skip to Main Content
What Cannabis Employers Should Expect – and How They Should Prepare – for the New Labor Climate

By Lori Armstrong Halber and Kirsten B. White

President Joe Biden has vowed to be the most pro-union president in U.S. history. So far, he has made good on that promise and, as a result, employers in the cannabis industry– which has experienced an upswing in union organizing over the past year – can expect significant new management challenges over the next few years.

On April 26, 2021, President Biden signed an Executive Order establishing the White House Task Force on Worker Organizing and Empowerment “dedicated to mobilizing the federal government’s policies, programs, and practices to empower workers to organize and successfully bargain with their employers.” The Task Force is chaired by Vice-President Kamala Harris and vice-chaired by Department of Labor Secretary Marty Walsh, and it includes more than twenty cabinet members and heads of other federal agencies who will take a whole-of-government approach to empower workers.

President Biden further demonstrated his support of organized labor when, in a well-publicized video message, he urged Amazon management to back off and let workers decide during the Retail, Wholesale and Department Store Union’s unsuccessful organizing campaign this spring: “The choice to join a union is up to the workers, full stop.” While it is always the workers’ right to decide whether or not they wish to be represented by a union, what made Mr. Biden’s video so surprising was that he did it to draw attention to the union fight. Presidents traditionally do not weigh in on union disputes, but as Mr. Biden said days after winning the election in November 2020, “I made it clear to the corporate leaders – I said, ‘I want you to know I’m a union guy.’”

A New Federal Labor Climate

NLRB Majority and General Counsel

The five-member National Labor Relations Board (the “NLRB”) is expected to swing decidedly more union- and employee-friendly when a new majority of Biden appointees takes control in August 2021.  Under a new Biden-era NLRB, all employers – whether unionized or not – should expect a number of changes to federal labor policy as the new majority undoes current precedent.

First, employers should expect the NLRB to aggressively challenge “facially neutral” employer workplace policies, handbooks and other rules. In December 2017, after nearly a decade of NLRB guidance and case law expanding the types of workplace policies deemed unlawful under prior precedent set in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), a then-new employer-friendly majority issued The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017) decision, setting a less burdensome standard for employers concerning the lawfulness of maintaining and enforcing various work rules under the National Labor Relations Act (the “NLRA”).  Under Lutheran Heritage, workplace rules and policies that might “reasonably be construed” by employees to restrict their ability to engage in protected concerted activity under the NLRA were deemed unlawful. The NLRB interpreted that standard increasingly broadly through late 2017, often seemingly straining to find possible interpretations of work rules that would render them unlawful until the issuance of The Boeing Co., which established a more workable and predictable standard for employers. Practitioners now expect a pendulum swing back to a more Lutheran- Heritage-type standard under a new NLRB majority.

Additionally, employers should expect the NLRB to revert to a number of other Obama-era labor policies, including broadening the standard for what constitutes joint employer status, and expanding unions’ ability to organize small or fragmented groups of employees – so-called “micro units” – enabling them to gain entry and organize broader groups of employees from within.

The Biden Administration also already has taken an unprecedented step with respect to the NLRB’s prosecutorial arm by, within twenty minutes of taking the oath of office on January 20, 2021, effectively ousting the NLRB General Counsel, Peter Robb, by threatening to fire him if he did not resign by 5:00 p.m. that day.  Robb, who had widely been considered a foe by worker advocates, refused to resign, and the White House made good on its promise by removing him from the role that evening.

Biden replaced Robb with Acting General Counsel Peter Ohr, a long-time NLRB employee who immediately rescinded ten GC Memoranda issued by his predecessor, stating that they were inconsistent with the NLRA, “which makes clear that the policy of the United States is to encourage the practice and procedure of collective bargaining and to protect the exercise by workers of their full freedom of association, self-organization, and designation of representatives of their own choosing for the purpose of negotiating the terms and conditions of their employment.”

In a definitive early sign of Ohr’s intention to aggressively prosecute employers perceived in the slightest to infringe on workers’ rights to collaborate, speak out against their employers or otherwise engage in “protected concerted activity,” Acting GC Ohr issued a Memorandum entitled “Effectuation of the National Labor Relations Act Through Vigorous Enforcement of the Mutual Aid or Protection and Inherently Concerted Activity.” In the Memo, Ohr signaled his intention to expand the outer limits of employee protected concerted activity under Section 7 of the NLRA, likely causing employers to defend unfair labor practice charges stemming from discipline issued to employees for actions that were previously not protected.  The memo instructs that some activities may be “inherently” concerted such that even a “one way” discussion with a speaker and a listener can be deemed protected. Previously, protected conduct required two or more active participants, even if one participant simply indicated their agreement by clicking the “like” button on another’s Facebook post complaining about a supervisor’s unfairness or wages or some other term or condition of employment. According to Ohr, discussions involving wages, schedules, and job security are “inherently concerted,” as could be discussions about workplace health and safety and race discrimination. At a time when employers are already struggling with navigating issues involving the COVID-19 pandemic and the appropriateness of employee workplace discussions concerning social justice and racial equality, they should expect managing these issues to become more complex under Acting GC Ohr and a new NLRB majority.

President Biden has nominated Jennifer Abruzzo, Special Counsel for Strategic Initiatives for the Communications Workers of America, to succeed Robb on a long-term basis.  On May 12, 2021, the Senate Health, Education, Labor and Pensions (“HELP”) Committee advanced Abruzzo’s nomination for full Senate consideration, by a tie vote of 11-11.

The PRO Act

Meanwhile, Congress too is showing a pro-labor climate. In March, the House of Representatives passed the Protecting the Right to Organize (PRO) Act of 2021, with five Republicans joining Democrats in support of the legislation. The PRO Act would, among other things, statutorily assign joint employer liability status and expand the definition of “employee” by narrowing the perimeters for what constitutes both an independent contractor and a supervisor. The PRO Act also would ban state right-to-work laws, which protect workers from being fired for not paying union dues, while ensuring they still have the ability to join unions voluntarily. Another key provision of the PRO Act would add civil penalties and liquidated damages as remedies and penalties for the commission of unfair labor practices.

Importantly, the PRO Act would give unions significant leverage in both the union election and collective bargaining processes – including by removing employers as a “party” to election proceedings, preventing employers from holding mandatory employee meetings to educate them about their options and rights with respect to union organizing, and mandating that an arbitration panel could decide the terms of an initial collective bargaining agreement if the parties fail to reach an agreement within 120 days of commencing negotiations. Finally, in its current form, the PRO Act would prevent employers from hiring temporary workers during strikes, potentially crippling a business that does not bow to union demands, no matter how unreasonable, and regardless of the practicality of the likely outcome.

Without full support from Democrats, Independents and some Republicans, the PRO Act is unlikely to pass the Senate.  As of May 11, only 47 senators have signed on in support of the measure, leaving the bill far short of the 60 “yes” votes necessary for it to overcome a filibuster.

Labor Strategies for the Maturing Cannabis Industry

Regardless of whether the PRO Act becomes law, and in addition to contending with what is expected to be a newly pro-union, pro-employee federal labor policy climate, cannabis employers have their own unique challenges by virtue of being members of a relatively new but maturing industry.

Over the past few years, labor unions have aggressively targeted cannabis employers for union organizing and implemented a holistic strategy to gain a foothold in the industry.  In several states, executing a Labor Peace Agreement (“LPA”) with a labor union is either a condition of obtaining and maintaining a cannabis license in the state, or gives an employer special consideration in the license application process. Such agreements tend to make it easier for a union to organize the employer’s employees. In addition, the pandemic caused new employee concerns about workplace health and safety, prompting some employees, for the first time, to seek union representation, and others who already have union representation to seek new and different workplace protections at the bargaining table.

Cannabis employers would be wise to consider a number of steps to mitigate legal risk associated with these anticipated federal labor policy changes, and best position themselves to maximize management flexibility as members of a stabilizing industry

Train managers and supervisors to recognize employee protected concerted activity and to issue discipline to minimize legal risk.

Given Acting GC Ohr’s memorandum pledging to “vigorously enforce” certain elements of the protected concerted activity doctrine, supervisors and managers need to understand what employee protected concerted activity is and how to respond to it.  Management should enforce policies consistently and uniformly, and employee discipline should be supported by documentation demonstrating the legitimate business reason for the discipline.

Update handbooks and workplace rules for NLRA compliance.

Work with labor counsel to ensure all workplace rules and policies are compliant with the NLRA.

Prepare for pandemic-related priorities at the bargaining table.

The pandemic has affected union priorities during collective bargaining negotiations. Employers should prepare for related union proposals concerning workplace safety conditions; procedures governing emergency circumstances; hazard pay for workers who must work in the physical workplace; paid sick time; and job security provisions, among others. In negotiations, employers should consider the value of maintaining management rights language and notice obligations that enabled them to make necessary workplace changes consistent with evolving public health data, government mandates, and agency safety guidance.

In addition, to the extent online bargaining is here to stay, at least for the near-term, employers should develop some best practices for setting ground rules and otherwise engaging in virtual negotiations.  For example, employers might consider seeking union agreement to mandate bargaining committee members participate by video, rather than audio alone, so as to replicate the in-person “bargaining table” as much as possible; instructing participants to resist the urge to use the virtual format “chat” function to communicate with other members of the negotiating committee, so as to avoid accidentally sending such communications to members of the other team; maintaining consistent phone communication with union lead negotiator to avoid surprises at the virtual bargaining table; and, encouraging note takers to interrupt the discussion if necessary to ensure accurate notes.

Review and Consider Renegotiating Labor Peace Agreements. 

Cannabis employers review and evaluate the terms of any existing labor peace agreements and consider whether any terms should be renegotiated, potentially because they go beyond the legal requirements for an LPA in the relevant jurisdiction or because they cover a broader geographic area than necessary.  When negotiating new LPAs, carefully consider all potential union partners when choosing a counterpart to ensure a good match for representing employees in the relevant prospective bargaining unit.

_______________________________________________________________________________________

About the Authors

 

Kirsten B. White is a partner in the Labor & Employment Department at Fox Rothschild LLP. She can be reached at [email protected].

 

 

Lori Armstrong Halber

Lori Halber

Lori Armstrong Halber is a partner in the Labor & Employment Department at Fox Rothschild LLP. She can be reached at [email protected].

This Post Has 0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Stories

To stay or to go: New York gets clearest view of local marijuana opt-outs after deadline

The haze over where marijuana can be legally bought and sold in New York became clearer on Tuesday as most localities decided they’re all in on retail sales and consumption lounge licenses, state data showed. Just 10% of cities across the state and about a third of municipalities have opted out of all cannabis sales in their jurisdictions before…

Third recreational marijuana constitutional amendment is proposed by group for Arkansas November ballot

A third group seeking to legalize marijuana for adult recreational use in Arkansas filed a petition for a proposed constitutional amendment to appear on the ballot in November, providing the group obtains enough signatures on petitions. The Arkansas Adult Use Cannabis Amendment is backed by the ballot question committee Responsible Growth Arkansas and has been…

Black entrepreneurs in Missouri are shut out of the medical marijuana business

Black entrepreneurs are being left out of the booming medical marijuana business in Missouri. And the state is losing some of its brightest entrepreneurial minds as a result. But an initiative to place recreational pot on the ballot in November could potentially level the playing field. Obtaining a license to cultivate and sell medical marijuana…

Minnesota groups unite to oppose marijuana legalization

Several businesses, trade groups and social organizations announced the formation of a coalition on Monday opposing legalization of recreational marijuana in Minnesota as the measure’s supporters signal another push for the issue ahead of the start of the legislative session next week. The proposal passed in the Democratic-controlled House last session with several Republican votes after picking…

More Categories

Back To Top
×Close search
Search