A Brooklyn marijuana dispensary run by a social equity license holder filed a new federal lawsuit in an attempt to overturn a New York State requirement that all cannabis companies enter into labor peace agreements with a labor union, claiming that the mandate runs counter to federal labor law.
Hybrid NYC, which just opened for business in October and signed a labor peace agreement with United Food and Commercial Workers Local 338 last March, filed the suit on April 14 in U.S. District Court for the Southern District of New York. The suit argues that the required LPA is invalid under both the U.S. Constitution and the National Labor Relations Act, and asserts that the state is unable to set down such a requirement without violating the U.S. Controlled Substances Act.
The New York LPA requirement was written into the state law that legalized recreational marijuana in 2021, and it was reiterated in industry rules adopted by the Office of Cannabis Management.
But those steps were in error, Hybrid argued in its lawsuit, and violate the company’s right to oppose unionization and to provide its employees with more information about the pros and cons of joining a labor union.
“But for New York’s Cannabis LPA Mandates, Hybrid would not have executed an LPA and would have reserved its rights under the NLRA to oppose unionization,” the suit states.
The lawsuit also claims that the UFCW Local 338 sent a letter to Hybrid stating that its employees had “chosen the Union to represent them for the purposes of collective bargaining” and gave the company 14 days to officially recognize the union as the negotiating representative of its workers.
Hybrid rejected that position but said in the lawsuit that its business permit is now in jeopardy because it suspects the union of skirting the rules governing union recruitment of workers.
“The requirement that Hybrid maintain an LPA as ‘an ongoing material condition of licensure’ accordingly injures Hybrid and threatens its adult-use cannabis license if Hybrid and Local 338 cannot resolve their dispute,” the suit states.
In addition, the Hybrid complaint argues that only one union chapter meets the state requirement for signing an LPA with a “bona fide” labor organization that represents marijuana industry workers: UFCW Local 338. That, Hybrid argued, eliminates its employees’ options for choices of which union to join.
The LPA also binds Hybrid from even making an argument to its employees that the wages and benefits provided without union support are sufficient; the company claims that it pays its workers $25 per hour, which it said is $7 an hour above market rates. Hybrid also noted in the suit that it provides workers with health benefit reimbursements, retirement plan contributions, four weeks paid vacation per year and 40% discounts on lifestyle products, among other benefits.
The lawsuit requests a court order declaring the LPA requirement null and void and prohibiting state officials from sanctioning cannabis companies for not signing the agreements.
The LPA requirement has become increasingly common, particularly in Democratic-led states that favor unions. California, Minnesota and New Jersey also have similar LPA requirements for cannabis companies.
Hybrid NYC vs NY state The lawsuit argues that the required LPA is invalid under both the U.S. Constitution and the National Labor Relations Act. Read More
