Marijuana Moment: Oregon Marijuana Businesses Urge Federal Court To Uphold Ruling Blocking Industry Labor Law Approved By Voters

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Oregon-based marijuana companies are asking a federal court to uphold a lower judge’s ruling that struck down a voter-approved law to require licensed cannabis businesses to enter into labor peace agreements with workers and mandate that employers remain neutral in discussions around unionization.

In a brief filed with the U.S. Court of Appeals for the Ninth Circuit on Wednesday, attorneys for two marijuana businesses—Bubble’s Hash and Ascend Dispensary—said the prior district court ruling was accurately decided, as the labor peace agreement requirement unconstitutionally infringed upon their freedom of speech.

This comes about two months after the defendants—Oregon Gov. Tina Kotek (D), Attorney General Dan Rayfield (D) and Oregon Liquor and Cannabis Commission’s (OLCC) Dennis Doherty and Craig Prins—urged the appeals court to review the constitutional challenge to the state law following their lower court defeat.

The plaintiffs initially filed a lawsuit in the district court challenging the implementation of Measure 119, and a federal judge sided with the plaintiffs, finding that the law unconstitutionally restricts free speech and violates the federal National Labor Relations Act (NLRA).

“Although Defendants and Plaintiffs do not dispute that the NLRA applies to the cannabis industry, and do not dispute the Lower Court’s opinion regarding the same, Plaintiffs acknowledge this Court may extend discretion to review without any such party challenge,” the latest filing, first reported by Law360, states.

Under the currently paused law, a marijuana businesses that was unable to provide proof of a labor peace agreement could have been subject a denial or revocation of their license.

In an order in May, the district court judge walked through various components of the legal arguments from both sides and ultimately agreed that the Oregon law is preempted by the NLRA, which is meant to provide protections for workers who want to unionize—but specifically preserves the right for “uninhibited, robust, and wide-open debate in labor disputes.”

By mandating neutrality from employers in labor discussions, the Oregon law constitutes a violation of the NLRA, the judge ruled.

The new filing from the cannabis businesses says that while the federal government has generally “declined to prosecute state marijuana laws that conflict with the” Controlled Substances Act (CSA), that “does not mean other constitutional limits on states’ regulatory powers also take a back seat.”

“The CSA does not grant states the power to burden interstate commerce that would otherwise be impermissible, simply because the CSA prohibits cannabis,” it said. “Finding that the NLRA applied to cannabis employers for which the [National Labor Relations Board] maintains jurisdiction, the District Court correctly concluded M119 was preempted under the NLRA principle of preemption.”

“For the reasons as set forth above, the Court should affirm the District Court, which held that the NLRA preempts M119…and that M119 violates the First Amendment speech protections,” it says.

The state, for its part, has argued that the federal circuit court “should reverse the district court’s judgment, and it should remand the case with instructions to enter judgment for defendants on the preemption and First Amendment claims.”

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On the question of whether the law violates First Amendment protections under the U.S. Constitution, the cannabis companies argued that “Measure 119 is a content-based restriction on speech that is subject to strict scrutiny, and that Defendants fail to provide a compelling government interest requiring this restriction.”

Measure 119 passed with about 57 percent of the vote last November. A regional chapter of United Food and Commercial Workers (UFCW)—UFCW Local 555—had submitted more than 160,000 signatures to qualify the measure for ballot placement last year.

During the Oregon legislature’s 2023 session, lawmakers declined to enact a bill containing similar provisions. UFCW lobbied for that legislation, and it decided to mount a campaign to let voters decide on the issue this year after that effort failed.

UFCW pressed legislators to enact a bill to codify the labor protections in 2023. And after it was effectively killed by a top House Democrat, it announced that it would be leading a recall effort to oust him.

Read the filing in the Oregon cannabis industry labor law case below:

Photo elements courtesy of rawpixel and Philip Steffan.

The post Oregon Marijuana Businesses Urge Federal Court To Uphold Ruling Blocking Industry Labor Law Approved By Voters appeared first on Marijuana Moment.

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