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Connecticut Joins Other States in Promoting Unions Within the Cannabis Industry

Connecticut recently legalized the use of recreational marijuana in July of 2021. Additionally, the new legislation included provisions that strongly encourage unions within the cannabis industry. Other states like New York, New Jersey, and California have already enacted mandates that are labor-friendly for companies applying for cannabis licenses.

Cannabis license conditions

These mandates promote collective bargaining and recognition of unions within the cannabis industry. Connecticut has since followed suit by putting conditions on its cannabis business licensing. Organizations applying for these licenses must agree to enter into a labor peace agreement (LPA) with a valid labor organization. An LPA is defined as an agreement between the cannabis business and a union, under which:

  • The owners will not lock out employees.
  • Labor organizations are prohibited from engaging in picketing, work stoppages, or boycotts against the business.
  • The employer must recognize the union as the representative of its employees and engage in bargaining with that union to establish the terms of the LPA.

Additionally, this new legislation requires the LPA to agree to go through arbitration by a neutral labor arbitrator if any part of the agreement is to be violated. Therefore, the State Department of Consumer Protection (DCP) will suspend the business license if the business fails to comply with an order issued by the arbitrator in an attempt to correct a failure to abide by the original agreement.

Businesses’ that find themselves in this position may seek to lift a license suspension by bringing a civil action to the Superior Court. However, the license will remain suspended until:

  • The arbitrator notifies the DCP that the business is now in compliance
  • Both parties notify the DCP that they have resolved their dispute separately
  • The court decides to lift the suspension after a completed hearing

Project Labor Agreements

The new Connecticut legislation includes a requirement in which construction or renovation projects of more than $5 million for any cannabis-related facility, must enter a Project Labor Agreement (PLA) with all contractors and sub-contractors. A PLA is an agreement that:

  • Binds all contractors/sub-contractors on the covered project through the inclusion of specifications in all relevant solicitation provisions and contract documents. Unions with the cannabis industry
  • Establishes uniform terms and conditions of employment for all construction labor employed
  • Allows contractors/sub-contractors to compete for the project regardless of whether they are otherwise parties to collective bargaining agreement.
  • Guarantees against strikes, lockouts, and similar job disruptions.
  • Sets mutually binding guidelines for resolving labor disputes.

Similarly to the the labor peace agreement, anyone involved with the project labor agreement may seek remedies for non-compliance by going through the superior court. Additionally, penalties for non-compliance with a PLA may run up to $10,000 per day that each violation occurs.

When it comes to employee rights and protections, employers should connect with a trusted partner or professional to ensure compliance.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.