Marijuana and the Workplace: What Employers Should Know

What Should Employers Know About Marijuana Laws?

The legalization of recreational use of marijuana in California has left many employers wondering about how it might impact their employment policies. In this article, we look at a few important areas of importance for employers regarding marijuana legalization.

Legal Marijuana in California

California voters passed the Adult Use of Marijuana Act ("Prop 64") on November 8, 2016, legalizing recreational marijuana. The California Bureau of Cannabis Control, however, only began accepting, processing, and issuing licenses to commercial marijuana dispensaries as of January 1, 2018 and, as of April 2018, the Bureau has granted over 5,000 licenses for a variety of commercial uses, including retail sales and distribution.

What Prop 64 does is it legalizes the use and cultivation of marijuana for adults 21 years of age or older, reduces criminal penalties for specific marijuana-related offenses for adults and juveniles, and authorizes or dismissal and sealing of prior, eligible marijuana-related convictions. The law also allows the government to regulate, license, and tax legalized marijuana. Obviously, the legalization has broad implications for California businesses and for employers in particular.

Still Illegal Under Federal Law

Under the Federal Controlled Substances Act, marijuana is still an illegal Schedule I drug, along with MDMA, LSD, and heroin. 21 U.S.C. §812(c). While the Obama administration chose not to interfere with state legalization efforts, the current U.S. Justice Department—under Attorney General Jeff Sessions—recently announced that it will enforce all federal drug laws, although the Trump administration quickly followed up the announcement by saying that it is now abandoning the Justice Department's new enforcement policy. Justice Department officials have offered no comment on the White House's reversal of its policy. This convoluted landscape of federal law and enforcement policy leaves substantial ambiguity and much remains to be resolved on that front.

But, Can Employers Still Maintain a Drug & Alcohol-Free Workplace?

Yes, California employers are still free to prohibit employees from using, or being under the influence of marijuana while conducting company business. In fact, Prop 64 expressly empowers California employers to "enact and enforce workplace policies pertaining to marijuana." Employers can "maintain a drug and alcohol-free workplace" and have "policies prohibiting the use of marijuana by employees and prospective employees."

On Duty vs. Off Duty Marijuana Prohibitions

Prop 64 also allows employers to prohibit employees' use of marijuana off-duty. The law does not hinder "[t]he rights and obligations of public and private employers to maintain a drug and alcohol free workplace...or affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees, or prevent employers from complying with state or federal law."

An area of potential confusion exists in Labor Code Section 96, which protects employees from adverse employment actions for engaging in lawful conduct, i.e. using marijuana, during nonworking hours and away from work. It is uncertain whether Labor Code Section 96 could be used to trump Prop 64's authorization to regulate off-duty marijuana use for certain employees. In light of this uncertainty, many California employers have begun to re-evaluate their position and treat marijuana usage in the same way as alcohol consumption—i.e. prohibit consumption while on-duty, but do not regulate employee's off-duty conduct.

Having a Clear Policy on Marijuana Use

Having clearly written policies that state an employer’s stance on marijuana use is critical. Vague policies are those that refer to "legal" or "illegal" drugs, generally. But, marijuana is both legal and illegal depending on the jurisdiction. Other issues that may be impacted are potential invasion of privacy, disability discrimination, and wrongful termination claims.

Employers may consider instituting a "zero tolerance" policy while an employee is (1) on company premises, (2) conducting or performing company business, (3) operating or responsible for operating company equipment or other property, or (4) responsible for the safety of others in connection with company business. the Employers should clearly identify and explain the drug testing policy and articulate that a violation of either policy is grounds for termination.

Because of the complications that may arise in employers should consult with counsel before implementing or revising programs or policies related to drug and alcohol use.

Drug Testing for Marijuana?

California still allows employers to require job applicants to take pre-employment drug tests and take illegal drug use into consideration in making employment decisions, so long as it is done in a consistent and non-discriminatory manner. Before drug testing applicants, employers should always provide clear disclosures, conditional offers of employment, and obtaining appropriate consent.

Drug testing current employees has become more complicated. While employers are permitted to drug test current employees, this right is subject to certain limitations. Employers must have "reasonable cause” to drug test an existing employee, e.g. red eyes, distant gaze, and the strong aroma of marijuana are all indicators that an employee may be under the influence of marijuana. Essentially, an employer's right to maintain a drug-free workplace is balanced with the employee's expectation of privacy.

Employers should have express written policies, and obtain prior consent through a written authorization form. Employers should also take care to consider the specific jobs for which drug testing is needed, ensuring that individuals in protected groups are not disparately impacted.

Lastly, of course, it is important for employers to confer with legal counsel on the issue relating to state and federal marijuana laws and their effects on the workplace and workplace policies.