Cannabis Businesses – Get Ready to Sit at the Bargaining Table

Posted on Friday, April 22nd, 2022.

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Cannabusiness. The mere utterance of this word generates excitement at the thought of the new business opportunities available. But those with visions of operating a cannabusiness in New Jersey need to be aware that other than “microbusinesses,” all licensed producers, growers, transporters and vendors will be required to enter into union agreements or face having their licenses revoked. Having a “labor peace” agreement with a labor union – that is, an agreement not to contest the union’s efforts to organize one’s workers, often in exchange for the union’s promise not to strike or picket – is a requirement for applying even for a temporary license. Once the license is granted, the licensee must maintain the labor peace agreement or enter into a collective bargaining agreement (or at least make good faith efforts to conclude such an agreement) within 200 days of opening for business. Failure to do so can result in license suspension or revocation.

Cannabusiness entrepreneurs face obstacles unique to that industry. But collective bargaining, even in a harmonious, constructive union relationship, imposes a new set of mutual rights and obligations that cannabusiness entrepreneurs may not be aware of. A short article can only skim the surface of these rights and obligations. But some key points are critical to understand.

First, an entrepreneur cannot simply begin to bargain with any union he or she chooses. Whether to be represented by a union is exclusively the employees’ option, and the employees have the exclusive right to choose which union will represent them. An entrepreneur who bargains with a union not selected by the majority of employees, or who tries to push the employees into selecting a specific union the entrepreneur may prefer, is committing a serious unfair practice.

This is a fine line for cannabusinesses to walk. They need to have labor peace agreements in place in order to apply for and maintain the licenses they need. This will likely mean dealing with a union that their employees have not yet selected as their bargaining agent. But if entrepreneurs cross the line into prematurely bargaining with that union as their employees agent, or are perceived as pressuring their employees into selecting that union as the bargaining representative,  entrepreneurs will run into serious trouble.

Second, once the majority of employees has selected a union, the cannabusiness entrepreneur must bargain with the union over wages, hours and working conditions. This obligation goes beyond simply wages, salaries and benefits. Any matter that regulates the relations between the cannabusiness as employer and its employees – including work rules, discipline, and even certain key entrepreneurial decisions – must be bargained with the union. In mature collective bargaining relationships, employers can rely on “management rights” clauses, bargained into their labor contracts, that allow them the authority to manage their businesses without having to bargain with the union continuously. Cannabusiness entrepreneurs without a “management rights” clause to fall back on will find themselves needing to deal regularly with the union over matters they may have assumed were managerial decisions but are considered “working conditions” under labor law.

Collective bargaining involves a complex network of mutual rights and obligations that can be treacherous for any new business. Partnering with trusted, experienced legal advisors such as Trimboli & Prusinowski’s attorneys to successfully navigate these waters is critical. Call our office to set up an appointment.

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