Labor / Employment

NLRB High On Marijuana Labor Relations

How do you regulate an illegal industry?

By Hilary Bricken on March 16, 2015 4:20 pm

Today, the National Labor Relations Board will be hearing marijuana workers’ allegations against their New Jersey medical marijuana dispensary employer for retaliation, union-busting, and unfair working conditions. This will be the second time the NLRB has entertained hearing a marijuana workers case.

The NLRB’s willingness to hear marijuana labor dispute cases constitutes further federal government legitimization of the marijuana industry. Equally importantly, this reveals that marijuana employers need to be mindful of both state and federal employment laws and regulations.

The federal Taft-Hartley and Landrum-Griffin Acts guarantee private employees the right to form and join unions to bargain collectively with employers for pay and for workplace rights and conditions. The National Labor Relations Act (NLRA) gives private sector employees the right to strike for better wages, benefits, or working conditions, without threat of termination. The NLRB oversees investigating and remedying unfair labor practices, including union busting, defined as a “range of activities undertaken to disrupt or prevent the formation of trade unions.”

Back in 2013, the NLRB was all set to hear allegations of union-busting and unfair working conditions in a case brought by United Food and Commercial Workers International Union (which maintains a Medical Cannabis and Hemp Division) against Wellness Connection of Maine, a medical marijuana dispensary, but this case settled before the hearing. When the NLRB agreed to hear this case many wondered how employees working at an “illegal enterprise,” could be entitled to redress under federal labor laws. At the time, it was not at all clear that marijuana workers even qualified as “employees” under the NLRA.

In August 2014, the NLRB’s Office of General Counsel/Division of Advice issued a memorandum recommending to the regional NLRB to take on the Wellness Connection case even though marijuana was (and still is) federally illegal. This memorandum explained that the NLRB should accept jurisdiction over the Wellness Connection case because of the following:

  • The NLRB may exercise jurisdiction over any employer doing business in the United States except those Congress specifically exempted.
  • The NLRB has authority to regulate the marijuana industry even when production and consumption are intended to be intrastate.
  • Medical marijuana industry-based labor disputes can substantially impact interstate commerce since the marijuana industry is a large and growing interstate business. Wellness Connection purchased enough supplies from outside Maine to meet the both the non-retail jurisdictional standard and it had enough revenue to meet NLRB’s retail standard. Also, marijuana industry labor could interfere with the federal government’s regulation of intrastate marijuana.

Though the NLRA does not include protections for “agricultural laborers,” the Agency’s memorandum made clear that marijuana workers (specifically, “processing assistants”) are covered by the NLRA since they are more like manufacturers than they are like farm laborers where certain marijuana workers transform the cannabis products “from their raw and natural state.”

It bears noting that this NLRB memo is neither law nor even binding on the NLRB. It is however a persuasive guideline regarding how the NLRB will regulate marijuana employers. Marijuana employers therefore must act accordingly when faced with unionizing employees and they should institute and enforce workplace policies and procedures that pass NLRA muster. Marijuana companies that ignore the NLRA without a doubt put themselves at risk for federal penalties and costly litigation.

Hilary Bricken is an attorney at Harris Moure, PLLC in Seattle and she chairs the firm’s Canna Law Group. Her practice consists of representing marijuana businesses of all sizes in multiple states on matters relating to licensing, corporate formation and contracts, commercial litigation, and intellectual property. Named one of the 100 most influential people in the cannabis industry in 2014, Hilary is also lead editor of the Canna Law Blog. You can reach her by email at [email protected].