Half Baked: Illinois Legislature Includes Some Employer Protections in New Recreational Cannabis Law – But Beware the Traps

Seyfarth Synopsis: Illinois Governor J.B. Pritzker is expected to sign a comprehensive recreational cannabis bill.  While the “Cannabis Regulation and Tax Act” contains extensive provisions preserving an employer’s right to ban cannabis and otherwise have a “zero tolerance” substance abuse policy, there are potential traps for the unwary and, thus, employers should carefully consider how the new law will impact their existing substance abuse and drug testing policies and procedures. 

Across the country, states are moving to legalize medical and recreational cannabis.  In states that legalize recreational cannabis, employers and drug testing services have seen significant increases in positivity rates for cannabis metabolites.  Wider cannabis use will require employers to take action to ensure safe work environments for their employees, especially in safety sensitive settings.  Drug policies must be updated and must address discrimination concerns.  To that end, we are closely monitoring new forms of discrimination claims from medical cannabis users and regarded-as disabled employees.  See our recent blog concerning a related Arizona court decision.  We also are monitoring what appears to be a new trend in states and localities expressly restricting employer use or consideration of positive test results for cannabis in pre-employment situations, as we reported has occurred in New York City and Nevada.

Illinois’ Cannabis Regulation and Tax Act

The Illinois legislature has just taken the route of full legalization of recreational cannabis.  On May 31, 2019, it approved House Bill 1438, which will create the “Cannabis Regulation and Tax Act.”  That same day, Illinois Governor Pritzker tweeted that he intends to sign the Act.

The Act provides, among many other things, that effective January 1, 2020, Illinois residents 21 years of age or older may legally possess up to 30 grams of cannabis flower, no more than 500 milligrams of THC contained in cannabis-infused products, and 5 grams of cannabis concentrate. Non-Illinois residents will be able to legally possess 15 grams of cannabis flower, no more than 250 milligrams of THC in cannabis-infused product, and 2.5 grams of cannabis concentrate.  Permitted cannabis purchases must be made from licensed cannabis dispensaries.

The House Bill also provides an excise tax imposed on purchasers for the privilege of using cannabis.  The rate of the excise tax is either 10%, 20% or 25% of the purchase price, depending on whether the sale is for a “cannabis-infused product” and the level of delta-9-tetrahydrocannabinol (THC) (i.e., strength). 

The Act’s Employment Provisions

Relevant to employers is Section 10-50, which states that the Act is not to be construed as prohibiting an employer from “adopting reasonable zero tolerance or drug free workplace policies, or employment policies concerning drug testing, smoking, consumption, storage, or use of cannabis in the workplace or while on call provided that the policy is applied in a nondiscriminatory manner.”  The Act does not require employers to permit an employee to be under the influence of or use cannabis in the employer’s workplace or while performing the employee’s job duties or while on call. Employers also retain the right to discipline an employee or terminate their employment if they violate the employer’s employment policies or workplace drug policy.  While the Act defines the term “workplace” to include the “employer’s premises” (any building, real property, and parking area under the control of the employer or area used by an employee while in performance of the employee’s job duties, and vehicles (leased, rented or owned)), it goes on to state that “workplace” may be further defined by the employer’s policy so long as the policy is consistent with the Act.

The Act provides guidance to employers in determining whether an employee is impaired by or under the influence of cannabis while working.  Specifically, an employer can meet this showing if it has a good faith belief that an employee manifests specific and articulable symptoms while working that decrease or lessen the employee’s performance of their job including:

• symptoms of the employee's speech, physical dexterity, agility, coordination, demeanor, irrational or unusual behavior, or negligence or carelessness in operating equipment or machinery;
• disregard for the safety of the employee or others, or involvement in any accident that results in serious damage to equipment or property;
• disruption of a production or manufacturing process; or
• carelessness that results in any injury to the employee or others.

The list is non-exhaustive, which leaves room for an employer to rely on other indicia of impairment.  The Act does not regulate drug testing and, thus, additional indicia might include a positive test result for cannabis if the employee is sent for a reasonable suspicion test.  However, given that cannabis can remain in a person’s system for a few weeks, and the Act’s standard for impairment requires facts showing an issue with an employee’s performance, most employers cannot take action against a current employee based solely on a positive test result where no other indicia of impairment exists.

If an employer disciplines or terminates an employee because they are under the influence of or impaired by cannabis, the employer must provide the employee a reasonable opportunity to contest the basis of the determination.  Exactly what this means remains to be seen. 

No Private Right of Action

The Act expressly states that employees do not have a private right of action against an employer for:

• subjecting an employee or applicant to reasonable drug and alcohol testing under the employer's workplace drug policy, including an employee's refusal to be tested or to cooperate in testing procedures;
• disciplining the employee or terminating employment, based on the employer's good faith belief that an employee used, possessed, was impaired by or was under the influence of cannabis in violation of the employer's workplace policies while in the employer's workplace, performing the employee's job duties or while on call; and
• injury, loss or liability to a third party if the employer neither knew nor had reason to know that an employee was impaired.

Interplay with the Illinois Right to Privacy in the Workplace Act

Employers should also bear in mind that the Act designates recreational cannabis used in compliance with the Act as a “lawful product” subject to the protections against discrimination provided under the Illinois Right to Privacy in the Workplace Act.  This means that an employee who lawfully uses cannabis outside of work and is not impaired by or under the influence of cannabis during working hours (while on duty or while on call) should generally not be subject to adverse employment action on that basis alone.  Thus, employers should carefully consider whether to test for cannabis or consider a positive test result for the drug in pre-employment situations given that job applicants are neither on duty nor on call. In terms of drug tests during employment (e.g., reasonable suspicion and post-accident), while the Act leaves open the possibility of relying on a positive cannabis test result as additional indicia of impairment, cannabis can remain in the system for weeks and, thus, employers should exercise caution and work with employment counsel before taking action against incumbent employees based solely on a positive cannabis test result.  Employers also should consider training their managers on the signs of impairment and, if an employee is referred for any drug test, steps to take if the employee tests positive for cannabis.   

Regulated Employers and Government Contractors

Notably, cannabis remains a Schedule I controlled substance under federal law and, thus, illegal, which might put some Illinois employers in a difficult situation.  Fortunately, the Act does not require employers to ignore their obligations under federal law, expressly stating that it is not to be construed to “interfere with any federal, State, or local restrictions on employment including, but not limited to, the United States Department of Transportation regulation 49 CFR 40.151(e)” nor does it impact an employer’s ability to “comply with federal or State law or cause it to lose a federal or State contract or funding.”  It is therefore likely the Act will be interpreted to allow employers to continue to maintain employment policies prohibiting any cannabis use where necessary to comply with applicable federal or state law.  However, it is not certain whether such policies would result in a violation of the Illinois Right to Privacy in the Workplace Act.

Next Steps for Employers

The Act states that “cannabis should be regulated in a manner similar to alcohol.”  But, what does this mean for employers?  Cannabis, unlike alcohol, is still illegal under federal law and signs of cannabis use or impairment are not as easily detectable as alcohol impairment.  Moreover, it also is easier to prove alcohol impairment with an alcohol test.  The same cannot be said for a drug test given that cannabis can remain in the system for several weeks.

The new law does not strip employers of the right to conduct drug tests pursuant to a drug testing or substance abuse policy and, in fact, expressly preserves it. Yet, Illinois employers should:

• review and, if necessary, revise their current policies and practices in advance of the January 1, 2020 deadline;
• determine whether to include cannabis or consider the drug in pre-employment drug tests; and
• train their managers on how to document and recognize the signs of use and impairment and steps to take if an employee tests positive for cannabis after a reasonable suspicion or post-accident drug test. 

Employers should be vigilant in documenting all signs and evidence of potential impairment, including any violations of occupational safety rules.  At the end of the day, employers will have to walk a fine line of balancing their drug policy objectives against applying that policy in a nondiscriminatory manner.  Further, employers will need to track the forthcoming regulations closely, and may need to further revise their policies to accommodate unexpected interpretations of the law.