The U.S. Court of Appeals for the D.C. Circuit recently denied a challenge to the National Labor Relations Board's (NLRB) "successor bar" rule filed by a Puerto Rico hospital. The successor bar rule requires employers that acquire companies with organized workers to bargain with the union for a certain period following the acquisition.
The NLRB had previously ruled that the Puerto Rico hospital violated the successor bar rule when acquiring another hospital in 2017. The hospital appealed the ruling, claiming that since the union had lost majority status, it was not bound by the rule.
Furthermore, the hospital argued that the NLRB had not always maintained its same stance on the successor bar rule over the years. The court rejected the hospital's argument, finding that the NLRB can overrule precedent and change its rules over time, so long as it properly weighs competing policies and establishes a reasonable purpose for the change.
The NLRB first rejected the successor bar rule in 1975. Six years later, in 1981, the NLRB put the rule into effect. Since that time, the NLRB has abandoned and reinstated the rule twice.
The NLRB last reaffirmed the successor bar rule in 2011. The U.S. Court of Appeals upheld the rule on appeal in a 2017 case.
In concurrence with the decision, one D.C. Circuit judge noted that the successor bar rule may be at risk in the future due to ongoing legal challenges to the Chevron doctrine. This 40-year-old legal doctrine requires federal courts to give deference to federal agencies' reasonable interpretations of ambiguous statutes. Currently, two cases are pending before the U.S. Supreme Court that could jeopardize the continued application of Chevron.
The case is Hospital Menonita de Guayama Inc. v. NLRB, No. 22-1163.
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