On the heels of Colorado, California, Massachusetts and a half-dozen other states legalizing recreational marijuana, New York Governor Andrew Cuomo recently announced his intention for New York to follow suit in 2019.  While Governor Cuomo's proposed timeline has met some pushback from legislators—the state's annual spending plan is due April 1, 2019, giving little time to iron out the details of such sweeping reform—it appears New York is poised to legalize recreational marijuana in the very near future.

Legalizing marijuana will have a significant impact on employers. Governor Cuomo just put forward a proposed Cannabis Regulation and Taxation Act (CRTA), while the state Senate and Assembly have considered for years different iterations of the Marihuana Regulation and Taxation Act (MRTA), S.1527, A.1617. Both contain substantially similar protections for employees who use marijuana and, recognizing this, employers should begin considering what steps to take to prepare for the post-legalization world, including identifying policies, handbooks, hiring practices, training procedures, and drug testing processes that require modification.

Anti-Discrimination Protections

The MRTA and CRTA both would prohibit discrimination against marijuana users, greatly expanding the protections afforded to medicinal marijuana users under New York's existing Compassionate Care Act (CCA).

Under both bills, it would be “unlawful to take an adverse employment action against an employee” based on lawful use, possession or cultivation of marijuana, with the MRTA also prohibiting adverse actions against employees who test positive for marijuana following a drug test.

An “adverse employment action” is broadly defined and includes any action impacting the “terms, conditions, or privileges” of employment, with only limited carve-outs: the employer can prohibit use or possession in the workplace, cannot be forced to violate federal law, and can take action if an employee's work is “impaired” by current marijuana use.

With respect to “impairment,” the employer can avail itself of this exception by demonstrating—“by a preponderance of the evidence” under the MRTA or “establishing” impairment under the CRTA—that the employee manifested “specific articulable symptoms [of intoxication] while working that decrease[d] or lessen[ed] the employee's performance … .” Notably, discipline would be contingent on performance being “decrease[d] or lessen[ed],” so employers would need to regularly monitor and document performance of employees to help defend against a claim of unlawful discrimination based solely on marijuana usage.

Moreover, while there is a natural tension between state and federal marijuana laws—marijuana remains illegal under the federal Controlled Substances Act—employers likely cannot rely on federal preemption to avoid complying with state anti-discrimination provisions, as courts increasingly have held. See, e.g., Noffsinger v. SSC Niantic Operating Co., 273 F. Supp. 3d 326, 334-35 (D. Conn. 2017) (state anti-discrimination protections for medicinal marijuana use not preempted by federal law).

In light of this, employers should consider ensuring that managers are trained on applicable anti-discrimination laws and identifying signs of intoxication, as well as implementing a system for documenting incidents and concurrent work performance to support an adverse action. Employers also would be well-advised to update anti-discrimination and harassment policies and training to include and identify protections for marijuana users. Likewise, they should consider training managers in safety-sensitive positions to recognize symptoms of intoxication and redress potentially dangerous situations as soon as possible.

Drug Testing

Legalized marijuana also presents challenges for workplace drug testing. The MRTA would expressly prohibit adverse employment actions based solely on a positive marijuana test. While the CRTA is silent on the issue, its anti-discrimination provisions would create risks for relying on such testing. Notably, neither bill provides exceptions that would allow employers to rely on a positive marijuana test to take adverse action against workers in safety-sensitive jobs. That said, employees subject to federal testing requirements—like CDL drivers covered by the Department of Transportation's testing protocols—may still be tested for marijuana as required by federal law. See 49 C.F.R. §40.151(e).

Given this, employers should review their drug testing policies and related hiring and termination practices. Depending on the wording of the legislation that is ultimately enacted, employers may consider stopping testing for marijuana—except as required by federal law—since such tests may become evidence in discrimination claims.

Drug Policies

Employers also will need to review policies regarding drug use, particularly if they prohibit the use of marijuana on personal time. Under the current draft bills, employers could prohibit the use or possession of marijuana during “work hours”; thus, if these bills were passed in current form, employers would need to ensure that their policies do not preclude usage during personal time. It should be noted that, while some employers have defeated discrimination claims based on blanket prohibitions on employees using federally banned substances, these have been limited to states without marijuana anti-discrimination laws.

Likewise, employers should take steps to prohibit employees from working while impaired by marijuana—even if the actual use occurs outside of working hours. Thought also should be given to whether employer anti-marijuana policies extend to off-site or after-hours functions. This may prove a delicate balance since, as the proposed legislation is drafted, employers only may prohibit use during “work hours”; thus, if an employer were to prohibit use at an off-site function (like a holiday party), there is a risk the employee could later claim such time constituted compensable “work hours.”

Similarly, federal contractors may be apprehensive about recreational marijuana, since they must maintain drug free workplaces, and a failure to do so could result in the loss of contracts. As drafted, the current bills provide carve-outs for employers who could lose federal contracts or funding, but this does not necessarily exclude contractors from state law. A Connecticut District Court recently considered this issue and held that, while contractors must maintain a drug free workplace under federal law, this does not extend to prohibiting employees from using legal marijuana in their personal time, since such does not imperil any federal contract. Noffsinger, 273 F. Supp. 3d at 334-35.

Reasonable Accommodations

Even if recreational marijuana is legalized, the CCA would continue in full force under both draft bills. Thus, employees certified to receive medicinal marijuana would remain classified as “disabled” under the New York State Human Rights Law, and ostensibly entitled to “reasonable accommodations.” That said, employers would remain free to prohibit medicinal marijuana use in the workplace and during work hours. It is worth noting that the CCA's reasonable accommodation requirement has not been litigated and courts in other jurisdictions have taken competing views on whether an employer can be compelled to accommodate the use of a federally-banned substance. Compare Barbuto v. Advantage Sales & Mktg., 477 Mass. 456, 464-65 (2017) (employer obligated to accommodate marijuana use under state law) with Emerald Steel Fabricators v. Bureau of Labor & Indus., 348 Or. 159 (2010) (employer had no obligation to reasonably accommodate).

Preemption

Undoubtedly, whatever legislation New York passes—whether it be the MRTA, the CRTA or a different bill—will be challenged on federal preemption grounds. Similar laws in other states have been subject to routine preemption attacks, but while no bill has been rejected in its entirety, courts have differed on the extent of enforceability, including if anti-discrimination and reasonable accommodation provisions are enforceable. See, e.g., Noffsinger, 273 F. Supp. 3d at 334-35 (explaining different outcomes by courts on different state statutes resulted from text-specific analyses); Garcia v. Tractor Supply Co., 154 F. Supp. 3d 1225, 1228 (D.N.M. 2016) (collecting cases finding aspects of state laws unenforceable).

If any theme exists, it is that compelling employers to act in contravention of federal law is impermissible, but prohibiting them from taking action against employees who use marijuana may be acceptable. By way of example, the Maine Supreme Court recently considered whether an employer and its workers' compensation carrier were required to reimburse medical marijuana costs. Bourgoin v. Twin Rivers Paper Co., 187 A.3d 10, 12 (Me. 2018). The court recognized the natural conflict with federal law, since reimbursement would constitute the purchase of marijuana in violation of the federal Controlled Substances Act, and held the employer and carrier could not be compelled by state law to violate federal law.

Ultimately, issues concerning preemption may be resolved through federal legislation. There is some support behind a bipartisan bill co-sponsored by Sens. Cory Gardner (R-Colo.) and Elizabeth Warren (D-Mass.), known as the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, S.3032, that would exclude states with legalized marijuana from the Controlled Substances Act's marijuana prohibitions. However, the STATES Act has gained little traction, as the most recent attempt to bring it for vote was blocked by Sen. Mitch McConnell in December 2018.

Conclusion

With New York seemingly poised to enact legislation legalizing recreational marijuana, New York employers will face a host of new compliance issues. Employers would be well-served to begin surveying their policies, procedures and training that will need to be adapted to comply with any such new law.

Garrett D. Kennedy is of counsel and Evan D. Parness is a partner in the labor and employment group at DLA Piper LLP (US).