The United States undeniably is moving toward federal legalization. With the support of the alcohol and tobacco industries, ecommerce powerhouse Amazon, and billionaires like Charles Koch, it’s only a matter of time before cannabis is legal nationwide. As they move forward, cannabis executives are paying special attention to one important aspect of the market: cannabis labor unions.
Influenced by pandemic-related concerns about workplace health and safety, union organizing has been rising steadily in the cannabis space. Unions are targeting the industry because they see it as an immense opportunity to gain more members. However, working with unions is unfamiliar to many cannabis business owners.
One of the most prominent unions targeting cannabis is United Food and Commercial Workers International (UFCW). In 2013, UFCW started the Cannabis Workers Rising campaign for employees in the cannabis and hemp industries, looking to provide them with better opportunities compared to mainstream organizations. Union officials have been appointed to New Jersey’s Cannabis Regulatory Commission and California’s Cannabis Advisory Committee.
The union push means companies should determine as soon as possible whether they want to remain union-free and what measures they should take if so. UFCW, which represents more than one million workers in a variety of industries, has signed contracts with cannabis companies in California, Illinois, Massachusetts, and Pennsylvania. From a company’s perspective, having a union representing its employees may limit the company’s flexibility with scheduling, overtime, promotions, and even selling the business.
Unions and employers
In an effort to compete, many small cannabis companies simply remain neutral to union organizing. However, employers must be cognizant of how unions can affect them. If employees choose to become union members, the union is deemed to be their exclusive bargaining representative; this means the company no longer can address employee concerns directly. Instead, all employee terms and conditions of employment (wages, benefits, working hours) must be negotiated with the union.
When employees (through a union) and employers meet to discuss the workplace environment, the process is referred to as collective bargaining. Unions will present a proposal, and employers have a choice to approve, reject, or present a counterproposal. Ultimately, the goal of collective bargaining is to improve the workplace for employees without disrupting the employer’s business. However, if the union is not satisfied with the collective bargaining results, it may commence a worker strike.
Labor peace agreements
Of the states that have legalized adult-use cannabis, California, Illinois, New Jersey, New York, Pennsylvania, and Virginia have ordained measures that support unions. Other states are proposing similar measures, and some state measures even require Labor Peace Agreements (LPA) as a licensure requirement. An LPA is an understanding between a union and an employer requiring both sides to relinquish specific rights under federal law. Under an LPA, an employer must agree not to challenge any union organizing efforts. Some LPAs may also require employers to remain neutral, give the union access to their facility, and even schedule a meeting to introduce the union. Conversely, union members cannot undertake activities that induce economic interference, including work stoppages and boycotts.
When it comes to LPAs, there are numerous points to consider. According to Fisher Phillips, a national labor and employment firm focused on the cannabis industry, many cannabis employers will have to enter LPAs. Here are the most important factors to consider before agreeing to one:
Determine whether the business is subject to an LPA requirement, including whether there is a required employee headcount under state or local law.
- Come to a full understanding of what is required by law.
- Understand the scope and duration of the proposed agreement.
- Be wary of LPAs that incorporate common terms such as neutrality, interest arbitration, or successorship, because those things often aren’t statutorily necessary.
- Vet the potential union with which you might enter an LPA.
- Be prepared for the formation of new, cannabis-specific unions in the near future.
If your cannabis company is considering or requires an LPA, avoid going beyond the terms that are statutorily necessary. It may be challenging to decipher what terms to agree to and which ones to avoid; retaining experienced labor relations counsel can help your company avoid unnecessary headaches. Most unions have extensive experience in negotiating LPAs in other industries. Unions may also have ready-to-use templates or form agreements that work in their favor. On the other hand, many cannabis employers are new to the process of dealing with unions and LPAs, so the help of a skilled and experienced labor attorney is highly recommended. This is especially true for employers that need an LPA to obtain a license. Cannabis entrepreneurs may be tempted to glance over the union’s proposed terms quickly in an effort to expedite the process to obtain an undoubtedly precious business license, but the agreed-upon LPA may cause long-term problems that can be avoided by retaining proven labor counsel.
According to its website, UFCW currently represents tens of thousands of cannabis workers in labs, dispensaries, manufacturing, processing, and other verticals. The union is urging Northeast governors to include LPAs in adult-use cannabis bills. Some legal experts believe labor peace provisions are unnecessary, as the same protections for employees are covered under federal labor laws. While several cannabis organizations are open to unionization and LPAs, other companies oppose unionization.
What does all this mean? For the most part, the answer will depend on the laws in each individual state. But one thing is clear for cannabis business owners or operators everywhere: It’s time to prioritize getting a better understanding of the labor laws in your state and learn how to collaborate with one or more unions.
Liesl Bernard is founder and CEO at CannabizTeam, an executive search and staffing firm focused specifically on the cannabis industry. Her team has placed thousands of candidates at executive and management levels in all verticals of the cannabis industry worldwide. She attributes her success in cannabis to her vast international recruitment experience and deep passion for the industry.
Todd A. Lyon, Esq., is a partner at Fisher Phillips and the co-chair of the firm’s Labor Relations Practice Group. For nearly twenty-five years, he has represented public- and private-sector employers in labor negotiations, collective bargaining, grievance and interest arbitrations, strikes/lockouts, and other litigation involving employment law and benefits. Previously, he represented labor organizations in both Chicago and Seattle.
Christopher Conti, Esq., is a partner at Fisher Phillips. He has defended unionized and non-unionized employers in cases involving wrongful termination, sexual harassment, discrimination, and retaliation lawsuits; class and representative wage and hour matters; and complex business relationships. His experience encompasses verticals including construction, retail, fast food, energy, manufacturing, automotive, hospitality, and cannabis.