Alert

Employers: Clock is Ticking to Update Marijuana Policies

January 27, 2023

With an increasing number of states passing laws protecting employees who utilize marijuana, employers throughout the country are presently tasked with redesigning their marijuana-related policies and practices to avoid the (significantly increased) risk of suffering discrimination, retaliation, and other costly claims. With many relevant state laws going into effect throughout the next twelve months, the clock is ticking.

For many companies in the United States, this will be their first direct interaction with state-specific marijuana laws. Employers are confused by conflicts among applicable state and federal laws – as well as the patchwork of state-specific laws which govern marijuana-related conduct in states with regulated markets – and are often unsure how to proceed. Indeed, the task of overhauling a company’s marijuana-related policies and practices is no small task. Decades-old wisdom and standard operations regarding adverse actions must be reevaluated in light of these new laws, or employers risk being held liable for discrimination or retaliation, which can result in the award of substantial damages to a victim in the form of future wages, emotional distress, statutory penalties, attorney’s fees, and more.

Regardless of a company’s individual stance regarding employee off-duty marijuana use, well-advised employers are wise to proceed cautiously when taking adverse actions against employees based on their off-duty conduct in states where relevant laws have recently gone into effect and which will go into effect throughout the coming months (see, California, New York, Washington D.C., New Jersey, Louisiana, Puerto Rico, and more).

Changing Landscape: Marijuana-Related Employment Laws & Policies

Historically, the use of medical marijuana (which has been permitted for decades in some states) is not protected under the Americans with Disabilities Act (ADA). As a result, even in states which permit marijuana for medical use, employers may, without fear of violating federal discrimination laws, terminate – or take other adverse employment actions against – employees who use medical marijuana as prescribed by their doctor.

In response to this lack of federal protection from discrimination, some states have passed laws protecting medical cannabis patients from the consequences of failing employment drug screenings. For example, last June (2022), Louisiana Governor John Bel Edwards signed into law a prohibition on state employers from “subject[ing] an employee or prospective employee to negative employment consequences” if the state employee (with certain job-safety-related exceptions) tests positive for THC as long as they are a registered medical cannabis patient who utilizes marijuana consistent with a marijuana prescription from a licensed physician.

Naturally, both employers and lawmakers in states with legal recreational marijuana markets began considering expanding these workplace protections to employees who legally utilize marijuana outside of the medical patient context. (Indeed, Louisiana is also currently discussing and drafting legislation that expands these protections to private-sector workers who use medical marijuana.)

As of January 2023, several states have passed, and many states are considering passing relevant laws which expand protections available to employees who would otherwise face adverse employment actions based on their off-duty medical and recreational use of marijuana. At least two of these laws have already gone into effect, and still, more will go into effect over the coming months. The relevant laws vary widely – ranging from amendments to protected classes in existing laws (New York, Puerto Rico) to entirely new laws (California, Washington D.C.) and present new challenges to companies and lawmakers which have the potential to remain unresolved without additional research and technological developments.

In line with the changes noted above, a trend that is currently gaining momentum throughout the country is the passing of “ban-the-box” laws, which generally prohibit an employer from asking about a prospective employee’s marijuana-related criminal history on an employment application. For example, Virginia passed a law that became effective on July 1, 2020, that prohibits employers from requiring job applicants to disclose information concerning any arrest, criminal charge, or conviction for simple possession of marijuana. However, to date, a majority of states have not yet passed such “ban the box” laws, and still other states maintain contradictory policies in this regard; for example, Michigan, which has a robust legal recreational marijuana market, still permits employers to refuse to hire employees based on their marijuana-related criminal history (and despite the fact that certain marijuana-related misdemeanors are expungable in Michigan).

It should also be noted that while off-duty medical and recreational use of marijuana by employees is not protected under the ADA, federal courts will still enforce other federal discrimination statutes related to the employment of employees in the cannabis industry, including Title VII of the Civil Rights Act of 1954, which protects employees against discrimination based on specific characteristics, and the Fair Labor Standards Act. The Occupational Safety and Health Administration (OSHA) has also recently taken an active role in regulating workplace safety in the cannabis industry.

Changing Landscape: Private Marijuana-Related Employment Practices

The majority of relevant corporate policy reform in this space is driven by compliance with these new state laws. However, some major employers in the U.S. have recently found their previous policies prohibiting previous or off-duty marijuana use inappropriately or disproportionately barred qualified applicants from employment and have reformed their employment practices related to off-duty marijuana use voluntarily and without any arm-twisting resulting from the threat of enforcement action.

Indeed, June 2021 brought a major policy change to Amazon’s hiring and firing policies and practices. The company, which is the second largest employer in the Fortune 500 as of 2022 with more than 1.6 million employees, announced it will exclude marijuana from its pre-employment drug screening program for unregulated positions (that is, positions not regulated by the Department of Transportation.) Amazon also announced it would reinstate employment eligibility for former employees and applicants who were previously terminated or deferred during random or pre-employment marijuana screenings, respectively. However, Amazon was clear that the company’s zero-tolerance policy for impairment while working had not changed, including that the company will continue to test for all drugs and alcohol after any accidents or other incidents.

Amazon’s home state of Washington was among the first in the country to legalize marijuana for recreational use in 2012, and the company’s east coast headquarters is located in Virginia, where marijuana-permissive laws were set to take effect just one month after Amazon’s announcement. Amazon’s statement cited equity-based reasoning for the dramatic change:

“Pre-employment marijuana testing has disproportionately affected communities of color by stalling job placement and, by extension, economic growth.”

Outside of the private employment context, the Air Force, Air Force Reserve, National Guard, and Space Force followed suit in September 2022, announcing a temporary policy change allowing a second chance to applicants who previously tested positive for (delta-9) THC during their entrance physical and were excluded from enlisting on this basis. Previously, a positive result on the initial test meant a permanent bar from entry. The new temporary program offers prospective applicants the opportunity to retake the drug screening test after 90 days if they are granted a waiver. Being granted a waiver requires applicants to meet all other qualification standards, including but not limited to possessing a high school diploma, scoring at least 50 points on the Armed Forces Qualification Test, having no felony or misdemeanor convictions, and being otherwise physically, psychologically, and medically qualified for service. Once admitted, however, the enlistee must adhere to the military’s total ban on drug use. Indeed, even medical use is not permitted by active military members. This temporary policy change will be effective for two years and, without any extension, will end in September 2024.

The policy’s about-face marks an attempt to rethink an aspect of the Air Force’s stringent ban on marijuana use as the service struggles to meet its recruiting goals. This shift mirrors policy changes implemented by other branches of the military in the recent past, which aim to counter the fact that more than half of all new military recruits between 2021 and 2022 came from states where medical marijuana is legal. The increased availability of legal marijuana has resulted in a steady rise in the number of applicants with (delta-9) THC in their system in recent years, from 165 THC-positive applicants in 2020 to 226 in 2021 and 290 in 2022.

Complex Compliance Considerations & Call to Action

Regardless of an employer’s preferences with respect to their employees’ off-duty marijuana use, these new relevant laws present novel questions and challenges for all employers; employers throughout the country should already be reevaluating their policies and practices surrounding their employee’s off-duty marijuana use and be prepared to make rapid and significant changes.

Complying with these new laws is no small feat: the task requires not only an appreciation for the interaction of relevant state and federal laws but also a comprehensive understanding of the patchwork of state-specific laws governing marijuana-related conduct in states with regulated markets, both medical and recreational. Further, those advising companies on these complex issues must also be equipped to extrapolate policies and guidance applicable to other employment issues to these interactions with marijuana. Examples include whether or not an employee’s home office constitutes a “workplace” where an employer can dictate an employee’s marijuana use and what “specific and articulable symptoms of impairment” an employer is legally required to observe or demonstrate related to job performance prior to taking adverse action against an employee based on his or her marijuana use.

Expanded Workplace Protections are Expected

There is no dispute that the commercial cannabis industry is still in its infancy. This fact, combined with the ever-present conflict between state and federal laws, the historical stigma associated with marijuana, and the current market competition for workers, means that there will likely be continued changes and developments affecting the methods by which employers may address employees’ off-duty marijuana use, if the employer desires to do so, in the future. While such uncertainty will likely persist for years to come, what is clear is that off-duty and off-site marijuana use by employees must now be acknowledged by employers to enable them to reevaluate their existing policies regarding this conduct and amend them to comply with these new laws.