Michigan Tries to Force Marijuana Businesses to Reach Labor Peace Agreements

Gov. Gretchen Whitmer’s administration has proposed new rules to govern Michigan’s fledgling adult-use marijuana market that would force all marijuana businesses to enter a labor peace agreement before they are able to apply for a state... Read more
Gov. Gretchen Whitmer’s administration has proposed new rules to govern Michigan’s fledgling adult-use marijuana market that would force all marijuana businesses to enter a labor peace agreement before they are able to apply for a state license. The move appears intended to curry favor with labor unions, which could use this requirement as leverage to exact broader union contracts. The proposal would place union bosses in the catbird seat since they would essentially need to sign off on entrepreneurs’ applications for marijuana licenses, which are required before marijuana businesses can open their doors in Michigan. Proposal 1, the initiative passed in 2018 that made marijuana legal for adult use in Michigan, made no mention of a forced unionization requirement. In fact, Proposal 1 states the administration may only require “qualifications for licensure that are directly and demonstrably related to the operation of a marijuana establishment.” There is a long series of legal precedents demonstrating that Whitmer’s proposed rule is unconstitutional. The Supremacy Clause to the U.S. Constitution elevates federal law above state and local laws that may be in conflict, and federal law reserves to the National Labor Relations Board (NLRB) the sole authority to regulate private-sector labor relations. A U.S. District Court in 2005 ruled that a similar provision in Wisconsin that would have required contractors with local governments to enter a labor peace agreement ran afoul of the National Labor Relations Act. For its part, the National Labor Relations Act only requires employers to negotiate “in good faith” with a federally recognized union that has achieved majority support of workers in an NLRB-supervised election. It never requires an employer to enter a union contract as a condition of opening its doors. Gov. Whitmer’s proposed rule purports to protect “the state’s interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant’s business.” This language implies a threat against marijuana licensees if they do not agree to the demands of union bosses and would strengthen that threat with the backing of the state—all in violation of federal law. Read less
Lansing, MI ( )
May 4, 2020

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For business reasons, some employers may wish to enter into a union contract and some employees may wish to be represented by a union while others may not. However, [such proposals] would illegally attempt to usurp the federal government's exclusive authority to regulate private-sector labor relations through the National Labor... Read more

For business reasons, some employers may wish to enter into a union contract and some employees may wish to be represented by a union while others may not. However, [such proposals] would illegally attempt to usurp the federal government's exclusive authority to regulate private-sector labor relations through the National Labor Relations Act. State policymakers must be mindful of their proper realm of authority vis-a-vis the federal government.

Ultimately, satisfaction of a basic criminal background check is the only restriction states should place on individuals seeking employment with a marijuana licensee. One exciting aspect of the emerging legal marijuana industry is the employment opportunity and chance for upward mobility that it will create for many individuals. It would be unwise to hamper this growth opportunity by placing unnecessary barriers in the paths of both employers and employees.

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February 12, 2020

We don't believe that it's the role of the Department to use licensure as a hammer to force independent businesses into forming relationships with labor unions which will unalterably change and distort their workplaces.

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Jessica Fox

The agency agrees with this comment.

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Andrew Brisbo

Director of MMRA
4th/ 20 in Cannabis Regulations
January 13, 2020

R 420.1 Definitions.(1) As used in these rules: (d) 'Bona fide labor organization' means a labor union that represents, or is actively seeking to represent, marihuana workers. (p) 'ËœLabor peace agreement' means an agreement between a licensee and any bona fide... Read more

January 13, 2020

R 420.1 Definitions.(1) As used in these rules: (d) 'Bona fide labor organization' means a labor union that represents, or is actively seeking to represent, marihuana workers. (p) 'ËœLabor peace agreement' means an agreement between a licensee and any bona fide labor organization that, at a minimum, protects the state's interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant's business.

R. 420.5 Application requirements; complete application. (6) The applicant shall attest, on a form provided by the agency and signed by a bona fide labor organization, that the applicant has entered into a labor peace agreement and will abide by the terms of the agreement. Copies of the labor peace agreements must be maintained and made available to the agency upon request.

R 420.13 Renewal of marihuana license.. (1) The agency shall include on the renewal form, a statement requesting renewal of the marihuana license and all of the following information: (e) An attestation by the licensee that the licensee has and continues to abide by the terms of a labor peace agreement.

R 420.14 Notification and reporting (3) Applicants shall report to the agency any proposed material changes to the marihuana business before making a material change that may require prior authorization by the agency. Material changes include, but are not limited to, the following: (h) The licensee shall notify the agency if there is a change in status of the labor peace agreement attested to at the time of initial licensure or license renewal.

 R 420.21 Designated consumption establishment license.  (a) A designated consumption establishment plan for the proposed consumption establishment. Upon the request of the agency, an applicant or licensee may be required to submit a revised designated consumption establishment plan. The plan must include all of the following: (m) An attestation by the applicant, on a form provided by the agency and signed by a bona fide labor organization, that the applicant has entered into a labor peace agreement and will abide by the terms of the agreement. Copies of the labor peace agreements must be maintained and made available to the agency upon request.

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February 12, 2020

We're not opposed to labor unions, but if labor unions think that they have an opportunity, it is up to them to come and negotiate with each of the individual businesses. It is not the role of the state to act as a brokerage agent for labor unions. We believe that it is a violation of the National Labor Relations Act to do so and we oppose this rule in its entirety.

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Supporting info

Medical Marihuana Facilities (Marihuana Regulatory Agency Request For Rulemaking)

- Michigan Administrative Rulemaking System

Michigan Tries to Force Marijuana Businesses to Reach Labor Peace Agreements

2020/01/03 - Reason Foundation

A Conceptual Policy Framework to Legalize Cannabis

2019/03/01 - Reason Foundation