Oregon Officials Ask Federal Court To Reverse Ruling That Blocked Marijuana Industry Labor Law Approved By Voters

Oregon officials are asking a federal appeals court to reverse a judge’s ruling that struck down a voter-approved law to require licensed marijuana businesses to enter into labor peace agreements with workers and mandate that employers remain neutral in discussions around unionization.

In a filing with the U.S. Court of Appeals for the Ninth Circuit 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 urged a review of the “constitutional challenge” to the state law.

The officials previously provided notice that they’d be contesting the U.S. District Court for the District of Oregon decision back in June.

After two marijuana businesses—Bubble’s Hash and Ascend Dispensary—initially 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).

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.

“The challenged law is constitutional because it does not in fact prohibit employers from expressing their views on any topic including unionization, and it therefore does not conflict either with the First Amendment’s free-speech guarantee or with any substantive protection in the NLRA,” the latest filing, first reported by Law360, says. “But even if it does affect employers’ freedom of expression, that effect is permissible under the NLRA because that federal law does not affirmatively protect employer expression at all.”

“Further, to the extent the federal law does protect employer expression on unionization, it leaves room to accommodate local interests in tightly regulating the marijuana market, which Congress intended to be tightly regulated,” it continues. “And any effect on expression is also permissible under the First Amendment because that effect is limited to commercial speech and survives intermediate scrutiny.”

In an order in May, 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.

But the state is asserting that the federal circuit court “should reverse the district court’s judgment, and it should remand the case with instructions to enter judgment for defendants on the preemption and First Amendment claims.”

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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 federal court filing in the Oregon marijuana labor laws case below:

Photo courtesy of Mike Latimer.