Loper Bright Strikes Again

In a July 21, 2026 decision, the D.C. Circuit struck down the National Labor Relations Board’s “successor bar” doctrine, holding that it is inconsistent with the National Labor Relations Act. In doing so, the majority opinion in Hospital Menonita de Guayama v. NLRB relied on Loper Bright and the court’s obligation to independently interpret statutes rather than to defer to an agency’s own interpretation of its statutory authority.

The decision is important for two reasons. First, it gives successor employers favorable circuit court precedent when challenging an incumbent union’s majority status. Second, it shows the willingness of the most prominent appellate court to scrutinize agency action and invalidate actions not grounded in statutory text.

What Is the Successor Bar?

The successor bar, which the Board adopted in UGL-Unicco Service Co., prohibits any challenge to an incumbent union’s representation status for one year after a business changes ownership. It applies even if the union has demonstrably lost majority support, and it blocks challenges from the employer, employees, and rival unions alike.

The NLRA does not mention a successor bar and contains no express limitation on the right to challenge a union’s majority support in the year following a change in business ownership. Instead, the successor bar doctrine was a “policy choice” of the NLRB, created to promote bargaining stability after a change in owner.

Why Did the D.C. Circuit Strike Down the Successor Bar?

The majority, hearing the case upon remand from the Supreme Court with the express instruction to consider it light of Loper Bright, looked to the text of the NLRA and held that the successor bar doctrine violates Sections 7 and 9 of the NLRA.

Section 7 of the NLRA grants employees the right “to bargain collectively through a representative of their choosing” or to “refrain” from the exercise of such rights. Section 9 of the NLRA requires that a bargaining representative have majority support among employees in a bargaining unit. Relying on that majority-support requirement, the Supreme Court held in International Ladies’ Garment Workers’ Union, AFL-CIO v. NLRB that an employer may not lawfully recognize and bargain with a union that lacks majority support among unit employees.

Given this statutory framework and Supreme Court precedent, the D.C. Circuit held that the successor bar, “[b]y entrenching incumbent unions, irrespective of whether they enjoy majority support, . . . is inconsistent with section 7’s unqualified employee right to freedom of choice and section 9’s requirement of majority rule.”

The majority also found support for its holding elsewhere in the text of the NLRA, specifically the “certification bar” found in Section 9(c)(3). That provision prohibits the Board from conducting a second election for the same unit in the 12 months following a valid election. The court reasoned that Congress, by including only the certification bar in the text of the NLRA, did not intend for the NLRB to create additional bars in the agency’s discretion.

The majority also looked to the Board’s enforcement proceedings to show how the successor bar violated the NLRA. The primary unfair labor practice allegation in the case concerned the employer’s withdrawal of recognition from the union, in violation of Section 8(a)(5) of the NLRA. The Court noted that ordinarily an employer has an obligation to bargain with a union only if it represents a majority of its employees and can defend against a withdrawal of recognition allegation by presenting evidence that the union lacks such support. Under the successor doctrine, however, the NLRB refuses to consider such evidence. The successor bar therefore may create a situation where an employer is compelled to recognize and bargain with a union that lacks majority support.

Why This Case Matters to Employers and the NLRB Going Forward

This case may serve as a template for how appellate courts will treat NLRB doctrines built on policy decisions and judicial deference rather than the text of the NLRA. The NLRB’s main defense in Hospital Menonita de Guayama was that the successor bar reflected a “reasonable” policy choice within its general authority to regulate labor relations. The court rejected that defense outright, holding that reasonableness cannot substitute for actual statutory authority, and that policy goals like bargaining stability cannot override the Act's specific guarantees of employee choice and majority rule.

The case therefore calls into question other NLRB doctrines, such as Cemex, the blocking charge rule, and others that rest on policy considerations rather than specific statutory text. Indeed, in Brown-Forman Corp. v. NLRB, the Sixth Circuit relied in part on Loper Bright to invalidate a Cemex bargaining orders after finding that the NLRB had exceeded its statutory adjudicatory authority.

Employers should therefore consider whether to challenge NLRB doctrines that were previously insulated by judicial deference. And because any employer may seek review of an adverse NLRB decision in the D.C. Circuit, the Hospital Menonita de Guayama decision provides especially valuable precedent for those cases.

Given the fact-specific nature and procedural complexity of these issues, employers should coordinate with labor counsel before withdrawing recognition or raising Loper Bright challenges. A miscalculation can still expose the employer to unfair labor practice liability.

Employers with questions or concerns should reach out to Seyfarth's team of experienced labor attorneys to help guide them through these issues.