Cannabis company is first forced to bargain with union under new NLRB test

By Daniel Wiessner

Sept 22 (Reuters) - A Massachusetts cannabis dispensary operator must bargain with a union even though it lost an election to represent the company's workers, a National Labor Relations Board (NLRB) judge has ruled in the first decision to apply a major recent ruling by the agency.

Administrative Law Judge Andrew Gollin in Boston said in a decision issued Thursday that I.N.S.A. Inc fired union supporters and engaged in an array of other unlawful conduct leading up to a 2022 election, rendering the chances of a fair vote unlikely.

Gollin is the first judge to apply the Democrat-led NLRB's August ruling involving building materials firm Cemex Construction Materials, which opened the door for many unions to gain recognition without winning elections in cases where employers commit unfair labor practices. That decision has riled business groups, who say it improperly favors unions and deprives workers of free choice.

I.N.S.A.'s employees at a Salem, Massachusetts, dispensary voted 17-11 last year against joining the United Food and Commercial Workers union, which filed charges with the NLRB, challenging the results.

Gollin said the company's illegal conduct was intended to send a message that employees could lose their jobs for supporting the union, which "irreparably harms the organizing effort and undermines the integrity of the election process."

Lawyers for I.N.S.A. and the UFCW did not immediately respond to requests for comment on Friday.

For decades, unions have been required to petition for and win secret ballot elections before employers must recognize and bargain with them. In the 1969 case NLRB v. Gissel Packaging Co, the U.S. Supreme Court upheld a narrow exception carved out by the NLRB in cases involving severe unfair labor practices.

In Cemex, the board said that when a union provides evidence of majority support in a workplace, such as signed authorization cards, an employer must voluntarily recognize the union or file a petition for an election.

If the employer commits an unfair labor practice, which is common in union campaigns, it can be made to bargain without a vote ever being held or after a union loses.

The board and supporters of the decision have said the change was necessary to counter the prevalence of illegal union-busting tactics by many employers, and they say that nothing in federal labor law requires formal elections.

It remains to be seen how often Cemex bargaining orders will be issued. Many lawyers and lobbyists expect to see them more frequently than orders issued under Gissel, which were reserved for cases involving the most egregious misconduct.

"Cemex really seems to step back from that and suggests these will be more common," said Glenn Spencer, senior vice president for employment policy at the U.S. Chamber of Commerce, the nation's largest business lobbying group. "This is a tool the board has given themselves, and they will use it."

Cemex is appealing the board's August ruling to the San Francisco-based 9th U.S. Circuit Court of Appeals. Spencer and other critics of the ruling have said the decision is likely vulnerable to legal challenges.

They argue that it conflicts with a 1974 U.S. Supreme Court ruling that said unions, and not employers, bear the burden of filing election petitions, and violates federal labor law by depriving workers of the choice of whether to join unions.

The process for unionizing is also arguably a "major question" with broad societal implications, which the Supreme Court recently said must be addressed by Congress and not federal agencies, said Ed Egee, a vice president at the National Retail Federation who was head of congressional and public policy at the NLRB during the Trump administration.

The case is I.N.S.A. Inc, National Labor Relations Board, No. 01-CA-290558.

For I.N.S.A.: James Fullmer and Jonathan Keselenko of Foley Hoag

For the UFCW: Alex Robertson of Pyle Rome Ehrenberg

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