brings to bear” on the question of whether a business entity is a joint employer of another employer's employees under the Act. BFI v. NLRB, 911 F.3d at 1208-1209. Accordingly, in defining the types of control that will be sufficient to establish joint-employer status under the Act, the Board looks for guidance from the judiciary, including primary articulations of relevant principles by judges applying the common law, as well as secondary compendiums, reports, and restatements of these common law decisions, focusing “first and foremost [on] the `established' common-law definitions at the time Congress enacted the National Labor Relations Act in 1935 and the Taft-Hartley Amendments in 1947.” Id. at 1209 (citations omitted).

Subject to comments, the Board believes that the policies of the Act, together with the expansive common-law employer-employee relationship defined by the judiciary, make it appropriate for the Board to give determinative weight to the existence of a putative joint employer's authority to control the essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any exercise of such control is direct or indirect, such as through an intermediary.

1. Reserved Control

First, long before the 1935 enactment of the Act, the Supreme Court recognized and applied a common-law rule that “the relation of master and servant exists whenever the employer retains the right to direct the manner in which the business shall be done, as well as the result to be accomplished, or, in other words, `not only what shall be done, but how it shall be done.' ” Singer Mfg. Co. v. Rahn, 132 U.S. 518, 523 (1889) (emphasis added) (quoting Railroad Co. v. Hanning, 82 U.S. 649, 657 (1872)). The Court in Singer affirmed the holding below that a worker was an employee ^[47] of a company because the Court concluded that the company had contractually reserved such control over the performance of the work that it “might, if it saw fit, instruct [the worker] what route to take, or even what speed to drive.” Id. at 523. In reaching this conclusion, the Court relied solely on the parties' contract, and did not discuss whether or in what manner the company had ever actually exercised any control over the terms and conditions under which the worker performed his work. In other words, the Court found a common-law employer-employee relationship based on contractually reserved control without reference to whether or how that control was exercised.^[48]

Between the Court's decision in Singer and the relevant congressional enactments of the NLRA in 1935 and the Taft-Hartley amendments in 1947, Federal courts of appeals and State high courts consistently followed the Supreme Court in emphasizing the primacy of the right of control over whether or how it was exercised in decisions that turned on the existence of a common-law employer-employee relationship. For example, in 1934, the Supreme Court of Missouri examined whether a worker was an “employee” of two companies under a State workmen's compensation statute—the terms of which the court construed “in the sense in which they were understood at common law”—and affirmed that “the essential question is not what the companies did when the work was being done, but whether they had a right to assert or exercise control.” ^[49] And, in 1945, the Court of Appeals for the District of Columbia Circuit explained that, in distinguishing employees from independent contractors, “it is the right to control, not control or supervision itself, which is most important.” ^[50]

Unsurprisingly, early twentieth century secondary authority similarly distills from the cases a common-law rule under which the right of control establishes the existence of the common-law employer-employee relationship, without regard to whether or how such control is exercised. For example, in 1922, an American Law Report (A.L.R.) annotation states as black-letter law that:

In every case which turns upon the nature of the relationship between the employer and the person employed, the essential question to be determined is not whether the former actually exercised control over the details of the work, but whether he had a right to exercise that control.^[51]

And, as stated above, the first Restatement of Agency, published in 1933, defines “master,” and “servant,” thus:

(1) A master is a principal who employs another to perform service in his affairs and who controls or has the right to control the physical conduct of the other in the performance of the service.

(2) A servant is a person employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right of control by the master.^[52]

Finally, the first edition of American Jurisprudence, published between 1936 and 1948, states that “the really essential element of the [employer-employee] relationship is the right of control —the right of one person, the master, to order and control another, the servant, in the performance of work by the latter, and the right to direct the manner in which the work shall be done,” and “[t]he test of the employer-employee relation is the right of the employer to exercise control of the details and method of performing the work.” ^[53]

The Board believes, subject to comments and based on consultation of this and other judicial authority, that when Congress enacted the NLRA in 1935 and the Taft-Hartley Amendments in 1947, the existence of a putative employer's reserved authority to control the details of the terms and conditions under which work was performed sufficed to establish a common-law employer-employee relationship without regard to whether or in what manner such control was exercised.

From 1947 to today, innumerable judicial decisions and secondary authorities examining the common-law employer-employee relationship have continued to emphasize the primacy of the putative employer's authority to control, without regard to whether or in what manner that control has been exercised. For example, in 2014, the Supreme Court of California affirmed that “what matters under the common law is not how much control a hirer exercises, but how much control the hirer retains the right to exercise.” ^[54] As noted above, the Restatement (Second) of Agency relevantly echoes the First Restatement's emphasis on the right of control. ^[55] Corpus Juris Secundum provides that “[a]n employee/servant is a type of agent whose physical conduct is controlled or is subject to the right to control by the master; the servant's principal, who controls or has the right to control the physical conduct of the servant, is called the master.” ^[56] And, the second edition of American Jurisprudence provides that “the principal test of an employment relationship is whether the alleged employer has the right to control the manner and means of accomplishing the result desired.” ^[57] Based on its examination of this and other judicial and secondary authority, the Board agrees with the District of Columbia Circuit that “for what it is worth [the common-law rule in 1935 and 1947] is still the common-law rule today.” ^[58] The Board also notes that, as set forth in greater detail above, this view is in keeping with the Board's prior treatment of reserved control in the period following the Greyhound decision and before the Board began imposing additional control-related restrictions in TLI/Laerco and their progeny.

Finally, because the facts of many cases do not require distinguishing between contractually reserved and actually exercised control, many judicial decisions and other authorities spanning the last century have articulated versions of the common-law test that do not expressly include this distinction. But the Board is not aware of any common-law judicial decision or other common-law authority directly supporting the proposition that, given the existence of a putative employer's contractually reserved authority to control, further evidence of direct and immediate exercise of that control is necessary to establish a common-law employer-employee relationship. For these reasons, the Board believes, subject to comments, that the judicially defined common-law boundaries on the Board's exercise of its policy expertise cannot justify the adoption of a joint-employer standard that requires a showing of actual exercise of direct and immediate control in order to establish that an entity is a joint employer of another entity's employees, as current § 103.40 improperly requires.

2. Indirect Control or Control Exercised Through an Intermediary

The Board believes, subject to comments, that evidence that an employer has actually exercised such control over essential terms and conditions, whether directly or indirectly, such as through an intermediary, necessarily also suffices to establish the existence of a joint-employer relationship. As the District of Columbia Circuit has recognized, “[t]he common law . . . permits consideration of those forms of indirect control that play a relevant part in determining the essential terms and conditions of employment.” BFI v. NLRB, 911 F.3d at 1199-1200. In addition, the District of Columbia Circuit has explained that the definition of “employer” set forth in section 2(2) of the Act “textually indicates that the statute looks at all probative indicia of employer status, whether exercised `directly or indirectly'” and therefore that the Act “expressly recognizes that agents acting `indirectly' on behalf of an employer could also count as employers.” Id. at 1216.

Judicial decisions and secondary authorities addressing the common-law employer-employee relationship confirm that indirect control, including control exercised through an intermediary, is relevant to the existence of an employment relationship. The Restatement (Second) of Agency explicitly recognized the significance of indirect control, both in providing that “the control or right to control needed to establish the relation of master and servant may be very attenuated” and in discussing the subservant doctrine, which deals with cases in which one employer's control may be exercised indirectly, while a second entity directly controls employees.^[59] As the District of Columbia Circuit explained in BFI, “the common law has never countenanced the use of intermediaries or controlled third parties to avoid the creation of a master-servant relationship.” ^[60]

Consistent with these longstanding common-law principles, the Board believes, subject to comments, that evidence showing that a putative joint employer wields indirect control over the essential terms and conditions of employment of another employer's employees is relevant to the joint-employer inquiry. Ignoring relevant evidence of indirect control over essential terms and conditions of employment would, in the words of the District of Columbia Circuit, “allow manipulated form to flout reality,” ^[61] contrary to the teachings of the common law. Under the proposed rule, for example, evidence that a putative joint employer communicates work assignments and directives to another entity's managers or exercises ongoing oversight to ensure that job tasks are performed properly may demonstrate the type of indirect control over essential terms and conditions of employment that is necessary to establish a joint-employer relationship. The Board welcomes comment on this and other forms of indirect control that should be considered probative (or not probative) of joint-employer status.

F. Proposal To Clarify That Evidence of Control Over Matters That Are Immaterial to the Existence of an Employment Relationship or That Do Not Bear on Employees' Essential Terms and Conditions of Employment Is Not Relevant to the Joint-Employer Inquiry

Proposed § 103.40(f) incorporates the District of Columbia Circuit's teaching in BFI that an employer's control over matters that are immaterial to the existence of an employment relationship under established common-law agency principles, or that otherwise do not bear on the employees' essential terms and conditions of employment, is not relevant to the joint-employer inquiry.^[62] In addition, the proposed rule responds to the District of Columbia Circuit's criticism that the BFI Board did not sufficiently “distinguish between indirect control that the common law of agency considers intrinsic to ordinary third-party contracting relationships, and indirect control over the essential terms and conditions of employment.” BFI, 911 F.3d at 1222-1223. In remanding the case to the Board, the court identified as key the “common-law principle that a joint employer's control—whether direct or indirect, exercised or reserved—must bear on the `essential terms and conditions of employment' . . . and not on the routine components of a company-to-company contract.” Id. at 1221 (citation omitted).

The Board's proposed rule does not purport to exhaustively detail the universe of business arrangements that bear on the existence of a common-law employer-employee relationship. However, the Board agrees with the BFI Board and the District of Columbia Circuit that contractual terms limited to “dictat[ing] the results of a contracted service,” that aim “to control or protect [the employer's] own property,” ^[63] or to “set the objective, basic ground rules, and expectations for a third-party contractor” ^[64] will generally not be relevant to the inquiry (assuming those terms do not otherwise affect the employees' essential terms and conditions of employment). In addition, the Board agrees that “routine components of a company-to-company contract,” like a “very generalized cap on contract costs,” or an “advance description of the tasks to be performed under the contract,” will generally not be material to the existence of an employment relationship under common-law agency principles.^[65] The Board specifically seeks public comment regarding this portion of its proposed rule and invites commenters to address which “routine components of a company-to-company contract” the Board should not consider relevant to the joint-employer analysis. In addition, the Board invites comment regarding which contractual controls reserved by a putative joint employer over another entity's employees should establish that the putative joint employer is also a common-law employer of the other entity's employees.

G. Proposal To Clarify That a Party Asserting Joint-Employer Status Has the Burden of Establishing That Relationship by a Preponderance of the Evidence

Proposed § 103.40(g) confirms, in keeping with BFI, 362 NLRB at 1616, that the party asserting that an employer is a joint employer of particular employees has the burden of establishing that relationship by a preponderance of the evidence.

H. Proposal To Explain That the Provisions of the Rule Are Intended To Be Severable

Proposed § 103.40(h) explains that the Board intends the provisions of the rule to be severable in the event any provision of the rule is held to be unlawful. The Board's preliminary view is that proposed § 103.40(a), (b), and (c), which address the common-law employment relationship, may be severable from the other provisions of the proposed rule, which address statutory issues that are informed by the common law. The Board specifically invites public comment on its preliminary view regarding the severability of the provisions of the rule.

V. Conclusion

The Board welcomes public comment on all aspects of its proposed rule. In particular, the Board seeks input from employees, unions, and employers with experience in workplaces in which multiple entities possess or exercise some control over a particular group of employees' working conditions.

Although the Board has offered proposed rule text that would rescind the 2020 Rule and replace it with a new rule setting forth the joint-employer standard, the Board is also specifically interested in commenters' responses to the following questions. Should the Board solely rescind the 2020 joint-employer rule and not replace it with a new rule? If so, how could the Board address the issue that the prior legal standard ( BFI 2015) was denied enforcement in part by the District of Columbia Circuit? In the alternative, should the Board amend the 2020 Rule, and if so, should the rule be amended in the manner set forth in this NPRM? Are there any reliance interests related to the 2020 Rule, and if so, how should the Board assess those interests?

As stated above, comments regarding this proposed rule must be received by the Board on or before November 7, 2022. Comments replying to comments submitted during the initial comment period must be received by the Board on or before November 21, 2022.

Our dissenting colleagues were part of the Board that issued the 2020 Rule at a time when the Board consisted of a three-member quorum without any dissenting views.^[66] As discussed above, the 2020 Rule displaced BFI, which had returned to the Board's traditional joint-employer analysis after a period during which the Board applied a more restrictive standard that we preliminarily believe was not supported by the text or purposes of the Act, by earlier Board or court precedent, or by the common law. Our dissenting colleagues express many of the same criticisms of the Board's traditional standard, as embodied in BFI and the proposed rule, that they expressed in the now-vacated decision in Hy-Brand Industrial Contractors,^[67] and in the 2020 Rule.^[68] We have expressed our preliminary view that the Act's purpose of promoting effective collective bargaining is better served by the Board's traditional standard than by the overly restrictive standard embodied in the 2020 Rule.^[69] We look forward to receiving and reviewing the public's comments and, afterward, considering these issues afresh with the good-faith participation of all members of the Board.

VI. Dissenting View of Members Kaplan and Ring

Two-and-a-half years ago, the Board issued a final rule (“the 2020 Rule”) setting forth the standard for determining, under the National Labor Relations Act (“NLRA” or “the Act”), whether two entities constitute a joint employer of employees directly employed by only one of them.^[70] There, after thoroughly considering tens of thousands of public comments and carefully analyzing the legal landscape, the Board adopted a comprehensive joint-employer standard that is consistent with common-law agency principles and provides clear guidance to regulated parties. The 2020 Rule was an immense undertaking, requiring thousands of personnel hours to complete. Today, however, with their Notice of Proposed Rulemaking (“NPRM”), the majority sets in motion a project to do it all over again. Worse, the rule they propose would be clearly inferior to the 2020 Rule, it would be contrary to the very common-law principles they so insistently emphasize, and it would fail to pass muster under the Administrative Procedure Act.

Our colleagues offer no valid justification for launching a second resource-intensive joint-employer rulemaking. They do not purport to rely on any experience under the 2020 Rule. Indeed, they cannot do so, since the Board has yet to apply it in a single case. Nor do they rely on any court precedent postdating the 2020 Rule's publication or on any factual developments, much less any seismic shift in American workplaces. The majority's stated purpose for this new rulemaking is to “explicitly ground the joint-employer standard in common-law agency principles and provide relevant guidance to parties covered by the Act regarding their rights and responsibilities under the Act.” But the 2020 Rule already achieves both these objectives and does so far better than the rule the majority proposes. Indeed, the proposed rule fails to achieve either of its stated aims. It neither articulates the common-law agency principles that appropriately bear on determining joint-employer status under the NLRA nor provides any real guidance to the regulated community. Instead, it simply purports to expand joint-employer status to the outermost limits of the common law (while actually going beyond those limits) and leaves everything else to case-by-case adjudication.

The universally accepted general formulation of the joint-employer standard—embodied in the 2020 Rule—is that an employer may be considered a joint employer of a separate employer's employees only if the two employers “share or codetermine the employees' essential terms and conditions of employment.” See § 103.40 of the Board's Rules and Regulations; see also Browning-Ferris Industries of California, Inc. v. NLRB, 911 F.3d 1195, 1201 (D.C. Cir. 2018); NLRB v. Browning-Ferris Industries of Pennsylvania, Inc., 691 F.2d 1117, 1123 (3d Cir. 1982), enfg. 259 NLRB 148 (1981). To establish that this “share or codetermine” standard has been met, the Board's longstanding rule was that a putative joint employer's control over employment matters must be direct and immediate. See, e.g., TLI, Inc., 271 NLRB 798, 798-799 (1984), enfd. mem. sub nom. General Teamsters Local Union No. 326 v. NLRB, 772 F.2d 894 (3d Cir. 1985); Laerco Transportation, 269 NLRB 324 (1984). Indirect control, or an unexercised contractual reservation of a right to control, was insufficient.

This standard, which had been applied for at least 30 years, was eliminated by a divided Board in Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, 362 NLRB 1599 (2015) ( BFI ).^[71] Under BFI, one company could be deemed a joint employer of another company's employees based exclusively on either a never-exercised contractual reservation of right to control one or more essential terms and conditions of employment or on its indirect control of or influence over such terms and conditions, provided the evidence satisfied a second analytical step, namely, that “the putative joint employer possesses sufficient control over employees' essential terms and conditions of employment to permit meaningful bargaining.” BFI, 362 NLRB at 1600.

The United States Court of Appeals for the District of Columbia Circuit denied enforcement of the Board's decision in BFI. The D.C. Circuit held that while the common law supported the Board's holding that indirect control and a contractually reserved right to control are relevant to the joint-employer inquiry, the BFI Board had “overshot the common-law mark” by failing to distinguish evidence of indirect control that bears on workers' essential terms and conditions of employment from evidence that simply documents the routine parameters of company-to-company contracting. Browning-Ferris Industries of California, Inc. v. NLRB, 911 F.3d at 1216. The court also faulted the Board for failing to “meaningfully apply” the second step of its standard. Id. at 1221-1222. Finally, and importantly, the court did not affirm BFI' s holding that indirect control, or a contractually reserved right to control, can establish joint-employer status absent direct and immediate control. It left those issues undecided. Id. at 1213, 1218.

In formulating the 2020 Rule, the Board heeded the D.C. Circuit's guidance. It announced a joint-employer standard that is firmly grounded in common-law agency principles. It recognized that indirect control and a contractually reserved right to control are probative of joint-employer status. But, addressing the issues the D.C. Circuit left unaddressed, it also recognized that making either one dispositive of joint-employer status, absent evidence of direct and immediate control over one or more essential terms and conditions of employment, would contravene the common law and ill serve the purposes and policies of the Act. Accordingly, the 2020 Rule specified that to establish that an entity shares or codetermines the essential terms and conditions of another employer's employees, the entity must possess and exercise such substantial direct and immediate control over one or more essential terms or conditions of their employment as would warrant finding that the entity meaningfully affects matters relating to the employment relationship with those employees. Evidence of the entity's indirect control over essential terms and conditions of employment of another employer's employees, the entity's contractually reserved but never exercised authority over the essential terms and conditions of employment of another employer's employees, or the entity's control over mandatory subjects of bargaining other than the essential terms and conditions of employment is probative of joint-employer status, but only to the extent 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. 29 CFR 103.40(a). The 2020 rule also specified in detail how a joint-employer determination is to be made, enumerating the specific factors that would be considered and how those factors would be applied. This included defining a closed set of “essential terms and conditions of employment,” specifying how “direct and immediate control” would be determined with respect to each of them, and defining all other key terms used in the rule. See 29 CFR 103.40(b)-(f). Thus, the 2020 Rule aligns with the common law and the D.C. Circuit's 2018 decision and provides a self-contained, comprehensive standard for determining whether a joint-employer relationship exists.

The proposed rule would eliminate all the 2020 Rule's detailed guidance regarding conduct that constitutes direct and immediate control of each essential term and condition of employment. In its place, the proposed rule simply incorporates by reference the entire body of common-law agency principles. As a result, unions, employers, and employees would find no guidance in the rule itself. Instead, they would have to go searching for guidance in the common law to determine whether a joint-employer relationship exists.

Worse, the proposed rule also radically expands the circumstances in which joint-employer status can be found, going well beyond common-law limits and anything contemplated by the Board's decision in BFI. As discussed below, the proposed rule makes a never-exercised contractual reservation of right to control, or indirect control of or influence over a single term or condition of employment deemed “essential,” determinative of joint-employer status. BFI did not.^[72] In addition, rather than respond to the D.C. Circuit's criticism of the BFI Board's failure to meaningfully apply the second step of its announced standard, the proposed rule simply abandons that step altogether, embracing the unsupported and wholly unreasonable assumption that where an entity possesses nothing more than a never-exercised right of control, any bargaining by that entity “will necessarily be meaningful.” In addition, the proposed rule substitutes an open-ended, non-exclusive list of essential terms and conditions of employment for the closed list set forth in the 2020 Rule. As explained below, this open-ended list renders the proposed rule impermissibly vague and therefore arbitrary and capricious. For all these reasons, we respectfully dissent.

Background and the 2020 Rule

Section 2(2) of the National Labor Relations Act defines an “employer” to include “any person acting as an agent of an employer, directly or indirectly.” 29 U.S.C. 152(2). In determining whether an employment relationship exists between an entity and employees directly employed by a separate employer, common-law agency principles are controlling.^[73] The Board will find that two separate entities are joint employers of employees directly employed by only one of them if the evidence shows that they share or codetermine those matters governing the employees' essential terms and conditions of employment.^[74]

The Board, with court approval, long held that a determination that two or more entities do share or codetermine such matters requires proof that a putative joint employer has actually exercised substantial direct and immediate control over one or more essential terms and conditions of employment of another entity's employees. See Summit Express, Inc., 350 NLRB 592, 592 fn. 3 (2007) (finding that the General Counsel failed to prove direct and immediate control and therefore dismissing joint-employer allegation); Airborne Express, 338 NLRB 597, 597 fn. 1 (2002) (holding that “the essential element” in a joint-employer analysis “is whether a putative joint employer's control over employment matters is direct and immediate”) (citing TLI, Inc., 271 NLRB at 798-799); Laerco Transportation, 269 NLRB at 324 (dismissing joint-employer allegation where user employer's supervision of supplied employees was limited and routine); see also NLRB v. CNN America, Inc., 865 F.3d 740, 748-751 (D.C. Cir. 2017) (finding that the Board erred by failing to adhere to its “direct and immediate control” standard); SEIU Local 32BJ v. NLRB, 647 F.3d 435, 442-443 (2d Cir. 2011) (“`An essential element' of any joint employer determination is `sufficient evidence of immediate control over the employees.' ”) (quoting Clinton's Ditch Co-op Co. v. NLRB, 778 F.2d 132, 138 (2d Cir. 1985)). Under this precedent, an entity's unexercised contractual reservation of a right to control or indirect control/influence was insufficient to establish joint-employer status.

In 2015, a divided Board significantly lowered the bar for proving a joint-employer relationship in BFI, supra, 362 NLRB at 1599. There, a Board majority eliminated the requirement of proof that a putative joint employer had actually exercised direct and immediate control over essential terms and conditions of employment. Id. at 1613-1614. The BFI majority held that a joint-employer relationship could be based solely on an unexercised contractual reservation of right to control and/or indirect control. In other words, the BFI majority expanded the joint-employer doctrine to potentially include in the collective-bargaining process an employer's independent business partner that has an indirect or potential impact on the employees' essential terms and conditions of employment, even where the business partner has not itself actually established those essential employment terms or collaborated with the undisputed employer in setting them.

The defining feature of the Board's BFI standard was its elimination of the preexisting requirement of proof that a putative joint employer actually exercised substantial direct and immediate control over the essential terms and conditions of another company's workers. Contrary to our colleagues' claims that the D.C. Circuit “broadly uph[e]ld[ ] the Board's BFI joint-employer standard,” the court did not uphold its defining feature. It expressly left unaddressed whether indirect control or contractually-reserved-but-unexercised authority could, standing alone, establish a joint-employer relationship.^[75]

After canvassing common-law agency principles, including those identified in the Restatements of Agency, the D.C. Circuit did “uphold as fully consistent with the common law the [ BFI] Board's determination that both reserved authority to control and indirect control can be relevant factors in the joint-employer analysis.” 911 F.3d at 1222 (emphasis added). In short, the court held that contractually reserved control and indirect control can contribute to a joint-employer finding without addressing whether those factors could independently establish a joint-employer relationship.

The court in Browning-Ferris Industries of California v. NLRB made several other important points that subsequently informed the 2020 Rule. First, the court made clear that the common law sets the outer limit of a permissible joint-employer standard under the Act, without suggesting in any way that the standard must or should be coextensive with that outer limit.

The policy expertise that the Board brings to bear on applying the National Labor Relations Act to joint employers is bounded by the common-law's definition of a joint employer. The Board's rulemaking, in other words, must color within the common-law lines identified by the judiciary.

Id. at 1208 (emphasis added). Hence, while it is clear that the Board is precluded from adopting a more expansive joint-employer doctrine than the common law permits, it may adopt a narrower standard that promotes the Act's policies. This is a point that was recognized by the Board majority in BFI itself. BFI, 362 NLRB at 1613 (“The common-law definition of an employment relationship establishes the outer limits of a permissible joint-employer standard under the Act.”). Indeed, the Board, with court approval, has long made policy choices not to exercise the full extent of its jurisdiction, including as to particular classes of employment relationships.^[76]

Second, the D.C. Circuit made clear that, under the common law, the independent-contractor standard, with its emphasis on the right to control, is different from the joint-employer standard:

[T]he independent-contractor and joint-employer tests ask different questions. The independent-contractor test considers who, if anyone, controls the worker other than the worker herself. The joint-employer test, by contrast, asks how many employers control individuals who are unquestionably superintendent.

911 F.3d at 1214. In this regard, the court explained that “a rigid focus on independent-contractor analysis omits the vital second step in joint-employer cases, which asks, once control over the workers is found, who is exercising that control, when, and how. ” Id. at 1215 (emphasis in original). To rephrase, the vital second step of a common-law joint-employer analysis does indeed focus on the exercise of control.

Third, the D.C. Circuit held that the BFI Board's treatment of the indirect-control factor contravened the common law. Id. at 1221. Specifically, the court concluded that the BFI Board had “overshot the common-law mark” by failing to distinguish evidence of indirect control that bears on workers' essential terms and conditions of employment from evidence that simply documents the routine parameters of company-to-company contracting. Id. at 1216. The court explained that, for example, it would be inappropriate to give any weight in a joint-employer analysis to the fact that Browning-Ferris had controlled the basic contours of a contracted-for service, such as by requiring four lines' worth of employee sorters plus supporting screen cleaners and housekeepers. Id. at 1220-2221.

Fourth, the court held that the Board had erred by failing to meaningfully apply the second step of its two-step standard: “whether the putative joint employer possesses sufficient control over employees' essential terms and conditions of employment to permit meaningful collective bargaining.” On this point, the court rebuked the Board for “never delineat[ing] what terms and conditions of employment are `essential' ” and for adopting an “inclusive” and “non-exhaustive” approach to the meaning of “essential terms.” Id. at 1221-1222. The court also faulted the Board for failing to clarify what “meaningful collective bargaining” might require in the parties' arrangement. The court remanded the case to the Board for further proceedings consistent with the court's opinion.^[77]

The Board's 2020 Rule is within the boundaries set by common-law agency principles as defined by the D.C. Circuit's 2018 BFI decision and furthers the Act's policy of promoting meaningful collective bargaining. The 2020 Rule appropriately accounts for the “vital second step in joint-employer cases” identified by the court in BFI: once control over the workers is found, determining “ who is exercising that control, when, and how. ” Id. at 1215. Under the 2020 Rule, an entity can be deemed a joint employer of another company's employees only if it possesses and actually exercises substantial direct and immediate control over a broad-but-exhaustive list of essential terms and conditions of employment.

The 2020 Rule does not turn a blind eye to reserved control or indirect control. It expressly provides that those forms of control are “probative of joint-employer status.” See § 103.40(a) of the Board's Rules and Regulations. Specifically, each may serve to supplement and reinforce evidence the putative joint employer either possesses or has exercised substantial direct and immediate control over workers' essential terms. Plainly, the fact that an entity has a contractual reservation of a right to control is relevant to establishing possession of control. Further, both reserved control and indirect control are relevant to whether the control possessed and exercised is substantial. 85 FR 11186. However, standing alone, reserved and indirect control cannot establish that one company is the joint employer of another's employees. See § 103.40(a) of the Board's Rules and Regulations. The 2020 Rule requires proof that a putative joint employer played an active role, either alone or in collaboration with an undisputed employer, in setting employees' essential terms. The D.C. Circuit left this issue open for the Board to resolve, and the Board appropriately did so in the 2020 Rule.

In promulgating the 2020 Rule, the Board also made clear that it did not intend to permit an entity to immunize itself from joint-employer status by implementing its control through an intermediary. “Direct and immediate control exercised through an intermediary remains direct and immediate.” 85 FR 11209. This, too, is consistent with the D.C. Circuit's guidance. See Browning-Ferris v. NLRB, 911 F.3d at 1217 (“[T]he common law has never countenanced the use of intermediaries or controlled third parties to avoid the creation of a master-servant relationship.”).

The 2020 Rule, unlike our colleagues' proposed rule, appropriately recognizes that the determination of joint-employer status cannot be divorced from the practical consequences of finding that an entity is a joint employer. The Board explained that the 2020 Rule promoted the Act's policies by imposing bargaining obligations only on those employer entities that actually control essential working conditions and by establishing a fairly bright-line rule to guide regulated parties. In that rule, it was stated that the Board believes a standard that requires an entity to possess and exercise substantial direct and immediate control over essential terms and conditions of employment is consistent with the purposes and policies of the Act . . . . The Act's purpose of promoting collective bargaining is best served by a joint-employer standard that places at the bargaining table only those entities that control terms and conditions that are most material to collective bargaining. Moreover, a less demanding standard would unjustly subject innocent parties to liability for others' unfair labor practices and coercion in others' labor disputes. A fuzzier standard with no bright lines would make it difficult for the Board to distinguish between arm's-length contracting parties and genuine joint employers. Accordingly, preserving the element of direct and immediate control over essential terms and conditions draws a discernible and predictable line, providing “certainty beforehand” for the regulated community. 85 FR 11205.

A primary benefit of the 2020 Rule is the clear guidance that it provides to regulated parties. Not only does it clearly identify the general types of control that will render one company the joint employer of another's workers, it also provides specific examples with respect to each essential employment term. For example, with respect to “wages,” the 2020 Rule provides that an employer exercises direct and immediate control if it determines the wage rate paid to another employer's individual employees or job classifications, but not if it enters into a cost-plus contract with another company. Further, with respect to the essential term of “direction,” the 2020 Rule provides that an entity exercises direct and immediate control by assigning particular employees their individual work schedules, positions, and tasks, but not if it merely sets the schedule for completing a project or describes the work to be accomplished on a project. The 2020 Rule provides similar examples for each of the other six “essential” terms. And the 2020 Rule makes clear that like reserved and indirect control over essential terms, control over non-essential mandatory subjects of bargaining can be probative of joint-employer status but is insufficient, standing alone, to establish a joint-employer relationship.

Reasons for Our Dissent

We dissent from the majority's decision to engage in rulemaking in this area at this time because, for the reasons stated above, there is no valid justification for doing so, particularly a mere two-and-a-half years after the 2020 Rule was promulgated. We further dissent from the majority's NPRM because the proposed rule is fundamentally flawed and inconsistent with the common law and the policies of the Act for the reasons stated below. The proposed rule is sufficiently flawed that a decision to adopt it would be arbitrary and capricious. For the same reasons, any revised rule that could be permissibly based on it would be arbitrary and capricious as well.

A. The Proposed Rule Is Arbitrary and Capricious Because It Fails To Provide Meaningful Guidance

The choice between rulemaking and adjudication is left to the Agency's informed discretion in the first instance.^[78] In either circumstance, however, the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., establishes standards that Federal agencies must follow. Specifically, the APA prohibits administrative agencies from acting arbitrarily and capriciously. In this regard, the Supreme Court has explained that the APA requires the agency to “provide reasoned explanation for its action . . . . An agency may not, for example, depart from a prior policy sub silentio. . . . And of course the agency must show that there are good reasons for the new policy.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009) (internal citation omitted). More recently, the Supreme Court succinctly held that “[t]he APA's arbitrary-and-capricious standard requires that agency action be reasonable and reasonably explained.” FCC v. Prometheus Radio Project, __ U.S. __, 141 S. Ct. 1150, 1158 (2021). The proposed rule fails this test.

The majority justifies their decision to engage in rulemaking here by claiming that the proposed rule will, among other things, establish “a definite, readily available standard [that] will assist employers and labor organizations in complying with the Act” and “reduce uncertainty and litigation over the basic parameters of joint-employer status” compared to determining joint-employer status through adjudication. But the proposed rule fails to achieve these goals. It offers no greater certainty or predictability than adjudication because it expressly contemplates that joint-employer status will be determined through adjudication under the common law, not under the provisions of the proposed rule, in most if not all cases. In this respect, it will also provide markedly less guidance to parties than does the 2020 Rule.

Absent any rule whatsoever, joint-employer status would be determined through case-by-case adjudication applying the common law of agency.^[79] Rather than specify how the common-law standard will be applied in determining joint-employer status, however, the proposed rule simply incorporates it by reference in no fewer than three places. Section 103.40(a) of the proposed rule provides that “an employer, as defined by section 2(2) of the National Labor Relations Act (the Act), is an employer of particular employees, as defined by section 2(3) of the Act, if the employer has an employment relationship with those employees under common-law agency principles.” Section 103.40(b) of the proposed rule provides that “[w]hether an employer possesses the authority to control or exercises the power to control one or more of the employees' terms and conditions of employment is determined under common-law agency principles.” And § 103.40(f) of the proposed rule provides that “[e]vidence of an employer's control over matters that are immaterial to the existence of an employment relationship under common-law agency principles or control over matters that do not bear on the employees' essential terms and conditions of employment is not relevant to the determination of whether the employer is a joint employer.” Determinations of joint-employer status under each of these provisions will require adjudication under the common law, since the proposed rule by its terms provides no other guidance. This is precisely how the determinations would be made if there were no rule at all.^[80]

Moreover, the proposed rule incorporates “common-law agency principles” but offers no guidance whatsoever as to the meaning of that term. Does the proposed rule incorporate the Restatement of Agency? If so, which of the three Restatements is being incorporated? Do “common-law agency principles” include court decisions applying the common law? If so, which ones? Does a decision by a single court count, even if most other courts disagree? The proposed rule does not answer or even acknowledge any of these questions, much less provide a reasonable explanation for failing to do so. See FCC v. Prometheus Radio Project, 141 S. Ct. at 1158 (“The APA's arbitrary-and-capricious standard requires that agency action be reasonable and reasonably explained.”).

Another weakness in the proposed rule is the uncertainty it would inject into the identification of “essential” terms and conditions of employment. Where the 2020 Rule provided an exhaustive list, the proposed rule takes a “broad, inclusive” ( i.e., vague) approach. The text of the proposed regulation provides a non-exhaustive list of “essential” subjects without providing any guidance on how regulated parties (or the Board) could determine whether an unlisted subject is “essential.” The proposed rule compounds that uncertainty by suggesting that whether a particular subject is “essential” may depend on the particular industry involved, and further, that the category of “essential” terms may change over the course of time.

In Browning-Ferris Industries of California, Inc. v. NLRB, the D.C. Circuit faulted the BFI Board for failing to delineate what terms and conditions are “essential” to make collective bargaining “meaningful” and instead simply declaring that it would adhere to an “ `inclusive' and `non-exhaustive' approach.” 911 F.3d at 1221-1222 (citation omitted). In remanding the case to the Board, the D.C. Circuit articulated its trust that, before finding a joint-employer relationship, the Board “would not neglect to . . . explain which terms and conditions are `essential' to permit `meaningful collective bargaining,' ” id. at 1222—referring, in that last phrase, to the second step of the BFI standard.^[81] Our colleagues' response? They keep BFI' s “inclusive” and “non-exhaustive” approach to “essential” terms and conditions, but they evade—for the time being—the task of furnishing the explanation the D.C. Circuit requires by tossing out the second step of the BFI standard altogether and declaring that “any required bargaining under the new standard will necessarily be meaningful.” Whether this solution has legs remains to be seen. Although the D.C. Circuit did not expressly endorse BFI' s second step, presumably the court would not have instructed the Board to explain that step more fully on remand if it deemed it superfluous to begin with.

The proposed rule is a step backward from the 2020 Rule in all these respects. As noted above, the 2020 Rule specified the factors to be considered in making a joint-employer determination and explained how they relate to each other. This permitted parties to determine whether a joint-employer relationship would be found based on the text of the rule itself, without any need to resort to Restatements of Agency, precedent applying the common law, or any other source to make that determination because the 2020 Rule itself reflected the boundaries established by the common law. It also specified the terms or conditions of employment that would be considered essential in determining joint-employer status. For all these reasons, the 2020 Rule indisputably provides parties with greater certainty and predictability than they would have if joint-employer status were decided by adjudication. The proposed rule, on the other hand, does not.

While administrative agencies have the authority to revise or amend previously promulgated rules, the APA requires the agency to “provide reasoned explanation for its action . . . . [and] show that there are good reasons for the new policy.” FCC v. Fox Television Stations, Inc., 556 U.S. at 515 (internal citation omitted). Here, our colleagues fail to acknowledge that their proposed rule provides less guidance for the regulated community than the 2020 Rule. Nor have they shown that there are “good reasons” for replacing a clear, well-defined, and comprehensive rule with one that simply sets employers, employees, and unions adrift in a sea of common-law agency precedent, just as if there were no joint-employer rule at all. For this reason as well, the proposed rule is arbitrary and capricious. Id.

B. The Proposed Rule Is Contrary to the Common Law

The drastic changes our colleagues propose making to existing law also do not find support in the common-law standards they claim to endorse. They assert that the Act's policies “make it appropriate for the Board to give determinative weight to the existence of a putative joint employer's authority to control the essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any exercise of such control is direct or indirect.” However, they fail to cite a body of court precedent holding that a joint-employer relationship—whether under the common law or in the specific context of the National Labor Relations Act—may be based solely on a never-exercised contractual reservation of right to control or on indirect control of or impact on employees' essential working conditions.

Contrary to our colleagues' suggestion, Greyhound Corp., 153 NLRB 1488 (1965), does not support their view that a joint-employer relationship may be based exclusively on a never-exercised contractual reservation of a right to control and/or indirect control. In that case, the Board found that Greyhound was a joint employer of its cleaning contractor's employees based in part on Greyhound's actual exercise of substantial direct and immediate control over the employees' essential terms and conditions of employment. Specifically, the Board relied on the fact that Greyhound had actually engaged in “detailed supervision” of the employees on a day-to-day basis regarding the manner and means of their performance. Id. at 1496. Also, the Board relied on the fact that Greyhound had actually prompted the discharge of one of the contractor's employees whom Greyhound had felt was unsatisfactory. Id. at 1491 fn. 8. To be sure, the Board also gave some weight to provisions in the business contract between Greyhound and the contractor. That contract granted Greyhound the right to specify the “exact manner and means” through which the employees' work would be accomplished, control their wages, set their schedules, and assign employees to perform the work. Id. at 1495-1496. But the Board specifically stated that “[t]he joint employer finding herein is premised on the common control exercised by Greyhound and [the cleaning contractor] over the employees.” Id. at 1492 (emphasis added). And the Board explained that Greyhound had “reserved to itself, both as a matter of express contractual agreement and in actual practice, rights over these employees which are consistent with its status as their employer along with [the cleaning contractor].” Id. at 1495 (emphasis added). In short, Greyhound supports the 2020 Rule, not the proposed rule.^[82]

In an earlier case related to Greyhound, the Supreme Court held that a Federal district court lacked subject-matter jurisdiction to enjoin the Board from conducting a representation election based on the plaintiff's challenge to the Board's joint-employer determination in the representation proceeding. Boire v. Greyhound Corp., 376 U.S. 473 (1964). While the Court there did not rule directly on the joint-employer standard, it observed that the Board had found Greyhound and the cleaning contractor constituted a joint employer “because they had exercised common control over the employees.” Id. at 475. The Court further stated that “whether Greyhound possessed sufficient indicia of control to be an `employer' is essentially a factual issue.” Id. at 481. Accordingly, Boire v. Greyhound offers no support for the proposed rule.

The majority's proposed rule also finds no support in NLRB v. Browning-Ferris Industries of Pennsylvania, Inc., 691 F.2d at 1117. There, the Third Circuit set forth the “correct standard” as follows: “[W]here two or more employers exert significant control over the same employees—where from the evidence it can be shown that they share or co-determine those matters governing essential terms and conditions of employment—they constitute `joint employers' within the meaning of the NLRA.” Id. at 1124 (emphasis added).^[83] Applying that standard, the court found that the operator of a refuse site (BFI) was a joint employer of drivers directly employed and supplied by its trucking contractors. The court relied on BFI's actual exercise of substantial direct and immediate control over the drivers' essential terms and conditions of employment. Specifically, BFI possessed and exercised the right to hire and fire the drivers at issue. Id. at 1120, 1124. Also, BFI and the trucking contractors “together determined the drivers' compensation and shared in the day to day supervision of the drivers.” Id. at 1125. On that record, the Third Circuit found that substantial evidence “support[ed] the Board's finding that BFI exerted significant control over the work of the drivers,” and it therefore affirmed the Board's joint-employer conclusion. Id. at 1125 (emphasis added). The Third Circuit did not hint, much less hold, that an entity shares or codetermines matters governing essential terms and conditions of employment of a separate employer's employees without having actually exercised control over those terms and conditions—on its own or in collaboration with the undisputed employer—by hiring, discharging, disciplining, supervising, or directing them or by setting their wages, benefits, or hours of work.

Our colleagues also mistakenly rely on independent-contractor-or-employee cases to support their proposed drastic changes to the Board's joint-employer standard. To be sure, the courts have stated that a worker is an employee, not an independent contractor, if an employer possesses a “right to control” her manner and means of performance, regardless of whether that right is exercised. In determining whether an employer possesses a “right to control” in that context, courts consider a variety of factors, which the Supreme Court summarized in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989).^[84] But, as referenced above, the D.C. Circuit explained in Browning-Ferris v. NLRB that the common-law independent-contractor standard and joint-employer standard are different because the joint-employer standard has a crucial second step, which asks, who is exercising control, when, and how. 911 F.3d at 1215. As the court explained, “using the independent-contractor test exclusively to answer the joint-employer question would be rather like using a hammer to drive in a screw: it only roughly assists the task because the hammer is designed for a different purpose.” Id. Our colleagues' proposed rule simply disregards the second step of the common-law joint-employer standard identified by the D.C. Circuit. It would eliminate any requirement of actual exercise of control and thus render immaterial “how” any control is exercised (directly or indirectly). Therefore, the proposed rule is inconsistent with the common law for this reason as well.

C. The Proposed Rule Misleadingly Claims To Return to the BFI Standard

Our colleagues say that they are proposing “to rescind [the 2020 Rule] and replace it with a new rule that incorporates the BFI standard.” This is not so. The majority's proposed rule ventures into territory the BFI Board steered clear of. It would not merely return the Board to the BFI standard but would implement a standard considerably more extreme than BFI. As shown below, the proposed rule's expansions of joint-employer status are contrary to the common law and the policies of the Act.

First, although the BFI majority opened the door to finding joint-employer status, on the facts of a particular case, based solely on indirect control or a never-exercised reserved right to control,^[85] they stopped short of declaring these dispositive of joint-employer status as a matter of law.^[86] Our colleagues' proposed rule does not. Section 103.40(b) of the proposed rule provides that employers are joint employers if they “share or codetermine those matters governing employees' essential terms and conditions of employment,” and § 103.40(c) states that “[t]o `share or codetermine those matters governing employees' essential terms and conditions of employment' means for an employer to possess the authority to control (whether directly, indirectly, or both), or to exercise the power to control (whether directly, indirectly, or both), one or more of the employees' essential terms and conditions of employment” (emphasis added). And if that isn't clear enough, § 103.40(e) of the proposed rule states: “Possessing the authority to control is sufficient to establish status as a joint employer, regardless of whether control is exercised. Exercising the power to control indirectly is sufficient to establish status as a joint employer, regardless of whether the power is exercised directly” (emphasis added).

The proposed rule also abandons BFI' s second step, which required proof that “the putative joint employer possesses sufficient control over employees' essential terms and conditions of employment to permit meaningful collective bargaining.” 362 NLRB at 1600. Our colleagues thus repudiate the BFI Board's view that in some cases, a putative joint employer's degree of control over the terms and conditions of employment of another employer's employees will be insufficient to warrant placing the putative joint employer at the bargaining table, and accordingly that it would be contrary to the policies of the Act to find a joint-employer relationship in those circumstances. 362 NLRB at 1610-1611, 1614. Instead, our colleagues simply assert that where “a putative joint employer possesses the authority to control or exercises the power to control employees' essential terms and conditions of employment, any required bargaining under the new standard will necessarily be meaningful.” The majority offers no support whatsoever for this step. They simply declare that it must be so.

The majority's omission of BFI' s “meaningful collective bargaining” inquiry contradicts the D.C. Circuit's decision in Browning-Ferris Industries of California, Inc. v. NLRB, supra. There, the D.C. Circuit faulted the Board for failing to apply the second step of the BFI standard and declared that the Board must explain how a putative joint-employer's control would result in “meaningful collective bargaining” before it could find a joint-employer relationship. Presumably, the court would not have remanded for that purpose if the inquiry were unnecessary to the joint-employer determination.

In our view, the majority's assumption that any bargaining required under their newly-fashioned standard will necessarily be meaningful is also patently unreasonable. It bears emphasis that joint-employer bargaining requires separate entities to bargain together. Such bargaining will be unworkable unless those entities' interests are sufficiently aligned to permit them to bargain together, rather than against, each other. Moreover, it makes no sense to force an entity to participate in collective bargaining where its influence over the terms and conditions of employment of another employer's employees is too attenuated to make its participation meaningful, and it is unfair to impose unfair labor practice liability on that entity if it fails or refuses to do so. Nevertheless, the proposed rule would require just that, even where a putative joint employer has never exercised a reserved right to control any one term or condition of employment our colleagues would deem essential—including where that employment term has never before been so deemed but is discovered to be essential in the case itself.^[87] It is unlikely, to say the least, that bargaining on the basis of so tenuous a relationship will be either meaningful or productive.

It is difficult to imagine a better recipe for injecting chaos into the practice and procedure of collective bargaining that the majority claims to promote. This is contrary to the national labor policy that Congress established, which aims to “achiev[e] industrial peace by promoting stable collective-bargaining relationships.” Auciello Iron Works, Inc. v. NLRB, 517 U.S. 781, 790 (1996) (emphasis added).^[88] Moreover, collective bargaining was intended by Congress to be a process that could conceivably produce agreements. See, e.g., NLRB v. Insurance Agents' International Union, 361 U.S. 477, 485 (1960) (Congress intended collective bargaining to be “a process that look[s] to the ordering of the parties' industrial relationship through the formation of a contract.”); H.J. Heinz Co. v. NLRB, 311 U.S. 514, 523 (1941) (The object of collective bargaining under the Act is “an agreement between employer and employees as to wages, hours and working conditions.”). There is nothing stable about the collective-bargaining relationships the proposed rule would create, nor is there any likelihood that those relationships would result in an agreement.

D. The Proposed Rule Is Not Required To Address Health and Safety Matters

Contrary to the majority's wholly unsupported suggestion, the 2020 Rule does not turn a blind eye to a putative joint employer's control over health and safety matters. To be sure, the 2020 Rule does require that an entity possess and exercise direct and immediate control over one or more essential terms or conditions of employment, as defined by the Rule, before joint-employer status may be found, and health and safety matters are not one of those essential terms and conditions of employment. As noted above, however, the 2020 Rule also specifically states that “the entity's control over mandatory subjects of bargaining other than the essential terms and conditions of employment is probative of joint-employer status, but only to the extent 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.” As such, control over health and safety matters is relevant to joint-employer status under the 2020 Rule.

We therefore emphatically reject the majority's unsupported assertion that “[t]he shortcomings of the 2020 Rule's exhaustive list of essential terms and conditions of employment (which did not include workplace health and safety) were revealed during the COVID-19 pandemic.” While the proposed rule cites no source for this claim, it is a matter of public record that this is one of the allegations in the complaint filed by the Service Employees International Union in their pending lawsuit to invalidate the 2020 Rule.^[89] It is the obligation of the Board to defend against that lawsuit, not to effectively support it by publicly endorsing the plaintiff's allegations.

There is, moreover, no merit to this reckless charge. Not one example has been cited in which a union's inability to bargain with a putative joint employer of employees it represents has adversely affected any employee's health or safety for any reason, much less because of the COVID-19 pandemic. Nor is it at all evident why a union would be unable to secure needed health and safety measures, including protections against COVID-19, through bargaining with the entity that is the undisputed employer of the employees it represents without also including a putative joint employer, much less that the differences between the 2020 Rule and the proposed rule would make any difference in this regard.

Among other things, the unlikely scenario posited by the majority would involve an undisputed employer that contracted away its control over its employees' health and safety despite its established legal obligation to provide a safe workplace and the liability that it would incur if it breached that duty.^[90] Even in that implausible scenario, the differences between the 2020 Rule and the proposed rule would be material only if the putative joint employer controlled health and safety but none of the essential terms and conditions of employment specified in the 2020 Rule. Our colleagues offer no reason to believe that this situation has ever occurred.

Conclusion

For all these reasons, we dissent from this Notice of Proposed Rulemaking to rescind and replace the 2020 Rule. We would leave the 2020 Rule in place and move the U.S. District Court for the District of Columbia to lift the stay on the SEIU's challenge to it. We would defend the 2020 Rule, and we are confident that it would be upheld by the courts as within the boundaries set by common-law agency principles. Of course, given that a second round of rulemaking will proceed, we shall consider with open minds all public comments, any developments brought to our attention, and the considered views of our colleagues.

VI. Regulatory Procedures

Regulatory Flexibility Act

A. Initial Regulatory Flexibility Analysis

The Regulatory Flexibility Act of 1980 (“RFA”), 5 U.S.C. 601, et seq., requires agencies to “review rules to assess and take appropriate account of the potential impact on small businesses, small governmental jurisdictions, and small organizations, as provided by the [RFA].” ^[91]

It requires agencies promulgating proposed rules to prepare an Initial Regulatory Flexibility Analysis (“IRFA”) and to develop alternatives wherever possible, when drafting regulations that will have a significant impact on a substantial number of small entities. However, an agency is not required to prepare an IRFA for a proposed rule if the agency head certifies that, if promulgated, the rule will not have a significant economic impact on a substantial number of small entities.^[92] The RFA does not define either “significant economic impact” or “substantial number of small entities.” ^[93] Additionally, “[i]n the absence of statutory specificity, what is `significant' will vary depending on the economics of the industry or sector to be regulated. The agency is in the best position to gauge the small entity impacts of its regulations.” ^[94]

Although the Board believes that it is unlikely that the proposed rule will have a significant economic impact on a substantial number of small entities, it seeks public input on this hypothesis and has prepared an IRFA to provide the public the fullest opportunity to comment on the proposed rule. An IRFA describes why an action is being proposed; the objectives and legal basis for the proposed rule; the number of small entities to which the proposed rule would apply; any projected reporting, recordkeeping, or other compliance requirements of the proposed rule; any overlapping, duplicative, or conflicting Federal rules; and any significant alternatives to the proposed rule that would accomplish the stated objectives, consistent with applicable statutes, and that would minimize any significant adverse economic impacts of the proposed rule on small entities.^[95] Descriptions of this proposed rule, its purpose, objectives, and legal basis are contained earlier in the Summary and Supplemental Information sections and are not repeated here.

As with the Board's 2020 Rule on Joint Employer Status under the Act, we assume that the costs of compliance for most small entities will be minimal. We assume for purposes of this analysis all small employers and small entity labor unions will incur a low cost of compliance with the rule, related to reviewing and understanding the substantive changes to the joint-employer standard. The Board welcomes comments from the public that will shed light on potential compliance costs unknown to the Board or on any other part of this IRFA.

B. Description and Estimate of Number of Small Entities to Which the Rule Applies

In order to evaluate the impact of the proposed rule, the Board first identified the entire universe of businesses that could be impacted by a change in the joint-employer standard. According to the United States Census Bureau, there were 6,102,412 business firms with employees in 2019.^[96] Of those, the Census Bureau estimates that about 6,081,544 were firms with fewer than 500 employees.^[97] While this proposed rule does not apply to employers that do not meet the Board's jurisdictional requirements, the Board does not have the data to determine the number of excluded entities.^[98] Accordingly, the Board assumes for purposes of this analysis that all of the 6,081,544 small business firms could be impacted by the proposed rule and will incur the one-time compliance cost of reading and familiarizing themselves with the text of the new rule.^[99]

The Board also recognizes that businesses that are involved in the exchange of employees or operational control, or labor unions that represent employees at such businesses, may have a particular interest in the rule and are most likely to incur the compliance costs discussed herein. Therefore, as it did in its 2018 IRFA, the Board is emphasizing the relevance of the rule to entities in the following five categories: (1) contractors/subcontractors; (2) temporary help service suppliers; (3) temporary help service users; (4) franchisees; and (5) labor unions.^[100]

(1) Businesses that enter contracts or subcontracts to receive a wide range of services that may satisfy primary business objectives or solve discrete problems that they are not qualified to address often share workspaces and control over workers, rendering their relationships potentially subject to application of the Board's joint-employer standard. The Board does not have the means to identify precisely how many businesses are impacted by contracting and subcontracting within the U.S. or how many contractors and subcontractors would be small businesses as defined by the SBA. In its 2018 IRFA, the Board solicited input on the number of contractors and subcontractors that qualify as small businesses but received no responsive comments.^[101]

(2) Temporary help service providers (NAICS #561320) are primarily engaged in supplying workers to supplement a client-employer's workforce. To be defined as a small business temporary help service supplier by the SBA, the entity must generate receipts of less than $30 million annually.^[102] In 2017, there were 14,343 temporary service supplier firms in the U.S.^[103] Of these temporary service supplier firms, 13,384 had receipts of $29,999,999 or less. Therefore, according to SBA standards, 93.3% of all temporary help service supplier firms are small businesses.

(3) Entities that use temporary help services in order to staff their businesses are widespread throughout many types of industries. The Census Bureau's 2020 Annual Business Survey revealed that of the 2,687,205 respondent firms with paid employees, 94,930 of those firms obtained staffing from temporary help services in that calendar year.^[104] This survey provides the only gauge of employers that obtain staffing from temporary help services and the Board is without the means to estimate what portion of those are small businesses as defined by the NAICS. For purposes of this IRFA, the Board assumes that all 94,930 users of temporary services are small businesses.

(4) Franchising is a method of distributing products or services in which a franchisor lends its trademark or trade name and a business system to a franchisee, which pays a royalty and often an initial fee for the right to conduct business under the franchisor's name and system.^[105] Franchisors generally exercise some operational control over their franchisees, which potentially renders the relationship subject to application of the Board's joint-employer standard. The Board does not have the means to identify precisely how many franchisees operate within the U.S., or how many are small businesses as defined by the SBA. The Census Bureau's 2020 Annual Business Survey revealed that, of the 130,492 firms that operated a portion of their business as a franchise, 125,989 had fewer than 500 paid employees.^[106] Based on this available data and the fact that the 500-employee threshold is commonly used to describe the universe of small employers, we assume that 125,989 (96.5% of total) are small businesses.

(5) Labor unions, as defined by the NLRA, are entities “in which employees participate and which exist for the purpose . . . of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.” ^[107] By defining which employers are joint employers under the NLRA, the proposed rule impacts labor unions generally, and more directly may affect those labor unions that organize the specific business sectors discussed above. The SBA's “small business” standard for “Labor Unions and Similar Labor Organizations” (NAICS #813930) is $14.5 million in annual receipts.^[108] In 2017, there were 13,137 labor union firms in the U.S.^[109] Of these firms, at least 12,875 labor union firms (98% of total) had receipts of under $10 million and are definitely small businesses according to SBA standards. Since the Board cannot determine how many of the 89 labor union firms with receipts between $10,000,000 and $14,999,999 fall below the $14.5 million annual receipt threshold, it will assume that these are all small businesses as defined by the SBA. For the purposes of the IRFA, the Board assumes that 12,964 labor union firms (98.7% of total) are small businesses.

Based on the foregoing, the Board assumes there are 13,384 temporary help supplier firms, 94,930 temporary help user firms, 125,989 franchise firms, and 12,964 union firms that are small businesses. Therefore, among these four categories of employers that are likely most interested in the proposed rule, 247,267 business firms are assumed to be small businesses as defined by the SBA.^[110] We believe that these small businesses, and small businesses regularly engaged in contracting/subcontracting, have a general interest in the rule and would be most likely impacted by the one-time compliance cost of reviewing and understanding the rule, as described below. But employers will only be significantly impacted when they are alleged to be a joint employer in a Board proceeding. Given our historic filing data, this number is very small relative to the number of small entities in these five categories.

A review of the Board's representation petitions and unfair labor practice (ULP) charges provides a basis for estimating the frequency that the joint-employer issue comes before the NLRB. During the four-year period between January 1, 2018 and December 31, 2021, 75,343 representation and unfair labor practice cases were initiated with the Agency. In 772 of those filings, the representation petition or ULP charge asserted a joint-employer relationship between at least two employers.^[111] Accounting for repetitively alleged joint-employer relationships in these filings, we identified 467 separate joint-employer relationships involving an estimated 934 employers.^[112] Accordingly, the joint-employer standard most directly impacted approximately .015% of all 6,102,412 business firms (including both large and small businesses) over the four-year period.

C. Recordkeeping, Reporting, and Other Compliance Costs

The RFA requires the Agency to determine the amount of “reporting, recordkeeping and other compliance requirements” imposed on small entities.^[113] The United States Court of Appeals for the District of Columbia Circuit has explained that this provision requires an agency to consider direct burdens that compliance with a new regulation will likely impose on small entities.^[114]

At the outset, it is critical to understand that entities may lawfully choose to associate as joint employers under Federal law. Joint-employer status under the NLRA is relevant only to apportioning liability and bargaining obligations as a result of NLRB unfair labor practice and representation cases, not to whether such liabilities and obligations exist in the first instance. While entities may choose to rearrange their business relationships to minimize risk of joint-employer status, they may also choose not to. Accordingly, because the proposed rule would not make any form of business arrangement unlawful, it appears to impose no direct compliance costs other than those for reading and understanding the rule.

We therefore believe that the proposed rule imposes no capital costs for equipment needed to meet the regulatory requirements; no direct costs of modifying existing processes and procedures to comply with the proposed rule; no lost sales and profits directly resulting from the proposed rule; no changes in market competition as a direct result of the proposed rule and its impact on small entities or specific submarkets of small entities; no extra costs associated with the payment of taxes or fees associated with the proposed rule; and no direct costs of hiring employees dedicated to compliance with regulatory requirements.^[115] And, like the current rule, the proposed rule does not impose any new information collection or reporting requirements on small entities.

For the purposes of this IRFA, the Board assumes that small entities, with particular emphasis on those small entities in the five categories with special interest in the proposed rule, will be interested in reviewing the rule to understand the restored common-law joint-employer standard. We estimate that a human resources or labor relations specialist at a small employer who undertook to become generally familiar with the proposed changes may take at most one hour to read the text of the rule and the supplementary information published in the Federal Register .^[116] It is also possible that a small employer may wish to consult with an attorney, which we estimated to require one hour as well.^[117] Using the Bureau of Labor Statistics' estimated wage and benefit costs, we have assessed these labor costs to be between $147.24 and $151.51.^[118]

Labor unions would also review the rule, similarly incurring an hour of legal fees. ($99.64, see fn. 118.) Like labor compliance professionals or employer labor-management attorneys, union counsels would only require one hour of legal time because they would already be familiar with the pre-2020 standard for determining joint-employer status under the Act and common-law principles.

The Board is not inclined to find the estimated $151.51 cost to small employers and the estimated $99.64 cost to small labor unions for review to be significant within the meaning of the RFA. In making this finding, one important indicator is the cost of compliance in relation to the revenue of the entity or the percentage of profits affected.^[119] Other criteria to be considered are the following:

—Whether the rule will cause long-term insolvency, i.e., regulatory costs that may reduce the ability of the firm to make future capital investment, thereby severely harming its competitive ability, particularly against larger firms;

—Whether the cost of the proposed regulation will (a) eliminate more than 10 percent of the businesses' profits; (b) exceed one percent of the gross revenues of the entities in a particular sector, or (c) exceed five percent of the labor costs of the entities in the sector.^[120]

The minimal cost to read and understand the rule will not generate any such significant economic impacts.

Since the only quantifiable impact that we have identified is the $151.51 or $99.64 that may be incurred in reviewing and understanding the rule, we do not believe, subject to comments, that the proposed rule will have a significant economic impact on a substantial number of small entities.

D. Duplicate, Overlapping, or Conflicting Federal Rules

The Board has not identified any Federal rules that conflict with the proposed rule. It welcomes comments that suggest any potential conflicts not noted in this section.

E. Alternatives Considered

Pursuant to 5 U.S.C. 603(c), agencies are directed to look at “any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities.” The SBA has described this step as “[t]he keystone of the IRFA,” because “[a]nalyzing alternatives establishes a process for the agency to evaluate proposals that achieve the regulatory goals efficiently and effectively without unduly burdening small entities, erecting barriers to competition, or stifling innovation.” ^[121] The Board considered two primary alternatives to the proposed rules.

First, the Board considered taking no action. As explained in section II above, the Board believes, subject to comments, that the 2020 Rule wrongly departs from the common-law definition of employer. The Board is additionally concerned that the 2020 Rule does not adequately reflect important background legal principles and the Act's public policy of “encouraging the practice and procedure of collective bargaining” and maximizing employees' “full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.” ^[122] Thus, for the reasons stated in Sections II and III above, the Board believes it necessary to revisit the 2020 Rule. Consequently, we reject maintaining the status quo.

Second, the Board considered creating exemptions for certain small entities, but is inclined to believe, subject to comments, that doing so would be both contrary to judicial precedent and impracticable. As noted previously, the Supreme Court and District of Columbia Circuit have explained that common-law agency principles apply when construing statutes, like the Act, whose terms are otherwise undefined in statute.^[123] The Board is therefore bound to assess the employment relationship under common-law rules and is inclined to believe that the Act and judicial precedent would not provide strong support for the development of exceptions to longstanding common-law principles solely for small entities.^[124] Moreover, even if the Act would permit such an exemption, the Board believes that exception would swallow the rule, given that such a large percentage of employers and unions would be exempt under the SBA definitions. We further agree with the observations regarding a small-entity exemption that the Board made in the 2020 Rule, which are equally applicable now, that as this rule often applies to relationships involving a small entity (such as a franchisee) and a large enterprise (such as a franchisor), exemptions for small businesses would decrease the application of the rule to larger businesses as well, potentially undermining the policy behind this rule. Additionally, given the very small quantifiable cost of compliance, it is possible that the burden on a small business of determining whether it fell within a particular exempt category might exceed the burden of compliance. Congress gave the Board very broad jurisdiction, with no suggestion that it wanted to limit coverage of any part of the Act to only larger employers.^[125] As the Supreme Court has noted, “[t]he [NLRA] is federal legislation, administered by a national agency, intended to solve a national problem on a national scale.” ^[126]

85 FR 11235. We therefore rejected a small entity exemption as an effective alternative to the proposed rule. The Board welcomes comments on other alternatives to consider that would reduce the regulatory burden on small entities while carrying out the mission of the Act in conformance with the statutory language and judicial precedent.

Paperwork Reduction Act

The NLRB is an agency within the meaning of the Paperwork Reduction Act (PRA). 44 U.S.C. 3502(1) and (5). This Act creates rules for agencies when they solicit a “collection of information,” 44 U.S.C. 3507, which is defined as “the obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties or the public, of facts or opinions by or for an agency, regardless of form or format.” 44 U.S.C. 3502(3)(A). The PRA only applies when such collections are “conducted or sponsored by those agencies.” 5 CFR 1320.4(a).

The proposed rule does not involve a collection of information within the meaning of the PRA; rather, it adopts a judicially approved standard for determining joint-employer status under the Act. Outside of administrative proceedings (discussed below), the proposed rule does not require any entity to disclose information to the NLRB, other government agencies, third parties, or the public.

The only circumstance in which the proposed rule could be construed to involve disclosures of information to the Agency, third parties, or the public is when an entity's status as a joint employer has been alleged in the course of the Board's administrative proceedings. However, the PRA provides that collections of information related to “an administrative action or investigation involving an agency against specific individuals or entities” are exempt from coverage. 44 U.S.C. 3518(c)(1)(B)(ii). A representation proceeding under section 9 of the Act, as well as an investigation into an unfair labor practice under section 10 of the Act, are administrative actions covered by this exemption.^[127] The Board's decisions in these proceedings are binding on and thereby alter the legal rights of the parties to the proceedings and thus are sufficiently “against” the specific parties to trigger this exemption.^[128]

For the foregoing reasons, the proposed rule does not contain information collection requirements that require approval by the Office of Management and Budget under the PRA.

List of Subjects in 29 CFR Part 103

• Colleges and universities
• Election procedures
• Health facilities
• Jurisdictional standards
• Labor management relations
• Music
• Remedial orders
• Sports

The Proposed Rule

For the reasons discussed in the preamble, the Board proposes to amend 29 CFR part 103 as follows:

PART 103—OTHER RULES

1. The authority citation for part 103 continues to read as follows:

Authority: 29 U.S.C. 156, in accordance with the procedure set forth in 5 U.S.C. 553.

Subpart D—Joint Employers

2. Revise § 103.40 to read as follows:

Footnotes

The Atlanta Opera, Inc. and Make-Up Artists and Hair Stylists Union, Local 798, IATSE.  Case 10– RC–276292

June 13, 2023

DECISION ON REVIEW AND ORDER

BY CHAIRMAN MCFERRAN AND MEMBERS KAPLAN, WILCOX, AND PROUTY

In FedEx Home Delivery, 361 NLRB 610 (2014) (FedEx II), the Board restated and refined its approach to assessing whether workers are employees covered under Section 2(3) of the National Labor Relations Act or, instead, are independent contractors, excluded from coverage. The Board there reaffirmed longstanding principles—consistent with the previous instructions of the Supreme Court—and asserted that its inquiry would be guided by the nonexhaustive common-law factors enumerated in the Restatement (Second) of Agency, Section 220 (1958), and that “all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.”¹ The Board expressly rejected the notion—which had been endorsed by the United States Court of Appeals for the District of Columbia Circuit— that entrepreneurial opportunity for gain or loss should constitute the “animating principle” of the test.² The Board further undertook a careful and measured effort to clearly define the analytical significance of a putative contractor’s entrepreneurial characteristics—a consideration that it had previously assessed in varying formulations. To this end, the Board clarified that it would (a) give weight only to actual, not merely theoretical, entrepreneurial opportunity; and (b) consider the “full constellation of considerations that the Board has addressed under the rubric of entrepreneurialism” by asking whether the evidence tends to show that a putative independent contractor is, in fact, rendering services as part of an independent business.³

Less than 5 years later, the Board in SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019)—without public notice or an invitation to file briefs—repudiated this approach and purported to “return the Board’s independent contractor test to its traditional common-law roots.”⁴ Specifically, the Board in that case held that “entrepreneurial opportunity . . . has always been at the core of the common-law test”⁵ and, accordingly, “is a principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain.”⁶ But, as we will explain, this approach cannot be squared with Board precedent, with the common law, or with Supreme Court precedent. Indeed, any approach that purports to elevate a single factor or designate an animating principle necessarily runs counter to the Supreme Court’s admonition that “[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.”⁷

In granting the Employer’s request for review in this case, we invited the parties and interested amici to file briefs addressing the following questions:

1. Should the Board adhere to the independentcontractor standard in SuperShuttle DFW?
2. If not, what standard should replace it? Should the Board return to the standard in FedEx II, either in its entirety or with modifications?

Various parties filed briefs in response to the Board’s invitation, and the Employer and Petitioner filed responsive briefs.⁸

Having carefully reviewed the entire record, including the parties’ briefs and the amicus briefs on review, we have decided to overrule SuperShuttle and to reinstate the Board’s FedEx II standard as extant law. Applying this reinstated standard, we find that the workers at issue in this case—makeup artists, wig artists, and hairstylists who work at The Atlanta Opera—are employees under Section 2(3) of the Act and not independent contractors.

I.

Section 2(3) of the Act excludes independent contractors from statutory coverage.⁹ The starting point for independent-contractor determinations under the Act is the Supreme Court’s 1968 decision in NLRB v. United Insurance Co. of America, supra. There, the Court held that the Act incorporated the “common-law agency test . . . in distinguishing an employee from an independent contractor.”¹⁰ Upholding the Board’s determination that insurance-company “debit agents” were statutory employees (and reversing the Seventh Circuit’s contrary determination), the Court explained that:

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.  What is important is that the total factual context is assessed in light of the pertinent common-law agency principles.¹¹

In later decisions also involving application of the common-law agency test to employee-status determinations under federal statutes, the Supreme Court has been guided by the multifactor test articulated in Section 220 of the Restatement (Second) of Agency, which addresses the relationship between “masters” and “servants.”¹² To this end, Section 220(2) of the Restatement identifies a list of factors to be considered “[i]n determining whether one acting for another is a servant or an independent contractor.” It provides that:

[T]he following matters of fact, among others, are considered:

• the extent of control which, by the agreement, the master may exercise over the details of the work;
• whether or not the one employed is engaged in a distinct occupation or business;
• the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;

1. the skill required in the particular occupation;
2. whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

• the length of time for which the person is employed;
• the method of payment, whether by the time or by the job;
• whether or not the work is a part of the regular business of the employer;
• whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business.

No Supreme Court decision has cast doubt on the continuing viability of United Insurance or the later cases that look to the Restatement for authoritative guidance. In fact, the District of Columbia Circuit has more recently affirmed that

This court too has relied specifically on Section 220 of the Restatement (Second) of Agency to determine whether a worker is an employee or independent contractor under traditional common-law principles in National Labor Relations Act cases . . . . Accordingly, controlling precedent makes the Restatement (Second) of Agency a relevant source of traditional common-law agency standards in the National Labor Relations Act context.¹³

The ^[1]Board’s seminal modern independent-contractor case is Roadway Package System, 326 NLRB 842 (1998), a unanimous full-Board decision that endorsed the use of the open-ended, multifactor Restatement test. There, relying heavily on the Supreme Court’s decision in United Insurance, the Board (1) rejected the argument that “those factors which do not include the concept of ‘control’ are insignificant when compared to those that do”;¹⁴ (2) correctly noted that the Restatement “specifically permitt[ed] the consideration of . . . relevant factors” other than those identified by the Restatement;^[2]and (3) concluded that the “common-law agency test encompasses a careful examination of all factors and not just those that involve a right of control.”^[3]

In addition to those factors specifically enumerated in the Restatement, the Board has historically considered whether putative contractors have a “significant entrepreneurial opportunity for gain or loss.”^[4] Related to this particular question, the Board has assessed whether purported contractors had the ability to work for other companies,^[5] could hire their own employees,^[6] and had a proprietary interest in their work.^[7] Crucially, the Board has weighed these considerations alongside the Restatement factors without assigning to them any special significance or weight. In no case did the Board find that “entrepreneurial opportunity” was sufficient to establish independent-contractor status by itself. Indeed, the unanimous Board in Roadway expressly reaffirmed in the Supreme Court’s directive that “all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.”^[8] And the Board in that case considered whether the putative contractors had “significant entrepreneurial opportunity for gain or loss” only as one factor among the other relevant common-law factors.^[9][10]

But the District of Columbia Circuit, in a divided decision, FedEx Home Delivery v. NLRB, 563 F.3d 492 (D.C. Cir. 2009) (FedEx I), nevertheless characterized Board law as having, over time, shifted “away from the unwieldy control inquiry in favor of a more accurate proxy: whether the ‘putative independent contractors have “significant entrepreneurial opportunity for gain or loss.”’”²³ The court explained that it endorsed this shift “at the Board’s urging . . . . ”^[11] “Thus,” the panel majority announced, “while all the considerations at common law remain in play, an important animating principle by which to evaluate those factors in cases where some factors cut one way and some the other is whether the position presents the opportunities and risks inherent in entrepreneurialism.”^[12]

This description of the Board’s independent-contractor case law was not accurate, as then-Circuit Judge Garland explained in his detailed dissent.^[13] First, the Board had not treated “control” as an “animating principle” or master factor. The Roadway decision makes this plain. There, the Board rejected the argument that the Restatement factors that did not involve the right to control were relatively insignificant. Second, the Board decisions cited by the Circuit panel majority as marking the Board’s posited shift in emphasis—away from control and to “entrepreneurial opportunity”—reveal no such shift.^[14] In fact, post-Roadway Board decisions were wholly consistent (until SuperShuttle) in their emphasis on common-law agency principles, including the Restatement’s multifactor test, and a corresponding adherence to the Supreme Court’s admonition in United Insurance that “there 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.”²⁸ Significantly, the Circuit panel majority relied primarily on Board decisions—not the Restatement, the Supreme Court’s decisions, or some other source—as support for its own interpretation of the common law.

The Board’s subsequent decision in FedEx II was a direct response to the District of Columbia Circuit’s misperception that the Board had already adopted a new approach, and to the Circuit’s endorsement of that supposed shift. To this end, the FedEx II Board first reaffirmed the Board’s longstanding commitment to the principles articulated by the Supreme Court in United Insurance, to the “seminal” Roadway decision, and to the “nonexhaustive common-law factors enumerated in the Restatement (Second) of Agency.”²⁹ Second, the Board “more clearly define[d] the analytical significance of a putative independent contractor’s entrepreneurial opportunity for gain or loss, a factor that the Board has traditionally considered.”³⁰ But it expressly “decline[d] to adopt the District of Columbia Circuit’s . . . holding, insofar as it treat[ed] entrepreneurial opportunity . . . as an ‘animating principle’ of the inquiry.”³¹ 

“Entrepreneurial opportunity,” the Board held, “represents one aspect of a relevant factor that asks whether the evidence tends to show that the putative contractor is, in fact, rendering services as part of an independent business.”³² The Board carefully explained why it chose not to adopt the District of Columbia Circuit's approach, observing that this approach was not mandated by the Act, by the Supreme Court's decision in United Insurance, or by Board precedent, and that “adopting it would mean a broader exclusion from statutory coverage than Congress appears to have intended.”^[15] The Board observed, in turn, that the “Restatement makes no mention at all of entrepreneurial opportunity or any similar concept,” a “silence [that] does not rule out consideration of such a principle, but . . . cannot fairly be described as requiring it.”³⁴ Further, the Board correctly noted that the United Insurance Court’s admonition against relying on a “shorthand formula or magic phrase” weighed against the District of Columbia Circuit's approach.^[16]

In sum, the Board’s decision in FedEx II represented a carefully calibrated, precedent-based effort to both reaffirm the Board’s commitment to core common-law principles—as required by the Supreme Court—and to align the Board’s prior approach to assessing entrepreneurial characteristics with those principles.^[17] But in SuperShuttle DFW, a newly constituted Board overruled FedEx II and essentially (as well as belatedly) adopted the Circuit’s flawed view of Board law as the Board’s own position. For the reasons explained below, we overrule the SuperShuttle decision today.

We turn first to the factual background of this case.

II.

The specific issue before us is whether the workers whom the Petitioner seeks to represent—makeup artists, wig artists, and hairstylists (collectively known as stylists)—are employees of The Atlanta Opera, Inc. (the Employer), or independent contractors. On April 28, 2021, Make-up Artists and Hair Stylists Union, Local 798, IATSE (the Petitioner) filed a petition to represent the stylists. The Employer asserted that the stylists are independent contractors and therefore not covered by the Act.

A.  Operations

The Employer has planned and presented opera performances for 42 years. Tomer Zvulun, the Employer’s general and artistic director, is responsible for artistic quality, planning, and managerial duties; he reports to the Employer’s board of directors. Zvulun oversees a managing director; a chief of marketing and audience development; a chief finance officer; a chief advancement officer; a director of production; and an artistic administrator. The Employer asserted that it employs a total of 32 full-time staff members, including senior management, as well as 16 seasonal employees, including company players and studio artists. The Employer’s main venue is the John Williams Theater at the Cobb Energy Performing Arts Center in Northwest Atlanta; for each season— which runs from autumn through spring—the Employer usually offers four performances of four productions on this main stage. In addition, the Employer offers four to eight seasonal productions of smaller operas in other venues.

The Employer spends several years planning each production. Each production generally requires contributions from 40 to 90 orchestra members; carpenters and electricians who work with scenery and lighting; choristers, soloists, actors, and other performers; stage managers; dressers; and makeup artists. For each production, the Employer selects a director, who coordinates the artistic vision and selects a design team, which usually includes lighting designers, a costume designer, a set designer, a sound designer, a wig designer, and/or a makeup designer. Although the director of a specific production need not be the Employer’s artistic director, Zvulun was the director for each of the Employer’s four productions during the Fall 2020/Spring 2021 season.

B. Makeup Artists, Wig Artists and Hairstylists

For each production, the director chooses a wig and makeup designer, who is part of the director’s design team and who works closely with the lighting and costume designers to effectuate the director’s vision. The wig and makeup designer works with a wig and makeup department head, who seeks out other qualified hair, wig, and makeup artists to execute the styles for each character. Director of Production Kevin Mynatt creates a budget, including a wig and makeup budget, for each production. Mynatt discusses the budget and the design of the show with the wig and makeup designer. The wig and makeup department head then selects and hires the stylists that are needed for the production. Stylists do not work pursuant to written contracts; they agree to an hourly pay rate with the wig and makeup department head and fill out timesheets accordingly.^[18] Stylists are not on the Employer’s payroll; they are designated as vendors and may not all receive the same pay rate. The Employer does not provide benefits to the stylists, nor does it withhold taxes from their pay. The Employer requires that each stylist sign a W-9 tax form and a direct-deposit form; stylists are not given the option to sign a W-2 tax form.^[19] The Employer keeps financial records regarding the work of the stylists, but it does not keep any other records or personnel files for them. The Employer does not provide any information, training, or orientation to stylists. Stylists do not generally wear uniforms, although they are expected to wear black during productions to minimize their visibility to the audience. Stylists are not subject to the Employer’s rules and regulations, save for its infectious disease policies.

For its most recent productions, the Employer has engaged Frandresha “Brie” Hall as both its wig and makeup designer and its wig and makeup department head. (The two positions had not been combined previously.) Hall is a member of the petitioned-for unit.^[20] Unlike other stylists in the unit, Hall signed agreements with the Employer—for both positions—stating that she is an independent contractor and that “[t]he parties acknowledge that the Services being performed are outside the usual course of the business of the Company.” Hall assigns work to each of the stylists (such as assigning each stylist to cover a specific character) and schedules them accordingly. Stylists’ overall schedule is dictated by the Employer’s rehearsal and performance schedule. Hall selects stylists who are available for the entirety of a production, which generally spans 8 days of work for rehearsals and public performances; the Employer cannot control whether a particular stylist is available for any specific production. Once hired for a production, a stylist commits to a schedule for the entire course of the show. If a stylist is not available for a specific performance, Hall seeks a replacement and notifies the Employer that she is doing so. Stylists cannot hire or find their own substitutes if they are not available for a particular date.

C. Job Responsibilities

Stylists’ primary responsibility is to execute the wig, hair and makeup looks that each production requires. To this end, stylists apply makeup; prepare, fit, and fasten wigs; style performers’ natural hair; create special makeup effects (such as wounds, aging effects, or facial hair); work with the audio department to attach performers’ microphones; work with the wardrobe department to integrate wig styles with costumes; and remove the performers’ makeup, wigs, and microphones after the performance. At the Employer’s home venue, stylists work in a room in the backstage hallway. Stylists are responsible for setting up their chairs in the space; loading in equipment; setting up the tables, mirrors, peg boards, and wig stands; cleaning their stations; and locking up the wigs and equipment after the performances. Stylists are expected to arrive knowing how to do the hair, wig, and makeup work that is required for the job, and department head Hall testified that she specifically seeks stylists who have the appropriate skills and who have worked on previous productions by the Employer. Stylists’ work requires specialized knowledge of makeup, hair, and wigs for stage productions, including the appropriate way to apply makeup so that it is not washed out by theater lighting and the ability to execute and recreate various looks and styles. Hairstylists must be certified in Georgia. Some of the stylists take continuing education classes.

Stylists perform their day-to-day hair, wig, and makeup work largely free from immediate or direct supervision by the Employer. But in so doing, they are expected to effectuate Director Zvulun’s creative vision for each character. Zvulun generally communicates his directives via verbal or written notes to department head Hall, which Hall then passes to the stylists. Hall testified that she never “disregards” the Director’s instructions, and that characters’ respective looks evolve over the course of rehearsals as Zvulun provides ongoing feedback. The record includes, among others, the following examples of Zvulun’s directives to Hall:

• “Regarding [a performer’s] drag look: it should have simple, natural make-up (not Drag Race), a wig that is easily removed onstage without a wig cap.”
• “Carmen [ ] and the Flamenco Dancer [ ] should have the same color red nail polish for the show.”
• “Regarding Carmen’s . . . hair & make-up look: we would like for her to be similar in look to the Flamenco Dancer [ ]. We would like to use [the dancer’s] real hair, which will most likely mean a wig for both [performers playing] Carmen[ ].”
• “Regarding the Escamillo look: [one performer] should have hair & make-up reminiscent of Elvis; [another performer] should have hair & make-up reminiscent of Steven Tyler.”
• “Regarding Don Jose’s . . . hair: he should not have a haircut at this point. He should start the show with his hair slicked back. Then, after his exit in Scene 2, he should mess up his hair so that he looks unkempt.”
• In a Pagliacci production, a clown character’s wig and makeup should be less “clowny” or “comedy” and more “dark [and] dystopic.” (A stylist testified that “we went through various clown makeup looks to land on the right one that executed [Zvulun’s] vision.”).
• In a Porgy and Bess production, the performers look “almost sallow” under the stage lights; use “different hues and tones to counteract the lighting . . . for the show, which was a blue light.”

Zvulun also directed stylists to use more eyeliner, tighten ponytails, pull a wig up so that ribbons fit around a performer’s head, change the placement of a performer’s microphone, and ensure that blush shows above a performer’s mask.

Once stylists are informed of the desired looks, they are expected to use their skills to achieve the looks.

Based on the testimony of one stylist, Hall does not “stand over” stylists to tell them how to do “this or that,” but Hall does come by to check in after stylists are finished styling the performers to make sure that their looks are consistent with the Director’s “guidelines.” The stylists testified that the Employer provides all necessary tools and that they bring their own tools only when they prefer to do so. The Employer generally provides the makeup itself, although some performers prefer to use their own makeup; the Employer also provides prosthetics, wig clamps, wig heads, pins, brushes, hairspray, gel, shampoo, conditioner, sponges, blocking ribbons, “blood” for special effects, and makeup remover. The Employer rents wigs from Hall’s contacts in the industry.

Stylists’ hours of work on a given day are dictated entirely by the Employer’s master schedule and each production’s specific hair, wig, and makeup needs. department head Hall testified that by the time stylists are scheduled to begin wig and makeup work (i.e., during the final week of rehearsals), she already knows what times the various performers are onstage, what kind of preparations they need before going onstage, how long each type of preparation should take, and when the performers will need readjustment of their hair, makeup, or microphones between scenes. Based on that knowledge, she assigns and schedules the stylists to work with performers at specific times. All stylists generally wait until the last one has completed their work before leaving the premises. While stylists wait for others to finish, they prepare for the next show, particularly where different shows are performed on alternate nights. Director of Production Mynatt sometimes walks around after performances telling stylists that it is nearly time to leave or asking them how long it will take for them to complete their work. Stylists are eligible for, and have received, overtime pay, but their ability to earn overtime is dictated by the Employer’s needs; they cannot unilaterally choose to work more hours.

Stylists, all of whom live in the Atlanta area, are bound to the Employer for only a single production and may choose not to work on future productions without harming their chances of working again with the Employer. Although Hall prefers to work with stylists from previous productions, the Employer makes no commitment to rehire for future productions stylists it has previously used.^[21] The Employer places no restrictions on stylists’ ability to work with other performing-arts entities; the record makes clear that stylists are participants in a wider creative economy in which they routinely market and apply their skills for a variety of clients, i.e., theater, film, and private clients. Stylists may develop professional relationships with the performers in the Employer’s productions, which, in turn, may lead to outside opportunities for work, e.g., styling for other productions or photoshoots. Although stylists are free to do other jobs during the course of a production with the Employer, stylists’ time commitment on show days usually runs from 7 to 9 hours. Stylists neither receive a percentage of the Employer’s revenues from ticket sales nor sustain profits or losses based on the relative success of a production. The record does not indicate that stylists have independent access to the revenue source (i.e., ticket buyers/audience members). Stylists do not have any proprietary interest in their positions or the hair, wig, and makeup services they provide in the context of the Employer’s productions.^[22] And stylists cannot subcontract or hire anyone else to do hair, wig, and makeup work for them.

III.

On June 17, 2021, the Acting Regional Director issued a Decision and Direction of Election finding the stylists to be statutory employees. In so doing, the Acting Regional Director concluded that, viewed in its entirety, the record established that stylists do not choose where and when they will work; they have little independent authority over the details of their work; they do not supply equipment or tools; their work is part of the Employer’s regular business; they do not render services to the Employer as independent businesses; and they enjoy no entrepreneurial opportunity and take on no risk in their work for the Employer. Notably, the decision was imprecise in its application of independent-contractor principles; indeed, the Acting Regional Director cited the Board’s independent-contractor formulation in FedEx II (which had already been overruled) and did not cite SuperShuttle DFW (which represented the controlling law) at all.^[23] In accordance with Section 102.67 of the Board’s Rules and Regulations, the Employer filed a request for review of the Acting Regional Director’s Decision and Direction of Election, which the Board granted in tandem with its Notice and Invitation to File Briefs.

The Petitioner contends that the Board should, on review, affirm the Acting Regional Director’s finding that the stylists are statutory employees; in so doing, it argues that the Acting Regional Director properly found that most common-law factors weigh in favor of employee status or are inconclusive. In addition, the Petitioner argues that the stylists have limited opportunities for entrepreneurial opportunity—as evidenced by their fixed hourly wages, set schedule requirements, and inability to hire replacements—and that the ultimate result would be the same under any formulation of the independentcontractor test. The Employer argues that the stylists are independent contractors under the totality of the common-law factors, and that they have significant entrepreneurial characteristics, based on their overall ability to choose when and where to work, freedom to accept or reject opportunities with the Employer, and short-term single production commitments. The Employer also asserts that the outcome would be the same under either FedEx II or SuperShuttle.

Amici in support of the Petitioner argue generally that SuperShuttle should be overruled, with a majority favoring a return to the Board’s approach in FedEx II. A number of amici cite then-Member McFerran’s dissenting position in SuperShuttle, arguing that the Board’s extant approach does not comport with the requirements of the common-law test and cannot be squared with the Supreme Court’s directive that all incidents of the relationship must be assessed, with no one factor being decisive. They also posit that the current approach impermissibly broadens the Act’s independent-contractor exclusion. Amici in support of the Employer argue generally that the SuperShuttle approach should be retained; they contend, consistent with the majority position in that case, that the SuperShuttle approach properly adheres to the common-law standard and that there is no compelling reason to revisit it after only 4 years. They also question the enforceability of any decision that fails to adhere to the District of Columbia Circuit’s position in FedEx I.^[24]

IV.

Having considered the record in its entirety, including the parties’ briefs and the amicus briefs on review, we have decided to overrule SuperShuttle, to reinstate the Board’s FedEx II approach, and to apply that standard in this case, consistent with the Board’s established approach to retroactivity. First, we explain why the Board’s decision in SuperShuttle cannot be reconciled with common-law agency principles or Supreme Court and Board precedent. Next, we explain how the Board’s FedEx II approach, unlike SuperShuttle, properly rejected the notion that entrepreneurial opportunity is an “animating principle” of the independent-contractor test and correctly set forth a comprehensive framework for assessing the entrepreneurial characteristics of putative contractors. Finally, seeing no obstacle to retroactivity, we apply that approach here and find the Employer’s stylists to be statutory employees under Section 2(3). A.

In SuperShuttle, the Board overruled FedEx II and essentially adopted the District of Columbia Circuit’s position, agreeing after the fact that the Board had, indeed, shifted its perspective to consider entrepreneurial opportunity as a “principle by which to evaluate the overall effect of the common-law factors on a putative^[25] contractor’s independence to pursue economic gain.”⁴⁴ The SuperShuttle Board justified its view by asserting that control and entrepreneurial opportunity are two sides of the same coin: the more of one, the less of the other. Indeed, entrepreneurial opportunity often flowers where the employer takes a “hands off” approach. At the end of the day, the Board has simply shifted the prism through which it evaluates the significance of the common-law factors to what the D.C. Circuit has deemed a “more accurate proxy” to “‘capture[] the distinction between an employee and an independent contractor.’”^[26]

In explaining how entrepreneurial opportunity would be considered going forward, the Board explained that it would “evaluate the common-law factors through the prism of entrepreneurial opportunity when the specific factual circumstances of the case make such an evaluation appropriate.”^[27]

The SuperShuttle Board accordingly overruled FedEx II, including that decision’s consideration of entrepreneurial opportunity as one aspect of a factor that asks whether the evidence tends to show that the putative contractor is, in fact, rendering services as part of an independent business.^[28] Specifically, the SuperShuttle Board asserted that the FedEx II formulation had “impermissibly altered the Board’s traditional common-law test for independent contractors by severely limiting the significance of entrepreneurial opportunity to the analysis.”^[29] In contrast, the SuperShuttle Board repeatedly characterized its decision as “return[ing] the Board’s independentcontractor test to its traditional common-law roots.”^[30]B.

We find today that SuperShuttle cannot be reconciled with the mainstream of Board law, the common law, or Supreme Court precedent. In our view, the SuperShuttle Board tried, and failed, to have it both ways: it could not claim fidelity to both the common-law test and the District of Columbia Circuit's description of Board law, which departed from the traditional test. On the one hand, the Board stated that it was required to apply the multifactor, common-law agency test for ascertaining employee status, as articulated in the Restatement (Second) of Agency, Section 220. On the other, the Board held that “entrepreneurial opportunity . . . has always been at the core of the common law test”^[31] and thus the Board must treat “entrepreneurial opportunity” as “a principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain.”^[32] Simply put, these two principles are contradictory: “entrepreneurial opportunity” is demonstrably not “at the core of the common law test” as it has traditionally been understood.

First, the SuperShuttle approach cannot be reconciled with Board precedent. The SuperShuttle Board adopted the District of Columbia Circuit’s characterization of “entrepreneurial opportunity” as a “more accurate proxy” than the “unwieldy control inquiry.”^[33][34] But the Roadway Board’s seminal 1998 decision clarified that there is an “insufficient basis for the proposition that those factors which do not include the concept of ‘control’ are insignificant when compared to those that do.”⁵³ In so holding, the Board made clear that there is no singular “animating principle” (to use the phrase of the Circuit and the SuperShuttle Board) of the independent-contractor doctrine. In supposedly replacing “control” with “entrepreneurial opportunity,” then, the SuperShuttle Board adopted the court’s incorrect reading of prior Board law.

Contrary to the SuperShuttle Board’s assertion, the Board has never afforded special weight or significance to “entrepreneurial opportunity,” nor has it treated it as a trump card, as erroneously suggested by the District of Columbia Circuit in FedEx I.^[35] As we have explained, the Board decisions that the court relied on for this claim did not actually support it; in fact, both decisions treated the relevant evidence as simply one aspect of a commonlaw factor (“method of compensation”) that was itself part of a multifactor test, with no factor receiving determinative weight.⁵⁵ And the SuperShuttle Board failed to cite a single Board decision that employed “entrepreneurial opportunity” as the Circuit did: to “evaluate” the common-law factors, and to ask—as the decisive question—“whether the position presents the opportunities and risks inherent in entrepreneurialism.”^[36] SuperShuttle echoed the Circuit in asserting that “entrepreneurial opportunity, like employer control, is a principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain.”⁵⁷ But this is simply not how the Board had ever before approached independent-contractor determinations applying the common-law agency test. 

The SuperShuttle Board also failed in its attempt to explain how the District of Columbia Circuit’s approach comported with Roadway or other Board precedent. Tellingly, SuperShuttle and our dissenting colleague cite with apparent approval two cases—Roadway itself, as well as its companion case, Dial-A-Mattress—in which the absence of “entrepreneurial opportunity”—a function of constraints imposed by the employer—was relied upon as one factor among others in finding that drivers were employees, not independent contractors. In Roadway, supra, the Board explained:

As in United Insurance, the drivers here do not operate independent businesses, but perform functions that are an essential part of one company’s normal operations; they need not have any prior training or experience, but receive training from the company; they do business in the company’s name with assistance and guidance from it; they do not ordinarily engage in outside business; they constitute an integral part of the company’s business under its substantial control; they have no substantial proprietary interest beyond their investment in their trucks; and they have no significant entrepreneurial opportunity for gain or loss. All these factors weigh heavily in favor of employee status . . . . ⁵⁸

Of course, finding that disputed individuals are employees because—among other factors considered—they lack “entrepreneurial opportunity” does not mean that the presence of some “entrepreneurial opportunity,” however limited, would establish independent-contractor status. In any event, nothing in Roadway suggests that if the drivers there had enjoyed “significant entrepreneurial opportunity for gain or loss,” this alone would have been decisive.⁵⁹ The Roadway Board clearly did not use “entrepreneurial opportunity” to “evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain” (as the SuperShuttle Board and our dissenting colleague suggest).⁶⁰

Nor did the Board do so in the companion case to Roadway, Dial-A-Mattress, supra, where it found delivery drivers to be independent contractors. The Board there, citing Roadway, observed that the “list of factors differentiating ‘employee’ from ‘independent contractor’ status under the common-law agency test is nonexhaustive, with no one factor being decisive” and found that in the case before it, the “factors weigh[ed] more strongly in favor of independent-contractor status.”⁶¹ To be sure, the Board found that the drivers’ “separateness from [the company was] manifested in many ways, including significant entrepreneurial opportunity for gain or loss,” but the Board also distinguished Roadway in several respects, including by observing that the employer there “exercise[d] more control over its drivers’ manner and means of accomplishing their work.”⁶² Critically, as in Roadway, the Board did not elevate entrepreneurial opportunity above other common-law agency factors in order to simplify an analysis for which no “shorthand formula or magic phrase can be applied to find the answer . . . .”⁶³ Instead, the Board engaged in a nuanced analysis and weighing of multiple factors. For all of these reasons, the SuperShuttle Board’s assertion that that the District of Columbia Circuit’s decision did not “depart[] in any significant way from the Board’s traditional independent-contractor analysis”⁶⁴ is simply incorrect.⁶⁵

Significantly, the Circuit’s FedEx I decision did not cite either Roadway or Dial-A-Mattress as evidence of the Board’s supposed focus on “entrepreneurial opportunity.” As a result, the SuperShuttle Board was constrained to describe the supposed “shift[]” in the Board’s “perspective” as having occurred “particularly since Roadway” (emphasis added).⁶⁶ But as shown, this “shift” never happened at all, until SuperShuttle. As the District of Columbia Circuit has itself explained, “[a]n agency’s failure to come to grips with conflicting precedent constitutes ‘an inexcusable departure from the essential requirement of reasoned decision making.’”^[37][38] This is just what the SuperShuttle Board did: it departed from Board precedent—that is, the precedent before FedEx II— without ever acknowledging that prior precedent conflicted with its decision.

The SuperShuttle Board claimed that “the Board’s precedent in this area . . . has not been entirely consistent” and that its decision was “intended to eliminate any ambiguity over how to treat entrepreneurial opportunity in the Board’s independent-contractor analysis in the future.”⁶⁸ In fact, it was the Board’s FedEx II decision that, responding to the District of Columbia Circuit, actually eliminated ambiguity and clarified Board doctrine, within the permissible bounds of the precedent that it preserved. The SuperShuttle Board, in contrast, adopted an approach that cannot be reconciled with what came before and that provided no clear guidance for the future. C.

In addition, the SuperShuttle Board failed to reconcile its new approach with common-law principles and the Supreme Court’s decision in United Insurance. Like the Circuit in FedEx I, the SuperShuttle Board claimed that its approach was faithful to United Insurance and paid lip service to the settled principle that the “ten-factor [Restatement] test is not amenable to any sort of brightline rule.”^[39] But the approach adopted by the Circuit and the SuperShuttle Board is precisely the kind of “shorthand formula” that both the common law and the United Insurance decision expressly reject.

The SuperShuttle Board asserted that it was required to overrule the Board’s FedEx II decision because that decision “impermissibly altered the Board’s traditional common-law test for independent contractors by severely limiting the significance of entrepreneurial opportunity to the analysis.”^[40] According to the SuperShuttle Board, the FedEx II Board effectively abandoned the common-law agency test in favor of the “economic realities” test endorsed by the Supreme Court’s 1944 NLRB v. Hearst Publications decision, which was legislatively overruled by Congress in 1947.^[41] This claim (repeated by our dissenting colleague) is baseless. Indeed, it was the SuperShuttle approach—with its endorsement of “entrepreneurial opportunity” as a sort of super-factor—that subordinated the common law to a particular vision of supposed “economic reality” where workers are deemed “entrepreneurs.”^[42][43]

The Board’s position in SuperShuttle rested on the premise that “entrepreneurial opportunity” is the core concept of the traditional common-law agency test. But there is no support for such a claim. The Restatement certainly does not define a “servant” as a “person employed to perform services in the affairs of another and who in the performance of the services lacks entrepreneurial opportunity for gain or loss.” But the SuperShuttle Board, embracing the District of Columbia Circuit’s characterization of Board law, effectively rewrote the definition this way. None of the Restatement Section 220(2) factors, meanwhile, explicitly or implicitly incorporate the concept of “entrepreneurial opportunity.” “Entrepreneurial opportunity” does not inform (in any clear and direct way, at least): “extent of control”; “distinct occupation or business”; “kind of occupation”; “skill required”; who supplies the instrumentalities; “length of time . . . employed”; “method of payment”; “part of the regular business”; the parties’ belief in what relationship they are creating; and the “business” of the principal. To be clear, the Supreme Court has never suggested, let alone held, that “entrepreneurial opportunity” is the principal guidepost in the common-law analysis.

In addition, SuperShuttle’s description of “employer control” and “entrepreneurial opportunity” as “opposite sides of the same coin”⁷³ is not analytically sound. The common-law agency factors focus on a range of dimensions of the employer-employee relationship and cannot be reduced to a simple comparison between employer control and entrepreneurial opportunity. SuperShuttle’s mistaken attempt to group and classify the common-law agency factors was a prelude to short-circuiting the comprehensive analysis the common law requires of “all of the incidents of the relationship.”^[44][45] Indeed, by equating control and entrepreneurial opportunity and concluding that “in general, the more control, the less scope for entrepreneurial initiative, and vice versa,”⁷⁵ SuperShuttle offered precisely the kind of “shorthand formula” the Supreme Court has cautioned the Board not to adopt. Here, as in the joint-employer context, the Board “must color within the common-law lines identified by the judiciary,” as the District of Columbia Circuit has observed.^[46][47] This means weighing evidence regarding all factors that may inform the Board’s analysis, not relying on a shorthand formula to collapse the nuanced, multifactor inquiry into a comparison of two factors alone.

Quoting former Member Johnson’s dissent in FedEx II, the SuperShuttle Board claimed that the Board’s FedEx II approach “greatly diminishe[d] the significance of entrepreneurial opportunity and selectively overemphasize[d] the significance of ‘right to control’ factors relevant to perceived economic dependency.”⁷⁷ But the Board in SuperShuttle failed to explain where, how, and why traditional common-law agency doctrine not only incorporates the concept of “entrepreneurial opportunity,”^[48] but also subordinates the “control” factors (along with the remaining Restatement factors) to it. The SuperShuttle Board approvingly cited the supposed “evolving emphasis on entrepreneurial opportunity” in the decisions of the District of Columbia Circuit and the Board, as described by the FedEx I court. But the Board there did not explain how the common-law agency test could evolve in a fundamental way and yet still adhere to the common law as reflected in the Restatement, a legal source treated as authoritative by the Supreme Court.^[49]Indeed, in recently upholding the Board’s joint-employer standard, the District of Columbia Circuit “look[ed] first and foremost to the ‘established’ common-law definitions at the time Congress enacted the National Labor Relations Act in 1935 and the Taft-Hartley Amendments in 1947.” Browning-Ferris Industries, supra, 911 F.3d at 1208. There is no clear indication that in adopting the “independent contractor” exclusion in 1947—and thus incorporating the common-law agency test into the National Labor Relations Act (as the Supreme Court held in United Insurance)—Congress intended for the test to evolve over time in any fundamental way. United Insurance, meanwhile, contains no hint that “entrepreneurial opportunity” was an “animating principle” of the common-law test.

In sum, the SuperShuttle “entrepreneurial opportunity” test cannot be reconciled with the Board’s pre-FedEx II precedent or with Supreme Court precedent and the common law of agency to which the Board must adhere.

V.

For these reasons, we overrule SuperShuttle and return to the Board’s approach in FedEx II. First, consistent with the discussion above, we reaffirm the Board’s longstanding pre-SuperShuttle position—based on the Supreme Court’s United Insurance decision—that, in evaluating independent-contractor status “in light of the pertinent common-law agency principles,” “all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.” This involves a qualitative assessment of which factors are determinative in a particular case and why.^[50] Consistent with Supreme Court precedent, our inquiry will be guided by the nonexhaustive common-law factors enumerated in the Restatement (Second) of Agency, Section 220.

Second, we more clearly define the analytical significance of a putative independent contractor’s entrepreneurial opportunity for gain or loss in a manner that is consistent with Board precedent, the common law, and Supreme Court precedent. To this end, we explain the place of “entrepreneurial opportunity” in the Board’s analysis. In the context of weighing all relevant, traditional common-law factors, including those identified in the Restatement, the Board also considers whether the evidence tends to show that the putative independent contractor is, in fact, rendering services as part of an independent business.

Third, we find that the Board should give weight only to actual (not merely theoretical) entrepreneurial opportunity, and that it should necessarily evaluate the constraints imposed by a company on the individual’s ability to pursue this opportunity.

A.

We reaffirm today that the Board will consider evidence of entrepreneurial opportunity when assessing whether a putative contractor is, in fact, rendering services as part of an independent business. This formulation is grounded in established law. In United Insurance, for example, the Supreme Court observed that the insurance ^[51][52]agents involved did “not operate their own independent businesses.”⁸¹ And citing United Insurance, the Board in Roadway explained that the drivers did not operate an independent business but rather “perform[ed] functions that are an essential part of one company’s normal operations.”⁸²

This independent-business analysis encompasses considerations that the Board has examined in previous cases. For example, the Board will consider not only whether the putative contractor has a significant entrepreneurial opportunity, but also whether the putative contractor: (a) has a realistic ability to work for other companies;^[53] (b) has proprietary or ownership interest in their work;^[54] and (c) has control over important business decisions,^[55] such as the scheduling of performance; the hiring, selection, and assignment of employees; the purchase and use of equipment; and the commitment of capital.^[56] This factor synthesizes the full constellation of considerations that the Board has addressed under the rubric of entrepreneurialism.^[57] At the same time, the Board will continue to give full consideration and appropriate weight to all of the traditional common-law factors. As with all other relevant factors, the weight given to whether a putative contractor renders services as part of an independent business will depend upon the factual circumstances of the particular case.

In performing this analysis, the Board must necessarily consider evidence (as it has previously) that the employer has effectively imposed constraints on an individual’s ability to render services as part of an independent business.^[58] Such evidence would include limitations placed by the employer on the individual’s realistic ability to work for other companies,^[59] and restrictions on the individual’s control over important business decisions.^[60] Pursuant to this inquiry, the Board will consider whether the terms or conditions under which the individuals operate are “promulgated and changed unilaterally by the company.”^[61]

To the extent that the Board’s decisions in Arizona Republic, supra, 349 NLRB at 1045, and St. Joseph NewsPress, supra, 345 NLRB at 481-482, may have mistakenly suggested that such considerations are not relevant to the Board’s independent-contractor inquiry, the two decisions are in tension with prior precedent, as well as inconsistent with the view articulated today. Those decisions are now overruled.

B.

We also reaffirm today the principle that “if a company offers its workers entrepreneurial opportunities that they cannot realistically take, then that does not add any weight to the [c]ompany’s claim that the workers are independent contractors.”^[62][63] As the Board noted in its FedEx II decision, the Board has been careful to distinguish between actual opportunities, which allow for the exercise of genuine entrepreneurial autonomy, and those that are circumscribed or effectively blocked by the employer. In Roadway, supra, for instance, the Board rejected the employer’s argument that delivery drivers’ proprietary interest in their routes and their ability to sell their routes made them independent contractors. The Board noted that the employer “imposed substantial limitations and conditions on both . . . features of the driver's relationship such that neither one retains any significant entrepreneurial characteristics.”⁹³ Specifically, the employer exercised control over whether drivers could sell their routes, to whom, and under what circumstances.^[64] In addition, the employer retained the right to unilaterally reconfigure all routes, and it was unclear whether any drivers had ever realized any gain or profit from the sale of their routes.^[65][66]

Unlike the District of Columbia Circuit in FedEx I, we are reluctant to accept an employer’s assertions of entrepreneurial opportunity with little weight given to these countervailing considerations. In finding, for example, that drivers had a genuine entrepreneurial opportunity to assign their routes without the employer’s permission, the court relied solely on the fact that two drivers were able to sell their routes for a nominal profit.⁹⁶ In fact, drivers’ opportunities in this area were significantly constrained: drivers could sell only to buyers that the employer accepted as qualified; the employer awarded routes to drivers without charge; and the employer retained the unilateral right to reconfigure routes. Nonetheless, the court concluded that the drivers’ ability to assign their routes was a “significant . . . and novel” indicator of contractor status.^[67]

Insofar as the Circuit’s decision holds that even a showing of theoretical entrepreneurial opportunity supports a finding of independent-contractor status—and, indeed, will prove decisive if other factors point in conflicting directions—we disagree. Such an expansive approach departs from the mainstream of Board precedent, lacks clear support in traditional common-law principles, and could dramatically broaden the independentcontractor exclusion under the Act without justification. The fact that only a small percentage of workers in a proposed bargaining unit have pursued an opportunity

tends to show that it is not, in fact, a significant aspect of their working relationship with the putative employer.^[68]Indeed, if the day-to-day work of most individuals in the unit does not have an entrepreneurial dimension, the mere fact that their contract with the employer would permit activity that might be deemed entrepreneurial is not sufficient to deny them classification as statutory employees.^[69][70]

C.

The SuperShuttle Board’s primary criticism of the formulation set out here—which is endorsed by our dissenting colleague—was that it was somehow illegitimate to treat “entrepreneurial opportunity” as a factor, or as an element of a factor, in the independent-contractor analysis. To this end, the Board insisted that “[p]roperly understood, entrepreneurial opportunity is not an independent common-law factor;”¹⁰⁰ rather, it is “a principle by which to evaluate the overall effect of the common-law factors on a putative contractor's independence to pursue economic gain”^[71] and thus (according to SuperShuttle), the FedEx II approach “impermissibly altered the Board's traditional common law test for independent contractors by severely limiting the significance of entrepreneurial opportunity to the analysis.”^[72] We disagree. As explained already, it is the SuperShuttle Board’s treatment of “entrepreneurial opportunity” as a sort of super-factor that contradicted the common-law agency test. As for today’s approach, in contrast, the Restatement explicitly states that the factors listed in Section 220(2) are nonexhaustive and to be considered “among others.” The Roadway Board, in turn, accurately described the Restatement as “specifically permitting the consideration of other relevant factors as well, depending on the factual circumstances presented.”¹⁰³ Pre-FedEx II decisions by the Board, as noted, have treated “entrepreneurial opportunity” as a factor. And, as earlier pointed out, the District of Columbia Circuit itself, in a post-FedEx I decision, has described “entrepreneurial opportunity” as a “factor” to be considered, along with those identified in the Restatement.^[73]

As already explained, the SuperShuttle Board’s insistence—also reiterated by our dissenting colleague—that today’s approach impermissibly abandoned common-law agency principles to return to the “economic realities” test articulated by the Supreme Court in Hearst, supra, is baseless—as demonstrated by any fair reading not only of FedEx II and today’s decision, but of the Board decisions in which it applied FedEx II,^[74] all of which reflected a careful analysis of the Restatement factors and the independent-business factor articulated in FedEx II.^[75]

VI.

[Feel free to skim this section, which applies the new (old?) test to the facts of the case]

Consistent with the preceding discussion, and with the Board’s long-established approach to the retroactivity of new standards, we now apply the standard adopted today, carefully consider all relevant factors, and find that the Employer’s stylists are employees under Section 2(3) of the Act.^[76] Our discussion tracks the factors set out in Section 220 of the Restatement (Second) of Agency— cited with approval by the Supreme Court and routinely applied by the Board—before concluding with the reaffirmed independent-business factor. Under established law, the burden of proof is on the party asserting independent-contractor status, here the Employer.¹

A.  Extent of Control by Employer

The Employer here exercises substantial control over the essential details of stylists’ day-to-day work. At its core, the stylists’ job is to effectuate the relatively detailed artistic vision of Zvulun and the Employer’s creative team, including their visual interpretation of the characters.¹⁰⁹ The fact that the Employer has dictated every aspect of a character’s look—from overall aesthetic to hairstyle and nail polish color—is indicative of the degree of control that it “may exercise over the details of the work” (in the words of the Restatement), even if that control is not exercised in every instance.¹¹⁰ In addition, the Employer dictates the time and place of rehearsals and performances, the stylists’ daily schedules, and the availability of breaks and overtime.¹¹¹

Accordingly, we find that this case is akin to Lancaster Symphony, supra, and Musicians (Royal Palm Theatre), 275 NLRB 677, 681–682 (1985), cases where the Board, in finding substantial employer control, emphasized that employees’ work was guided by the detailed creative agenda and process of a director. In Lancaster Symphony, the Board found—with approval of the District of Columbia Circuit—that the Employer’s director had “complete and final authority over how the musicians perform at both rehearsals and concert performances.”¹¹² To this end, the Board emphasized that the employer retained the right to control the content of each performance; how the music was performed; the musicians’ rehearsal and worktime schedules; and their attendance requirements.¹¹³ The Board also underscored that “[u]nlike a soloist who is hired to render a piece of music in the manner of his or her choice, here, the music director makes the artistic choices and directs the musicians accordingly.”¹¹⁴

Similarly, in Royal Palm Theatre, the Board found that an employer exercised control over the work of musicians where the theater’s music director selected the music, the instruments, the time and place of sessions, and dictated rehearsal times, seating arrangements, and breaks.¹¹⁵ The Board there underscored that musicians were subject to the director’s “complete discretion and artistic interpretation and taste” in making a recording.^[77]We find the scenario in this case—where the Employer dictates the creative and logistical components of stylists’ work in all major respects—to be substantially similar to those cases. If anything, the Employer’s control is more definitive, where the stylists work in a behind-thescenes subsidiary capacity, rather than onstage, to support the director’s vision.

For these reasons, we find that this factor weighs in favor of employee status.

B.  Whether or not Individual is Engaged in a Distinct Occupation or Business

We find that the stylists are generally engaged in a distinct occupation as theatrical makeup artists and wig and hair stylists: they have specific training in this area, and they are hired by the Employer to work in this professional niche. Such a finding is consistent with other Board decisions involving creative professionals.^[78] At the same time, we note that, unlike in those cases, the stylists here are fully integrated into the Employer’s company and productions, do not display any signifiers of engaging in an independent business, and work in tandem with the Employer’s other departments, including the costume and sound departments.^[79] And as Board has cautioned in a similar context, “consideration of this factor also provides little guidance” where the putative contractors at issue “work in many settings and perform as employees in some and independent contractors as others.”^[80] Accordingly, we find that this factor weighs in favor, but not heavily in favor, of contractor status.

C.  Whether the Work is Usually Done Under the Direc-tion of the Employer or by a Specialist Without Supervision

Although stylists perform their manual hair, wig, and makeup work largely free from the Employer’s immediate oversight, they exercise only negligible discretion in completing the details of their work. To this end, the Employer essentially directs stylists by communicating a continuous stream of detailed feedback and instructions through wig and makeup department head Hall. Tellingly, Hall testified that she never disregards this input and that she inspects the stylists’ completed looks to ensure that they conform with the Employer’s directives.^[81] Accordingly, we find that this factor weighs in favor of employee status.^[82] 

D. Skill Required in the Occupation

The record establishes that stylists exercise considerable skill in executing the Employer’s artistic vision for hair, wig, and makeup designs; indeed, the Employer relies on the stylists to perform at a proficient level so that it can focus solely on creative direction rather than close technical direction. In addition, stylists do not receive in-house training and are expected to arrive with the requisite skills and training.^[83] The Board has recognized that specialized skillsets in similar creative contexts are indicative of contractor status.^[84] Significantly, while comment i to Section 220 of the Restatement (Second) of Agency emphasizes that those performing unskilled labor are generally regarded as employees, it notes that even skilled workers can be considered employees when performing an “incident of the business establishment of the employer.” Here, where stylists employ their skills in furtherance of the Employer’s core business—staging operas—they are arguably more like employees than contractors. Nonetheless, in light of the stylists’ specialized skills and their personal investment in training and certification, we find that this factor weighs in favor of contractor status

E.  Whether the Employer or Individual Supplies Instrumentalities, Tools, and Place of Work

The Employer here provides all equipment, supplies, and workspaces necessary for stylists to do their jobs. In an employer-employee relationship, the employer generally supplies the instruments and tools of work.^[85] Accordingly, we find that this factor weighs in favor of employee status.^[86]

F. Length of Time for which Individual is Employed

Stylists work on a single-production basis rather than for an ongoing or indefinite period. Although there is evidence that stylists have worked on multiple productions, there is no indication that stylists have any expectation of continuous or future employment. Nor do they make any commitment to the Employer beyond a single production. Indeed, this arrangement appears to be central to stylists’ professional identity, as they commit only for a specified term and are otherwise free to seek other opportunities. The Board has found that this factor weighs in favor of contractor status where workers used on “project basis rather than for an indefinite time period,” may decline future work, and routinely work for other companies.^[87] Accordingly, we find that this factor weighs in favor of contractor status.

G. Method of Payment

The Employer pays stylists an hourly wage with the potential for overtime, an arrangement that suggests employee status.^[88] We recognize that the Board has found the absence of tax withholding and benefits—also present here—to be indicative of contractor status.^[89][90] But in Lancaster Symphony—a case with multiple parallels to this one—the Board found that the method of payment factor weighed in favor of employee status where the payment scheme for musicians approximated an hourly wage, even though the employer did not deduct payroll taxes or provide fringe benefits.¹²⁹ Accordingly, we find that, on balance, this factor weighs slightly in favor of employee status.

H.  Whether or not Work is Part of the Regular Business of the Employer

The Employer’s regular business is to stage operas, and stylists perform a function—providing makeup, hair, and wig treatments to onstage performers—that is integral to that endeavor; indeed, the Employer’s witnesses could not cite an instance where the Employer has operated without stylists.^[91] We find the stylists’ contributions here to be comparable to those of the video crew members in Minnesota Timberwolves, supra, where the Board found that their work broadcasting video content on the scoreboard was integral to employer’s presentation of professional basketball events.¹³⁰ If anything, stylists’ contributions are more central here, as they work directly with the onstage performers.^[92] Accordingly, we find that this factor weighs in favor of employee status.

I.  Whether or not the Parties Believe they are Creating an Independent-Contractor Relationship

Here, all stylists except Hall entered into informal oral agreements that did not specify stylists’ relationship to the Employer, and there is no basis for any shared understanding between the parties. The fact that the Employer asked stylists to provide W-9 forms, without further explanation, does not establish they knew or should have known they were entering into putative contractor relationships (and, indeed, a number of stylists testified to the contrary). Accordingly, we find this factor to be inconclusive.^[93]

J. Whether the Principal is or is not in Business

The Employer is in the business of presenting operas, and the styling of costumed performers constitutes a “key element” of that presentation.^[94] The stylists play an essential role in facilitating the experience that the Employer provides to audiences.¹³⁴ Accordingly, we find that this factor weighs in favor of employee status.^[95]

K.  Whether the Evidence Tends to Show that the Individual is, in Fact, Rendering Services as an Independent Business

In their work with the Employer, stylists are fundamentally constrained in their ability to make entrepreneurial decisions. Because the Employer controls stylists’ schedules, dictates the precise number of hours to be worked, and decides unilaterally when overtime is needed, there are no opportunities during productions for stylists to employ strategies or take risks that could result in additional (or less) income.^[96] Stylists agree to a fixed hourly wage; they do not receive a percentage of ticket sale revenues, nor do they lose or benefit based on the relative success of a production.^[97] Likewise, the Employer makes all business decisions, including those related to hiring, allocation of labor, and commitment of capital.^[98] In addition, stylists have no proprietary or ownership interest in their positions or their work.^[99] And they lack the ability to subcontract their positions, hire helpers, or find replacements for even a single rehearsal or performance.¹⁴⁰ These considerations demonstrate that stylists are not rendering services for the Employer as part of their own independent businesses.

We recognize that stylists have a realistic opportunity to work for other employers and that they regularly pursue jobs in the broader creative economy when they are not working for the Employer. Such evidence might suggest that stylists work for the Employer with a measure of entrepreneurial opportunity. But we infer here that the primary reason that stylists work for multiple employers is the fact that the Employer’s productions occur on a seasonal and intermittent basis, making exclusive employment with the Employer unrealistic.^[100] Indeed, the Board has held that the significance of such evidence is diminished where, as here, employment in the relevant industry is consistently part-time.^[101] In this case, having considered the evidence that stylists do have the opportunity to work for other employers, we find that circumstance is plainly outweighed by the other considerations cutting against a finding that the stylists render their services as independent businesses.

VII.

Determining the status of the stylists here “requires more than a quantitative analysis based on adding up the factors on each side; it requires the difficult task of assessing the relative significance of each factor, and ultimately each set of factors, in light of the impact of each factor on the overall relationship” between the parties.¹⁴³ Having considered all the incidents of the relationship with this in mind, we find that the Employer has failed to carry its burden to establish that the stylists are independent contractors.

As explained, the majority of the traditional common law factors, as incorporated in the Restatement (Second) of Agency, point toward employee status:

the Employer controls the details of stylists’ work; the Employer directs stylists’ work via continuous feedback from Director Zvulun; the Employer supplies all instrumentalities, tools, and places of work; the Employer pays the stylists at an hourly rate with a fixed number of working hours; the work of the stylists is part of the regular business of the Employer; and the Employer is in business (which, moreover, is the same business as the stylists are in).

Three of the traditional factors—distinct occupation, skill, and length of employment—weigh in favor of independentcontractor status. Another traditional factor—the parties’ belief as to the nature of the relationship—is inconclusive. Finally, we have carefully considered whether the evidence tends to show that the stylists render services to the Employer as part of their own, independent businesses. We have determined that, on the whole, it does not, given that stylists do not have a proprietary interest in their work; stylists cannot assign their positions or hire replacements; the Employer makes all business decisions; and there are no opportunities during productions for stylists to employ entrepreneurial strategies or take risks that could result in more (or less) income.

Weighing the evidence concerning all incidents of the stylists’ relationship with the Employer, in light of the Employer’s burden of proof, we conclude that the stylists are statutory employees and not independent contractors. The evidence related to the three factors favoring independent-contractor status here does not outweigh the evidence tending to show an employment relationship, including (but not limited to) the evidence demonstrating the Employer’s control over the work performed by the stylists. That the stylists do not render services to the Employer as part of their own, independent businesses supports our ultimate conclusion.

VIII.

Our dissenting colleague does not take issue with our conclusion that the stylists here are statutory employees. Indeed, in agreeing that they are, our colleague largely relies upon the same considerations that we do. Instead, our colleague disagrees with the independent contractor standard that we reinstate today—particularly the assessment of whether a putative independent contractor is, in fact, rendering services as part of an independent business. But his dissent is less a criticism of this approach than it is a defense of the prior Board’s SuperShuttle decision. We have already fully explained why our approach is compatible with Supreme Court precedent, the main current of Board law, and the common law—and why SuperShuttle is not.

Our colleague’s main concern with our decision to reinstate FedEx II appears to be prudential: he contends that the District of Columbia Circuit has already rejected our formulation of the standard for determining independent-contractor status and that today’s decision will “face an uphill battle” and “will not withstand judicial review.” To this end, he asserts that “there is no reason for my colleagues to expect a different result where they have ignored the court’s FedEx holdings yet again by reinstating the previously vacated FedEx II standard.”

Here, however, our colleague misinterprets, or at least overstates, the court’s previous FedEx holdings. He first suggests that the District of Columbia Circuit’s “chosen standard” in FedEx I, 563 F.3d 492—which described entrepreneurial opportunity as the “animating principle” of the independent contractor analysis—is binding on the Board. But, as our colleague readily acknowledges, the court’s decision in that case was premised expressly on its view of how the Board analyzed independentcontractor issues under our own law; indeed, the court stated that it endorsed this approach “at the Board’s urging.”¹⁴⁴ Thus, FedEx I was not a prescription for how the Board must approach entrepreneurial opportunity under Supreme Court precedent or the common law. For the reasons explained, we have decided today to disavow the court’s characterization of Board precedent (which the SuperShuttle Board embraced), just as we previously did in FedEx II.¹⁴⁵ To the extent that the Circuit takes the Board’s analysis as a starting point in this area—as it has routinely over decades¹⁴⁶—we disagree with our colleague’s assertion that we are bound by the FedEx I court’s interpretation of our own precedent.

It is certainly true, as our colleague emphasizes, that the District of Columbia Circuit in FedEx III vacated the Board’s underlying order based on its earlier opinion in FedEx I. 849 F.3d at 1124. But the court was explicit that, in so doing, it relied solely on the “law-of-thecircuit” doctrine: that “the same issue presented in a later case in the same court should lead to the same result.” Id. at 1127 (emphasis in original).¹⁴⁷ But the FedEx III court did not (as our colleague claims) “vacate[] [the] FedEx II standard,” reject the Board’s legal reasoning, or make any clear statement about the validity of independent-contractor formulation that we reinstate today. The court instead made clear that its law-of-the-circuit holding was based on the fact that FedEx I and FedEx III involved “the same material facts.” Id. In response to the argument that FedEx I had failed to weigh all of the common-law factors, FedEx III responded that FedEx I had in fact done so.¹⁴⁸ Despite this dicta, the court said nothing about the independent-contractor standard articulated in FedEx II.¹⁴⁹ Given the limited scope of the court’s decision, it is simply unwarranted to assign any broader significance to FedEx III beyond that narrow circumstance involving the FedEx drivers at issue in that case.

Likewise, we reject our colleague’s assertion that the Board’s approach here will undoubtedly be met with hostility in other circuits that “have also recognized that entrepreneurial opportunity is an important consideration in evaluating the traditional common-law agency factors.” Tellingly, all of the court decisions that our colleague cites in support of this argument merely assess a putative contractor’s entrepreneurial potential as a single consideration among other common-law factors—which is exactly what we do here.¹⁵⁰ Nothing in these decisions augurs a poor judicial reception for FedEx II’s modest effort to formalize and clarify the role of this consideration, because none of them mirror the SuperShuttle Board in defining entrepreneurial opportunity as the “animating principle” of the inquiry or as “a principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain.” Indeed, none of the proponents of entrepreneurial opportunity as the “animating principle” identifies support for this approach in judicial decisions applying the common law, the Restatement of Agency, treatises, or any other recognized authority.¹⁵¹

We strongly disagree with our colleague’s suggestion that we have misconstrued the Board’s own caselaw. We maintain that prior to SuperShuttle, the Board at no time elevated entrepreneurial opportunity above all other common-law factors. Ultimately, while the Board’s decisions speak for themselves, there can be no doubt that the decisions that our colleague relies on most emphatically here (Roadway, Dial-A-Mattress, and Corporate Express) do not support his core contention, for the reasons discussed above. Indeed, our colleague himself concedes that “[i]t is true that the post-Roadway Board decisions did not explicitly describe whether the putative contractors had significant entrepreneurial opportunity for gain or loss in this manner.”¹⁵² It is perhaps for this reason that our colleague chooses to cite the District of Columbia Circuit’s characterization of statements that the General Counsel made in briefs to the court.¹⁵³ We question whether these are accurate characterizations in the first instance, but even if they are, they are hardly persuasive; as the District of Columbia Circuit itself has emphasized, “counsel’s explanation to this court cannot substitute for ‘reasoned decision-making at the agency level.’”¹⁵⁴

Finally, we reject our colleague’s apparent attempt to use two of the Board’s post-SuperShuttle decisions (Velox Express, Inc.¹⁵⁵ and Intermodal Bridge Transport¹⁵⁶) to show that SuperShuttle was more aligned with the common law than it appears, because the Board did not treat entrepreneurial opportunity as a “super-factor” in those cases. While emphasizing that the Board there nominally applied SuperShuttle by “evaluating the common-law factors through the prism of entrepreneurial opportunity,” our colleague effectively depicts each as involving a routine multifactor inquiry where the Board assessed and weighed all incidents of the parties’ relationship with no one factor being decisive. But our colleague cannot obscure that SuperShuttle said what it said: that entrepreneurialism is “an important animating principle” of the inquiry and “a principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain.”¹⁵⁷

Whether or not the Board’s post-SuperShuttle cases can be read to mitigate the SuperShuttle decision, the Board cannot revise the independent-contractor standard so indirectly. Rather, as the Supreme Court has held, the Board must apply the test that it articulates, and not some other standard, to engage in reasoned decisionmaking. See Allentown Mack Sales & Service, Inc. v. NLRB, 522 U.S. 359, 372–377 (1998). In any event, the fact that the Board found employee status in two cases where it applied SuperShuttle does not mean that the standard there was consistent with Supreme Court precedent or the common law. Accordingly, rather than nominally apply SuperShuttle again today in a way that might be more defensible, we overrule that decision outright.  

ORDER

The case is remanded to the Regional Director for further action consistent with this Decision.

Dated, Washington, D.C.  June 13, 2023

______________________________________

Lauren McFerran,                              Chairman

________________________________________

Gwynne A. Wilcox,                            Member

________________________________________

David M. Prouty,                                Member

(SEAL)            NATIONAL LABOR RELATIONS BOARD

MEMBER KAPLAN, dissenting in part and concurring in part.

In 2019, the Board issued SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019) (SuperShuttle), which, in effect, adopted the independent-contractor standard found appropriate by the United States Court of Appeals for the District of Columbia Circuit (the D.C. Circuit). For the reasons set forth in SuperShuttle, in which I participated, and as discussed further below, that standard—which is consistent with the common law, court precedent, and the Act—provides the most effective measure for determining the important issue of whether individuals should be considered employees, in which case they fall within the jurisdiction of the Act, or independent contractors, in which case they do not. Applying SuperShuttle here, I find that the workers at issue in this case—makeup artists, wig artists, and hairstylists who work at The Atlanta Opera—are employees under Section 2(3) of the Act and not independent contractors.

I imagine that my colleagues would also conclude that these workers are employees under the test set forth in SuperShuttle, which could decide the matter. Instead, my colleagues, apparently with the optimism of Sisyphus, have decided to try their luck yet again at revising the common-law standard for determining independent contractor status. Given the position of the D.C. Circuit and other courts of appeals on this issue, they undoubtedly recognize that they face an uphill battle.

Prior to the Board’s issuance of SuperShuttle in 2019, it was settled law in the D.C. Circuit that entrepreneurial opportunity was “an important animating principle by which to evaluate” the traditional common law factors used to differentiate employees from independent contractors. FedEx Home Delivery v. NLRB, 563 F.3d 492, 497 (D.C. Cir. 2009) (FedEx I), denying enforcement of FedEx Home Delivery, 351 NLRB No. 16 (2007); see Corporate Express Delivery Systems v. NLRB, 292 F.3d 777 (D.C. Cir. 2002)). Unhappy with the D.C. Circuit’s decision in FedEx I, the Board issued a new decision 5 years later. Although the case presented nearly identical facts to FedEx I, the Board rejected the court’s analysis as well as its prior determination that the drivers at issue were independent contractors. FedEx Home Delivery, 361 NLRB 610 (2014) (FedEx II). Not surprisingly, the D.C. Circuit was not persuaded. In denying enforcement of the Board’s “second try” decision, and once again finding the drivers at issue to be independent contractors, the D.C. Circuit expressly found that the court’s earlier decision FedEx I was consistent with both the common law and Supreme Court precedent. FedEx Home Delivery v. NLRB, 849 F.3d 1123, 1127–1128 (D.C. Cir. 2017) (FedEx III).

Today, my colleagues overrule the independent contractor standard in SuperShuttle and return to the flawed standard in FedEx II without any substantive modification of it.^[102] My colleagues assert that SuperShuttle, which incorporated the court’s standard, cannot stand because it is inconsistent with the common law, Board precedent, and Supreme Court precedent. In short, my colleagues’ position relies on one conclusion: the D.C. Circuit is wrong. I do not agree, nor have my colleagues presented compelling reasons for reaching their conclusion. Accordingly, although I concur in the result in this case, I must otherwise dissent.

1. I. LEGAL FRAMEWORK

A. The Common-Law Agency Test

Section 2(3) of the Act, as amended by the Taft Hartley Act in 1947, provides that the term “employee” shall not include “any individual having the status of independent contractor.” 29 U.S.C. § 152(3). The Supreme Court has long mandated that independent contractor status be determined by applying the common law of agency. NLRB v. United Insurance Co. of America, 390 U.S. 254, 256 (1968). In conducting the analysis under the common-law agency test, the Board and the courts apply the non-exhaustive factors set forth in the Restatement (Second) of Agency §220 (1958):

• The extent of control which, by the agreement, the master may exercise over the details of the work.
• Whether or not the one employed is engaged in a distinct occupation or business.
• The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.
• The skill required in the particular occupation.
• Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work.
• The length of time for which the person is employed.
• The method of payment, whether by the time or by the job.
• Whether or not the work is part of the regular business of the employer.
• Whether or not the parties believe they are creating the relation of master and servant. (j) Whether the principal is or is not in business.

In construing these factors, the Court held that there is no “shorthand formula” and that “all the incidents of the relationship must be assessed and weighed with no one factor being decisive. What is important is that the total factual context is assessed in light of the pertinent common-law agency principles.” 390 U.S. at 258.

1. The Board and the Courts’ Consideration of Entrepreneurial Opportunity in their Independent-Contractor Analysis

In the decades following the issuance of United Insurance in 1968, the Board and the courts have revised and clarified the application of the common-law agency factors in assessing whether workers are employees or independent contractors. Many decisions during this time either considered an employer’s right to exercise control as being “foremost” among the common-law agency principles or described the entire independent-contractor analysis as being a “right of control test.” See, e.g., American Federation of Musicians (Royal Palm Dinner Theater), 275 NLRB 677, 682 (1985) (finding that musicians who were hired to pre-record music for dinnertheater productions were employees primarily because they worked under the direct supervision of the theater’s music director who had “complete control” over “every note” they played, the number and types of instruments they used, and the time and place where they recorded the music).^[103] Despite this focus on the “right of control” aspect of the common law of agency, the Board has also historically considered an individual’s opportunities for entrepreneurship as part of its approach to assessing whether workers are employees or independent contractors. For example, in Young & Rubicam International, Inc., 226 NLRB 1271, 1276 (1976), the Board found that photographers who worked with an advertising agency were independent contractors because they “operate as independent businessmen rather than serving as employees.” In doing so, the Board considered the photographer’s opportunities for entrepreneurship, reasoning that the photographers maintained studios at their own expense, made capital investments in their enterprises, worked with other companies, received pay on a per-job basis, and were generally incorporated. Id. Similarly, in Standard Oil Co., 230 NLRB 967, 971 (1977), the Board found that the putative contractors “ha[d] no significant entrepreneurial opportunity” because their “limited opportunities to take risks and influence their profits by their own business decisions” was indicative of employee status. The Board reasoned that the employer controlled “all meaningful decisions of an entrepreneurial nature which affect profit or risk of loss” where the employer established the drivers’ pay and delivery territories, the prices of the products, and the customers to whom they could deliver. Id.^[104]

Significantly, in Corporate Express Delivery Systems v. NLRB, 292 F.3d 777 (D.C. Cir. 2002), the United States Court of Appeals for the District of Columbia Circuit upheld as reasonable the Board’s approach in assessing whether workers are employees or independent contractors to focus “not upon the employer's control of the means and manner of the work but instead upon whether the putative independent contractors have a significant entrepreneurial opportunity for gain or loss.” Id. at 780.^[105] The court expressly “agree[d] with the Board's suggestion that the latter factor better captures the distinction between an employee and an independent contractor.” Id. Further, drawing on the comments in the Restatement (Second) of Agency, the court reasoned that it is not “the degree of supervision under which [one] labors but . . . the degree to which [one] functions as an entrepreneur—that is, takes economic risk and has the corresponding opportunity to profit from working smarter, not just harder,” that better illuminates one’s status. Id. Emphasizing entrepreneurialism, the court concluded that where the owner-operators were not allowed to hire others to do the job or to use their vehicles for other work, they “lacked all entrepreneurial opportunity and consequently functioned as employees rather than as independent contractors.” Id. at 780–781.

In FedEx I, the D.C. Circuit again considered the role of entrepreneurialism in its independent-contractor analysis, as previously acknowledged in Corporate Express.  The court, based on its review of the Board’s and its own independent-contractor jurisprudence, recognized that application of the common-law agency test had shifted over time. 563 F.3d at 496–497. The court concluded that the determination whether the “‘putative independent contractors have significant entrepreneurial opportunity for gain or loss’” was “a more accurate proxy” to use in evaluating independent contractor status under the common law. Id. at 497 (quoting Corporate Express, 292 F.3d at 780).^[106] 

Applying its chosen standard, the court vacated the Board’s order finding that FedEx unlawfully refused to bargain with the union and held that single-route FedEx drivers working out of Wilmington, Massachusetts, were independent contractors. Id. at 504. After pointing out that several common-law factors indicated that the drivers were independent contractors, such as that FedEx did not control when the drivers worked, for how long, or when they could take breaks, the court emphasized that the record revealed “many of the . . . characteristics of entrepreneurial potential.” Id. at 498. Specifically, FedEx permitted the drivers to contract with the company to serve multiple routes, to hire their own employees and replacement drivers, to assign their employment obligations without company permission, and to use their vehicles for other jobs. Id. at 498–500. Looking at those common-law factors through the lens of entrepreneurial opportunity, the court concluded that the indicia of independent contractor status “clearly outweighed” the factors that would support employee status. Id. at 504.

1. The Board’s Decision in FedEx II and the D.C. Circuit’s Response

As mentioned above, the Board refused to acquiesce in the D.C. Circuit’s holding in FedEx I and, in response, issued its decision in FedEx II, creating a new standard for evaluating the common-law agency factors.^[107] In so doing, the Board majority expressly rejected the D.C. Circuit’s holding in FedEx I. 361 NLRB at 610. Instead, under the guise of “more clearly defin[ing] the analytical significance of a putative independent contractor’s entrepreneurial opportunity for gain or loss,” the FedEx II Board found that entrepreneurial opportunity represents merely “one aspect of a relevant factor that asks whether the evidence tends to show that the putative contractor is, in fact, rendering services as part of an independent business.” Id. at 620 (emphasis in original). The Board framed entrepreneurial activity “as part of a broader factor . . . in the context of weighing all relevant, traditional common-law factors identified in the Restatement.” Id. at 617. The FedEx II decision further asserted that the “independent-business factor” should not receive any special weight in the overall common-law agency analysis.

Id. at 621.

Applying its new standard, the Board held, on a materially indistinguishable factual record from FedEx I,^[108] that single-route FedEx drivers were employees under the Act. The Board emphasized that FedEx maintained “pervasive control over the essential details of [its] drivers’ day-to-day work,” and the “core” nature of the drivers’ work to FedEx’s business operations. Id.

Not surprisingly, after reviewing FedEx II, the D.C. Circuit in FedEx III again vacated the Board’s decision. In particular, the court expressly rejected two aspects of the FedEx II decision. First, the court emphasized that, consistent with the Supreme Court’s holding in United Insurance and contrary to the conclusion set forth in FedEx II, the Board was not entitled to deference from the court regarding its interpretation of the common-law agency factors. Second, the court addressed the suggestion in FedEx II that the decision in FedEx I was potentially impermissible under United Insurance due to its application of entrepreneurial opportunity as an animating principle for evaluating the traditional common-law agency rules. The court found that FedEx I was consistent with United Insurance, noting that the analysis in that case “did consider all of the common-law factors as the law requires.” 849 F.3d at 1128. 

D.  The Board’s decision in SuperShuttle

In response to the D.C. Circuit’s twice-made criticism of the Board’s failure to adequately consider the significance of entrepreneurial opportunity in its independent contractor formulation, the Board attempted to formulate a standard that, consistent with the traditional common law, best distinguished independent contractors from employees and, further, could survive judicial review. In its 2019 decision in SuperShuttle, the Board overruled the flawed standard set forth in FedEx II, explaining in detail why the FedEx II Board improperly altered the Board’s independent-contractor test by significantly limiting the importance of entrepreneurial opportunity to the analysis, without any basis in common law for doing so. 367 NLRB No. 75, slip op. at 1, 7–8. Accordingly, the Board decided that, “while all the considerations at common law remain in play, an important animating principle by which to evaluate those factors . . . is whether the position presents the opportunities and risks inherent in entrepreneurialism.” Id., slip op. at 8, quoting FedEx I, 563 F.3d at 497. 

For the reasons set forth in that decision, in which I participated, I believe that the Board’s standard therein is not only consistent with the common law but, as the D.C. Circuit recognized, “better captures the distinction between an employee and an independent contractor.” Corporate Express, 292 F.3d at 780.^[109]

1. II. MY COLLEAGUES’ CRITICISMS OF SUPER SHUTTLE ARE WITHOUT MERIT AND THAT DECISION SHOULD NOT BE OVERRULED

My colleagues’ criticism of SuperShuttle, as well as the D.C. Circuit decisions assessing entrepreneurial opportunity as an animating principle in determining independent contractor status, is that they “cannot be reconciled with the mainstream of Board law, the common law, or Supreme Court precedent.” Working backwards from these premises, I will explain why none is accurate.

Before turning to that analysis, however, I note that my colleagues assert that my primary concern with their decision to reinstate FedEx II is that it won’t be enforced. It is true I do not believe my colleagues’ return to FedEx II will survive judicial review. But make no mistake: my chief disagreement with my colleagues’ return to the FedEx II standard is that FedEx II wrongfully diminished the significance of entrepreneurial opportunity to the Board's independent-contractor formulation by “creating a new factor (‘rendering services as part of an independent business’) and then making entrepreneurial opportunity merely ‘one aspect’ of that factor.” SuperShuttle, 367 NLRB No. 75, slip op. at 1. However, because my objections to the standard my colleagues reinstate today, as well as my explanation of why it is inappropriate, have already been fully addressed in SuperShuttle, I find it unnecessary to repeat that analysis here. Instead, I am focusing my dissent on what I have not already addressed, namely the assertions made by my colleagues in support of their position that SuperShuttle must be overruled. 

1. SuperShuttle is Consistent with Supreme Court Precedent
2. The D.C. Circuit has rejected the argument, proffered by my colleagues, that viewing entrepreneurial opportunity as an animating principle in analyzing the common-law agency factors is inconsistent with United Insurance.

My colleagues assert that recognizing “entrepreneurial opportunity” as an animating principle in application of the common-law agency factors cannot be reconciled with the Supreme Court’s decision in United Insurance, 390 U.S. at 256 (1968). With all due respect to my colleagues, the D.C. Circuit has expressly addressed this argument already and rejected it. In FedEx III, the panel, consisting of Judges Henderson, Millett, and currentJustice Kavanaugh, decided as follows:

The Board contends that [the D.C. Circuit’s decision in] FedEx I transgressed the Supreme Court’s command in United Insurance to consider and weigh all of the common-law factors in evaluating employee status. But, as we indicated in Lancaster Symphony, FedEx I did consider all of the common-law factors as the law requires.

849 F.3d at 1128. Unlike my colleagues, I would not presume to have a better understanding of what the Supreme Court required in United Insurance than the D.C. Circuit, especially considering that a current Supreme Court justice did not find any conflict between the D.C. Circuit’s standard and that case.^[110]

Because so much of my colleagues’ decision centers on their assertion that SuperShuttle—which adopted the D.C. Circuit’s “animating principle” test—cannot be reconciled with United Insurance, they understandably refuse to accept that the D.C. Circuit has already rejected this assertion and attempt to distract from this fact. But their attempts are not successful. To begin, my colleagues suggest that the statement cited above in FedEx III is dicta because “the court was explicit that . . . it relied solely on the ‘law-of-the-circuit’ doctrine” in deciding FedEx III” (emphasis added). With all due respect to my colleagues, that is, at best, an inaccurate oversimplification of the holding in FedEx III. Although the court inarguably relies on “law-of-the-circuit” in reaching its decision, the decision does not stop there. Rather, the court expressly considers and decides three issues that could provide justifications for not applying the “law of the circuit” doctrine to the case. Because it is clear that, had it found any of these three issues to have merit, the court could have rejected the “law of the circuit” doctrine and possibly reached a different outcome, the court’s conclusions regarding these issues had a material effect on the court’s decision and are decidedly not dicta.^[111]    

Two of the issues involved whether, due to the nature of the Board’s decision in FedEx II, that decision was entitled to deference that would warrant an exception from the “law-of-the-circuit” doctrine. First, the court addressed whether it should defer to the new Board decision because the Board had changed its interpretation and implementation of the law where the change is “reasonable, within the scope of the statutory designation, and the departure from past precedent is sensibly explained.” FedEx III, 849 F.3d at 1128 (internal citations omitted). The court found that this possible exception to the “lawof-the-circuit” doctrine was without merit, as commonlaw agency principles do not involve any special administrative expertise and, therefore, no Chevron deference was owed. Similarly, the court considered and rejected the assertion that the Board in FedEx II had made a “choice between two fairly conflicting views” and that, therefore, the new decision was entitled to deference. Id.

The third issue, as noted above, was the Board’s contention that FedEx I could not be reconciled with the Supreme Court’s decision in United Insurance. And, as noted above, the FedEx III court, including currentJustice Kavanagh, expressly rejected that proposition. My colleagues take two approaches to seek to avoid this express finding by the court. First, my colleagues assert that the Board should ignore that holding because the FedEx III court “solely” relied on the “law-of-thecircuit” doctrine. And that, accordingly, this statement was merely dicta. As discussed above, that is not an accurate representation of the FedEx III decision. But even beyond that, my colleagues are apparently suggesting that, even had the FedEx III court determined that FedEx I was in fact inconsistent with Supreme Court law, it would have nevertheless adopted FedEx I based on the “law-of-the-circuit” doctrine. This cannot be true. Indeed, I do not take such a dim view of the D.C. Circuit to assume that it would not recognize that its duty to apply Supreme Court precedent, and to overrule any decision that runs contrary to that precedent, trumps any duty created by the “law-of-the-circuit” doctrine. 

Relatedly, my colleagues seem to assert that the court’s statement regarding United Insurance is of no moment because it was limited to a finding that the court in FedEx I had weighed all the common-law factors. But that is precisely the point. The court in FedEx I had weighed all the common-law factors in light of its view that entrepreneurial opportunity was an “animating principle by which to evaluate those factors . . . .” FedEx I, 563 F.3d at 497. Indeed, the court expressly found that, having considered all the common law factors,

“[b]ecause the indicia favoring a finding the contractors are employees are clearly outweighed by evidence of entrepreneurial opportunity, the Board cannot be said to have made a choice between two fairly conflicting views.” Id. at 504 (emphasis added). Accordingly, the question before the court in FedEx III was not whether the court in FedEx I had actually considered all the common-law factors—it clearly had, and the Board in FedEx II did not argue otherwise. Rather, the obvious question was whether the analysis in FedEx I, considering the common-law factors in light of entrepreneurial opportunity, ran afoul of United Insurance. By finding that because the court in FedEx I had met the requirement of considering all the common-law factors, and therefore its analysis was not at odds with United Insurance, the court in FedEx III clearly found that the FedEx I decision, including its focus on entrepreneurial opportunity, was consistent with United Insurance. 

But even under my colleagues’ erroneous reading of FedEx III, their argument still fails. As detailed above, the D.C. Circuit in FedEx I expressly relied on the earlier holding in Corporate Express, which it characterized as “emphasizing entrepreneurialism” and from which it gleaned that entrepreneurialism was “an important animating principle by which to evaluate those factors . . . .” FedEx I, 563 F.3d at 497. The FedEx I court then held that “Corporate Express is . . . doctrinally consistent with United Insurance and the Restatement.” Id. at 503. Therefore, even assuming that the court in FedEx III had only addressed the issue in dicta, the D.C. Circuit had already expressly found that there was no conflict between the consideration of entrepreneurial opportunity as “an important animating principle” and Supreme Court precedent. 

For the reasons set forth above, my colleagues’ assertion that the “animating principle” doctrine, set forth in FedEx I and adopted in SuperShuttle, cannot be reconciled with United Insurance can only be true if the D.C. Circuit is simply wrong: wrong about what the Supreme Court held in United Insurance and wrong about what the common law of agency requires. Effectively, by asserting that their interpretation of United Insurance should trump that of the D.C. Circuit, my colleagues are taking the position that the Board knows better than the courts when it comes to interpreting the scope and meaning of Supreme Court decisions as well as interpreting the common law. I do not share that view.

2. Neither SuperShuttle, nor the application of SuperShuttle, treated “entrepreneurial opportunity” as the deciding consideration, to the exclusion of the other traditional common-law agency factors.

As the SuperShuttle Board carefully explained, the FedEx II Board mischaracterized the D.C. Circuit’s analysis of entrepreneurial opportunity in FedEx I as treating entrepreneurial opportunities as the “the overriding consideration in all but the clearest cases” and as the “single animating principle in the inquiry.” Id., slip op. at 8 (quoting FedEx II, 361 NLRB at 617-618). In my view, the SuperShuttle Board rightly found that based on the FedEx II Board’s misreading of the D.C. Circuit’s analysis of entrepreneurial opportunity, the FedEx II Board greatly diminished the significance of entrepreneurial opportunity to the Board’s independent-contractor formulation by “creating a new factor (‘rendering services as part of an independent business’) and then making entrepreneurial opportunity merely ‘one aspect’ of that factor.” 367 NLRB No. 75, slip op. at 1.

To begin, the majority repeatedly asserts that the Board in SuperShuttle elevated consideration of entrepreneurial opportunities to an undue level of prominence, reasoning that the Board treated it as a sort of “superfactor.” These assertions are erroneous. In SuperShuttle, the Board stated:

[W]e will continue to adhere . . . to the [Supreme] Court’s decision, considering all of the common-law factors in the total factual context of each case and treating no one factor (or the principle of entrepreneurial opportunity) as decisive. And where the commonlaw factors, considered together, demonstrate that the workers in question are afforded significant entrepreneurial opportunity, we will likely find independentcontractor status. Thus, our approach is faithful to United Insurance and the common-law agency test that it requires.

The SuperShuttle Board further emphasized that “‘the tenfactor test is not amenable to any sort of bright-line rule’” and that “’there is no shorthand formula or magic phrase that can be applied to find the answer, but all the incidents of the relationship must be assessed and weighed with no one factor being decisive.’” Id., slip op. at 8 (quoting United Insurance, 390 U.S. at 258).

Importantly, the cases applying SuperShuttle demonstrate that the Board did not treat entrepreneurial opportunity as a “super-factor” but rather applied and considered all of the relevant common-law factors to determine whether the workers at issue do or do not possess entrepreneurial opportunity. In Velox Express, Inc., 368 NLRB No. 61, slip op. at 1, 3–4 (2019), after evaluating the common-law factors through the prism of entrepreneurial opportunity, the Board concluded that many factors supporting employee status substantially outweighed the two factors supporting independent-contractor status, and the drivers had little entrepreneurial opportunity for economic gain. Specifically, the Board reasoned that the drivers did not have the authority to determine their work schedule, their routes, or their customers. Id., slip op. at 3. The Board indicated that the employer assigned routes with specific stops that drivers had to service on designated days and during specific time periods. Id. In addition, the Board explained that the drivers did not have “a proprietary interest in their routes, and thus they [could not] sell or transfer them, nor [could] they hire employees to service their routes.” Id. The Board also reasoned that the employer’s method of compensation did not provide the drivers significant entrepreneurial opportunities because they received the same amount of compensation regardless of their efforts. Id. Thus, the Board concluded that the drivers did “not have any meaningful opportunity for economic gain (or run any meaningful risk of loss) through their own efforts and initiative” and were deemed employees under the Act. Id. at 4.

Similarly, in Intermodal Bridge Transport, 369 NLRB No. 37, slip op. at 1–2 (2020), the Board found that the employer’s drivers had little opportunity for economic gain or risk of loss after considering the common-law factors through the prism of entrepreneurial opportunity, which weighed heavily against a finding of independentcontractor status. The Board observed that the drivers had little control over when and how long they worked and what loads to haul. Id. slip op. at 2. The Board further noted that the drivers did “not have their own routes, let alone a proprietary interest in routes that they can sell or transfer, nor can they hire employees to work in their stead.” Id. The Board further explained that the employer determined the drivers’ compensation and expenses. Id., slip op. at 2–3. The Board also noted that the drivers did not have to make “a significant initial investment or take on a serious risk of loss to enter into a relationship” because the employer provided the truck, which was leased to the drivers for an assigned shift. Id. slip op. at 3. Under these circumstances, the Board found that the drivers did not “have any meaningful opportunity for economic gain (or run any meaningful risk of loss) through their own efforts and initiative.” Id. These cases show that the SuperShuttle standard “consider[s] how the evidence in a particular case, viewed . . . in light of all the commonlaw factors, reveals whether the workers at issue do or do not possess entrepreneurial opportunity.” 367 NLRB No. 75, slip op. at 11.^[112] Moreover, the application of SuperShuttle in these cases, makes clear that the test poses no great bar to finding that individuals are employees rather than independent contractors.^[113]

1. The standard set forth in SuperShuttle was not contrary to Board Precedent

My colleagues further maintain that the SuperShuttle standard must be reversed because it is contrary to Board precedent. To begin, it is rather bold for my colleagues to take this position when their decision today requires them to overrule two cases: Arizona Republic, 349 NLRB 1040 (2007), and St. Joseph News-Press, 345 NLRB 474 (2005). Indeed, my colleagues want to have it both ways. They criticize SuperShuttle for failing to apply established Board precedent, yet they do not have enough faith in that established precedent to revert back to it. Instead, they choose to create new law. They set forth new, limiting factors to be used to determine whether a putative contractor has a significant entrepreneurial opportunity. They suggest that only evidence that the employer has effectively imposed constraints on an individual’s ability to render services as part of an independent business is relevant.¹³ They “reaffirm” the principle that, even where individuals have exercised an entrepreneurial opportunity—and realized a profit—they will not credit that exercise if an employer has placed “significant constraints” upon that entrepreneurial opportunity. Yet, even though it requires the overruling of Board precedent, they assert that their decision today merely “clarifies” existing precedent. I leave it to the reader to decide whether that is an accurate representation of today’s decision. I also note that, in making this point, my colleagues must “disavow” the D.C. Circuit’s characterization of Board precedent. In other words, the D.C. Circuit was wrong yet again.

In support of their contention that SuperShuttle is contrary to the Board’s traditional independent-contractor analysis, my colleagues state that the Board’s independent-contractor case law has historically considered whether the putative contractors had significant entrepreneurial opportunity for gain or loss only as one factor among the other relevant common-law factors.¹⁴ They note that the Board decisions post-Roadway never examined “whether the position presents the opportunities and risks inherent in entrepreneurialism” and that the Board has never shifted its emphasis to entrepreneurial opportunity as an animating principle.

It is true that the post-Roadway Board decisions did not explicitly describe whether the putative contractors had significant entrepreneurial opportunity for gain or loss in this manner. And some cases relied on by my colleagues simply cite to the language whether the purported contractors have significant entrepreneurial opportunity for gain or loss alongside the Restatement factors. However, my colleagues have misconstrued the principle whether the putative contractors have significant entrepreneurial opportunity for gain or loss and have misread the post-Roadway cases by simply highlighting the Board’s explicit reference to this language. Contrary to my colleagues’ assertions, since Roadway, the Board has considered a number of common-law factors to determine whether workers were provided with the entrepreneurial opportunity for gain or loss.

In Roadway, the Board found that the employer’s demanding schedules for the drivers and detailed specifications for the drivers’ trucks effectively precluded drivers from pursuing business activity during their off-work hours and therefore constrained the “entrepreneurial independence” that ownership of a truck provides its driver. 326 NLRB at 851, fn. 36. The Board observed that the employer “has simply shifted certain capital costs to the drivers without providing them with the independence to engage in entrepreneurial opportunities.” Id. at 851. Moreover, the Board found that the drivers’ potential for “entrepreneurial profit” was suppressed by the employer’s control over their routes, the number of packages and stops on their routes, and the prices charged to customers, and their compensation. Id. at 852–853. Finally, the Board found that the employer’s “considerable control” over whether the drivers can sell their routes imposed significant limitations on the drivers’ potential to “influence their profits like entrepreneurs.” Id. at 853.¹⁵

In addition, contrary to my colleagues’ position, the Board in Corporate Express Delivery Systems, 332 NLRB 1522, 1522 (2000), enfd. 292 F.3d 777 (D.C. Cir. 2002), relied on entrepreneurial opportunity in evaluating the overall effect of the common-law factors. There, the Board found that the drivers had “no significant opportunity for entrepreneurial gain or loss” where the employer controlled the routes, the base pay, and the amount of freight on each route, and did not permit the drivers to add or reject customers and hire others to drive their route. Id. Although it is true that the Board did not expressly indicate that there was a shift in its analysis, it is clear that the “extent of control” common law factor was interpreted through the lens of entrepreneurial opportunity.^[114] 

In other cases, the Board has found that specific common-law factors favored independent-contractor status because they afforded workers with significant entrepreneurial opportunity for gain or loss. In Dial-A-Mattress Operating Corp., 326 NLRB 884, 891 (1998), the companion case to Roadway, the Board, in finding that the drivers were independent contractors, emphasized that the drivers had significant entrepreneurial opportunity for gain or loss where they could own multiple trucks and hire their own employees over whom they had complete control, they were not guaranteed minimum compensation, they could decline orders, and they were not expected to provide delivery services on every workday.^[115]Similarly, in St. Joseph News-Press, 345 NLRB 474 (2005), the Board, found that certain conditions “permit[ted] a carrier to be an entrepreneur—enabling carriers to take economic risk and reap a corresponding opportunity to profit ‘from working smarter, not just harder.’” Id. at 479 (quoting Corporate Express, 292 F.3d at 780). Specifically, the Board reasoned that the carriers could hire full-time substitutes over whom they had complete responsibility, hold contracts on multiple routes, deliver other products (including for competitors) while delivering the employer’s newspaper, and solicit new customers. 345 NLRB at 479. Likewise, in Argix Direct, Inc., 343 NLRB 1017, 1020 (2004), the Board, at the outset, emphasized that the “owner-operators ha[d] a significant proprietary interest in the instrumentalities of their work.” In this respect, the Board noted that the employer’s drivers owned or leased the trucks and the employer permitted the drivers to use their trucks for purposes other than delivering for the employer. Id. The Board further reasoned that some of the employer's drivers were entrepreneurs who owned multiple trucks and hired their own drivers and that all of the drivers could “choose to maximize or minimize their income” because they determined their work schedules and therefore chose when and when not to work. Id. at 1021.^[116]

In sum, my colleagues are clearly incorrect when they assert that the post-Roadway Board decisions show no shift in emphasis away from control and to entrepreneurial opportunity. As discussed above, the Board has since Roadway found that specific common-law factors may or may not demonstrate entrepreneurial opportunity depending on the overall circumstances of the case. Indeed, as noted above, in St. Joseph News-Press, 345 NLRB at 479, the Board relied on the key language from the D.C. Circuit’s decision in Corporate Express, in addressing the entrepreneurial nature of the carriers’ employment. Board precedent simply does not support the FedEx II standard reinstated by my colleagues today that attempts to cabin consideration of entrepreneurial opportunity to one aspect of a single factor.

Further, the SuperShuttle Board and D.C. Circuit’s approach of treating entrepreneurial opportunity as a principle to help evaluate the overall effect of the commonlaw factors on a putative contractor’s independence to pursue economic gain, is consistent with other courts of appeals that have also recognized that entrepreneurial opportunity is an important consideration in evaluating the traditional common-law agency factors.^[117] In Painting Co. v. NLRB, 298 F.3d 492, 500 (6th Cir. 2002), the Sixth Circuit Court of Appeals agreed with the Board that the two individuals at issue were “not independent contractors, especially because they did not have any meaningful entrepreneurial or proprietary component to their employment.” The court reasoned that neither individual “exhibited any meaningful entrepreneurial or proprietary characteristics that would lead one to believe that they controlled the terms of the work they completed.” Id. Similarly, in NLRB v. Friendly Cab Co., 512 F.3d 1090, 1097 (9th Cir. 2008), the Ninth Circuit Court of Appeals, in finding that drivers were employees “place[d] particular significance on Friendly’s requirement that its drivers may not engage in any entrepreneurial opportunities.” Citing the D.C. Circuit’s decision in Corporate Express, 292 F.3d at 780, the Ninth Circuit recognized

The ability to operate an independent business and develop entrepreneurial opportunities is significant in any analysis of whether an individual is an “employee” or an “independent contractor” under the common law agency test. Friendly’s restrictions against its drivers’ operating independent businesses or developing entrepreneurial opportunities strongly supports the NLRB's determination that Friendly’s drivers are employees.

512 F.3d at 1098. And the Eleventh Circuit Court of Appeals in NLRB v. Associated Diamond Cabs, Inc. stated that “Congress intended for the line between employees and independent contractors to be drawn by reference to the traditional principles of agency law and, within those principles, the degree to which agents have only a vicarious interest in the work as opposed to an independent entrepreneurial interest in the venture.” 702 F.2d 912, 919 (11th Cir. 1983) (internal quotation marks omitted).^[118] Accordingly, what my colleagues attempt to depict as one aberrant decision in FedEx I, is anything but that.

Further, I take issue with my colleagues’ position that the court in FedEx I pulled the approach of treating entrepreneurial opportunity as a principle to evaluate the significance of the common-law factors in determining whether a worker is an employee or an independent contractor out of thin air.^[119] Not only do my colleagues misread the Board’s post-Roadway precedent as detailed above, but they fail to acknowledge that it was the Board itself that advocated for this approach before the D.C. Circuit in the first place. In the Board’s brief to the court in Corporate Express, the General Counsel said that “[a] related consideration, as Judge Learned Hand made plain, is the extent to which the service provider has a significant proprietary interest in a business and possesses significant entrepreneurial prerogatives that influence his remuneration.” Corporate Express Delivery Systems v. NLRB, 2001 WL 36039100, at 22 (November 16, 2001). The General Counsel further observed that “the fact that a service provider is subject to significant manner-and means controls cannot convert a bargain that was struck by an independent businessman into a basis for finding an employer-employee relationship.” Id. Conversely, the General Counsel noted that “where there is no ownership or proprietary interest in a business and minimum entrepreneurial prerogatives, it is more likely that an employer-employee relationship will be found to exist.” Id. As set forth above, the D.C. Circuit in Corporate Express adopted the General Counsel’s argument, stating it was reasonable of the Board “to focus not upon the employer’s control of the means and manner of the work but instead upon whether the putative independent contractors have a significant entrepreneurial opportunity for gain or loss.” 292 F.3d at 780. Building on Corporate Express, the General Counsel emphasized to the court in FedEx I that it had previously found “that a significant factor bearing on an employer’s control over a worker is the extent to which the worker can be said to have an entrepreneurial interest in his business.” FedEx Home Delivery v. NLRB, 2008 U.S. D.C. Cir. Briefs LEXIS 28, at 41-42 (June 20, 2008). The General Counsel further pointed to “the Board’s focus on the existence of ‘significant entrepreneurial opportunity for gain or loss.’” Id. at 42. Accordingly, contrary to my colleagues’ position, this was not the D.C. Circuit’s “misperception that the Board . . . adopted a new approach.” Rather, the court reasonably adopted and endorsed the Board’s characterization of entrepreneurial opportunity. And as explained above, this approach of treating entrepreneurial opportunity as a principle to help evaluate the overall effect of the common-law factors that was advocated to the court comports with the Board’s independent-contractor case law.^[120]

1. SuperShuttle is consistent with common-law agency principles

   Finally, the majority asserts that the independent-contractor standard in SuperShuttle, based on the standard adopted by the D.C. Circuit, cannot be reconciled with common-law agency principles. Again, by taking this position, the necessary conclusion is that the D.C. Circuit is wrong. And again, I disagree. This position is especially remarkable given that no court has rejected the SuperShuttle decision’s assessment of the role entrepreneurial opportunity plays in evaluating independent contractor status. In fact, as discussed above, several courts have recognized entrepreneurial opportunity as an important consideration in evaluating the common-law agency principles.

As detailed above, the Board’s subtle shift in emphasis from control to entrepreneurial opportunity as a principle to help evaluate the overall effect of the commonlaw factors did not fundamentally revise the Board’s independent-contractor test. As set forth in SuperShuttle, employer control and entrepreneurial opportunity are opposite sides of the same coin: the more of one, the less of the other. 367 NLRB No. 75, slip op. at 9. The Board in SuperShuttle simply shifted the lens through which the Board considers the importance of the common-law factors to what the D.C. Circuit independently determined to be a “more accurate proxy” to “‘capture[] the distinction between an employee and an independent contractor.’”  Id., slip op. at 11 (quoting FedEx I, 563 F.3d at 497).^[121] 

The majority repeatedly states that “SuperShuttle rested on the premise that entrepreneurial opportunity is the core concept of the traditional common-law agency test.” The majority has mischaracterized a comment in a footnote in SuperShuttle stating that “as our review of the Board’s case law shows, entrepreneurial opportunity, however it is characterized, has always been at the core of the common-law test.” 367 NLRB No. 75, slip op. at 2 fn. 4 (emphasis added). The SuperShuttle Board did not say, as my colleagues claim, that any of the Restatement Section 220(2) factors expressly cite the principle of entrepreneurial opportunity. Rather, the point the footnote was making was that the Board's case law post-Roadway shows that the Board, in evaluating entrepreneurial opportunity, has considered a number of common-law factors to determine whether workers were provided with the entrepreneurial opportunity for gain or loss. Further, the footnote is consistent with Corporate Express, where the D.C. Circuit drawing on the comments in the Restatement (Second) of Agency, reasoned that whether the putative independent contractors have a significant entrepreneurial opportunity for gain or loss “better captures the distinction between an employee and an independent contractor,” because it is not “the degree of supervision under which [one] labors but . . . the degree to which [one] functions as an entrepreneur—that is, takes economic risk and has the corresponding opportunity to profit from working smarter, not just harder,” that better illuminates one’s status. 292 F.3d at 780.

Tracking the language in FedEx II, my colleagues reiterate that the Board will consider only actual (not merely theoretical) entrepreneurial opportunity, and the constraints on the individual’s ability to take such opportunities. In so finding, they disagree with the court’s finding in FedEx I that the FedEx drivers’ right to sell their routes provided evidence of actual entrepreneurial opportunity, reasoning that the drivers’ ability to assign their routes was constrained. I agree with my colleagues that the Board should give weight only to actual (not merely theoretical) entrepreneurial opportunity. The Board has long considered whether entrepreneurial opportunities are actual and not merely theoretical.^[122] Indeed, the D.C. Circuit has stated that “if a company offers its workers entrepreneurial opportunities that they cannot realistically take, then that does not add any weight to the company's claim that the workers are independent contractors.” C.C. Eastern, Inc. v. NLRB, 60 F.3d 855, 860 (D.C. Cir. 1995). Further, the Board has analyzed entrepreneurial opportunity for gain or loss in terms of constraints on the ability to take such opportunities (e.g., whether a putative contractor has the ability to work for other companies or hire employees without approval).^[123] But contrary to the majority’s position, I do agree with the court in FedEx I that the FedEx drivers’ right to sell their routes provided evidence of actual entrepreneurial opportunity. The FedEx I court found that drivers had significant entrepreneurial opportunity where two drivers were able to sell their routes for a profit ranging from $3,000 to $16,000, drivers could operate multiple routes, and drivers could use their trucks to conduct other business outside of FedEx work. 563 F.3d at 499-500. The court found the fact that at least one person had seized an opportunity was sufficient to establish that an actual opportunity exists because “there is no unwritten rule or invisible barrier” preventing others from taking such opportunities. Id. at 502 (quoting C.C. Eastern, 60 F.3d at 860). The majority further argues that in FedEx I, the FedEx drivers’ opportunities to assign their routes was “significantly constrained” because they could only sell to buyers that FedEx “accepted as qualified.” But as the court found, being qualified simply meant that the buyer met Department of Transportation regulations. FedEx I, 563 F.3d at 499. And the Board has held that government-imposed rules and regulations generally do not constitute control by the employer. A.K.A. Metro Cab Co., 341 NLRB 722, 724 (2004).

Finally, the majority contends that SuperShuttle’s approach to entrepreneurial opportunity is not supported by the Act’s policies. The majority reasons that the policy of the Act is “encouraging the practice and procedure of collective bargaining and . . . protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing” and that “exclusions from statutory coverage should be interpreted narrowly, not expansively.” They further cite the Supreme Court's admonition that “administrators and reviewing courts must take care to assure that exemptions from NLRA coverage are not so expansively interpreted as to deny protection to workers the Act was designed to reach.” Holly Farms Corp. v. NLRB, 517 U.S. 392, 399 (1996). But as discussed above, the Board made clear in SuperShuttle that Congress rejected the Hearst approach of deciding “independent contractor” issues based on policy considerations. In its place, Congress decided that such issues are to be resolved on the basis of the common law. 

1. The Majority’s Return to FedEx II will Likely Not Survive Judicial Review

As I have already highlighted, the majority’s decision to overturn SuperShuttle and return to the standard in FedEx II likely will not withstand judicial review.^[124] The

D.C. Circuit having (twice) found that a standard using entrepreneurial opportunity as an “animating principle”—as set forth in Corporate Express and FedEx I and adopted by SuperShuttle—is consistent with Supreme Court law, Board precedent, and the common law, there is no reason to expect the court to reach a different conclusion this time. Because the D.C. Circuit has plenary jurisdiction to review Board decisions, it is a possible venue for review of the instant case.²⁷ Nor, for that matter, do I believe my colleagues’ assertions that SuperShuttle must be overruled will be welcomed by the Eleventh Circuit, which would also have jurisdiction over any petition for review in this case. See Associated Diamond Cabs, 702 F.2d at 924. 

In addition, as discussed above, the Board’s return to the FedEx II standard for determining independentcontractor status is entitled to no deference by a reviewing court. In United Insurance, in applying the commonlaw agency test, the Supreme Court specifically held that the statutory exclusion from the Act of those “having the status of independent contractor” is a “determination of pure agency law” that involves “no special administrative expertise that a court does not possess.” 390 U.S. at 260; accord FedEx III, 849 F.3d at 1128.

For all of these reasons, as well as the reasons already set forth in SuperShuttle, it is my view that SuperShuttle Board properly overruled the Board's FedEx II decision and restored to the Board’s analysis the appropriate consideration of entrepreneurial opportunity as the animating principle of all independent-contractor factors under the common law.

1. III. APPLICATION OF STANDARD TO FACTS OF THIS CASE

Nonetheless, turning the facts of this case, I agree with my colleagues that the workers whom the Petitioner seeks to represent—makeup artists, wig artists, and hairstylists (collectively known as stylists)—are employees of The Atlanta Opera, Inc. (the Employer). I believe that the result in this case is the same under the FedEx II standard, which my colleagues have reinstated today, or the SuperShuttle standard.

A.  Essential Facts

The Employer presents live operatic performances at theatrical venues in the Atlanta, Georgia area. The process of planning each operatic production starts years in advance. Tomer Zvulun, the Employer’s general and artistic director, is charged with artistic quality and planning as well as managerial duties. The Employer employs a total of 32 full-time staff, including senior management, as well as 16 seasonal employees, including company players and studio artists. The Employer typically offers four performances of four productions on its main stage each season in addition to four to eight performances of two smaller operas. Each season runs from autumn to spring. The Employer begins the planning of a particular opera by choosing a director who determines the artistic vision of the production. The director selects a design team, which is comprised of lighting designers, a costume designer, a set designer, a sound designer, a wig designer, and/or a makeup designer.

The wig and makeup designer collaborates with a wig and makeup department head, who hires the stylists that are needed for the production. Stylists do not work under written contracts. They are paid an hourly rate and submit written timesheets to account for their hours worked. Stylists are also able to earn overtime pay based on the Employer’s needs. The Employer does not share any of its revenues from ticket sales with stylists. And stylists do not make any profit or risk loss based on the production’s success. None of the stylists are on the Employer’s payroll but rather are considered vendors. The Employer does not pay for unemployment insurance, and stylists are not eligible for health insurance or any other benefits. And the Employer does not withhold taxes from stylists’ pay and stylists complete a W-9 tax form. Stylists are not required to wear uniforms, although they wear black during performances to minimize their visibility to the audience. Stylists are not covered by the Employer’s personnel policies except for its infectious disease policies.

Frandresha Brie Hall, who is a member of the petitioned-for unit, has been the wig and makeup designer and wig and makeup department head for the Employer’s most recent productions. For both positions, unlike the other stylists, Hall signed agreements with the Employer indicating that she is an independent contractor. Hall chooses stylists who can commit to the entire production, which typically comprises 8 days of work for rehearsals and public performances. A stylist commits to a schedule for the entire course of the show after being hired for a production. If a stylist is unavailable for a specific performance, Hall informs the Employer that she is finding a substitute. Stylists cannot hire or find their own replacements if they are not available for a particular date.

Hall assigns work to each of the stylists. Stylists’ main duty is to implement the performers’ wig, hair, and makeup looks required for each production. Specifically, stylists apply makeup for the performers, prepare wigs to fit them to the specific performers, style performers’ natural hair based on the desired looks, prepare special makeup effects, and take off the performers’ makeup, wigs, and microphones after the performance. The Employer provides no training nor orientation for stylists. Rather, stylists are required to have the skills to do the hair, wig, and makeup work that is necessary for the job. Hall looks to hire stylists who have the requisite skills and who have worked on past productions by the Employer. Stylists’ work entails specific knowledge of makeup, hair, and wigs for stage productions, including the skill to achieve specific looks and styles. Hairstylists are required to be certified in Georgia.

Although no one directly monitors or instructs stylists while they do their wig and makeup work, they are expected to implement the vision that director Zvulun has created for each character. Zvulun typically provides instruction in the form of verbal or written notes to Hall, which Hall relates to the stylists. Hall always follows the director’s directives, and with Zvulun’s constant feedback throughout rehearsals, the characters’ respective looks are created. After stylists are finished styling the performers, Hall checks their work to make sure that their looks comport with the Director’s guidelines. Zvulun also provided directives directly to the stylists, including, among other things, instructing stylists to use more eyeliner, tighten ponytails, and modify a wig. The Employer supplies stylists with all requisite tools but if they prefer, stylists can bring their own tools. Stylists’ hours of work are determined solely by the Employer’s master schedule and the specific hair, wig, and makeup needs for each production. Based on knowledge of the performers’ needs, Hall schedules stylists based on the Employer’s rehearsal and performance schedule.

Stylists work for the Employer for only one production. The Employer does not commit to rehire stylists it has used for past productions for future productions. Nor does the Employer limit the stylists’ ability to work with other performing-arts entities. Stylists are able to commit to other jobs during a production with the Employer. However, on show days, stylists are working from 7 to 9 hours.

B.  Applying the Common-Law Factors

I find that under either the common-law agency test as stated in SuperShuttle or the reinstated FedEx II standard, the Employer failed to meet its burden of establishing that the stylists are independent contractors. I therefore agree with my colleagues that the Employer’s stylists are employees under Section 2(3) of the Act.

1. Extent of control by Employer

I agree with my colleagues that this factor weighs in favor of employee status. The Employer exercises substantial control over the essential details of stylists’ dayto-day work. In this respect, the stylists’ main duty is to execute director Zvulun’s artistic vision for each character. The Employer controls every detail of a character’s look. Moreover, the Employer determines the time and location of rehearsals and performances, the stylists’ daily schedules, and the availability of breaks and overtime. See Centerfold Club, 370 NLRB No. 2, slip op. at 1 (finding that unlike the drivers in SuperShuttle that had a high degree of autonomy, the employer maintained substantial control over the dancers’ day-today work which limited the dancers’ opportunities for economic gain); Velox Express, 368 NLRB No. 61, slip op. at 3-4  (finding that the employer’s drivers were employees where, among other things, they did not have the ability to determine their schedules).^[125]

2. Method of payment

I find that this factor weighs heavily in favor of employee status. The Employer pays stylists an hourly wage with the potential for overtime. Because stylists are guaranteed the same rate of compensation for a performance, over which they have no control, they do not have any real opportunity for economic gain (or, conversely, risk of loss) through their own efforts and initiative. See Intermodal Bridge Transport, 369 NLRB No. 37, slip op. at 2 (finding that employer’s method of compensating the drivers did not provide them entrepreneurial opportunity where they were paid a per-load rate); Velox Express, 368 NLRB No. 61, slip op. at  3  (finding that where the drivers were paid a flat rate, they “[could not] work harder, let alone smarter, to increase their economic gain” and they “receive[d] the same amount of compensation no matter what they d[id]”).^[126] 

3. Instrumentalities, tools, and place of work

I agree with my colleagues that this factor weighs in favor of employee status. 

The Employer furnishes all equipment, supplies, and workspaces that is required for stylists to do their jobs. Unlike in SuperShuttle, where the franchisees made significant initial investment, including paying the franchise fee and acquiring a van, and then continued to make ongoing investments to maintain and operate the van, stylists’ investment is minimal. See Centerfold Club, 370 NLRB No. 2, slip op. at 1, 17 (noting that the employer’s dancers made minimal investment where the employer provided the building, furniture, lighting, sound system, stages, and music).

4. Supervision

I agree with my colleagues that this factor weighs in favor of employee status. Although the Employer doesn’t directly monitor or instruct stylists while they do their wig and makeup work, the Employer controls their work by relating constant detailed feedback and instructions. See Intermodal Bridge Transport, 369 NLRB No. 37, slip op. at 3 (noting that although the drivers were free from in-person supervision, the employer controlled the details of their work through a several policies and procedures).

5. Whether or not the parties believe they are creating an independent-contractor relationship

I agree with my colleagues that this factor inconclusive. Aside from Hall, all stylists entered into informal oral agreements that did not address stylists’ relationship to the Employer, and there was no mutual understanding between the parties. Compare St. Joseph News-Press, 345 NLRB at 479 (noting that the parties believed that they were creating an independent contractor relationship where the carriers’ contracts indicated that there was an independent contractor relationship).

6. Whether or not individual is engaged in a distinct occupation or business

I find that this factor weighs in favor of contractor status. As recognized by my colleagues, stylists work in a distinct occupation as theatrical makeup artists and wig and hair stylists. They have specialized knowledge in this field and are hired by the Employer for their professional skills. See Pennsylvania Academy of the Fine Arts, 343 NLRB 846, 847 (2004) (finding that models at art academy “engaged in the distinct occupation of modeling” supported contractor status). However, I disagree with my colleagues that stylists are fully integrated into the Employer’s company and productions. In this respect, stylists do not engage in business in the Employer’s name. Nor are they subject to the Employer’s rules and regulations. See Minnesota Timberwolves Basketball, LP, 365 NLRB No. 124, slip op. at 6 (2017) (finding that crewmembers were not well integrated into the employer’s organization where they did conduct business in the employer’s name, identify themselves out as the employer’s employees, were not issued employer credentials, or handbook, and did not attend employer meetings or events such as holiday parties); compare Intermodal Bridge Transport, 369 NLRB No. 37, slip op. at 13 (finding that the drivers were fully integrated into the employer’s operations where the drivers operated in the employer’s name and they used the employer’s insurance).

7. Whether or not work is part of the regular business of the employer & the principal’s business

I agree with my colleagues that these factors weigh in favor of employee status.  These two factors are closely related. As my colleagues observe, the stylists’ job in providing makeup, hair, and wig treatments to onstage performers is necessary to the Employer’s regular business of presenting opera performances. The Employer cannot conduct its business without stylists. See Intermodal Bridge Transport, slip op. at 3 (finding employee status where drivers’ work was an essential part of employer’s logistics, drayage, and container-storage business); BKN, Inc., 333 NLRB at 145 (holding that employee-writers clearly performed functions that were an essential part of the employer’s normal business).

8. Length of employment

I agree with my colleagues that this factor weighs in favor of contractor status.

Stylists are hired for a single-production and there is no evidence that they have any expectation of continuous employment. See Pennsylvania Academy of the Fine Arts, 343 NLRB at 847 (finding that the employer and the models did not have an ongoing relationship indicative of employee status where the model’s contract was limited to a single a semester).

9. Skill required in the occupation

I agree with my colleagues that this factor weighs in favor of contractor status.  As set forth above, stylists exercise considerable skill in achieving the wig, hair and makeup looks that is required for each production. Further, the Employer does not provide training for stylists; they are expected to know how to do the work required for the job.

10. Determination

Evaluating the common-law factors through the prism of entrepreneurial opportunity, I find that on the facts of this case, stylists have little opportunity for economic gain or, conversely, risk of loss. As set forth above, the Employer exercises significant control over stylists’ work, which in turn, results in a significant degree of control over stylists’ opportunities for economic gain. The Employer controls stylists’ schedules and determines the hours to be worked, including the need for overtime. Further, the Employer's method for compensating stylists does not afford them entrepreneurial opportunity. Stylists are paid an hourly rate and do not receive a percentage of the Employer’s revenues from ticket sales, nor do they sustain profits or losses based on the relative success of a production. Further, stylists are unable to subcontract or hire anyone else to do hair, wig, and makeup work for them. See Intermodal Bridge Transport, 369 NLRB No. 37, slip op. at 2 (finding that employer’s drivers have little opportunity for economic gain where, among other things, they could not hire others to work for them). In addition, unlike the drivers in SuperShuttle, who made a significant economic investment and faced significant economic risk, stylists make minimal investment and have minimal economic risk. Therefore, stylists do not have a proprietary interest in their work. Finally, that stylists routinely work for several employers does not so much reflect significant entrepreneurial opportunity as it does the fact that the Employer’s productions occur on a seasonal and intermittent basis, and therefore exclusive employment with the Employer is not possible. See Velox Express, 368 NLRB No. 61, slip op. at 4.

Therefore, I agree with my colleagues that the Employer failed to establish that the stylists are independent contractors. The stylists are thus employees under Section 2(3) of the Act.

CONCLUSION

As set forth above, I believe that FedEx II was wrongly decided and that my colleagues’ return to that standard is entirely unjustified. In SuperShuttle, the Board acted in response to the D.C. Circuit's rejection of the Board’s operative independent-contractor standard set forth in FedEx II. The SuperShuttle decision incorporated the established standard used by the D.C. Circuit, which, as the court found, was both consistent with common law and Supreme Court precedent. By contrast, since the issuance of SuperShuttle, no court has indicated disagreement with the D.C. Circuit’s standard. To the contrary, other courts have similarly recognized that entrepreneurial opportunity is an important consideration in evaluating the traditional common-law agency factors. Because I believe that SuperShuttle was correctly decided, and further, because I am far less optimistic than my colleagues that the standard they set forth today will find success in the courts of appeals, I dissent.

Dated, Washington, D.C.  June 13, 2023

______________________________________

Marvin E. Kaplan,                        Member

                  NATIONAL LABOR RELATIONS BOARD

[1] NLRB at 850.

[2] Id.

[3] Id.

[4] Id. at 851; Dial-A-Mattress Operating Corp., 326 NLRB 884, 891 (1998). See also Standard Oil Co., 230 NLRB 967, 971 (1977) (finding that “all meaningful decisions of an entrepreneurial nature which affect profit or risk of loss are controlled by the [c]ompany”). In United Insurance, immediately after recognizing that “[w]hat is important is that the total factual context is assessed in light of the pertinent commonlaw agency principles,” the Supreme Court noted that the putative contractors in that case “do not operate their own independent businesses.” 390 U.S. at 258-259. The Board has at times, alongside the Restatement factors, considered whether putative contractors operate their own independent businesses by assessing whether they have significant entrepreneurial opportunity. See, e.g., Standard Oil Co., supra, 230 NLRB at 971 (finding that the putative contractors “have no significant entrepreneurial opportunity” because their “limited opportunities to take risks and influence their profits by their own business decisions are more consistent with an employment, than with an independent contractor, relationship”).

[5] See C.C. Eastern, 309 NLRB 1070, 1070-1071 (1992), enf. denied 60 F.3d 855 (D.C. Cir. 1995); Stamford Taxi, 332 NLRB 1372, 1373 (2000).

[6] See C.C. Eastern, supra, 309 NLRB at 1071; Slay Transportation Co., 331 NLRB 1292, 1294 (2000).

[7] See Roadway, supra, 326 NLRB at 853.

[8] Id. at 850 (quoting 390 U.S. at 258). 

[9] Id. at 851.

[10] F.3d at 497 (quoting Corporate Express Delivery Systems v. NLRB, 292 F.3d 777, 780 (D.C. Cir. 2002)).

[11] Id.

[12] Id.

[13] Id. at 504-519 (Garland, J., dissenting).

[14] In Corporate Express, 332 NLRB 1522, 1522 (2000), one of the cases cited by the Circuit and our dissenting colleague, the Board found that driver “owner-operators” working for a delivery company were statutory employees, not independent contractors, but gave no special emphasis to the concept of “entrepreneurial opportunity.” In Arizona Republic, 349 NLRB 1040 (2007), meanwhile, a divided Board also reaffirmed Roadway and considered several factors (including “entrepreneurial potential” in connection with “method of compensation”) in determining that the newspaper carriers at issue were independent contractors. But here, too, there was no hint of a shift in emphasis or the elevation of “entrepreneurial opportunity” into an “animating principle.” 

The same is true of two other Board decisions briefly cited by the Circuit panel majority as well as our dissenting colleague. In St. Joseph News-Press, 345 NLRB 474 (2005), a divided decision involving newspaper carriers, a Board majority reaffirmed Roadway, observing that “both the right of control and other factors, as set out in the Restatement, are to be used to evaluate claims that hired individuals are independent contractors.” Id. at 478. The Board majority concluded that

[15] Id. at 617. ³⁴ Id. at 618.

[16] Id.

[17] The District of Columbia Circuit, meanwhile, denied enforcement of the Board’s FedEx II decision, applying the law-of-the-circuit doctrine and holding that the issue addressed there—the independentcontractor status of the company’s drivers—had already been resolved by the Circuit’s earlier decision. FedEx Home Delivery v. NLRB II, 849 F.3d 1123, 1127 (D.C. Cir. 2017) (FedEx III).

Significantly, however, the District of Columbia Circuit also enforced the Board’s decision in Lancaster Symphony Orchestra, 357 NLRB 1761 (2011), enfd. 822 F.3d 563 (2016), where the Board had determined that symphony orchestra musicians were statutory employees, not independent contractors, based on an analysis that seemingly departed from the court’s own preferred approach. The court there described “entrepreneurial opportunity” as a “factor which does not appear in the Restatement but which the Board and this court use in assessing whether workers are employees or independent contractors.” 822 F.3d at 569. The court analyzed the Restatement factors, then seemed to consider “entrepreneurial opportunity” as a separate factor, concluding that in the case of the musicians, it was “limited” and “provide[d] only miniscule support for independent contractor status.” Id. at 570. “Summing up,” the court determined “that the relevant factors point in different directions” and accordingly “defer[red] to the Board’s conclusion that the . . . musicians [were] employees.” Id.

[18] The record shows that for the Employer’s Spring Fest 2021 stylists were paid $25/hour, but for one stylist designated as an assistant who was paid $27.50/hour. 

[19] One stylist provided an LLC name (“Coiffure Etc. LLC”) on her W-9 form. 

[20] The Employer takes the position that Hall is a statutory supervisor while the Petitioner takes the position that she is not. The Acting Re-

[21] Between April 2019 and May 2021, 23 stylists worked during seven production periods. Department head Hall worked all seven productions; one stylist worked six productions; two stylists worked five productions; two stylists worked three productions; and four stylists worked two productions. The other stylists worked only one production.

[22] Hall’s unique contract for her work as the Employer’s wig and makeup designer includes provisions that indicate that she retains an intellectual property interest in her work.

[23] In addition, the Acting Regional Director considered entrepreneurial opportunity as an individual factor in apparent contravention of SuperShuttle’s admonition that “entrepreneurial opportunity is not an individual factor in the test,” 367 NLRB No. 75, slip op. at 2.

[24] Other amici have proposed other tests for independent contractor status that we decline to adopt.

Several amici—Weinberg, Roger & Rosenfeld and Fight for Freelancers et al., for example—urge the Board to adopt the “ABC test” codified by the California courts and legislature in which the independent-contractor analysis turns on the following questions: (1) Is the worker free from the control and direction of the hiring entity in the performance of the work, both under the contract for the performance of the work and in fact? (2) Does the worker perform work that is outside the usual course of the hiring entity’s business? (3) Is the worker customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity? See Dynamex Operations W. v. Superior Court, 4 Cal. 5th 903 (2018). It is unclear whether this three-part analysis is compatible with

[25] NLRB No. 75, slip op. at 9–10.

[26] Id., slip op. at 11 (quoting FedEx I, supra, 563 F.3d at 497).

[27] Id., slip op. at 9.

[28] Id., slip op. at 11–12.

[29] Id.

[30] Id., slip op. at 12.

[31] Id., slip op. at 2 fn. 4.

[32] Id., slip op. at 9.

[33] Id., slip op. at 11 (citing FedEx I, supra, 563 F.3d at 497).

[34] NLRB at 850.

[35] Indeed, the court in FedEx I explicitly rejected the Board’s view that the drivers in that case were employees “[b]ecause the indicia favoring a finding [that] the contractors are employees are clearly outweighed by evidence of entrepreneurial opportunity.” 563 F.3d at 504. ⁵⁵ See Arizona Republic, supra, 349 NLRB at 1042–1046; St. Joseph News-Press, supra, 345 NLRB at 478–479.

[36] FedEx I, supra, 563 F.3d at 497.

[37] NLRB v. CNN America, Inc., 865 F.3d 740, 751 (D.C. Cir. 2017).

[38] NLRB No. 75, slip op. at 11 fn. 22.

[39] Id., slip op. at 8 (quoting FedEx I, 563 F.3d at 496).

[40] Id., slip op. at 11–12.

[41] Id., slip op. at 9 (citing Hearst Publications, supra, 322 U.S. 111).

[42] Neither the common law, nor the policies of the Act, support the SuperShuttle Board’s expansive view of how “entrepreneurial opportunity” should operate to exclude workers from statutory coverage. Indeed, the explicit policy of the Act is “encouraging the practice and procedure of collective bargaining and . . . protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing . . . .” Sec. 1, 29 U.S.C. § 151. In light of that policy, exclusions from statutory coverage should be interpreted narrowly, not expansively, as the Supreme Court has made clear. See Holly Farms Corp. v. NLRB, 517 U.S. 392, 399 (1996). In examining the agricultural laborer exemption to Sec. 2(3), the Supreme Court there observed that “administrators and reviewing courts must take care to assure that exemptions from NLRA coverage are not so expansively interpreted as to deny protection to workers the Act was designed to reach.” Id.

[43] NLRB No. 75, slip op. at 9.

[44] United Insurance, supra, 390 U.S. at 258.

[45] NLRB No. 75, slip op. at 9.

[46] Browning-Ferris Industries, supra, 911 F.3d at 1208.

[47] NLRB No. 75, slip op. at 7.

[48] Id., slip op. at 8.

[49] See, e.g., Nationwide Mutual Insurance, supra, 503 U.S. at 323– 324.

[50] FedEx I, supra, 563 F.3d at 497 fn. 3.

[51] U.S. at 259.

[52] NLRB at 851.

[53] See DIC Animation City, 295 NLRB 989, 991 (1989) (noting that

“for 10 months out of the year, the writers do not work for the [e]mployer and do work for other companies”); cf. C.C. Eastern, supra, 309 NLRB at 1070–1071 (noting that “[t]he drivers are not permitted to work for competitor employers or accept work from other employers during normal weekday business hours” and “[t]he record shows no instances of drivers working for other companies during evening or weekend hours”).

[54] Roadway, supra, 326 NLRB at 846–848, 853; BKN, Inc., 333 NLRB 143, 143–145 (2001).

[55] See Penn Versatile Van Division of Penn Truck, 215 NLRB 843, 845 (1974) (“One of the basic factors in determining that an individual is an independent contractor is his opportunity to make business decisions affecting his profit or loss.”).

[56] See, e.g., AAA Cab Services, 341 NLRB 462, 465 (2004) (weighing these considerations); R. W. Bozel Transfer, 304 NLRB 200, 200201 (1991) (same); Daily Express, 211 NLRB 92, 94 (1974) (same).

[57] Contrary to our dissenting colleague’s assertion, this new factor does not “attempt[] to cabin consideration of entrepreneurial opportunity to one aspect of a single factor.” As explained, this factor is intended to capture all considerations that the Board and courts have historically considered under the heading of entrepreneurialism or entrepreneurial opportunity. To this end, our revised standard represents an effort to regularize and explain how entrepreneurial characteristics are to be considered alongside other factors rather than an attempt to modify the balance of factors or to devalue any specific elements.

[58] See NLRB v. Friendly Cab Co., 512 F.3d 1090, 1098 (9th Cir. 2008) (“[The employer’s] restrictions against its drivers’ operating independent businesses or developing entrepreneurial opportunities strongly supports the NLRB’s determination that [its] drivers are employees.”).

[59] See Time Auto Transportation, 338 NLRB 626, 638–639 (2002) (“The witnesses[’] credited testimony reveals that [the employer’s] procedures and its policies prevented drivers from performing similar services for other companies, a factor relied on by the Board and courts in concluding that individuals are statutory employees.”), enfd. 377 F.3d 496 (6th Cir. 2004).

[60] See Standard Oil, supra, 230 NLRB at 971 (finding employee status where the company made all “significant business decisions”).

[61] United Insurance, supra, 390 U.S. at 259; see also Stamford Taxi, supra, 332 NLRB at 1373 (noting that employer’s ability to unilaterally draft, promulgate, and change the terms of the driver’s lease arrangements “weigh[s] heavily in favor of employee status”).

[62] C.C. Eastern, Inc. v. NLRB, 60 F.3d 855, 861 (D.C. Cir. 1995).

[63] NLRB at 853.

[64] Id.

[65] Id. Similarly, in Slay Transportation, supra, the Board rejected the Regional Director’s finding that drivers possessed entrepreneurial opportunities via their ability to hire drivers and control costs to enhance their income. 331 NLRB at 1294. The Board noted that the employer established and controlled the rates of compensation, leaving little room for drivers to increase income through their own efforts. Id. Moreover, although drivers were permitted to hire other drivers, they could do so only at the wage rates set by the employer. Id. Accordingly, the Board concluded that “despite this theoretical potential for entrepreneurial opportunity, the control exercised by the [e]mployer over the other aspects of its relationship with the owner-operators severely circumscribes such opportunity. In reality, there is little economic independence realized by the owner-operators.” Id. See also Stamford Taxi, supra, 332 NLRB at 1373 (finding that rules maintained and enforced by the employer “severely restrict[ed] the drivers’ entrepreneurial opportunities to engage in taxicab business independent of the [employer]”).

[66] F.3d at 500.

[67] Id.

[68] In Arizona Republic, supra, 349 NLRB at 1045, the Board stated that “the fact that many carriers choose not to take advantage of [an] opportunity to increase their income does not mean that they do not have the entrepreneurial potential to do so.” Applying this principle, the Board determined that newspaper carriers were independent contractors after finding that 363 carriers, or 29 percent of them, had multiple routes. Id. at 1045 fn. 6. As mentioned above, to the extent that the Board’s approach in Arizona Republic is inconsistent with today’s holding, it is overruled.

[69] For similar reasons, we disagree with the weight the Circuit in FedEx I accorded to systemwide evidence of the number of route sales and the amount of profit, if any, on such sales. We find instead that to be relevant and probative, evidence of entrepreneurialism must pertain directly to the individuals that the petitioner actually seeks to represent. Indeed, our focus on actual opportunity demands that we assess the specific work experience of those individuals in the petitioned-for unit. Evidence that goes only to employees who are outside of the petitioned-for unit is simply unlikely to have probative value and should not outweigh countervailing considerations specific to individuals in the petitioned-for unit.

[70] NLRB No. 75, slip op. at 9.

[71] Id.

[72] Id., slip op. at 11–12.

[73] Lancaster Symphony, supra, 822 F.3d at 569–570. See also Pennsylvania Interscholastic Athletic Assn., 926 F.3d at 842–843.

[74] See Minnesota Timberwolves Basketball, LP, 365 NLRB No. 124 (2017); Pennsylvania Interscholastic Athletic Assn., 365 NLRB No. 107 (2017), enf. denied 926 F.3d 837 (D.C. Cir. 2019); Sisters’ Camelot, 363 NLRB 162 (2015); Porter Drywall, Inc., 362 NLRB 7 (2015).

[75] In Porter Drywall, for example, the Board followed this approach and determined that “crew leaders” hired as drywall-installation subcontractors were independent contractors, not employees. Porter Drywall, supra, 362 NLRB at 7. Then-Member Johnson (who had dissented in FedEx II) concurred, observing that the result would have been the same under the test he had advocated in his FedEx II dissent. Id. at 12. If FedEx II had actually left the common law behind, one might think it would yield different results.

[76] The Board's customary practice—including in representation cases—is to apply new policies and standards “to all pending cases in whatever stage.” Aramark School Services, 337 NLRB 1063, 1063 fn. 1 (2002) (quoting Deluxe Metal Furniture Co., 121 NLRB 995, 1006– 1007 (1958) (both representation cases). See also SuperShuttle, supra (applying revised independent-contractor standard retroactively). Accordingly, the Board applies a new rule to the parties in the case in which the rule is announced so long as doing so would not work a “manifest injustice.” Pattern Makers (Michigan Model Mfrs.), 310 NLRB 929, 931 (1993). In determining whether the retroactive application of a Board decision will cause manifest injustice, the Board balances three factors: (1) the reliance of the parties on preexisting law; (2) the effect of retroactivity on accomplishment of the purposes of the Act; and (3) any particular injustice arising from retroactive applica-

[77] Id. at 682.

[78] See, e.g., Pennsylvania Academy, supra, 343 NLRB at 847 (models at art academy “engaged in the distinct occupation of modeling,” supporting contractor status); The Comedy Store, 265 NLRB 1422, 1448 (1982) (stand-up comedians pursuing “distinct vocation,” supporting contractor status); Puerto Rico Hotel Assn., 259 NLRB 429, 444 (1981) (hotel musicians engaged in distinct occupation), enf. denied Hilton International Co. v. NLRB, 690 F.2d 318 (2d Cir. 1982).

[79] Cf. FedEx II, supra, 361 NLRB at 622 (factor weighs in favor of employee status where drivers are fully integrated into organization and rely on employer’s infrastructure to perform work).

[80] Lancaster Symphony, supra, 357 NLRB at 1766.

[81] See FedEx II, supra, 361 NLRB at 622 (finding that, “[a]lthough drivers are ostensibly free of continuous supervision in their work duties,” the employer directs them through tracking mechanisms and guidelines).

[82] We note that the Acting Regional Director analyzed this factor in tandem with the extent of control factor, and that the Employer did not separately request review of her finding that this factor weighed in favor of employee status.

[83] Cf. Pennsylvania Interscholastic, supra, 365 NLRB No. 107, slip op. at 6 (reasoning that the skill factor “tend[ed] to favor employee status, or is at least inconclusive” based in large part on the fact that officials received all training and certification in-house, thereby “undermin[ing] the impression that the officials are selling their skills and expertise on the open market”). Here, in contrast, stylists pursue all training and certification on their own initiative in order to sell their skills on the open market.

[84] Royal Palm Theatre, supra, 275 NLRB at 681 (the fact that musicians “were picked on their ability to sight read music so that they could rely on their own skill and ability” suggests contractor status).

[85] Pennsylvania Academy, supra, 343 NLRB at 847.

[86] The Employer in its request for review did not contest the Acting Regional Director’s finding that this factor weighed in favor of employee status.

[87] See Porter Drywall, supra, 362 NLRB at 10.

[88] See, e.g., K-Air Corp., 360 NLRB 143, 150 (2014) (method of payment factor indicative of employee status where worker was “told what hours and days to work . . . and was paid by the hour”).

[89] See, e.g., Argix, 343 NLRB 1017, 1021 (2004) (method of payment factor indicative of contractor status where employer “takes no deductions from the owner-operators for taxes, social security contributions, state disability, fringe benefits, health insurance benefits, or vacations”).

[90] NLRB at 1765–1766, 1769.

[91] NLRB No. 124, slip op. at 11–12.

[92] See also Lancaster Symphony, supra, 357 NLRB at 1765 (“The [employer] is in the business of providing live music in its region. The musicians are in the business of performing music, and thus their work is part of the employer's regular business.”).

[93] See Minnesota Timberwolves, supra, 365 NLRB No. 124, slip op. at 12.

[94] Id., slip op. at 12–13. Cf. Community for Creative Non-Violence

13. Reid, 490 U.S. 730, 753 (1989) (treating the fact that a putative employer was “not a business at all” as relevant in finding that an individual who rendered services to that entity was an independent contractor). ¹³⁴ Minnesota Timberwolves, supra, 365 NLRB no. 124, slip op. at 12-13.

[95] In Minnesota Timberwolves, the Board observed that “the Board and some other tribunals have analyzed this factor by assessing whether the principal is in the business—i.e., the same business as the disputed individuals,” though it acknowledged that “Sec. 220(2)(j) of the Restatement (Second) of Agency itself frames the relevant consideration as simply ‘whether the principal is or is not in business.’” Id., slip op. at 12 fn. 48 (emphasis in original). As in Minnesota Timberwolves, we find it unnecessary to resolve this issue in the present case. The Employer is obviously “a business,” and the evidence shows that the Employer’s business involves styling costumed performers as part of its presentation of stage performances. Under either formulation, therefore, we find this factor weighs in favor of employee status.

[96] Id., slip op. at 13–14 (evidence weighs against independentbusiness finding where employer dictates schedule and crew members have no control over specific work hours); BKN, supra, 333 NLRB at 145 (no entrepreneurial opportunity where writers “have no ability to increase their compensation through the exercise of discretion in how they perform their work”).

[97] See Lancaster Symphony, supra, 357 NLRB at 1766 (“Further, the musicians do not bear any entrepreneurial risk of loss or enjoy any opportunity for entrepreneurial gain; their service is part of the [employer’s] regular business; and they are paid on a modified hourly basis.”).

[98] Minnesota Timberwolves, supra, 365 NLRB No. 124, slip op. at 13-14.

[99] Id., slip op. at 13; BKN, supra, 333 NLRB at 145. ¹⁴⁰ Minnesota Timberwolves, supra, 365 NLRB No. 124, slip op. at 13.

[100] Id.

[101] Sisters’ Camelot, supra, 363 NLRB at 166; Lancaster Symphony, supra, 357 NLRB at 1765.

[102] At the outset of their decision, my colleagues find that they are reinstating the FedEx II standard and they have not disavowed any aspect of that decision. But at footnote 87, they say that they have implemented a “revised standard [that] represents an effort to regularize and explain how entrepreneurial characteristics are to be considered alongside other factors.” It is true that my colleagues have dressed up the FedEx II standard with some new phrasing. For example, my colleagues emphasize that their FedEx II reboot no longer considers evidence of entrepreneurial activity as “one aspect of a relevant factor.” In another part of their decision, the majority refers to their new consideration of entrepreneurial opportunity as an “independent-business analysis” rather than an "independent-business factor.” But then my colleagues, tracking the language from FedEx II, go on to state: “This factor synthesizes the full constellation of considerations that the Board has addressed under the rubric of entrepreneurialism.” (Emphasis added.) And the majority concludes its analysis by stating that its “discussion tracks the factors set out in Section 220 of the Restatement (Second) of Agency . . . before concluding with the reaffirmed independent-business factor.” Thus, it is clear that my colleagues have returned to FedEx II without any modification.

[103] See also Roadway Package Systems, Inc., 288 NLRB 196, 198 (1988) (“Roadway I”).

[104] See also DIC Animation City, 295 NLRB 989, 991 (1989) (finding independent-contractor status where writers bear some entrepreneurial risk in that they “exert time, effort, and travel to solicit work, but may have their ideas rejected”); Roadway I, 288 NLRB at 198 (finding that the drivers “[bore] few of the risks and enjoy[ed] little of the opportunities for gain associated with an entrepreneurial enterprise” where the employer controlled the number of packages and stops for each driver and their service areas, did not give drivers a proprietary interest in the areas they serviced, and determined the drivers’ compensation).

[105] As discussed infra, the D.C. Circuit’s decision in Corporate Express was influential. For example, it was cited by NLRB v. Friendly

Cab Co., 512 F.3d 1090, 1097 (9th Cir. 2008), in its discussion of the application of the common-law agency factors to determine independent contractor status. 

[106] The court further indicated that the Board and the court's shifting focus on entrepreneurial opportunity was a “subtle refinement . . . done at the Board's urging.” Id. at 497 (quoting Corporate Express, 292 F.3d at 780).

[107] My colleagues assert that the Board’s decision in FedEx II “was a direct response to the District of Columbia Circuit’s misperception that the Board had already adopted a new approach, and to the Circuit’s endorsement of that supposed shift.” To be clear, regardless of whether or not the D.C. Circuit had correctly perceived any shift at the Board, the court decided for itself that a “significant entrepreneurial opportunity for gain or loss . . . . better captures the distinction between an employee and an independent contractor.” Corporate Express, 292 F.3d at 780 (internal quotation marks omitted). As noted above, the court, drawing on a comment in the Restatement (Second) of Agency, compared the status of a full-time cook, a corporate executive, and a lawncare provider, concluding that “[t]he full-time cook and the executive are employees and the lawn-care provider is an independent contractor not because of the degree of supervision under which each labors but because of the degree to which each functions as an entrepreneur—that is, takes economic risk and has the corresponding opportunity to profit from working smarter, not just harder.” Id. My colleagues criticize the court for drawing this conclusion from the Restatement, asserting that the comment “says nothing at all relating to entrepreneurial opportunity.” I am not inclined to question the D.C. Circuit’s interpretation of the common law, nor do I expect that my colleagues’ suggestion that the Board is better positioned than the courts to interpret and apply the common law of agency will meet with any more success here than it did in FedEx II. See FedEx III, 849 F.3d at 1128 (rejecting the argument that the court should enforce the decision in FedEx II because it owed deference to the Board’s formulation of the independent contractor test under the common law or because the Board had “made a choice between two fairly conflicting views”) (internal quotations omitted).

[108] The drivers in FedEx II operated out of Hartford, Connecticut, whereas the drivers in FedEx I operated out of Wilmington, Massachusetts.

[109] Further, I believe that the Board in SuperShuttle rightly found that the FedEx II decision improperly revived the “economic realities” test

[110] If the D.C. Circuit’s decisions were in fact inconsistent with United Insurance, it is puzzling that the Board chose not to file a petition for rehearing en banc or a petition for certiorari in Corporate Express Delivery, FedEx I, or FedEx III. 

[111] Not only is this view of the case consistent with the language in the court’s decision, it is also consistent with common sense. Had the court solely been relying on the “law-of-the-circuit” doctrine in deciding the case, any further analysis would have been irrelevant. And I am not inclined to read irrelevant analysis into a decision by the D.C. Circuit. 

[112] See also Nolan Enterprises, Inc. d/b/a Centerfold Club, 370 NLRB No. 2, slip op. at 1 (2020) (finding that the judge correctly analyzed the common-law factors through the prism of entrepreneurial opportunity, as required under SuperShuttle, in determining that a worker lacked sufficient opportunity for economic gain to render her an independent contractor).

My colleagues maintain that my citations to Velox Express and Intermodal Bridge Transport do not support a finding that SuperShuttle was consistent with the common law because, by its own terms, SuperShuttle treated entrepreneurial opportunity as a “super factor.” But, as discussed above, SuperShuttle said no such thing. And despite my colleagues’ assertion to the contrary, these cases are in fact significant because they demonstrate that SuperShuttle meant what it actually said: that entrepreneurial opportunity is an animating principle for evaluating all of the traditional common-law factors. See FedEx III, 849 F.3d at 1128 (finding that FedEx I, which was adopted in SuperShuttle, “consider[ed] all of the common-law factors as the law requires”).

[113] Likewise, contrary to my colleagues’ assertion, the court in FedEx I did not treat entrepreneurial activity as a “trump card.” Indeed, in finding that the FedEx drivers were independent contractors, the court considered all the common law factors, and indicated that it was the balance of the factors that led to its finding of independent-contractor status. 563 F.3d at 504.

In response to the SuperShuttle Board’s position that that the FedEx II decision improperly revived the “economic realities” test, my colleagues maintain that it is the SuperShuttle standard that in fact “subordinated the common law to a particular vision of supposed ‘economic reality’ by treating entrepreneurial opportunity” as a sort of “superfactor.” As discussed above, however, SuperShuttle did not treat entrepreneurial opportunity as a “super-factor.”

[114] Likewise, in Slay Transportation Co., 331 NLRB 1292, 1294 (2000), the Board found that the drivers did not have a significant entrepreneurial opportunity for financial gain or loss where the drivers did not operate independent businesses but instead performed work exclusively for the employer and the employer determined the drivers’ compensation and the prices charged to the customers. The Board further noted that even though the drivers were permitted to hire other drivers, they could only do so at wage rates set by the employer. Id. In those circumstances, the Board found: 

Despite this theoretical potential for entrepreneurial opportunity, the control exercised by the [e]mployer over the other aspects of its relationship with the owner-operators severely circumscribes such opportunity. In reality, there is little economic independence realized by the owner-operators. Thus, there has been no demonstration that this ability has resulted in true economic gain, or even the chance for such gain. 

Id.; see also Stamford Taxi, Inc., 332 NLRB 1372, 1373 (2000) (finding that the employer’s rules “severely restrict[ed] the drivers’ entrepreneurial opportunities to engage in taxicab business independent of the [employer]”).

[115] My colleagues argue that the Board in Dial-A-Mattress did not place any more importance on entrepreneurial opportunity for gain or loss than other factors it considered. To the contrary, the Board emphasized that the employer had “structured its relationship with the owneroperators to allow them (with very little external controls) to make an entrepreneurial profit beyond a return on their labor and their capital investment.” Id. at 891.

[116] My colleagues maintain that, in Arizona Republic, 349 NLRB 1040 (2007), the Board merely considered entrepreneurial potential in connection with method of compensation. However, the Board found that the newspaper carriers had entrepreneurial potential to increase their income where they could hire full-time substitutes and control the substitutes’ terms and conditions of employment, hold contracts on multiple routes, deliver other products while on their routes, negotiate the piece rate for delivering the employer's newspaper, solicit new customers, and receive tips. Id. at 1044-1045. And the D.C. Circuit and Board have made clear that the determination as to whether putative independent contractors have significant entrepreneurial opportunity for gain or loss includes these other considerations as well.

[117] The majority points to the D.C. Circuit’s decision in Lancaster Symphony Orchestra, 822 F.3d 563 (D.C. Cir. 2016), where the court enforced the Board’s finding that symphony orchestra musicians were statutory employees, observing that the court’s analysis of entrepreneurial opportunity was inconsistent with its approach in FedEx I. But the court in Lancaster Symphony explicitly stated that “[i]n considering what counts as entrepreneurial opportunity, we are guided by our decisions in Corporate Express . . . and FedEx [I].” 822 F.3d at 569 (internal citations omitted). Significantly, quoting FedEx I, the court stated that “[w]e too have considered ‘whether the position presents the opportunities and risks inherent in entrepreneurialism.’” Id. The Lancaster Symphony court further explained that it held that the FedEx drivers in FedEx I were independent contractors because “we emphasized that the record revealed ‘many of the . . . characteristics of entrepreneurial potential.’” Id. (citation omitted). But the court found that “[u]nlike in FedEx [I]—but as in Corporate Express—the record here reveals few “characteristics of entrepreneurial potential.” Id. Citing to Pennsylvania Interscholastic Athletic Assn. v. NLRB, 926 F.3d 837 (D.C. Cir. 2019), the majority makes the same argument. But again, the court there relied on its decision in Corporate Express, in stating that it considers whether the workers have a significant entrepreneurial opportunity for gain or loss. 926 F.3d at 840.

[118] My colleagues reject my position that these circuit courts have recognized that entrepreneurial opportunity is a significant consideration in assessing the traditional common-law agency factors. Pointing variously to the courts’ “rigorous, detailed analysis of the common-law factors” and their “comprehensive review of the Board’s findings,” my colleagues represent these cases as “merely assess[ing] a putative contractor’s entrepreneurial potential as a single consideration among other common-law factors.” My discussion of these cases above, which includes specific quotations from those cases, demonstrates otherwise. In any event, I am confident that readers can decide for themselves which view of these cases is more accurate.

My colleagues also observe that the Eleventh Circuit in Associated Diamonds “relied extensively on the now-repudiated ‘right-to-control’ test.” However, it is clear from that decision that the court effectively shared the SuperShuttle Board’s view that control and entrepreneurial opportunity are two sides of the same coin. 702 F.2d at 924 (“A fortiori the annual lessees, over whom the Company concededly exercises even less control and who have a greater investment and entrepreneurial interest in the taxicabs than the daily lessees also are independent contractors.”).

[119] If anything, one might say that the FedEx II majority’s revision of the common-law agency test in FedEx II, which was not based on any particular formulation set forth in an earlier Board decision or a court of appeals decision, could be said to have come out of thin air.

[120] My colleagues attempt to minimize the D.C. Circuit’s reliance on the General Counsel’s arguments made in briefs to the court, noting that such arguments did not appear in Board decisions. However, the General Counsel’s arguments in this regard were consistent with postRoadway Board decisions in which the Board, as set forth above, considered a number of common-law factors to determine whether workers were provided with the entrepreneurial opportunity for gain or loss. And although this refinement was done at the Board’s urging, the D.C. Circuit decided for itself that a consideration of a “significant entrepreneurial opportunity for gain or loss” was an effective means of “captur[ing] the distinction between an employee and an independent contractor.” Corporate Express, 292 F.3d at 780 (internal quotation marks omitted).

[121] My colleagues assert that SuperShuttle’s characterization of employer control and entrepreneurial opportunity as opposite sides of the same coin is without support, reasoning that the common-law agency factors “cannot be reduced to a single comparison.” However, as detailed above, SuperShuttle made clear that its analysis considers all of the common-law factors, observing that it would “consider how the evidence in a particular case, viewed . . . in light of all the common-law factors, reveals whether the workers at issue do or do not possess entrepreneurial opportunity.” 367 NLRB No. 75, slip op. at 11. This principle from SuperShuttle that employer control and entrepreneurial opportunity are opposite sides of the same coin is illustrated in the cases applying the standard. For example, in Intermodal Bridge Transport, 369 NLRB No. 37, slip op. at 1–2, the Board, in finding that the evaluation of common-law factors showed that the employer's drivers had little opportunity for economic gain or risk of loss, emphasized common-law factors showing the employer’s control. The Board observed, among other things, that the drivers had little control over when and how long they worked and what loads to haul. and the employer determined the drivers’ compensation and expenses. Id., slip op. at 2-3. The Board further noted that the employer maintained a progressive discipline policy with several policies and procedures, which it used to control the details of the driver’s work. Id., slip op. at 3. Thus, the Board emphasized that the employer’s extensive control over the drivers and “their attendant lack of entrepreneurial activity” evidenced that the drivers were employees. Id.; see also Centerfold Club, 370 NLRB No. 2, slip op. at 1 (observing that the employer, through various measures substantially limited the dancers’ entrepreneurial opportunity).

[122] See, e.g., Slay Transportation, 331 NLRB at 1294 (finding employee status where, “despite [a] theoretical potential for entrepreneurial opportunity, the control exercised by the [e]mployer over the other aspects of its relationship with the owner-operators severely circumscribed such opportunity”); Roadway, 326 NLRB at 853 (finding employee status where employer “imposed substantial limitations and conditions”).

[123] See, e.g., Stamford Taxi, Inc., 332 NLRB at 1373 (noting that employer’s rules “severely restrict[ed] the drivers’ entrepreneurial opportunities to engage in taxicab business independent of the [employer]”); Corporate Express, 332 NLRB at 1522 (finding that the drivers had “no significant opportunity for entrepreneurial gain or loss” where the employer controlled the routes, the base pay, and the amount of freight on each route, and did not permit the drivers to add or reject customers and hire others to drive their route).

[124] My colleagues insist that, by making this and similar statements, I am incorrectly asserting that FedEx I, and similar cases in other cir-

[125] See also BKN, Inc., 333 NLRB 143, 145 (2001) (finding that the employer exercised extensive control over the details of the writers' work based on its revisions and suggestions to the writer’s work in the development of the script); Royal Palm Dinner Theatre, 275 NLRB at 682 (finding that where the employer exercises complete control over the manner and means by which the desired result is accomplished, the person performing the service is an employee).

[126] See also BKN, 333 NLRB at 145 (finding that employee-writers had no substantial proprietary interest and no significant entrepreneurial opportunity for gain or loss when they were paid a per script fee determined by the employer and had no means to increase their compensation through the use of discretion in their work performance).