On February 27th, the D.C. Circuit Court of Appeals ruled against a challenge from a Puerto Rico hospital regarding the National Labor Relations Board’s (NLRB) “successor bar” rule. This regulation mandates that new employers, upon acquiring a business with a unionized workforce, must negotiate with the existing union for a set period. The case arose after Hospital Menonita de Guayama was found to have breached the National Labor Relations Act in 2017, for not engaging in talks with the union from a hospital it had acquired.
The hospital contended that the union no longer represented a majority and criticized the NLRB for its inconsistent application of the successor bar rule over time. This rule has seen several reversals since its initial rejection in 1975, with its most recent affirmation in 2011, and a notable endorsement by the 1st Circuit in 2017.
Judges involved in the case pointed out the NLRB’s history of policy shifts, acknowledging that agencies have the authority to modify their policies, provided they offer a reasoned explanation. Additionally, the discussion highlighted the potential impact of the U.S. Supreme Court’s decision on the Chevron doctrine, which currently underpins the deference federal courts offer to agency interpretations of unclear laws. Although the future of the successor bar rule might hinge on this, the D.C. Circuit emphasized its current obligation to adhere to the Chevron doctrine until further notice from the Supreme Court. This case underscores the ongoing debate over agency authority and the legal frameworks that govern labor relations in the United States.
