High Stakes: How Will the Legalization of Recreational Marijuana in New Jersey Affect the Workplace?

During this upcoming election, New Jersey residents will have an opportunity to vote on amending the New Jersey state constitution to legalize the recreational use of cannabis for adults 21 years and older. While many are excited and hopeful for the referendum to pass next month, some employers are rightfully concerned with how this change will affect the workplace.

The 2020 Referendum

If the referendum passes, a state-created Cannabis Regulatory Commission would oversee the new cannabis market and cannabis products would be subject to New Jersey’s sales tax. Legislation governing its use will also follow. Though no one knows for certain how recreational use will be regulated by the Commission, Senator Nicholas P. Scutari recently hinted expectation that the new proposed legislation will closely resemble the provisions of his March 2019 bill.

As we wait for New Jersey’s legalization of recreational use, employers should begin analyzing how best to respond to this change. As a starting point, employers should know that New Jersey will not be the first state to legalize the recreational use of cannabis. Though cannabis is currently classified as a Schedule I drug in the federal Controlled Substance Act, a growing number of states have decided to legalize the use of cannabis for recreational and/or medicinal purposes. Currently, eleven states and the District of Columbia have legalized the recreational use of cannabis and thirty-three states have legalized the use for medical purposes.

None of the states that passed recreational use laws, however, have required employers to accept on-the-job-use. If the proposed legislation tracks the March 2019 proposal, it is expected the new bill would include a provision that expressly entitles employers to prohibit recreational use on its property or during work hours. We already see this prohibition in states with recreational use. In fact, New Jersey’s own medical cannabis law suggests employers will not have to tolerate cannabis at the workplace. New Jersey’s Jake Honig Compassionate Use Medical Cannabis Act allows employers to prohibit cannabis from the workplace – even if the employee is a lawfully registered medicinal user. Thus, while the Act prohibits an employer from adverse employment action (i.e. disciplinary action) against an individual simply because the individual is a lawfully prescribed medical patient, it does not require an employer to tolerate use on its property. In fact, the Act further allows employers to take adverse actions against employees who possess or use cannabis in the workplace.

Updating Employer Policies

The legalization of recreational marijuana also requires employers to consider whether drug testing should be incorporated into its policy manual. First, employers must consider the category of employees and the nature of their jobs before creating a uniform policy. For example, employers with federal contracts or safety sensitive positions, however, must have a drug and alcohol policy that is strictly enforced and follows governmental guidelines. Even in the absence of federal contracts, employers must also tailor their policies consistent with State and Federal employee privacy rights. In some states, the concept of random drug testing is limited by individual privacy rights, except for those holding safety sensitive positions (e.g., in New Jersey, police officers are required to submit to random drug testing under the AG guidelines). As a result, employers often elect to impose testing requirements based on “reasonable suspicion” of impairment.

Drug Testing

Likewise, employers must consider the methodology for drug testing. The three popular ways to test for cannabis are urinalysis, blood sampling, and saliva testing. The three tests, however, merely detect prior use and not necessarily current impairment. Given the way the human body metabolizes cannabis, a person may still test positive weeks after a single use. As a result, those tests cannot detect whether an employee is currently impaired. Because of this problem, new tests, such as cannabis breathalyzers and digital sobriety tests, are being developed to test current impairment. Employers with unionized employees may have to negotiate the testing procedures with union officials to not violate any collective bargaining agreements.

Once the employer’s goals are identified, it should craft policies to put its employees on notice of its expectations, ensure those responsible with policy enforcement receive training and apply the policies consistently. Before using the policies to take adverse action against an employee for testing positive for cannabis, employers must also be mindful of their obligations to those with disabilities treated by cannabis. Employers should be hesitant in taking similar action against a medicinal user. Disciplining an employee simply for testing positive for cannabis may expose the employer to a lawsuit under the New Jersey Law Against Discrimination (NJLAD). A recently decided New Jersey Supreme Court case, Wild v. Carriage Funeral Holdings, illustrates this exact scenario.

The Wild Decision

In Wild, a licensed funeral director was terminated from his employment for testing positive for cannabis. He later filed a NJLAD claim against his employer for failing to accommodate his out-of-office use of medical marijuana for his cancer treatment. The trial court initially dismissed the employee’s complaint, finding the law at the time did not require an employer to accommodate the medical use of cannabis in any workplace. The Appellate Division disagreed with the trial court’s decision. In reversing the lower court’s decision, the Appellate Division found the director was not seeking a reasonable accommodation to use medical marijuana in the workplace, but rather sought an accommodation to use his prescription outside of his job. Accordingly, the Appellate Division concluded the director presented sufficient facts to raise his claims under NJLAD.

Earlier this year, the Supreme Court affirmed the Appellate Division’s holding in Wild and added two points. First, the Court clarified there is no requirement to permit an employee to operate a vehicle or heavy machinery at work when the employee is under the influence of cannabis. Second, the Court explained an employee’s use of medical marijuana is authorized by law, and therefore, may be protected under NJLAD if consumed outside the workplace. The Wild case strongly implies that prior to disciplining an employee for testing positive for cannabis use, employers should first confirm whether the employee has a legitimate medical explanation for the positive test result. Otherwise, the employer may face a discrimination lawsuit.

Bottom Line

As the use of cannabis becomes normalized and more widespread throughout the United States, workplace drug policy is something every employer should prioritize. For additional guidance on the cannabis referendum or for assistance in updating and revising your company’s employee handbook and workplace drug policies, please contact Jennifer Roselle, Esq., Counsel in the firm’s Cannabis, Labor, Human Resources Counseling & Compliance Practice Groups here or Daniel Pierre, Esq., Associate in the firm’s Cannabis and Labor Practice Groups here.