Employers in California, and nationally, find themselves in the middle of evolving laws and cultural norms surrounding cannabis use. The legalization of recreational cannabis presents unique challenges to employers' efforts to maintain a drug-free workplace. Now, more than ever, employers must be vigilant to keep up with changes in laws regulating cannabis. By ensuring their drug testing and drug-free workplace policies comply with the law, employers will be prepared to confront the challenges associated with increased recreational use of cannabis among their employees.

Proposition 64

On Nov. 8, 2016, California voters approved Proposition 64 (the "Control, Regulate and Tax Adult Use of Marijuana Act"), which legalized the recreational use of cannabis by adults 21 years of age and older. Proposition 64 was the second major change to cannabis laws approved by California voters, who passed Proposition 215 in 1996 (the "Compassionate Use Act of 1996"), legalizing the medicinal use of cannabis. Despite these new laws, cannabis remains a Schedule 1 illegal substance under the federal Controlled Substance Act of 1970.

While Proposition 64 legalizes the recreational use of cannabis, it does not affect an employer's right to maintain drug testing and drug-free workplace policies as they pertain to cannabis use. Proposition 64 provides a carve-out allowing "public and private employers to maintain a drug and alcohol free workplace" and to enact "policies prohibiting the use of cannabis by employees and prospective employees." The law also does not prevent "employers from complying with state or federal law." California employers, therefore, may still enforce drug testing and drug-free workplace policies as they pertain to cannabis use.

Drug Testing

Drug testing of prospective and current employees implicates two competing interests: the constitutionally protected privacy rights of the employee or job applicant, and an employer's legitimate interest in maintaining a drug-free work environment. Whether a particular drug testing policy is reasonable, and thus lawful, depends on a balancing of the interests of both the individual employee or applicant, and the employer.

An employer's drug policy must not overly intrude on an employee's or applicant's reasonable expectation of privacy. California courts recognize that applicants and employees have different expectations of privacy when it comes to drug testing. Job applicants may anticipate requests for a pre-employment physical examination (which includes a urinalysis) to determine job fitness, and they may often reveal certain private information as part of the application process. In contrast, employees typically do not expect such examinations as a regular part of their job, and thus have a higher level of privacy expectations. An employer's drug testing policy must therefore differentiate between applicants and current employees.

Mandatory pre-employment drug testing of applicants as a condition of employment is generally permitted so long as procedures are in place to minimize the intrusion into an applicant's privacy. The elements of a valid pre-employment drug testing policy upheld by the courts include the following:

• Applicants are provided written notice before the testing.
• The test applies to all applicants in similar positions.
• The test is conducted by medical personnel (not associated with the employer) in a private environment.
• The applicant's medical history and test results remain confidential.
• Applicants' medical information and test results are not provided to the employer. Instead, employers receive a "suitability rating" that does not disclose which part of the test the applicant failed.
• An applicant who receives an unsatisfactory rating is informed which portion of the test he/she failed and allowed to challenge the test result.
• Any applicant who receives an unsuitability rating may reapply after a specified period of time.

In contrast, courts have upheld policies permitting drug testing of current employees only when the employer has "reasonable suspicion" that an employee is under the influence of drugs. Whether an employer has "reasonable suspicion" to require an employee to test for drugs must be justified by specific objective facts and rational inferences drawn from those facts. Although the courts have not provided specific guidance as to what exactly constitutes "reasonable suspicion," the Ninth Circuit upheld the federal Department of Labor's drug-testing policy, which provided that reasonable suspicion may be based on the following:

• Observable phenomena, such as direct observation of drug use or possession, or symptoms of someone who is under the influence of a drug;
• A pattern of abnormal conduct or erratic behavior;
• Arrest or conviction for a drug-related offense;
• Information from reliable sources or information independently corroborated;
• Evidence the employee tampered with a previous drug test.

Testing current employees for suspected cannabis use may present a unique challenge. A positive cannabis test will not necessarily show whether the employee was under the influence of cannabis at work because urine testing may detect cannabis use that occurred many days before the test was administered. Therefore, it is important for an employer to establish specific facts to support "reasonable suspicion" of cannabis use before imposing the testing, so as not to rely solely on the test result.

The reasonable suspicion factors set forth in the DOL's policy are a good place for employers to start when creating their own drug testing policy for current employees. Employers must also be aware of local ordinances that may restrict their ability to drug test employees.

Drug-Free Workplace Policy

With recreational cannabis use becoming more prevalent, the ability of employers to maintain a drug-free workplace will be tested. Critical to that effort is establishing an effective drug-free workplace policy. There are plenty of resources available that provide sample drug-free workplace policies.

Any drug-free policy adopted should be included in the employer's personnel handbook and posted in a visible location in the workplace. The policy should clearly set forth the pre-employment drug testing procedures, as well as reasonable suspicion guidelines for testing employees. Managers and human resources staff must be trained to identify factors that may establish reasonable suspicion of being under the influence of cannabis at work.

Employers should also establish and enforce a "no smoking" policy that applies equally to tobacco and cannabis smoking in the workplace. If an employer prohibits the smell of cigarette smoke on employees at work, then the same should be true for the smell of cannabis smoke, and vice versa. Finally, all safety-sensitive positions should be subject to a "no drug" policy, which should be reflected in a position's job description.

Change in this area is inevitable. However, by establishing compliant drug workplace policies, employers will be better prepared to confront the challenges associated with those changes and maintain a healthy and safe work environment for their employees.

Michael Warren is a partner with law firm McManis Faulkner in San Jose, Calif. He may be reached at [email protected].