On November 8, 2022, Maryland voters approved a referendum to legalize cannabis use for adults 21 and older. Earlier this year, the Maryland General Assembly passed the accompanying Cannabis Reform Act, establishing the state’s regulatory and taxation framework for the sale of adult-use cannabis in the state. Maryland’s adult-use market opened in July 2023, and the new program includes several provisions designed to help unions organize employees, which should be on the radar of every cannabis business. This coincides with recent developments at the National Labor Relations Board easing requirements for unions to organize.
Union Relations
Among other things, the legislation requires that, on or before July 1, 2024, the Maryland Cannabis Administration to establish “minimum standards for licensed growers to protect the rights of the growers and employees concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment.” In this regard, the administration must prohibit unions from “engaging in picketing, work stoppages, boycotts, or any other economic interference with the operation” of licensed growers. This sounds good on the surface, but there’s more.
The legislation also requires, as a condition of licensure, that licensed growers “negotiate in good faith” with “any legitimate labor organization” that the administration recognizes. It is possible that these requirements render the new law illegal because they conflict with federal labor law. But the MCA might issue regulations similar to those found in the cannabis industry in other states, which impose “neutrality” requirements on growers — those have been found to be legal.
Organizing Process
Normally, a union signs up employees by collecting authorization cards from employees. Under new NLRB rules, the union may present the cards to the employer, which may then file a petition with the NLRB for a secret ballot election. The election will typically be held in three to four weeks. Employers generally use this time to communicate their position on unionization to employees. They may, for instance, point out that if unionized, there might be less flexibility in place (in favor of rigid rules in a labor agreement), that if employees unionize, the law prevents the employer from “dealing directly” with the employees, that there generally are no raises until an agreement is reached, and other facts that the employees might not know.
Neutrality legislation typically requires that an employer: (a) grant union organizers access to the workplace to speak with employees; (b) provide employee contact information to union organizers; (c) refrain from communicating negative or critical facts to employees about unions or unionization; or (d) forgo their right (and employees’ rights) to an NLRB secret ballot election, opting instead for a “card check” procedure, whereby a third-party neutral (such as an arbitrator) would examine signatures on cards. If the union has collected signed cards from 50% plus one employee, the employer must recognize the union. This is very important because employees very often do not understand what union cards are being used for, and sometimes are pressured into signing them by co-workers or union organizers. In short, they may not be an accurate barometer of whether employees want the union to represent them. The MCA’s regulations may include some or all of these things.
Growing Unionization
The regulations will be issued amid union organizing at historic highs. Recent data shows that more than 16 million U.S. workers were represented by a union in 2022, an increase of 200,000 from 2021. NLRB election petitions increased more than 50% year over year in 2022 and are up over 20% so far in 2023. Maryland was listed as one of five states that experienced the largest increase in unionization in 2022, adding roughly 40,000 union workers. Additionally, we have seen a significant increase in union organizing over the last three years among cannabis businesses nationwide. As legalization spreads and the cannabis workforce grows, employers in this fast-growing industry should expect to see increased organizing efforts. And due to a recent NLRB case, if the employer commits any unfair labor practice during a campaign before a vote, the union will be declared the winner of the election by default. This means that if employees sign cards, unionization is almost inevitable.
What Employers Should Do
Given this new law and the impending regulations that will create a favorable environment for union organizing, it is imperative that cannabis businesses implement proactive measures. This includes training managers and supervisors on what to do — and not do — when there might be unionizing activity, as well as education about the reality of having a union in the workplace. Importantly, cannabis businesses should also focus on strengthening employee relations, developing a positive workplace culture and lawfully educating employees on their employee relations philosophy and the implications of unionization. A positive employee relations program focusing on all of these key objectives should be developed with labor attorneys, as the legal rules are nuanced. If the right plan is put into place, the workplace culture may be such that employees decide for themselves that, despite union-friendly legal requirements, they are happy at work, connected to the company’s mission and politely say “no thanks” if a union organizer asks them to sign a card.