Federal Judge Blocks Voter-Approved Oregon Law Requiring Marijuana Businesses To Have Labor Peace Agreements With Workers

A federal judge has struck down a voter-approved Oregon law that required licensed marijuana businesses enter into labor peace agreements with workers and mandated that employers remain neutral in discussions around unionization.

About three months after two marijuana businesses—Bubble’s Hash and Ascend Dispensary—filed a lawsuit in the U.S. District Court for the District of Oregon challenging the implementation of Measure 119, Judge Michael Simon on Tuesday ruled in favor of the plaintiffs, agreeing that the law unconstitutionally restricts free speech and violates the federal National Labor Relations Act (NLRA).

Under the now defunct 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.

The lawsuit named Gov. Tina Kotek (D), Attorney General Dan Rayfield (D) and Oregon Liquor and Cannabis Commission’s (OLCC) Dennis Doherty and Craig Prins as defendants.

In the order on Tuesday, the 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,” 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.”

“Defendants respond that Measure 119 is a permissible regulation of commercial speech,” the order says. “Plaintiffs reply that Measure 119 does not regulate commercial speech.” The judge agreed with the plaintiffs.

Therefore, “the Court grants the requested declaratory and permanent injunctive relief, after concluding that Measure 119 is preempted by the NLRA in violation of the Supremacy Clause and violates Plaintiffs’ First Amendment rights, and that all requirements for permanent injunctive relief have been satisfied.”

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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 federal court’s order and judgement in the Oregon Measure 119 lawsuit below:

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Photo elements courtesy of rawpixel and Philip Steffan.