NLRB Judge Rules That “Joint Employers” Are Joint Employers

Eric Paltell
Eric Paltell
12/22/2015

The legalization of medical and recreational marijuana use has created a host of new employment law issues. One of the most common questions we get is about drug test results:  what happens if an employee or applicant tests positive in a state where medical or recreational marijuana use is legal? (the answer is that marijuana use is still illegal under federal law, so, in theory, an employer can discipline the employee or not hire the applicant).

Legalized marijuana use has also sparked a wave of union organizing activity.  For example, the United Food and Commercial Workers have created a “Medical Cannabis and Hemp Division,” and the union claims to have organized over 3,000 workers nation-wide.  Though one might think employers in the marijuana industry would be more receptive to having unions organize their workers, a recent decision from an NLRB Administrative Law Judge shows that may not always be the case.

In Campaign for the Restoration and Regulation of Hemp, THCF and Presto Quality Care Corporation, Case No. 19-CA-143377 (Dec. 17, 2015), three corporations were engaged in promoting hemp and cannabis, growing marijuana, and aiding medical marijuana patients.  The three companies shared a common president, who was responsible for operational and financial decisions at all three organizations.

According to the ALJ’s decision, in August 2014, Matthew Marino applied for a job as a door-to-door canvasser with  Campaign for the Restoration and Regulation of Hemp (CRRH).  CRRH’s hiring manager, Purdy, told him that positions were available and invited him to come in for an interview. When he arrived, however, Purdy asked him to step outside.  Once outside, Purdy told Marino he could not hire him because he has been a member of the International Workers of the World (“IWW”).  Purdy also mentioned that he has checked Marino’s Facebook page and saw that he had posted pro-union videos.  Purdy told Marino that he could not hire him “until the union stuff blew over,” referring to a pending unfair labor practice proceeding filed against the employer.

Marino filed an unfair labor practice charge, alleging (not surprisingly) that he was not hired because of his pro-union activities.  The NLRB issued a complaint and subpoenaed records from all three corporations, but none responded to the subpoenas.  Relying primarily on evidence from Marino and material the corporations had submitted in earlier proceedings, the judge found that CRRH, THCF, and Presto were a joint employer under the NLRA.  Because the same individual (Stanford, the president of all three entities) controlled labor relations at all of the companies, they were deemed to be a “joint employer” under the NLRB’s recent Browning-Ferris decision, 362 NLRB No. 186 (2015). The judge further ruled that, despite an affidavit from Stanford stating he was “pro-labor,” the refusal to hire Marino was based on his union activities, and therefore violated Section 8(a)(3) of the Act.

While this case may get some attention because it involves the marijuana industry, the legal principles are nothing new. Even before Browning-Ferris was issued in August, the NLRB would likely find that three entities were joint employers where the same individual controlled labor relations at all three companies. Second, when an employer refuses to comply with NLRB subpoenas, the case does not just go away. Rather, the case will proceed to trial, the judge will draw adverse inferences based on the employer’s non-compliance, and in all likelihood, the employer will lose.  Regardless of whether marijuana is legalized in their jurisdiction,   employers who flaunt the NLRB’s authority will end up  on the wrong side of the law.

 

 

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