Just days before a trial was set to begin over a host of unfair labor practice charges against a Columbia, Missouri cannabis dispensary, the parties reached a settlement, which was recently approved by the NLRB’s Regional Director of Region 14. The case involves a charge filed within days after the NLRB issued its game changing decision in Cemex, 372 NLRB No. 130 (August 25, 2023). Among the claims asserted by the General Counsel in her Complaint were allegations that the dispensary terminated 10 employees because of their involvement in a March 2023 union organizing drive at the dispensary. Based on the numerous alleged unfair labor practices, the General Counsel sought a bargaining order under Cemex.

Notably, the settlement continues the General Counsel’s policy that requires all settlements to address each allegation in the General Counsel’s Complaint. As a starting point, under the settlement agreement, the dispensary was required to offer reinstatement to 5 of the 10 terminated employees and pay more than $145,000 in monetary damages.  In addition to backpay and front pay, the settlement required the dispensary to pay damages to one terminated employee “for the interest on a high interest loan” the employee had to take out following the employee’s termination.

However, it is the non-monetary portions of the settlement that are more troubling and should concern employers vulnerable to union organizing. Most significantly, the dispensary was required to “recognize and bargain” with the Union. The settlement, therefore, deprived the employees in the bargaining unit of their right to vote in an election to decide whether they wanted to be represented by the Union. In addition to agreeing to recognize the Union, the settlement agreement required the dispensary to do all the following:

• Rescind its ban of terminated employees from public areas of the dispensary;
• Rescind certain provisions of its Handbook and Non-Disclosure Agreement;
• Read a remedial Notice to Employees at meetings covering each shift;
• Email the remedial Notice to Employees to its current employees;
• Place the Notice to Employees on WhatsApp, the messaging platform utilized by the dispensary to communicate with its employees; and
• Attend a training conducted by the NLRB for its managers and supervisors about employee rights under the National Labor Relations Act.

The notice that NLRB required the dispensary to disseminate to its employees is not for the faint of heart.  The notice not only provides employees with a description of their rights under the National Labor Relations Act, but also sets forth the remedies that the employer has agreed to provide. For example, the notice would state:

WE WILL expunge and remove from our files all references to the termination of [EMPLOYEE NAME],

WE WILL make [EMPLOYEE NAME], who has waived her right to reinstatement, whole for any loss of earnings and other benefits resulting from her termination, less any interim earnings, with interest, total excess tax liability, and front pay.

WE WILL compensate [EMPLOYEE NAME] for the adverse tax consequences, if any, of receiving a lump-sum backpay award, and WE WILL file with the Regional Director, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report allocating the backpay award to the appropriate calendar years for [EMPLOYEE NAME].

The notice would also address every other allegation in the General Counsel’s complaint, such as unlawful policies or rules. With the increased of electronic means of communication, the NLRB is now requiring employers to not only physically post the notice, but also disseminate the notice electronically through any means in which the employer regularly communicates with its employee, including in this case, via WhatsApp.

This case once again demonstrates the risks for cannabis employers who are subject to union organizing. With multiple unions focused on efforts to organize the cannabis industry, employers should take immediate steps to safeguard themselves from becoming the target of this pro-union NLRB.

Bianchi & Brandt lawyers can help.