California probes alleged fake union at Jay Z-linked marijuana company

August 23, 2023 · MJ Biz Daily

California labor regulators are investigating another complaint involving an alleged “fake union” that’s signing required labor agreements with regulated marijuana companies in violation of state law.

According to a complaint from the International Brotherhood of Teamsters filed July 26 at the state Agricultural Labor Relations Board, an organization called the National Agricultural Workers Union – which signed labor peace agreements with licensees doing business under the Caliva brand name – is in fact a sham union with no members and no intent of organizing workers.

Caliva is a property of The Parent Co., whose investors include billionaire entrepreneur and hip-hop mogul Sean Carter, better known as Jay-Z.

Caliva holds 11 licenses under Nc3 Systems and Nc3 Systems dba Caliva, according to state business records.

Both the National Agricultural Workers Union (NAWU) and Nc3 Systems have 10 days from Aug. 16 to respond to the allegations, according to an Agricultural Labor Relations Board (ALRB) notice obtained by MJBizDaily.

Reached at a publicly available contact number connected to the Nc3 Systems licenses, Jessica Box, whose LinkedIn profile indicates she is The Parent Co.’s licensing director, declined to comment to MJBizDaily before hanging up the phone.

Box did not respond to a text message.

Neither Caliva nor The Parent Co. responded to further emails and phone calls.

U.S. Department of Labor records indicate that the NAWU takes in zero union dues and has only one member: Sean McNally, a Bakersfield-based attorney who is not allowed to practice law in California, according to the state bar.

McNally did not return telephone messages seeking comment.

Both Caliva and NAWU have 10 days from Aug. 16 to respond to the Teamsters’ allegations, according to a notice from the ALRB.

Under California law, cannabis businesses that meet certain requirements must sign a labor peace agreement (LPA) with a “bona fide labor organization” before receiving a license.

An LPA is a nonbinding pact between a company and a labor union that states the company won’t interfere with the union’s organizing activities.

So-called “unions” that do not have members and do not show any outward signs of organizing workers have flourished in California and in other states with relative impunity, MJBizDaily previously reported.

Such “company unions” have a long history in American labor relations but have appeared in cannabis markets across the country as state lawmakers have attempted to give organized labor a foothold in cannabis with labor-peace agreement requirements.

In July, California labor regulators declared one so-called union, Professional Technical Union Local 33, or ProTech, “not a bona fide labor organization.”

Licensees that signed with that organization have 90 days to sign a new LPA with a legitimate union.

Licensees that signed LPAs with ProTech include prominent companies such as distribution giants Herbl and Nabis as well as vertically integrated powerhouse Glass House Group, according to state records obtained by MJBizDaily.

Reached for comment, a California Department of Cannabis Control (DCC) spokesperson reiterated the requirement in state law for marijuana companies to sign up with legitimate unions.

The DCC did not address inquiries as to how the agency granted licenses to companies that signed with fake unions.

In a statement texted to MJBizDaily, Peter Finn, the Teamsters’ Western Region vice president, said the union is “taking a stand against the deliberate circumvention of labor peace agreements by certain businesses within the state.”

“Teamsters are here to ensure that employees in the industry are not deprived of their right to representation,” he said.

“However, numerous companies have been discovered signing contracts with sham unions, thus sidestepping the essence of these agreements, and denying workers their fundamental voice.” (Full Story)

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