Medical cannabis products. Photo by Thom Morris.

As Governor Murphy works to make New Jersey the ninth state to legalize recreational marijuana, employers throughout the state are paying close attention to what is occurring in Trenton. The legalization of marijuana places employers in a precarious position. Regardless of polls that show general acceptance of medical and recreational marijuana throughout the state, there remains a stigma surrounding its use, and it remains illegal under the federal Controlled Substances Act, which classifies it as a Schedule I substance.

For obvious reasons, many employers—especially those with federal contracts—are reluctant to violate federal law. Employers are also worried that the position they take regarding their employees' use of marijuana will have a significant impact on their business and their relationship with customers, as many continue to oppose marijuana on ethical, moral or financial grounds. Finally, whether reasonable or not, employers are concerned that marijuana usage will decrease their employees' productivity.

To address these concerns, many employers may wish to prohibit their employees' use of marijuana, both during and after the workday. However, as the state law changes, it remains unclear whether employers will be permitted to enforce a universal ban. On the one hand, marijuana remains a federally illegal substance. On the other hand, to lawfully obtain medical marijuana in New Jersey an individual must have a serious medical condition and a recommendation from a doctor. Such serious conditions likely qualify as disabilities, requiring the employer to provide the employee with a reasonable accommodation. The proposed legalization legislation would also penalize employers for taking adverse employment actions against employees based on their legal use of marijuana. As a result, employers throughout the state must prepare to deal with the impact that marijuana use has on their businesses, employees and customers.

Medical Marijuana

In 2010, New Jersey enacted the Compassionate Use Medical Marijuana Act (CUMMA). Shortly after taking office, Governor Murphy issued Executive Order No. 6 to provide patients with “a greater opportunity to obtain medical marijuana.” As a result of the order and actions by the Department of Health, the process to obtain a license was streamlined, and the number of qualifying medical conditions was expanded.

The question that employers will soon need to confront is how they should respond to a request by an employee to use medical marijuana as an accommodation for their disability. Unfortunately, case law across the country is inconsistent on this question. While some states have found that an employer has no obligation to accommodate, the recent trend is to require employers to provide an accommodation. What these recent cases illustrate is that state courts are more concerned with the individual wording of their state's statute, rather than the federal supremacy issue. For example, the Massachusetts Supreme Judicial Court recently found in Barbuto v. Advantage Sales & Marketing that, despite federal law, state law required that an employer undergo the interactive process to determine whether it can provide a medical marijuana user with a reasonable accommodation.

Each of the medical conditions that qualifies an individual to use medical marijuana under CUMMA likely falls within the broad definition of a “disability” under the Americans with Disabilities Act. However, as presently written, CUMMA does not require employers to accommodate an employee's medical use of marijuana in the workplace. Therefore, New Jersey employers are still permitted to enforce “zero tolerance” policies during working hours. However, this does not alleviate an employer's responsibility to accommodate its employees. Should an employee request to use marijuana during the workday because the employee suffers from a disability, the employer may reject this accommodation, but still must engage in the interactive process to offer another reasonable accommodation to the employee.

Despite CUMMA allowing employers to reject reasonable accommodations in the workplace, employers still face several issues if employees are using medical marijuana outside the office. With the rise of remote access and smart phones, the modern workforce no longer works exclusively in the office or during normal business hours. Therefore, employers that allow employees to use medical marijuana outside the office or on the weekend remain at risk for having these employees work while they have marijuana in their systems. Thus, employers face a difficult question: must they allow employees to use medical marijuana while not working, or may they enforce a zero tolerance policy and terminate any employee who uses marijuana?

While courts around the country have reached different conclusions, the New Jersey Superior Court recently addressed this issue in Wild v. Carriage Services. Justin Wild was diagnosed with cancer and prescribed medical marijuana. Sometime thereafter, Wild was involved in an accident at work. Wild disclosed his marijuana usage to his employer, but claimed he was not under the influence during the accident because he only used marijuana at night. Upon failing a drug test, he was terminated for violating the employer's drug and alcohol policy. Wild filed a lawsuit, which was primarily based on claims of disability discrimination and failure to accommodate under the New Jersey Law Against Discrimination. In an unpublished decision, Judge Powers dismissed both claims, finding that employers may terminate employees in violation of a zero tolerance policy and, under CUMMA, “no accommodations are required to be made for medical marijuana usage in the workplace.” The case is on appeal, so additional clarity may be provided soon. However, should this case stand, New Jersey employers may enforce zero tolerance policies that discipline or terminate employees found to have used marijuana, regardless of whether it was during the workday or after hours.

An important component of the court's decision was that CUMMA contains no employment-related protections. However, pending legislation proposes to add such protections. Therefore, employers must continue to monitor what is occurring in Trenton closely. If legislation passes, employers may need to make difficult decisions on how to amend their policies about the “off duty” use of medical marijuana. While modifying policies for traditional employees may be straightforward, the issue becomes increasingly complex for employees who work remotely or during non-business hours, especially where there is no clear workday or hours. Employers should proceed with caution. While an overly restrictive policy could cause a lawsuit under CUMMA, too lenient of a policy could result in an employee working under the influence and a potential negligence lawsuit. As an alternative to passing a broad policy that regulates employees' out-of-office use of medical marijuana, a safer practice would be to engage in the interactive process with these employees to see if both parties can reach a reasonable solution.

Recreational Marijuana

The next significant hurdle employers will need to address is how to respond if recreational marijuana is legalized. The most prominent legalization legislation would not require employers to permit or accommodate marijuana in the workplace, nor would it affect the ability of employers to prohibit employees from enacting or maintaining drug-free workplace policies that prohibit the use of, or being under the influence of, marijuana “during work hours.” As previously noted, many employees no longer work the traditional workday or hours. Instead, with remote access and smartphones, employers now expect employees to be available to respond to the business's needs or client's demands at all times. It is no longer unusual for employees to answer emails while at their child's soccer game or when out to dinner with friends. Employers must proceed with caution if legislation is passed in modifying and implementing policies that consider the modern work schedule, while not being overly restrictive to violate employees' rights under the proposed law.

Another crucial piece of the proposed legislation would make it unlawful for an employer to take an adverse employment action against an employee due to the employee's use of marijuana, unless the employer has a rational basis to do so. This piece of the bill is likely to cause the greatest increase in litigation against employers, as it grants employees an additional cause of action any time an adverse employment action is taken against them. For example, an employee known for using marijuana may feel that a decision not to promote the employee was based on the stigma associated with marijuana use. While the lawsuit may be meritless, it still places employers in the uncomfortable position of having to defend their decisions.

Conclusion

Governor Murphy has expanded the state's medical marijuana program and continues to endorse legalizing recreational marijuana. Since it appears unlikely that the federal government will change its stance on medical or recreational marijuana in the immediate future, employers are placed in a difficult position. However, until a bill is finalized and signed by the governor, and the New Jersey Supreme Court has an opportunity to interpret and apply the statute (including deciding the inevitable supremacy argument), an employer's exact responsibilities will remain unclear. As a result, employers should act prudently in enacting policies that balance their employees' needs with their own business interests as employers.

David Disler is an associate with Porzio Bromberg & Newman in Morristown. He is a member of the firm's Litigation Practice Group and focuses his practice on employment and education law.