A federal appeals court ruling Dec. 28 could significantly complicate an ongoing rulemaking by the National Labor Relations Board and constrain the agency to a standard close to the more expansive test for ‘joint employment’ liability that’s currently in place.

The National Labor Relations Board acted properly in 2015 when it adopted a more expansive test for determining when companies in franchise, staffing, and other relationships should be considered joint employers for liability and collective bargaining purposes, the D.C. Circuit...