Unions Flexing Legal, Political Muscle in Cannabis with Federal Complaints

June 10, 2023 · Green Market Report

Dozens of complaints have been filed with the NLRB against cannabis companies.

Organized labor has been increasingly flexing its legal and political muscle in the American cannabis sector.  The most visible representation of the situation came just last month, when workers organized by the International Brotherhood of Teamsters went on a nearly two-week strike at several facilities in Illinois owned by multistate operator Green Thumb Industries.

Though the strike ended, the company still must deal with 10 unfair labor practice complaints the Teamsters filed with the National Labor Relations Board, which are all but certain to cost the company plenty more time and money.

The Teamsters also announced three new federal complaints in a press release on June 8, alleging GTI “spied on workers” and retaliated by “diverting hours from part-time workers who exercised their right to strike.”

GTI isn’t alone in facing such federal labor law complaints. The Teamsters and the United Food and Commercial Workers – the two most active unions in the marijuana industry – have more than 60 active unfair labor complaints pending with the board as of late May, Green Market Report found in the NLRB’s online database. Some of the open cases date back as far as 2020.

Those include:

  • 10 complaints against Ascend Wellness in Massachusetts, Michigan, and New Jersey
  • 10 against Ayr Wellness in Arizona and Massachusetts
  • 16 against Curaleaf in Arizona, Illinois, and New York
  • 1 against TerrAscend in Pennsylvania
  • 1 against Cresco Labs in Illinois
  • 7 against Trulieve in Massachusetts
  • 3 against Verano Holdings in Arizona and Massachusetts

The complaints have a range of allegations against the companies for various union-busting tactics, such as firing or suspending employees for attempting to unionize, rewarding workers who didn’t go on strike, prohibiting pro-union apparel, threatening organizers with arrest, or engaging in illegal surveillance of employees.

One complaint filed in July 2022 in Arizona against Curaleaf by the UFCW, for instance, alleges the company was “creating the impression of surveillance, threatening with arrest, and calling the police and having its employees removed from its property because of their union sympathies and activities.”

In an email Friday, a Curaleaf representative wrote that the company denies any wrongdoing and “respects the rights of team members who have chosen to be represented by a union.” About the Arizona situation specifically, the representative said the company has “respect” for the adjudication process and “is prepared to defend its position.”

The tally of unfair labor practices above is just a tiny snapshot, however, of the number of complaints that unions have filed against marijuana businesses nationwide.

UFCW Vice President Ademola Oyefeso, who runs the union’s growing cannabis division, estimated that the 60 ULPs found by Green Market Report represent at most 30% of the number that have been filed against marijuana companies in the past 12 months. (The NLRB also has more than 17,000 total active complaints spanning all U.S. employers, even including some filed against union locals and many mainstream companies, such as Starbucks.)

“There have been a lot more,” Oyefeso said. “It’s been increasing, for multiple reasons.”

The tally also doesn’t include ULPs that have been settled or resolved by the board, and one UFCW organizer in California noted that ULPs have been filed in the past against many other high-profile companies, including Hightimes Holding Corp.

But the number of complaints in the cannabis industry – and the frequency with which they’re filed – has been growing steadily in conjunction with the expansion of the U.S. marijuana industry, Oyefeso said.

“What you’re getting is a maturing of the industry. These are multibillion dollar companies, so you see them going the, quote-unquote, ‘traditional’ employer route,” Oyefeso said. “Which is, fight workers’ rights to organize. And labor’s doing what it’s been doing since its inception, which is, making sure we fight back and we help workers.”

Oyefeso also noted that labor has been successful in getting state-level requirements that cannabis companies of certain sizes sign labor peace agreements with unions, which require employers to remain neutral in union organizing campaigns.

Labor peace agreement requirements – which generally give the UFCW and Teamsters an edge when trying to recruit new dues-paying members – are in effect in California, Connecticut, Delaware, Minnesota, New Jersey, New York, and Rhode Island, Oyefeso said. Illinois and Pennsylvania have licensing incentives for marijuana companies that have signed labor peace agreements, he said, and regulators in other upcoming markets – such as Maryland – are considering such requirements.

There are other factors at play too with the uptick in ULPs, said New York-based employment attorney Ruth Kraft, who said there’s been an increase of complaints filed against U.S. companies in all sectors, not just cannabis. That’s in part because the Biden administration is much friendlier towards labor than the Trump administration before it.

Apart from that, many of the complaints filed against marijuana businesses can often be chalked up to basic ignorance of federal labor laws on the part of managers, which then provides unions a legal opening to exploit, Kraft said.

“When you have a burgeoning industry, and you have new people who are not so savvy about the technicalities of (labor law), they do things they think are on an ad-hoc basis, and they may think they’re doing them right, but they’re not,” Kraft said. “Those practices are basically coming home to bite them faster in the current economic and political environment.”

The Cost of Doing Business

Unfair labor complaints are yet another area of legal liability that cannabis companies need to take into consideration, both in budgeting and in how retail shops, cultivation facilities, and manufacturing plants are run, Kraft said. Because neither the unions nor the ULPs are going anywhere.

If anything, the number of complaints will continue to increase as the industry further blossoms.

“Those lawsuits have a tremendous likelihood of succeeding, if not in full, in settlements. And that’s money for the plaintiff and the lawyer,” Kraft said, noting that the vast majority of ULPs are settled before they’re adjudicated by the NLRB itself, akin to out-of-court settlements in civil business lawsuits.

And, Kraft said, it’s quite easy for the cost of ULPs to quickly skyrocket – depending on how they’re handled by the defendant company’s attorney. In complaints with the NLRB, unpaid wages that are often wrapped into settlement deals typically must be doubled. Then there are the legal fees to take into account, she noted, which can easily be run up to five- or six-figure bills.

“Now you’re talking about a lot of money,” Kraft said.

Here to Stay

The unions signaled that they’re much more interested in mutually beneficial relationships with employers of all stripes, including in marijuana business, than they are in fighting.

And, they say, the support can go both ways, since labor has been among some of the voices in Washington D.C. clamoring for the passage of the SAFE Banking Act.

“With regards to our experience thus far with most cannabis companies, it’s a mixed bag, but the Teamsters are more than willing to have a productive relationship with cannabis employers, including MSOs,” said Peter Finn, Teamsters Western region international vice president, in an emailed statement. “If you look at the work we’re doing with industry on lobbying for the SAFE Banking Act, that’s a perfect example of the ways we can benefit employers.”

But if companies take a hard-nosed approach to unions and workers who want to organize, Oyefeso said, the UFCW and Teamsters will be happy to oblige with more ULPs.

“The thing we’re trying to promote … is that unionization is good for workers and for the industry as a whole. Imagine an industry where you’re providing high quality jobs, great benefits, at a low cost to the employer, where turnover isn’t high and product diversion is zero. That’s beneficial for the company and for the workers,” Oyefeso said.

“We’ll teach them the hard way via ULPs, but we’d rather not.” (Full Story)

In categories:Labor Legal
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