What cannabis businesses should know about unionization
Unionization has become a hot-button issue in Missouri’s cannabis industry in recent months, as one dispensary pushed forward the campaign faltered and lost support internally before a vote could occur. Meanwhile, others around the state are exploring the landscape of what unionization could mean. For employers, and employees, unionization raises many questions – but many feel uncomfortable asking those questions publicly at the risk of being seen as anti-union.
While there is little debate about the place of unions in American history and how employees across all industries have benefitted from organized labor, the practicality is that unionization is simply not as common as it once was. Data provided by the U.S. Department of Labor shows union membership hit historic lows in 2021, falling to 10.3%. In the private sector, union workers now make up only 6.1% of the workforce.
Greenway recently spoke to two of Missouri’s most respected labor attorneys, Michael Kaemmerer of McCarthy, Leonard & Kaemmerer, and Robert Kaiser of Armstrong Teasdale, asking many of the questions that operators and employees are facing.
For many, even the process surrounding unionization is unclear.
Understanding the process
“The normal process is that a Union will, unbeknownst to the employer, collect ‘Authorization Cards’ from employees,” Robert Kaiser explained. “The Union can then approach the employer with those cards and demand that the employer voluntarily recognize the union.”
Kaiser cautions businesses against voluntary recognition, “The employer should not look at or accept the cards, but should require the Union to go to an election.”
The NLRB (National Labor Relations Board) requires at least 30% of workers to sign cards or a petition saying they want a union. “Most unions won’t seek an election at 30%, it’s numerical – why would a union think they would win an election if only 30% of the employees are even interested,” Michael Kaemmerer explained.
From there, the NLRB will conduct an election. It generally takes the labor board approximately six weeks to determine who is eligible to vote and schedule the election. During the time leading up to the vote, like any election, a campaign begins.
“Employers should expect union business agents to talk to their employees, often on a parking lot, or even at their homes. There is also typically at least one employee ‘insider’ who is also talking to coworkers,” Kaiser explained. “The employer should make sure all supervisors and managers understand the ‘Do’s and Don’ts’ in a campaign to make sure they express their perspective in a lawful way. This does involve training, typically from a labor lawyer,” Kaiser said.
“Employers should remember the old acronym, T.I.P.S., to succinctly describe the prohibited behaviors in that time,” advised Kaemmerer, “ T is for threaten, I for interrogate, P is for promises, S would be surveillance.”
“Employers can’t threaten employees or say things like, ‘If you unionize I’m closing this place down,” Kaemmerer explained. “Employers can’t interrogate employees. You can’t say, ‘Why are you doing this, who is behind this’ – the who, what, where, when, and why when asked by the employer of the employee is impermissible.”
Employers also can’t try to dissuade employees from organizing via promises, Kaemmerer said. “Promises are the exact opposite of threats, employers can’t go to employees and say ‘Sorry, you were doing this, but what if we gave you a raise?”
Employers can’t make efforts to observe employees, “I hear there’s a union meeting tonight, I can’t drive-by to count and identify cars,” Kaemmerer explained.
“Conversely, employers have free-speech rights, meaning as long as they don’t threaten or use restraint or coercion, they have the ability to produce facts and inform employees of what the employer perceives as the potential negatives of a union organization.
“That may be union dues or the fact that in most cases all matters proceed through the union and workers risk losing individuality for the collective. There is, of course, always the risk of strikes,” Kaemmerer said.
If a majority of eligible employees who vote choose the union, the NLRB will certify the union as their representative for collective bargaining.
Once a union has been certified or recognized, employers are then required to bargain over terms and conditions of employment with union representatives.
While many see employer opposition to unions as a move motivated purely by profit, Kaiser says that’s often not the case. “[Unionization can lead to] poor communication, less efficiency and flexibility, protection of poor performers, and increased costs, to name a few.”
Aside from the impact faced by employers, Kaiser explains that there can be negative impacts felt by employees as well. “Employees lose individualization, rewards that are individual and merit-based (as opposed to collective), and an open relationship with their supervisor. They may end up paying the union for things they get for free.”
“People believe, oftentimes, that they will get more or do better sooner, but that manifests no understanding of the system,” said Kaemmerer. “There is no such thing as a standard labor contract. Certainly not in this industry, and if there were it would be on an individual matter as each dispensary operates independently and uniquely. Unionization is hardly a guarantee of better circumstances, it’s a goal. In the end, you may like it better, it may stay the same, or you may like it less. There are no certainties.”
So why do employees unionize?
Kaiser says there are many reasons why employees may choose to unionize, “The most common include: fear or dislike of supervisors or management, seeking protection against discipline or work rules, pay or benefits, or a romanticized perspective on unions and ‘solidarity.”
Kaemmerer adds, “[Employees unionize when] they have employers who have little credibility, they have said or done things that at this point are beyond redemption. It has caused employees to lose trust. Sometimes there’s one precipitating occurrence that has so irritated the employees that they are livid.” Kaemmerer described a hypothetical situation where a sudden change to healthcare rates would be that lightning rod type of event. “An employer tells their employees, you were paying $10 per week for health insurance, I’m sorry I have to raise it to $60. That, to me, real-world is how it translates to what we see most often.”
A starting point
Medical marijuana is a new industry to Missouri, with most positions having dozens – if not hundreds, of applicants. Pay in the cannabis industry is generally higher than comparable pay rates for similar jobs, in the retail setting, the average cannabis worker in Missouri starts at roughly $3-4 more per hour than the average retail salary in the state. The average hourly pay for a retail position in Missouri is $10.61 as of February 2022, according to ZipRecruiter. 35% of the state’s retail employees make $9.89 or less. Missouri’s minimum wage rose to $11.15 per hour as of Jan 1, 2022, but retail and service businesses with less than $500,000 in annual gross sales are exempt from minimum wage requirements. With so many applicants vying for positions, why has talk of unionization become so popular?
“Unionization is not necessarily common in new or emerging industries, but unions do look for inroads in particular industries in order to expand membership,” Kaiser said. “Unions are in the membership business and members form the basis of their revenue stream. New or emerging industries may provide an opportunity to expand that revenue stream.”
What should Missouri’s cannabis operators do to prepare their businesses?
“The principal reasons [that employees do not unionize] often reflect the flip side,” Kaiser explained. “[Employees who] like or respect their supervisor, feel like they are being treated fairly, feel like they already have direct access to management [often don’t see a need to unionize].”
For Kaiser, unionization is often less about the industry and more about individual businesses and workplaces. Fostering a healthy and productive environment is key to mutual success he explains, “Open and transparent communication and expectations is not unique to combatting unionization; it reflects good business practices. Employees should understand expectations and managers should be approachable, consistent, and empathetic,” Kaiser said.
“Communication is crucial,” Kaemmerer said, “Employers who monitor situations, keep their ear to the ground and adapt to needs and changing ideas, and are forthright, honest, and fair in their dealings create an environment where people don’t expect you to do what they want, but to tell them what the rules are and even-handedly enforce them.”