The D.C. Circuit Strikes Down The NLRB's Successor Bar

• On July 21, 2026, the D.C. Circuit held that the National Labor Relations Board lacked statutory authority to create the “successor bar,” the Board-made rule that prevented any challenge to an incumbent union’s majority status for up to one year following an acquisition of a business.
• This is one of the first post-Loper decisions impacting labor law. We can expect to see more challenges to, and likely reversals of, the Board’s interpretations of the National Labor Relations Act.

On July 21, 2026, the D.C. Circuit issued its decision in Hospital Menonita de Guayama, Inc. v. NLRB, holding that the National Labor Relations Board’s “successor bar” is inconsistent with the National Labor Relations Act (the “Act”). The successor bar, re-adopted by a divided Board in 2011, “compels an employer who acquires a business to recognize and bargain with an incumbent union for up to one year.”

The dispute arose after Hospital Menonita de Guayama acquired another hospital in 2017. Hospital Menonita initially recognized the incumbent union, but later received evidence showing that most employees no longer supported the union as their representative. The Hospital thereafter withdrew its recognition of the union and refused to bargain. Applying the successor bar, the Board refused even to consider evidence showing the union had lost majority support and found the Hospital liable for unfair labor practices under Sections 8(a)(1) and 8(a)(5) of the Act. When the case reached the D.C. Circuit, the court upheld the Board’s decision by deferring to the Board’s “reasoned interpretation” of the Act.

Soon after, the Supreme Court decided Loper Bright Enterprises v. Raimondo, which overruled the longstanding Chevron doctrine. Under Chevron, courts deferred to executive agencies’ reasonable interpretations of ambiguous statutes. With Chevron overturned, the Hospital petitioned to have its case remanded, which the Supreme Court allowed. Now on its second review, the D.C. Circuit “independently assess[ed] the Hospital’s legal claim that the successor bar contravenes the Act” and concluded that it does.

The Act “guarantees employees the right to choose a union that represents their interests.” Section 7 gives employees the unfettered right to choose, or refrain from choosing, a bargaining representative, and Section 9(a) conditions a union’s status as the exclusive representative on the support of a majority of employees. But, in effect, the successor bar was protecting incumbent unions as majority representatives by Board decree, rather than employee choice. The D.C. Circuit therefore determined the successor bar “is inconsistent with Section 7’s unqualified employee right to freedom of choice and Section 9’s requirement of majority rule.”

The court grounded its interpretation in the statutory language: the Act expressly provides, in Section 9(c)(3), that no election related to representation (including a decertification election) can be held for twelve months after a valid election is held. Since Congress provided this explicit statutory exemption to employees’ freedom of choice, the D.C. Circuit reasoned that the Board could not create additional exceptions to the statutory rule.

With this reasoning, the decision suggests a potential dividing line for future Board action: where the Act expressly addresses the subject of a Board-made rule, the Board cannot layer on additional exceptions or rules of its own making. But if the Act is silent on a particular subject, it is arguable that the Board’s reasoned interpretations are not disturbed by this case (but nevertheless remain vulnerable).

For now, though, the majority's decision controls in the D.C. Circuit, and its message to employers is a favorable one: successor employers can once again test whether an incumbent union genuinely has majority support without waiting one year. If your business is acquiring or has recently acquired an operation with an incumbent union, or if you are evaluating your bargaining obligations, please reach out to one of Foley Hoag’s labor attorneys for advice on how this decision affects your options.