Prominent marijuana multistate operator Curaleaf Holdings sued New Jersey cannabis regulators earlier this month seeking to overturn labor-friendly licensing requirements as well as punishment the company claims is “the commercial equivalent of the death penalty.”
In a complaint filed Oct. 9 in United States Court in New Jersey against the state Cannabis Regulatory Commission, attorneys for Stamford, Connecticut-based Curaleaf allege that state law requiring cannabis businesses to obtain labor peace agreements (LPAs) violate federal law.
Mandated in several pro-union states, including California and New York as well as New Jersey, an LPA is a pact in which a business agrees to remain neutral during organizing activities. In return, the union agrees to forego strikes and boycotts.
Neither the New Jersey CRC nor representatives for Curaleaf immediately responded to requests for comment on Tuesday.
According to its suit, Curaleaf had an LPA with the United Food and Commercial Workers (UFCW) Local 360 that expired in April after the union and the company couldn’t agree on a renewal.
UFCW is one of two major unions organizing workers in the labor-intensive cannabis industry along with the International Brotherhood of Teamsters.
The lawsuit alleges that LPAs violate the federal National Labor Relations Act (NLRA).
It seeks a judge’s declaration that New Jersey’s LPA requirement violates federal law and cannot be enforced and that regulators can’t punish Curaleaf for not abiding by it.
Curaleaf lawsuit is latest challenge to pro-union cannabis laws
Curaleaf’s challenge to the LPA requirement in New Jersey is the latest of several ongoing lawsuits that seek to undo the labor-friendly licensing requirements seen in several major marijuana markets across the U.S.
But it also follows a successful legal effort to strike down an LPA requirement in Oregon.
In that case, a federal judge found that LPAs, which require businesses to remain neutral during unionization pushes, violate First Amendment protections on free speech as well as the NLRA.
And it seems to be timed with both that court case as well as a more pro-business shift in President Donald Trump’s second term after the labor-friendly Biden administration, observers said.
“I believe that Curaleaf and those like them are trying to capitalize off the federal government and the (Trump) administration, which is the most anti-union administration I have seen in my career,” Hugh Giordano, an organizer with Local 360, told MJBizDaily.
UFCW is not a party in the suit.
Curaleaf risks six-figure fines and commercial ‘death penalty’ over labor violation
In August, New Jersey regulators fined Curaleaf $610,000 for being in violation of the LPA requirement since April, according to an Aug. 25 notice.
According to the lawsuit, state regulators are also threatening to fine the company an additional $5,000 for every day the company remains out of compliance.
Regulators have also hinted that they could “revoke Curaleaf’s licenses” entirely, according to the suit.
That’s partially because the permit for the company’s cannabis store in Bordentown, New Jersey, was renewed “upon the condition that they secure an LPA by October 31,” the lawsuit claims.
“That is the commercial equivalent of the death penalty,” the company’s attorneys wrote.
Part of pattern of resistance to cannabis labor organizing
Curaleaf has hired prominent employer-side law firm Littler Mendelson to represent it in the case.
The firm, which Starbucks has also hired in its clashes with pro-union baristas, has a nationwide reputation for being anti organized labor.
Curaleaf has also proven willing to fight unionization efforts by other means.
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In July, a judge for the National Labor Relations Board (NLRB) found that Curaleaf unlawfully fired an employee in Arizona for pro-union activity.
Unionized workers there have been unable to negotiate a contract with the company for several years.
Other companies have gone to lengths some observers say are extreme in their efforts to circumvent LPAs. These include inking deals with so-called company unions or sham unions that have no intent on eventually organizing workers.
Despite companies’ opposition to them, LPAs have had mixed results for workers.
Frustrated with the slow progress in obtaining contracts, some unionized workers have voted to eliminate their unions.
Chris Roberts can be reached at chris.roberts@mjbizdaily.com.
