New Jersey Governor Clears the Medical Cannabis Haze

Seyfarth Synopsis: A New Jersey appellate court recently concluded in Wild v. Carriage Funeral Holdings, Inc. (reported in our blog here) that even though New Jersey’s Compassionate Use Medical Marijuana Act (the Act) did not “require … an employer to accommodate the medical use of marijuana in any workplace,” it also did not “immunize an employer’s obligation already imposed elsewhere” — such as in discrimination statutes. On July 2, 2019, a few months after that decision, New Jersey Governor Phil Murphy signed a bill that amends the Act’s employment provisions to not only clear up previously unanswered questions but also to create additional compliance obligations for employers. The amended law takes effect immediately.

The New Jersey legislature adopted the Act in 2009 and, at that time, specifically stated that the law did not require an employer “to accommodate the medical use of marijuana in any workplace.” That said, as the appellate court noted in Wild v. Carriage Funeral Holdings, Inc., medical cannabis users may be able to bring suit against an employer for disability discrimination under the state’s Law Against Discrimination. While the appellate court did not rule on the merits of any disability discrimination claim, it did let the case proceed.

More recently, however, New Jersey amended its law, now called the Jake Honig Compassionate Use Medical Cannabis Act, to remove the language that resulted in the Wild litigation and include new applicant/employee-side protections. Specifically:

• Employers are prohibited from taking any “adverse employment action” against a “registered qualifying patient” based solely on the person’s status as a registered patient. An “adverse employment action” is defined to mean “refusing to hire or employ an individual, barring or discharging an individual from employment, requiring an individual to retire from employment, or discriminating against an individual in compensation or in any terms, conditions, or privileges of employment.”
• Employers must provide applicants or employees who test positive for cannabis written notice of their right to explain and their right to provide a “legitimate medical explanation” for the positive test result. The employee has three working days to provide such information, which can include evidence that a health care practitioner has authorized the use of medical cannabis, proof that the applicant or employee is a registered patient, or both. Or, within that same three-day timeframe, the applicant or employee can request a confirmatory retest of the original sample at their own expense.

The silver lining for employers is the amended law includes two employer-side protections. First, the law does not restrict an employer in its ability to take action against an employee who uses or possesses “intoxicating substances” during work hours or on the premises of the workplace outside of work hours. In addition, the amendment states that nothing in the law should be viewed as requiring an employer to commit any act that would cause the employer to be in violation of federal law, that would result in the loss of a licensing-related benefit pursuant to federal law, or that would result in the loss of a federal contract or federal funding.

New Jersey is not alone in providing employment protections to applicants and employees using medical cannabis. In recent years, more and more states are passing laws, or their courts are interpreting existing laws, to protect medical cannabis users, including in Arizona, Connecticut, Delaware, Illinois, Maine, Massachusetts, Minnesota, Nevada, New York, Oklahoma, and Rhode Island. It is likely that list will grow. Employers in all jurisdictions should exercise caution when dealing with applicants and employees using medical cannabis. Before taking any action against medical cannabis users, employers should review the laws of the states in which they operate and work with employment counsel to help navigate this complex and rapidly evolving area of the law.

Seyfarth Shaw will continue to monitor legal developments at the federal and state level.