NLRB Unexpectedly Decides to Retrain Contract Bar Rule


In a surprising decision, and a disappointing one for employers, the National Labor Relations Board (the Board) decided to retain the Contract Bar in its existing form. In Mountaire Farms, the Board was considering whether to (1) rescind the Contract Bar, (2) retain it in its current form, or (3) modify it. It was widely believed that an employer-friendly Board, which for now remains comprised of three Republicans and a single Democrat, would rescind or modify the doctrine that serves to insulate a union from decertification or a petition from a rival union.

Contract Bar – What is it? In unionized settings, the Contract Bar prohibits decertification petitions or any other petition challenging a union’s status as employees’ representative during the term of the collective-bargaining agreement (CBA), for up to three years. The bar prevents the filing of a decertification or other petition unless the filing is within a 30-day window toward the end of the CBA – in the healthcare industry, between 120 and 90 days from the expiration of a CBA, and in other industries between 90 and 60 days from the expiration of a CBA (that is three years or less in duration). Employees are often unaware of this narrow “window period.”

Board Decision: In Mountaire Farms, an employee petitioner filed a decertification petition. The union immediately asserted that the Contract Bar required that the petition be dismissed because the petition was filed within the first three years of the CBA and not within the 30-day window period. The Regional Director refused to apply the bar because he concluded that the CBA contained an unlawful union security clause. The Union requested review of the Board. The Board granted the review and requested public briefing regarding whether the Contract Bar should be retained, rescinded, or modified. Typically, when the Board solicits public briefing on an issue where it is considering overruling or modifying existing case law and undertakes the prolonged process of reviewing and considering the extensive briefing, the Board often does overrule or modify the existing precedent.

Here, however, the Board retained the Contract Bar in its current form. While acknowledging that the existing Contract Bar is confusing to employees, the Board concluded that “a sufficiently compelling case has not been made for any particular proposed modification” to the Contract Bar doctrine. Further, the Board reversed the Regional Director and held that the union security clause was lawful. Therefore, the existing Contract Bar rule applied and barred the decertification petition, which was thus dismissed.

Takeaway: It is likely that the existing Contract Bar will remain in place for the foreseeable future. The political composition of the Board will be changing in the coming months, and the so-called Biden Board (when the Board is comprised of a Democratic majority) is unlikely to consider changing the Contract Bar rule that, in practice, largely serves to protect a union’s representative status from decertification and rival petitions.