DC judge questions Labor Board’s authorization over illegal business

A three-member panel for the District of Columbia Circuit denied enforcement of part of the National Labor Relations Board‘s decision about Curaleaf Holding’s (OTC: CURLF) Arizona dispensary. The decision stemmed from the firing of worker Anissa Keane, who was a union organizer at a cannabis dispensary. However, the panel did agree with the NLRB’s position that Curaleaf violated three other labor issues.

Curaleaf did not dispute that it violated the National Labor Relations Act by:

• Threatening employees’ tips if they unionized.
• Promising employees benefits if they did not unionize.
• Creating an impression of surveillance.

However, Judge Justin R. Walker questioned whether the NLRB had jurisdiction over cannabis, which he noted was still federally illegal. He added that federal law can’t be displaced by state law. He acknowledged that Congress held that the NLRB can hold employers responsible for upholding labor laws, but that might not count when the business is an illegal operation.

Judge Walker wrote,

That distinction may be more significant than the NLRB appreciates. After all, rings of bookies and counterfeiters affect interstate commerce, but the NLRB does not seem eager to adjudicate their labor disputes. Ditto for street gangs. Why does that change when a corner boy calls himself a “budtender” and his crew incorporates under state law? To me, at least, the answer is hazy.

Employee fired

The NLRB found fault with Curaleaf over its firing of Keane, agreeing that the action was due to her attempts to unionize the dispensary. Keane was organizing with the United Food and Commercial Workers Union Local 99 in Gilbert, Arizona, according to court filings.

The dispensary only deals in cash, and when an employee’s cash drawer doesn’t balance at the end of the shift, it is considered a violation. The employees had specified discipline policies that Curaleaf followed.

The NLRB found that Keane was fired after two cash drawer violations, while another employee wasn’t fired until he had seven such violations. Tyler Tanselle-Hubbard, the top salesman at Curaleaf’s store in Camelback, Arizona, was the only other employee fired under the company’s four-step policy. Tanselle-Hubbard had no union activities.

Curaleaf also combined employee missteps together. So, if the employee made mistakes other than the cash drawer violation, it still counted in the discipline process. With Keane, the company asserted it documented that she made a litany of errors as a budtender.

The court opinion wrote that “Keane made seven errors in a single transaction, including failing to check the patient’s medical card, dispensing the wrong quantity of marijuana, and failing to log the allotments … A senior Curaleaf Arizona manager called this transaction a ‘nightmare transaction,’ … and later testified that the transaction ‘was, in [his] five-and-a-half years, the most horrendous transaction [he had] ever seen.’”

One Curaleaf Gilbert manager sent an email at the time saying that he had “never come across a transaction that is quite this bad” in his “4 years of management.”

Curaleaf argued that Keane’s mistakes could have cost the company its license. One member of the NLRB stated that they believed Curaleaf had actually been lenient with Keane.

Other violations

According to the court filing, Curaleaf learned of Keane’s unionization attempts while she was still employed. Curaleaf management then discussed how to respond to the unionization effort.

“About a month later, Curaleaf Gilbert held two mandatory employee information sessions to discuss unionization. During one of the sessions, a Curaleaf human resources director stated that employees would receive ‘better discounts’ on dispensary products if they did not unionize, that unionizing would result in employees losing their tips, and that ‘the person trying to organize the Union was just trying to get a job with the Union because she would get paid more,’” the court filing stated.

In addition, while fighting to get Keane rehired with back pay, the labor board ordered the company to read aloud a notice of the unfair labor practice findings to Curaleaf Gilbert employees and to grant the union access to Curaleaf Gilbert’s facilities any time Curaleaf spoke to its employees about unionization. Curaleaf pushed back on the issues with Keane but did not challenge the the other two items.

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