Keeping the Peace

As unions spread within the cannabis industry, business owners can take steps to address “peace agreements” that can lead to unionization

By John Rebchook

Cannabis business owners increasingly must confront a workplace reality that mainstream companies have faced for generations: organized labor.

Front and center is the United Food and Commercial Workers union, which is aggressively seeking to convince cannabis workers to join its ranks. The UFCW said it aims to organize cannabis workers in every state where marijuana is legal, and that it already represents “tens of thousands” of MJ workers in multiple states.

The union’s ranks include employees in cultivation facilities, dispensaries, infused product companies and labs. The Teamsters and the United Farm Workers are also trying to organize marijuana industry workers.

In California, it will be hard for many marijuana businesses to avoid dealing with unions. The Golden State requires marijuana business licensees that have at least 20 employees to strike a “labor peace agreement” with a union. Such a pact can ultimately pave the way for unionization.

New York has a similar labor peace agreement requirement for marijuana businesses.

Unions also are making inroads in other states.

Following is what you need to know and the steps you can take when dealing with a union seeking a peace agreement. In most cases, it can be relatively quick and affordable.

The ABCs of Labor Peace Agreements

A labor peace agreement is not the same as union representation. Such a pact between a marijuana company and employees establishes the rules for a union organizing campaign, according to attorney Margaret J. Grover, a partner with Wendel, Rosen, Black & Dean in Oakland, California.

In other words, a labor peace agreement can be the first step toward unionization.

“Labor peace agreements drastically increase the likelihood of unionization,” attorneys Warren Nelson and Christopher Conti said in an email. Nelson is a partner with the Irvine, California, office of the law firm Fisher Phillips, and Conti is an associate in the firm’s San Diego office.

Currently, California and New York are believed to be the only states that require the agreements in the cannabis industry, according to attorneys.

Many California marijuana businesses, however, are blind to that requirement, said Megan Vaniman, an attorney with Harris Bricken in Portland, Oregon.

“In California, most cannabis business owners are unaware of what a labor peace agreement is,” Vaniman said. “They are learning about them as they are obtaining licenses.”

Hire a Lawyer

With something as potentially complicated as forging a labor agreement, you want a good lawyer as an advocate. That is especially important because statutes on what constitutes a valid agreement are vague, according to Nelson and Conti.

“Savvy labor counsel should be able to negotiate favorable terms that do not disadvantage the employer, yet pass union scrutiny,” they said.

Vaniman suggested contacting your cannabis business attorney to recommend a labor lawyer familiar with state marijuana laws.

“Cannabis attorneys that are aware of state regulations regarding the cannabis business with a specialty in labor law are ideal,” she said.

Don’t Overcomplicate a Peace Agreement

A labor peace agreement need be only three to five pages long, Vaniman noted.

“Unions are well versed in labor peace agreements,” Vaniman said. “Many states require them for the hospitality industries.” Those contracts can serve as a template for marijuana pacts. It might only take three hours of a lawyer’s time to draw up a simple labor agreement, Vaniman added.

However, it can take a lot more time “if significant negotiations are required or the company desires to enter into discussions with multiple unions,” she said.

Attorney Gina Roccanova noted that a “bare-bones” labor peace agreement can be negotiated and drafted fairly quickly.

“The more significant expenses arise if and when the employees agree to have the union represent them,” said Roccanova, a principal in the Oakland office of Meyers, Nave, Riback, Silver & Wilson.

“The employer will then have to bear the expense of negotiating the terms of a collective bargaining agreement, which in turn may require some significant changes in the way they do business,” she said.

What a Peace Pact Should Include

A labor peace agreement should prohibit a union from striking, picketing the marijuana operation and boycotts, lawyers agreed.

Labor peace agreements typically require an employer to remain neutral during organizing and refrain from running anti-union campaigns, Nelson and Conti said. In return, a union agrees not to disparage the employer or coerce employees to vote for representation.

According to Grover, employer concessions could include:

  • Permitting a “card check” rather than a secret ballot election for union representation. A card check allows employees to unionize after a majority sign authorization forms, or cards, showing they want union representation.
  • Providing organizers a list of employees that includes phone numbers or other contact information. Such a step makes it easier for organizers to reach out to employees.

“Collective bargaining agreements, which are negotiated after employees decide they want to have a union represent them, typically include provisions regarding wages, hours, benefits and other terms and conditions of employment,” Roccanova said.

Union contracts also often address some level of job security by requiring just cause for termination and a grievance process to resolve disputes, she added.

What to Avoid

At the top of the list of things to avoid is committing “unfair labor practices,” according to Grover.

Unfair labor practices include:

  • Firing or demoting employees who are pro-union.
  • Threatening pro-union employees with a loss of employment or benefits.
  • Promising benefits to those who reject the union.
  • Granting new benefits or withholding planned benefits to influence a union vote.
  • Seeking information about workers’ positions through spying, coercive questions or monitoring emails.

Also, if employees are allowed to discuss matters unrelated to their jobs during work hours, employers shouldn’t bar them from talking about union-related issues, she said.

Another thing to avoid is signing an agreement with ambiguous language.

“We strongly caution employers against agreeing to overbroad terms that may result in unnecessary burden and disruption to the business,” according to Nelson and Conti. “For example, we would generally counsel against agreeing to interest arbitration, successorship (requiring a potential future owner to abide by the terms of the agreement) or terms that seek to extend the agreement to suppliers and industry partners that are not covered by the employer’s license.”

The pair added: “Additionally, employers should avoid vague terms that govern organizing and union recognition. This means clearly defining the campaign period, the modes by which the employees may select the union and how long authorization cards remain valid.”

Nelson and Conti also warned that not being specific can have long-lasting consequences.

“The failure to define these terms may result in uncertain union campaigns lasting in perpetuity,” they noted.

At the same time, don’t panic. Instead, take a deep breath and relax.

“Businesses appear a bit overwhelmed by the (labor peace) requirement at first,” Vaniman said. “But once they learn about what it is and have a solid attorney on their side, they know that it’s a requirement that can be met and won’t create too much undue burden on their licensing procedure.”