As the cannabis industry grows both locally and nationally, labor organizers have increasingly targeted the field for unionization. While Connecticut is one of the earlier states to legalize cannabis, Connecticut only recently joined the ranks of states with unionized cannabis workers. As a result, Connecticut-based cannabis companies arguably enjoy some benefit from having the opportunity to observe what has come next in states where cannabis workers have joined, or are in the midst of joining, labor unions. Recent activity has shown that unions are taking aggressive action to unionize the cannabis industry and negotiate competitive inaugural collective bargaining agreements for employees.
Recent National Labor Conflicts
This spring, one leading labor union in the cannabis industry spearheaded a nearly two-week long strike in the Chicago region after it reached an impasse in contract negotiations over employee retirement benefits with a parent cannabis company. This strike, which ended only after the parent company offered the employees a significant wage increase, prompted the settlement of another collective bargaining agreement in the Chicago area guaranteeing a twenty percent general wage increase over the term of the three-year contract for those cannabis workers. This recent activity has had a domino effect, instigating a separate two-day work stoppage in Missouri in response to certain actions allegedly taken by a cannabis company to prevent its employees from unionizing.
Labor unions have not only used strikes to gain traction in the cannabis industry but have also filed charges with the National Labor Relations Board (“NLRB”) alleging labor law violations. In fact, labor disputes have been cited as a factor in a multistate cannabis company’s recent decision to withdraw from certain markets.
Unionization Efforts in Connecticut
Amid these out-of-state conflicts, the proactive efforts of labor unions to recruit Connecticut cannabis workers has proven successful. Last month, a labor union successfully organized 48 workers at a cannabis cultivation facility in West Haven, Connecticut. The labor union took advantage of the labor-friendly regulatory environment and may signal a growing movement toward unionization in Connecticut cannabis.
When Connecticut legalized cannabis, it created a complex regulatory framework governing everything from licensure to use. While many employers are now familiar with the employment protections created for recreational marijuana users, few are aware that the State requires every cannabis establishment to enter into a labor peace agreement (“LPA”) with a labor union as a requirement for licensure. As discussed in our prior post, the LPA requirement does not necessarily mean that a union must form – but it does mean that the employer has agreed to remain neutral if its employees seek to form a union. As a result, the cannabis business agrees not to lock out employees, while the union is prohibited from engaging in picketing, work stoppages, and boycotts. LPAs also must provide that a binding arbitration by a neutral arbitrator is the only available remedy to address an alleged violation. If a business fails to comply with the outcome of the arbitration, then the State Department of Consumer Protection (“DCP”) must suspend the business’s license. While these requirements create additional burdens on the business, they also provide protections for the business to help prevent strikes and other labor disputes cannabis companies are seeing in other markets, like Chicago.
Some labor experts have contemplated whether the LPA requirement is superseded by the National Labor Relations Act (“NLRA”). Until the requirement is challenged in court by an industry seeking to remain labor-free, the question remains unresolved. Meanwhile, we will likely see increased unionization efforts in Connecticut’s cannabis industry as the businesses become more established. Although Connecticut companies will not face work stoppages thanks to the LPA requirement, recent disputes in other states highlight the importance of having strong legal representation on labor issues from the outset. In the meantime, cannabis companies should continue to heed the neutrality provisions contained in their signed LPAs and stay apprised of the labor activity across the country.