Today, the U.S. Court of Appeals for the D.C. Circuit issued a ruling in a case involving unfair labor practice charges against medical marijuana dispensary Curaleaf Arizona. exist Absolute Healthcare v. NLRBthe court granted Curaleaf’s petition challenging some of the NLRB’s findings that the company engaged in unfair labor practices under the National Labor Relations Act.
The fact that Curaleaf is a medical marijuana dispensary makes this case interesting. Although Curaleaf’s activities were legal under Arizona law, they were criminal conduct under federal law, and therefore Curaleaf was engaging in criminal activity. This makes the federal agency (NLRB) regulating the way Curaleaf treats its employees interesting, to say the least. (For an exploration of other curiosities arising from state-level legalization of marijuana distribution and sales, see my book, Marijuana Federalism: Uncle Sam and Mary Jane.)
Judge Millett wrote the panel opinion granting Curaleaf’s petition because it challenged the NLRB’s findings. (Some of the NLRB’s findings were not disputed.) Senior Justice Ginsburg and Justice Walker joined in this opinion. Judge Walker also wrote a separate opinion raising questions about whether the NLRA raises questions about alleged unfair labor practices by employers engaged in businesses that remain illegal under federal law.
Congress authorized the National Labor Relations Board to protect the labor rights of certain employees of certain employers affecting interstate commerce. Admittedly, this is a broad grant of jurisdiction. But it may not be as widespread as the NLRB assumes.
Consider the facts of this case. The NLRB ordered a criminal enterprise named Curaleaf Gilbert to pay drug dealers to sell illegal drugs. This is a strange order from a government agency charged with faithfully enforcing federal law.
I can imagine three arguments in favor of the NLRB having jurisdiction over cannabis dispensaries like Curaleaf, but each has flaws.
First, many people believe that marijuana should be legal. There are thoughtful people on both sides of this policy debate, and there may well be a move toward legalization. But currently, marijuana remains illegal at the federal level, despite a lack of enforcement by the Department of Justice.
Second, Arizona law allows Curaleaf to sell marijuana. These prohibitions cannot be superseded by agency advisory memorandums.
Third, the NLRB generally retains jurisdiction even if the employer violates the law. In fact, Congress tasked the National Labor Relations Board with holding employers accountable when they violate federal labor laws. But this is a case where the business is otherwise legal – not necessarily a case where its sole purpose is to sell illegal products or provide illegal services.
This difference may be more important than the NLRB realizes. After all, bookmakers and counterfeiter rings influence interstate commerce, but the National Labor Relations Board appears to be in no rush to rule on their labor disputes. The same goes for street gangs.
Why did that change when the corner boy called himself a “budtender” and his group was formed under state law?
The answer, at least to me, is vague.
