Appeals court rejects NLRB rule locking new owners into union bargaining

The Board then charged the hospital with unfair labor practices. An administrative law judge applied the bar and refused to weigh the hospital’s evidence that the union had lost majority support. A divided Board panel agreed and ordered the hospital to bargain.

The dispute reached the appeals court once before. In 2024, the court upheld the rule by deferring to the Board. Then the Supreme Court decided Loper Bright, which overruled the long-standing Chevron doctrine and told judges to interpret statutes themselves, not defer to agencies. The justices sent the case back for another look.

This time, the court reached the opposite result. Reviewing the challenge without deference, it found the bar clashes with two core protections in the National Labor Relations Act: employees’ right to choose whether and how to bargain, and the requirement that a union have majority support. The Act, the court noted, quoting earlier precedent, “confers rights only on employees, not on unions.”

For HR leaders, the signal is practical. In this circuit, a company acquiring a business may have more room to test whether an inherited union still holds majority backing, rather than being locked into a year of bargaining.

One judge dissented, arguing the majority misread the earlier ruling and that the Board’s policymaking power survived Loper Bright ruling. The First Circuit has upheld the successor bar, leaving the two courts split. The ruling is a slip opinion and could still face further proceedings.