Two Oregon cannabis companies have filed suit to try to overturn a recently passed ballot measure that requires labor peace agreements. 

Measure 119, sponsored by UFCW Local 555, passed in November with the support of 57% of voters. It requires cannabis retailers and processors to sign labor peace agreements pledging to remain neutral in union organizing campaigns in order to obtain or renew their license to do business in Oregon. 

The plaintiffs in the lawsuit — filed Feb. 12 in U.S. District Court in Portland — are Bubble’s Hash, a marijuana processor on 4605 SW Beaverton Hillsdale Hwy., and Ascend Dispensary at 13836 NE Sandy Blvd., Portland. Fisher Phillips, one of the nation’s top union-busting law firms, is handling the case, assigning attorneys Stephen M. Scott, Todd Lyon, and Janelle Debes. Newly installed Oregon Attorney General Dan Rayfield will defend the law.

Plaintiffs argue that the law violates cannabis employers’ free speech rights. They also argue that the state law is preempted by a federal law, the National Labor Relations Act (NLRA), citing a 1959 Supreme Court case called San Diego Building Trades Council v. Garmon, in which the court ruled that states may not legislate on subjects covered by the NLRA.

Ironically, the NLRA itself is being challenged as unconstitutional in a lawsuit by Amazon and SpaceX. If the courts strike down the NLRA, that could leave states free to legislate their own labor laws as they pertain to unions, with the result that states like Oregon could end up with much stronger labor union laws, while right-to-work states like Idaho might end up with little or no legal protection for unionizing.

The question of whether a state requirement for a labor peace agreement is pre-empted by the NLRA also came up when the Oregon legislature discussed a very similar proposal in 2023. At the request of then state rep Paul Holvey, an attorney for the legislature looked into the question and delivered her opinion — that it would be preempted. Plaintiffs in the Bubble’s/Ascend lawsuit cited that letter to lawmakers as an exhibit in their lawsuit.

In the state’s response to the Bubble’s/Ascend lawsuit, Oregon Attorney General Dan Rayfield said whether the NLRA applies to cannabis businesses is currently an open question under federal law, and cast doubt on whether a small local cannabis business would be subject to the NLRA anyway. The NLRA is grounded on Congress’ power to regulate interstate commerce, but by law, cannabis grown in Oregon can’t be sold across state lines.

California, New Jersey, New York, Illinois, and Virginia have similar state cannabis labor peace statutes. Similar federal lawsuits have been filed against those laws in Rhode Island and California. The Rhode Island case was dismissed without the court ruling on the merits, but the California case is still pending.

In the Oregon case, the court denied plaintiffs’ request for a temporary restraining order. But they did schedule a hearing for April 29 on whether to issue a preliminary injunction to block the law from continuing in effect until the court decides the case.

How the cannabis labor law works

Passed by voters in November, Oregon’s Measure 119 took effect Dec. 5. The measure was placed on the ballot thanks to a paid signature campaign by United Food and Commercial Workers (UFCW) Local 555, which has tried to organize workers at cannabis retailers in recent years. The law says cannabis dispensaries and processors must sign a labor peace agreement with a union in order to have their licenses approved or renewed. Under the agreements, businesses promise to remain neutral in response to union organizing efforts. Businesses have to submit the agreement or a signed attestation to the Oregon Liquor & Cannabis Commission (OLCC). Employers can enter into labor peace agreements with any “bona fide” union, but all 23 valid agreements submitted to the OLCC in the first two weeks of the new requirement were with Local 555.

After it passed, Local 555 set up a website at oregonlpa.com where employers can get a template labor peace agreement to sign. Local 555’s labor peace agreement template lays out a card check process, which means workers wouldn’t need a formal election if at least half sign union authorization cards.

Local 555 spokesperson Miles Eshaia did not respond to questions about how many agreements the local had signed or how many shops had unionized.