Oregon Officials Will Appeal Court Decision That Overturned Marijuana Industry Labor Peace Law

Oregon officials have notified a federal appeals court that they are challenging a lower judge’s ruling striking down a voter-approved law that required licensed marijuana businesses to enter into labor peace agreements with workers and mandated that employers remain neutral in discussions around unionization.

In a notice of appeal submitted to the U.S. Court of Appeals for the Ninth Circuit late last week, attorneys for Oregon Gov. Tina Kotek (D), Attorney General Dan Rayfield (D) and Oregon Liquor and Cannabis Commission’s (OLCC) Dennis Doherty and Craig Prins said they will be contesting the decision by the U.S. District Court for the District of Oregon last month.

After two marijuana businesses—Bubble’s Hash and Ascend Dispensary—filed a lawsuit in the district court challenging the implementation of Measure 119, a federal judge sided with the plaintiffs, finding that the law unconstitutionally restricts free speech and violates the federal National Labor Relations Act (NLRA).

Now the state is pushing back, advising the Ninth Circuit that it will be appealing, as Law360 first reported. Details about the merits of the appeal are currently unknown. But the court gave the state a deadline of September 3 to provide an opening brief, and the plaintiffs must file a reply brief by October 3.

Under the currently paused law, a marijuana businesses that was unable to provide proof of a labor peace agreement could have been subject a denial or revocation of their license.

In an order last month, the district court judge walked through various components of the legal arguments from both sides and ultimately agreed that the Oregon law is preempted by the NLRA, which is meant to provide protections for workers who want to unionize—but specifically preserves the right for “uninhibited, robust, and wide-open debate in labor disputes.”

By mandating neutrality from employers in labor discussions, that constitutes a violation of the NLRA, the judge ruled.

“Measure 119 does not distinguish between permissible employer speech and threatening or coercive speech,” Judge Michael Simon said. “Measure 119 is not limited to restricting only threatening, coercive, false, or misleading speech, but instead prohibits all speech by employers that is not ‘neutral’ toward unionization.”

On the question of whether the law violates First Amendment protections under the U.S. Constitution, the cannabis companies argued that “Measure 119 is a content-based restriction on speech that is subject to strict scrutiny, and that Defendants fail to provide a compelling government interest requiring this restriction.”

Measure 119 passed with about 57 percent of the vote last November. A regional chapter of United Food and Commercial Workers (UFCW)—UFCW Local 555—had submitted more than 160,000 signatures to qualify the measure for ballot placement last year.

During the Oregon legislature’s 2023 session, lawmakers declined to enact a bill containing similar provisions. UFCW lobbied for that legislation, and it decided to mount a campaign to let voters decide on the issue this year after that effort failed.

UFCW pressed legislators to enact a bill to codify the labor protections in 2023. And after it was effectively killed by a top House Democrat, it announced that it would be leading a recall effort to oust him.

Read the text of the Oregon officials’ notices of appeal below: 

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Photo courtesy of Brian Shamblen.