Vera will be going to her new home in another week. She is a gorgous yellow girl who has a slightly undershot bite. The AKC Labrador standard states that "the teeth should be strong and regular with a scissors bite; the lower teeth just behind, but touching the inner side of the upper incisors. A level bite is acceptable, but not desirable. Undershot, overshot, or misaligned teeth are serious faults. Full dentition is preferred. Missing molars or pre-molars are serious faults".
The Canadian illustrated standard for the Labrador is a good reference guide. It states:
Teeth are described in the standard as strong and regular with a level mouth. Most breeders have taken “level mouth” to mean a scissors bite. Although a level bite is acceptable it is not preferred. The standard says nothing about undershot, overshot, or misaligned teeth, but these
have always been considered by breeders as serious faults in a retriever. Missing teeth are also not mentioned in the standard. It is not uncommon to see one or two missing premolars in Labradors. In the past this has not been considered by most breeders to be a serious fault, but Canadian breeders and judges are becoming more concerned about missing teeth, particularly if this involves more than one or two premolars. Full dentition is preferred. However, as in all things related to the Labrador, the yardstick should be how this will affect work in the field.
Not only does an "off" bite keep a dog from doing well in the show ring, but being a recessive trait, it is also something that one doesn't want to perpetuate in their lines. There are lots of good articles on bite issues in dogs.
Here is a good site that shows photos of bite issues in Labradors.