A federal judge has invalidated a recently passed Oregon law requiring licensed cannabis businesses to establish labor peace agreements with their workers. This ruling, issued by Judge Michael Simon in the U.S. District Court for the District of Oregon, comes just three months after two cannabis businesses—Bubble’s Hash and Ascend Dispensary—initiated a lawsuit opposing the law, known as Measure 119.
Judge Simon’s decision identifies the law as unconstitutional, asserting that it infringes on free speech rights and conflicts with the federal National Labor Relations Act (NLRA). The now-defunct Measure 119 mandated that cannabis employers maintain neutrality during discussions regarding unionization. If businesses failed to secure a labor peace agreement, they faced potential license denials or revocations.
The lawsuit was filed against key state officials, including Governor Tina Kotek, Attorney General Dan Rayfield, and members of the Oregon Liquor and Cannabis Commission (OLCC). In his ruling, Judge Simon detailed arguments from both sides, ultimately concluding that Measure 119 violates the NLRA, which aims to protect workers’ rights to unionize while allowing for open debate in labor disputes.
Judge Simon stated that the requirement for employers to remain neutral effectively suppresses their ability to engage in discussions about unionization, which is a violation of the NLRA. He emphasized that the law does not differentiate between acceptable employer speech and that which could be deemed threatening or coercive. Instead, it broadly restricts all non-neutral employer speech regarding union activities.
The cannabis companies argued that Measure 119 represents a content-based restriction on speech that requires strict scrutiny. The defendants contended that it was a legitimate regulation of commercial speech. However, Judge Simon sided with the plaintiffs, declaring that Measure 119 is both preempted by the NLRA and a violation of the First Amendment rights of the plaintiffs.
Following the ruling, the court has granted permanent injunctive relief, confirming that all conditions for such relief have been met. Measure 119 had previously passed with approximately 57% of the vote in November 2022, following a campaign led by UFCW Local 555, which submitted over 160,000 signatures to place the measure on the ballot. This chapter of the UFCW sought to establish labor protections for cannabis workers after legislative attempts to codify similar provisions in 2023 were unsuccessful.
The UFCW had advocated for the passage of a bill to protect labor rights in the cannabis industry, but when that effort was thwarted by a prominent House Democrat, the union decided to take the issue directly to voters.
This federal ruling marks a significant development in labor relations within the cannabis sector, highlighting ongoing tensions between state laws and federal labor regulations. The implications of this decision could affect not only cannabis businesses in Oregon but also labor relations practices across the industry nationwide.
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