Published Via JD Supra
In a recent Advice Response Memo, the National Labor Relations Board (NLRB) indicated that employees of a cannabis growing operation were exempt from the National Labor Relations Act (NLRA), meaning that the employees were not entitled to the NLRA’s protections. The employees had alleged that the cannabis operation interfered with their attempts to unionize, but the NLRB advised that the two workers fell under the NLRA’s agricultural workers exemption. Therefore, the employees’ claims were not within the NLRB’s jurisdiction.
While this Advice Response Memo is not a definitive NLRB holding on whether workers in the cannabis industry are generally protected by the NLRA, it provides key guidance on the agricultural exemption and for employers and employees in the cannabis industry generally.
The NLRA provides employees with the right to form and join a union, and employers cannot interfere with those employees’ attempts to do so. “Agricultural workers,” however, are among the various categories of workers exempt from the NLRA’s definition of “employees.” According to an appropriations rider attached to the NLRB’s budget, the NLRB cannot use funds “to organize or assist in organizing agricultural laborers.” The rider requires that the NLRB broadly define “agriculture,” using Fair Labor Standards Act’s definition, which characterizes more workers as exempt. This definition includes “the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities” and any practices performed “as an incident to or in conjunction with such farming operations.” If an employee is an agricultural worker under these definitions, they are exempt from the NLRA and thus outside of the NLRB’s jurisdiction.
The Advice Response Memo
A Regional NLRB office recently sought the NLRB’s Advice Division’s guidance on charges filed against Agri-Kind, a cannabis growing operation in Chester, Pennsylvania. Two Agri-Kind employees alleged that their supervisor’s union-related comments interfered with their attempts to unionize. The regional office asked the NLRB’s Advice Division “(1) whether the two employees at issue are exempt from the Act because they are agricultural laborers; (2) whether the Board should assert jurisdiction over the Employer, a marijuana enterprise; and (3) whether remarks from an agent of the Employer violate Section 8(a)(1).” Because the NLRB’s Advice Division concluded that the employees were exempt, the memo did not address the latter two issues.
The NLRB’s Advice Division noted at the outset that “the Board has not ruled on whether employees of a marijuana enterprise are agricultural laborers or statutory employees.” The memo ultimately concluded that “although the two employees work in indoor grow rooms akin to greenhouses, which the Board has previously distinguished from traditional exempt agricultural work,” the workers nonetheless fell under the agricultural exemption. The NLRB’s Advice Division relied on the following:
- 70% of the first employee’s job responsibilities involved harvesting, de-fanning, and skirting marijuana plants, which included cutting them from their stalks, removing large leaves, and taping on labels.
- The second employee was a “trimmer” who planted, harvested, cleaned, and packaged the plants.
- Neither worker used machinery nor processed the plants into other products, such as ointments.
Taking this into account, the NLRB’s Advice Division found that the employees were agricultural workers because they did not “significantly transform the natural product from its raw state” and instead worked primarily by hand and “substantially engage[d] in the primary agricultural functions of harvesting, pruning, and sorting of plants.” The NLRB’s Advice Division advised the regional office that such a conclusion “requires dismissal of these charges.”
Relationship to Past Guidance
The NLRB’s Advice Division provided even further guidance by distinguishing this memo from previous advice memos in which the division concluded that employees did not fall under the agricultural exemption. The first one, issued in 2013, involved employees who processed marijuana plants after they had been grown, harvested, and cultivated by other employees. The employees used machinery to extract and process byproducts from the plants and, in turn, create marketable products. Thus, the NLRB’s Advice Division concluded that those employees were not agricultural workers because they “transformed the raw plant into retail products, whereas the two employees [at Agri-Kind] handle the plants by hand and do not substantially transform them.”
In the second memo, issued in 2015, the employees at issue performed tasks similar to those of the Agri-Kind employees. However, the employees did not engage in any NLRA organizing activity, such as attempting to join or start a union. Thus, the rider, and its agricultural exemption, did not apply because it is implicated only in cases involving bargaining units (i.e., a group of workers placed together for purposes of union representation and collective bargaining). Instead, the NLRB’s Advice Division applied a different test, commonly used for greenhouse employees, and found that the employees were not exempt. In Agri-Kind’s case, on the other hand, the division noted that the two employees were “involved in formal union organizing” and therefore implicated the rider’s broader definition of “agriculture.”
While it may be too soon to realize the full implications of this Advice Response Memo, there are a few important takeaways for the cannabis industry.
First, although this is not the first time the NLRB has addressed marijuana workers generally, in light of the fact that marijuana remains a Schedule I narcotic under the federal Controlled Substances Act, it is worth noting that the NLRB takes the position that federal law can protect workers engaged in an activity that violates federal law. The marijuana industry should not take that fact for granted, as it stands in stark contrast to, for example, federal courts that do not extend the protection of federal bankruptcy laws to marijuana businesses.
Second, although the NLRB in this instance concluded that the employees at issue fell outside the scope of the NLRA, this should not be seen as an indication that all, or even most, marijuana employees are not covered by the NLRA. As noted above, the NLRB has previously opined that workers who processed marijuana fell within the scope of the NLRA. Perhaps the real takeaway here is that the NLRB will closely examine the facts and circumstances of the workers’ job responsibilities to determine whether any given individual is covered by the NLRA.
Finally, the Advice Response Memo could offer astute cannabis employers a roadmap for crafting the responsibilities of certain workers to make it more or less likely that the worker will be classified as an “employee” under the NLRA or fall under the agricultural workers exemption. Because the NLRB will look to things like the amount of time an employee performs certain tasks and the nature of those tasks, an employer with an eye on the application of the NLRB may think carefully about the type and amount of tasks certain employees are asked to undertake.
As the cannabis industry grows in the United States, the NLRB will be asked to answer questions that increase in number and complexity. Those answers will play a critical role in how the industry develops and the ability of those workers in the industry to take advantage of federal labor laws.