Businesses entering the provisional license stage in Connecticut’s nascent adult-use cannabis market are beginning to grapple with labor and employment issues. In addition to hiring a workforce, prospective cannabis businesses must also consider the role of organized labor. The Responsible and Equitable Regulation of Adult-Use Cannabis Act (the “Cannabis Act”) contains specific requirements for cannabis businesses pertaining to labor unions. Unionization of cannabis employees is a growing trend across the country. This may be unfamiliar territory, particularly for new cannabis business owners and supervisors, and it is important that employers know what they can and cannot say and do when expecting, or responding to, employee efforts to form or join a union.

State Labor Agreement Requirements

The Cannabis Act gives a nod to organized labor in two ways. First, a cannabis business must enter into a Labor Peace Agreement (“LPA”) with a labor union as a condition of final licensure. While this agreement does not require the cannabis business to employ unionized workers, it does require neutrality, meaning, among other things, that the cannabis business agrees not to lock out employees, and the labor union is prohibited from engaging in picketing, work stoppages and boycotts. LPAs must also provide that binding arbitration by a neutral arbitrator is the only available remedy to address an alleged violation of the agreement. Many cannabis businesses in Connecticut have signed LPAs with little fanfare.

Cannabis businesses are also required to enter into a Project Labor Agreement (“PLA”) with contractors and subcontractors for construction and renovation projects valued at $5 million or more. The $5 million threshold refers to the total contract price quoted. PLAs establish uniform terms and conditions of employment for all construction labor on the project; prohibit strikes, lockouts and similar job disruptions; and allow contractors and subcontractors to compete for contracts without regard to whether they are parties to other collective bargaining agreements.

A Growing National Trend Toward Unionization of Cannabis Workers

There has been substantial union activity in states where cannabis has been legalized for recreational use and retail sale. For example, cannabis workers in Colorado, Illinois, Massachusetts, California, Rhode Island, New York, New Jersey, Maryland and Washington, D.C. have joined unions in waves. Consistent with this trend, Connecticut labor unions have been proactive in trying to recruit Connecticut cannabis workers and increase their membership. This activity can be overwhelming to businesses that are already struggling to manage an ever-changing legal landscape, comply with complex regulations, and finance a new business. Nevertheless, cannabis businesses must ensure they do not interfere with employees’ right to form a union under the National Labor Relations Act or Connecticut State Labor Relations Act.

Maintaining Neutrality Between Cannabis Employers and Cannabis Workers

To steer clear of an unfair labor charge, cannabis businesses should be mindful of what the term “neutrality” means. Although the Cannabis Act does not explicitly define the parameters of what it means to be neutral, here are several considerations based on typical neutrality agreements, which are likely contained in LPAs that have already been signed by cannabis businesses:

  • Neither party should conduct itself or communicate about the other party in a manner that is negative, derogatory or demeaning during any organizing effort;
  • Neither party should conduct itself or communicate about labor unions or employers generally in a manner that is negative, derogatory or demeaning during any organizing effort;
  • Neither party should engage in conduct or delay tactics, nor make threats or misrepresentations, which may frustrate or interfere with employee efforts to select union representation;
  • Neither party should provide support to any person, group or entity opposed to the neutrality principles of the agreement;
  • Neither party should commit any unfair labor practice, such as coercively questioning employees about their union sympathies or prohibiting employees from talking about a union during work time when they are otherwise permitted to discuss other non-work related topics; and
  • The employer, and the employer’s agents, should not campaign to oppose union representation.

Cannabis businesses may look at these neutrality provisions and wonder what they can say or do amid a union campaign. Ultimately, the terms of the LPA will govern what employers are able to say and do, but here are some examples of activities that are generally acceptable:

  • Offer facts or opinions that cannot be perceived as negative, derogatory or demeaning toward any labor union;
  • Share verifiable factual information with employees, such as sharing the costs associated with being a part of a union;
  • When asked, communicate that it does not object to the unionization efforts;
  • Take reasonable steps to ensure that their workers do not feel threatened or harassed by a union representative;
  • Provide equal access to labor unions seeking to represent its employees; and
  • Truthfully respond to misrepresentations by any labor union.

This list provides some guidance about what cannabis businesses can do with respect to union campaigns, but is not exhaustive. Shipman’s experienced team of labor and cannabis lawyers is available to answer any questions cannabis businesses may have, and provide more information about navigating the union petition process from the employer’s perspective.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.