PORTLAND, Ore. (KOIN) – After Oregon voters approved Ballot Measure 119 — requiring cannabis businesses to enter labor peace agreements with employees — last fall, a federal judge ruled Tuesday that the law is unconstitutional.
Measure 119, also known as the United for Cannabis Workers Act, was passed by Oregon voters in November 2024 and took effect in December of that year. The measure requires cannabis retailers and processors to remain neutral in their communications to employees from labor organizations about bargaining rights.
Before Measure 119 took effect, employees already had the right to collectively bargain, however, the measure required cannabis businesses to have an agreement with a labor organization that at minimum requires the business to remain neutral.
If cannabis businesses violated the rule, the measure would allow the Oregon Liquor and Cannabis Commission to impose fines or licensing and certification penalties.
However, that law is unconstitutional, according to U.S. District Judge Michael H. Simon.
The lawsuit challenging the measure was filed in February by two Portland cannabis businesses, including recreational marijuana processor Bubble’s Hash and Ascend Dispensary. The companies argued the measure is unconstitutional, violates the First Amendment, and will harm cannabis businesses.
The suit was filed against Oregon Gov. Tina Kotek, Attorney General Dan Rayfield, Oregon Liquor and Cannabis Commission Chair Dennis Doherty and OLCC Executive Director Craig Prins.
The businesses argued that Measure 119 violates the First Amendment of the U.S. Constitution — which, in part, bans states from passing laws that impair obligations in contracts. They also argued the measure conflicts with the National Labor Relations Act.
According to the plaintiffs, there are only two “bona fide labor organizations” that will enter into a labor peace agreement with licensees — including Teamsters and UFCW 555.
“Measure 119 fails to provide any dispute resolution process if the bona fide labor organization and the licensees cannot agree to the terms of the LPA,” the lawsuit claimed. “The licensees, including plaintiffs, are left without choice or bargaining power in order to renew their licenses.”
In Tuesday’s ruling, which was first reported by The Oregonian/OregonLive, United States District Judge Michael H. Simon agreed, with the ruling stating Measure 119 is “preempted by the NLRA” and violates the First Amendment.
“Measure 119 is not limited to restricting only threatening, coercive, false, or misleading speech, but instead prohibits all speech by employers that is not ‘neutral’ toward unionization. Therefore, Measure 119 violates Plaintiffs’ First Amendment rights to free speech,” Judge Simon wrote, in part.
In response to Judge Simon’s ruling, the plaintiff’s attorneys with Fisher Phillips LLP told KOIN 6, “We are pleased with Judge Simon’s ruling. Judge Simon reached the right conclusion on this important case of first impression regarding National Labor Relations Act preemption and Constitutional First Amendment speech protections as related to laws requiring businesses to enter into labor peace agreements.”
The plaintiffs’ attorneys continued, “This case is poised to have far-reaching impacts, as many states are considering imposing similar requirements not only on cannabis licensees, but also in other sectors, and this decision helps maintain the proper balance between labor and management and allows cannabis employees to decide for themselves whether to organize without undue influence.”
Attorney General Rayfield’s office declined to comment on the ruling and deferred to the OLCC.
In a statement to KOIN 6 News, OLCC Executive Director Craig Prins explained, “Over the next few days, we plan to confer with our colleagues at the (Department of Justice) to better understand the ruling and what it means for the regulation of cannabis in the state.”
Governor Kotek’s office added that the governor “respects the court’s ruling.”
Meanwhile, a spokesperson for UFCW 555, a labor organization that has been a strong proponent of Measure 119, told KOIN 6 News on Tuesday, “We now have conflicting federal rulings, with a judge in Oregon putting Measure 119 on hold while a California judge has upheld a similar law. One of these rulings is destined to be overturned on appeal. Our strong suspicion is that Judge Simon’s opinion, which flaunts Supreme Court precedent, will be the one reversed.”
