The Effect of Cannabis on the New Jersey Workplace

While the recent expansion of cannabis laws will certainly affect society as a whole, the effect that this societal change will have on the workplace presents unique challenges for employers.  New Jersey, like the majority of states, has loosened its laws to permit the use of medical cannabis. In addition, many have speculated that the passage of Senate Bill 2703, currently known as the New Jersey Cannabis Regulatory and Expungement Aid Modernization Act (“SB 2703”), is imminent, which will legalize adult-use cannabis. Although cannabis with tetrahydrocannabinol (THC) levels in excess of 0.3 percent is still classified as a Schedule I substance under federal law, the ever-changing legal landscape at the state level requires employers to be cognizant of their policies and practices to ensure up-to-date compliance with the law.

Workplace Accommodation of Employee Cannabis Usage

Currently, employers have no obligation under New Jersey law to accommodate cannabis usage. With regard to medical cannabis, New Jersey’s Compassionate Use of Medical Marijuana Act (CUMMA) states that, “nothing in this act shall be construed to require … any employer to accommodate the medical use of marijuana in any workplace.” N.J.S.A. 24:6I-14 (emphasis added). As a result, employers are not required to grant any request to accommodate workplace medical cannabis use, even from a registered patient with a valid medical cannabis ID card from the New Jersey Department of Health.

Indeed, this past August in Cotto v. Ardagh Glass Packing, 2018 WL 3814278, at *7-9 (D.N.J. Aug. 10, 2018), the United States District Court for the District of New Jersey held that an employer was not required to accommodate a fork lift driver’s medical cannabis use by waiving the employee’s positive drug test result, despite the employee’s possession of a doctor’s note stating that he could operate machinery while using his prescription. There, the employer required the employee to pass a drug test before he could return to work after sustaining an injury while operating a fork lift. In rejecting the plaintiff’s claims under the New Jersey Law Against Discrimination (LAD), the court noted that the case concerned conduct resulting from the treatment of a disability, not the disability itself. The court reasoned that nothing in the LAD or CUMMA required an employer to accommodate the use of medical cannabis in the workplace.

Not surprisingly, there is also no obligation for employers to accommodate recreational adult-use of cannabis, which remains illegal under New Jersey law. See N.J.S.A. 24:21-5(e)(10). This will not change under the current proposed version of SB 2703, which provides that the bill does not “restrict or preempt the rights and obligations of employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, [or] … possession … of cannabis or cannabis items in the workplace.”

Even though New Jersey employers are not presently required to accommodate use of medical cannabis in the workplace, they are still under an obligation to engage in the interactive process with employees to reasonably accommodate their underlying medical conditions in other ways.  Of course, employers can always decide to be more generous under the law and accommodate cannabis usage, but employers (especially companies that engage in federal contracting work and/or receive federal funds) should beware that cannabis with THC levels in excess of 0.3 percent is illegal under federal law.

The Ability to Discipline Employees for Cannabis Use

Generally, under CUMMA, employers are permitted to issue discipline to employees who use cannabis within the workplace in violation of drug and alcohol free workplace policies. See N.J.S.A. 24:6I-14; N.J.S.A. 24:21-5(e)(10).

The situation is more complicated when an employee exclusively uses cannabis during non-working hours, yet such use may affect his/her working time, such as where the employee’s cannabis use results in a positive drug test. In February 2018, in Wild v. Carriage Funeral Holdings, 2018 WL 6704732 (Law Div. Feb. 2, 2018), the court addressed the issue of employee cannabis usage outside of the workplace. In that case, the employee, a funeral services director, was involved in an accident with no alleged connection to his medical cannabis usage. The employee took a drug test pursuant to the employer’s policy, which came back positive for cannabis use.  The employee was terminated for his violation of the company’s drug and alcohol policy and the failure to report prescription cannabis use. In granting the employer’s motion to dismiss the complaint, which contained claims under the LAD, the court held that CUMMA does not contain employment-related protections for users of medicinal cannabis, and no accommodations are required to be made in the workplace. Therefore, this decision indicates that at least in some instances, an employer may terminate an employee for cannabis use during non-working hours under the current state of the law.

Notably, the current proposed version of SB 2703 does not prohibit employers from taking adverse employment actions against their employees for recreational cannabis use. As such, employees will not enjoy any protection from discipline for violation of company policies if the current version of the bill is passed.

Regulating Cannabis In the Workplace

While many corporate policies may be indirectly affected by the expansion of cannabis laws in New Jersey, telecommuting and employment social events require immediate consideration by employers.

Telecommuting. Telecommuting policies have expanded in response to ever-increasing technological advances that permit employees to accomplish daily tasks and responsibilities from both inside and outside of the office, and the growing public sentiment for a better “work-life balance.” Indeed, the Department of Labor “strongly supports telecommuting and telework,” and the Equal Employment Opportunity Commission has taken the position that failure to consider telecommuting as a reasonable accommodation for a disability may be violative of the Americans with Disabilities Act.

Although telecommuting provides employers with certain benefits—such as decreased operational costs—it also diminishes an employer’s control over its workforce. Regardless of where the employee is physically working, however, it is important for employees to understand that they are still operating under the employer’s procedures and policies. This means an employee who works remotely is not free to undertake any action that would be in violation of a work policy if they were working from the employer’s physical address. Employers with telecommuting policies must ensure that such policies include prohibitions on the consumption of alcohol and drugs, including cannabis, during working hours, regardless of location.

Social Events. Whether to allow cannabis at work social events (assuming adult-use is legalized within the state) is a growing concern for employers. For many people, cannabis is still a taboo subject and employers may continue to ban its open consumption. However, if an employer is inclined to allow cannabis during social events, and keeping in mind that cannabis use remains illegal on the federal level, there are many considerations that must be taken into account.

Like alcohol, an employer must take precautions to ensure that any consumption is “reasonable” and should not allow employees to over consume cannabis. Similarly, the employer must be cautious and not allow employees to consume both alcohol and cannabis. An employer should also keep in mind that smoking within public buildings is strictly prohibited in New Jersey, thus limiting how cannabis can be lawfully consumed. Finally, an employer must be cognizant of its insurance policies to ensure coverage is not excluded if cannabis is permitted.

Certainly, these and other considerations must be taken into account prior to permitting cannabis at workplace social events and, if allowed, should be placed in a well-defined policy.

Enacting Employee Drug Testing

Although New Jersey has not enacted employment drug or alcohol testing laws, case law has delineated specific circumstances relating to drug testing within the state, including:

• Drug testing prior to employment as a condition of hiring (See Jevic v. Coca Cola Bottling Co. of New York, 1990 WL 109851, at *1 (D.N.J. June 6, 1990));
• Random drug testing when an employer has a “specialized need,” such as public safety or highly regulated industries (See Hennessey v. Coastal Eagle Point Oil Co., 129 N.J. 81 (1992)); and
• When an employer has a reasonable suspicion of drug use, such as post-accident.

Unlike testing for alcohol or other substances, however, a positive drug test for cannabis does not necessarily indicate that the employee (or potential employee) is under the influence at the time of the test. Rather, current medical research suggests cannabis remains in an individual’s system after consumption for up to 30 days, depending on the individual’s body characteristics (such as body fat percentage) and the frequency of the individual’s use. See Hadland SE, Levy S. Objective Testing: Urine and Other Drug Tests. Child Adolesc Psychiatr Clin N Am. 2016; 25(3):549-65. Thus, a positive drug test merely detects the presence of cannabis, not impairment. This distinction is critical. If an employer’s goal is to prevent impairment in the workplace, it is not necessarily furthering that policy by conducting drug tests for cannabis in one’s system. Rather, testing for cannabis may result in positive tests for otherwise highly productive and qualified employees that may never be impaired while present at work. This reality places an employer in a precarious position and is bolstered by the fact that approximately 35 million productive and hardworking Americans consume cannabis regularly. See MaristPoll, Weed & The American Family, Marist College Institute for Public Opinion, (April 17, 2017). Of course, this number is expected to increase substantially as states legalize recreational use.

Notwithstanding the above considerations, as indicated in Cotto, 2018 WL 3814278, at *7-9, at present an employer is still permitted to test for cannabis and discipline employees who test positive for same in violation of company policy. With New Jersey on the precipice of legalizing adult-use cannabis, however, it is important for employers to keep abreast of the emerging law, review their drug testing and related policies, and determine the appropriate measures to further their goal for a drug-free workplace while counterbalancing the increasing consumption of cannabis across the state.

Originally published here by the New Jersey Law Journal.

Randi W. Kochman is a member of Cole Schotz in Hackensack, and chairs the firm’s Employment Law Department. Marissa A. Mastroianni is an associate in the firm’s Employment, Litigation and Cannabis practice groups. Arnold P. Picinich is an associate in the firm’s Litigation Department.