Two years after Loper Bright Enterprises v. Raimondo overturned Chevron, its impact on labor law is beginning to take shape, most recently in Hospital Menonita De Guayama v. NLRB. As previous writers on the blog have detailed, Loper Bright has not had the immediate impact on labor law that some predicted. Hospital Menonita may be one of the first cases where Loper Bright actually changed the outcome. In July, the D.C. Circuit struck down the NLRB’s successor-bar doctrine, which prevents challenges to an incumbent union’s majority status for a reasonable period of time after the entrance of a successor employer.

The Successor Bar Doctrine

When a new owner takes over a unionized business and maintains the predecessor’s workforce, it generally must recognize and bargain with the incumbent union. However, the new owner ordinarily does not have to adopt the predecessor’s collective-bargaining agreement and may be able to set new initial wages, benefits, and other working conditions. Accordingly, incumbent unions following a change in ownership are in a “peculiarly vulnerable position,” as the Supreme Court recognized in Fall River Dyeing.

The Board adopted the current successor bar doctrine in UGL-UNICCO Service Co. in 2011. When a new employer takes over a unionized business and qualifies as a successor, the incumbent union receives an irrebuttable presumption of majority support for a “reasonable period” of at least six months. During that period, the employer, employees, and rival unions cannot challenge the incumbent union’s representative status.

Without this insulation period, a union would be required simultaneously to negotiate a new collective bargaining agreement while defending its continued existence, and that concern is not just theoretical. In Hampton Lumber Mills-Washington, a successor began operations on November 4, received an employee petition rejecting the incumbent union on December 8, and declined recognition that same day, before the union had participated in any bargaining sessions. To set the successor bar at six months to one year, the Board in Lee Lumber & Building Material Corp. (reinstated by UGL-UNICCO Service Co.) drew on Federal Mediation and Conciliation Service data, indicating that roughly six months was typically needed just to negotiate a renewal agreement. The successor bar simply gives the existing bargaining relationship time to work in the face of a new employer.

This concern with bargaining stability was also connected to how the Board understood employee choice: a change in ownership is not a choice by employees to abandon their representative, and the bar also does not permanently prevent workers from later reconsidering that choice.

Hospital Menonita

In Hospital Menonita, after acquiring a Puerto Rico hospital in 2017, Hospital Menonita initially recognized the incumbent union but later received evidence that a majority of employees no longer supported the union. On this basis, the hospital then withdrew recognition, but the Board refused to consider the evidence regarding the loss of employee support because the successor bar remained in effect.

The D.C. Circuit upheld the Board’s rule in 2024, finding that the Board was “entitled to deference” and that the successor bar fell “within the scope of reasoned interpretation [of the NLRA].” After Loper Bright, the Supreme Court vacated this judgment and remanded the case where a new panel of the D.C. Circuit reached a different result. Judge Rao’s majority opinion focused on Sections 7 and 9 of the NLRA, which protects employees’ right to choose a bargaining representative and makes majority support the basis for exclusive representation. The majority concluded that the successor bar impermissibly “suspends” those rights by requiring continued employer recognition even when employees may no longer support the union.

This framing of employee choice is somewhat one-sided. It focuses on employees’ ability to reject an incumbent union, but gives less weight to employees’ earlier decision to establish the union as the collective bargaining representative. A change in ownership does not indicate that employees have changed their minds about union representation, and refusing to recognize the union immediately can leave workers without an effective bargaining representative at a time when they need it the most. The Board’s rule reflected the judgment that employee choice is best protected by giving a representative already selected by the employees a meaningful opportunity to continue representing the employees through a change in ownership.

The majority also relied on the text of Section 9(c)(3), which expressly bars another representation election for one year following a valid election. The majority reasoned that because Congress expressly provided a limitation on testing majority support, the Board  “cannot create additional exceptions to the statutory rule.” But, as the Supreme Court has cautioned, when Congress expressly provides a statutory exception, it does not necessarily foreclose all others. Section 9(c)(3) says nothing about changes in ownership or successorship at all. The majority therefore reads that silence, together with Sections 7 and 9, as evidence that Congress withheld authority from the Board rather than left a gap for the Board to fill with policy, backed by their expertise.

What Remains of Policymaking?

Judge Randolph’s dissent rejects the majority’s description of the Board’s authority, arguing that the majority effectively treated the NLRB’s policymaking authority as flowing from Chevron, even though judicial recognition of that authority long predates that case and has existed alongside it. Randolph pointed to Fall River Dyeing, Curtin Matheson, and Allentown Mack, which all recognized the Board’s responsibility for developing national labor policy and its authority to create presumptions governing majority support without any deference under Chevron. As Randolph argued, because Loper Bright preserved actual congressional delegations of discretion, overturning Chevron did not eliminate this authority.

The litigation in Hospital Menonita is ongoing, as the NLRB General Counsel filed a petition for rehearing en banc on September 1. The current Republican-controlled Board’s decision to continue defending the successor bar is notable and may point to a desire to preserve discretion to make and change labor policy in future cases. If the outcome of the case doesn’t change, it will have negative effects on a vulnerable stage in the bargaining process. The decision also narrows the Board’s ability to decide how employee choice and bargaining stability should be balanced during a highly disruptive period in a collective-bargaining relationship. More broadly, after Loper Bright, it raises a question about how much room the Board has to create policy when the NLRA is silent.