In one of the most significant labor law decisions since the Supreme Court’s landmark Loper Bright decision, the U.S. Court of Appeals for the D.C. Circuit held that the National Labor Relations Board (NLRB or Board) exceeded its statutory authority by enforcing the Board’s longstanding “successor bar” doctrine. In Hospital Menonita de Guayama, Inc. v. NLRB, decided on July 21, 2026, the court concluded that the doctrine improperly restricts employees’ statutory right to choose – or reject – union representation and impermissibly compels successor employers to bargain with unions regardless of whether they continue to enjoy majority support.
For employers contemplating the acquisition of a unionized business, the decision could significantly alter the legal landscape. More broadly, it signals that courts may be increasingly willing to scrutinize (and invalidate) NLRB doctrines that cannot be grounded in the text of the National Labor Relations Act (“NLRA”).
Under the Supreme Court’s decision in NLRB v. Burns International Security Services, a purchaser of a unionized business may become a “successor employer” and, in many circumstances, must recognize and bargain with the incumbent union if it hires a majority of its workforce from the predecessor employer.
The successor bar is a separate, Board-created doctrine. Re-adopted by the Board in 2011, it prohibits successor employers, employees, and rival unions from challenging an incumbent...
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