Originally Published Via JD Supra
New Jersey Governor Phil Murphy signed legislation on February 22 enabling the constitutional amendment to legalize adult recreational use of cannabis and a companion decriminalization bill. Each law has significant employment implications, including a requirement in the enabling legislation that employers procure a “Workplace Impairment Recognition Expert” to conduct physical evaluations to determine marijuana use and impairment in the workplace.
On December 17, 2020, both houses of the New Jersey Legislature passed the “New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” (NJCREAMMA). NJCREAMMA is enabling legislation for the amendment to the New Jersey Constitution making lawful the personal, nonmedical use of cannabis for individuals age 21 and over. The New Jersey Senate and Assembly also passed on December 17, 2020 a companion cannabis decriminalization bill, and Governor Murphy signed both bills into law on February 22.
Governor Murphy held off on signing NJCREAMMA and the decriminalization bill until the legislature passed a so-called “clean up” bill, A-5342, which the governor also signed on February 22. That law addresses the governor’s concerns that there were insufficient penalties for individuals younger than 21 years old related to consumption and possession of marijuana, hashish, or cannabis items.
We previewed prior versions of NJCREAMMA and the decriminalization law in our LawFlash on November 10, 2020, but both bills underwent significant changes since then. We analyze below the employment-related aspects of each final law.
EMPLOYMENT PROVISIONS OF NJCREAMMA
Section 48 of NJCREAMMA prohibits employers from taking adverse employment action against employees or applicants based on their use (or nonuse) of cannabis items:
No employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee with respect to compensation, terms, conditions, or other privileges of employment because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items, and an employee shall not be subject to any adverse action by an employer solely due to the presence of cannabinoid metabolites in the employee’s bodily fluid from engaging in conduct permitted under [NJCREAMMA].
This provision replaced language from prior versions of NJCREAMMA that would have permitted employers to take adverse employment action against an employee for use or nonuse of cannabis items if the employer had “a rational basis for doing so which is reasonably related to the employment, including the responsibilities of the employee or prospective employee.”
No Duty to Accommodate in the Workplace
NJCREAMMA further provides that employers may establish drug- and alcohol-free workplaces and do not have to permit or accommodate cannabis use in the workplace or during work hours. Specifically, the law states that nothing in it:
Requires an employer to amend or repeal, or affect, restrict or preempt the rights and obligations of employers to maintain a drug- and alcohol-free workplace or require an employer to permit or accommodate the use, consumption, being under the influence, possession, transfer, display, transportation, sale, or growth of cannabis or cannabis items in the workplace, or to affect the ability of employers to have policies prohibiting the use of cannabis items or intoxication by employees during work hours.
Further, if these requirements would result in “a provable adverse impact on an employer subject to the requirements of a federal contract, then the employer may revise their employee prohibitions consistent with federal law, rules, and regulations.” Relatedly, in a catch-all provision in Section 53, NJCREAMMA states that nothing in it should be construed to “amend or affect in any way any State or federal law pertaining to employment matters.”
Private property owners—which would seemingly include landlords for leased office, warehouse, and retail spaces—may also generally prohibit the “consumption, use, display, transfer, distribution, sale, or transportation of cannabis items on or in that property.”
Unlike earlier drafts of NJCREAMMA, the law now addresses drug testing. Employers may drug test in six instances: (1) upon reasonable suspicion of an employee’s use of cannabis items at work, (2) upon finding observable signs of intoxication related to cannabis items at work, (3) as part of a work-related accident investigation, (4) randomly, (5) as part of pre-employment screening, or (6) as part of regular screening of current employees to determine use during work hours.
A drug test must include “scientifically reliable objective testing methods and procedures, such as testing of blood, urine, or saliva” and a “physical evaluation.” The individual conducting the “physical evaluation” must be certified under regulatory standards established by the Cannabis Regulatory Commission, in consultation with the Police Training Commission, as a “Workplace Impairment Recognition Expert” (WIRE). To be certified, the WIRE must receive education and training “in detecting and identifying an employee’s usage of, or impairment from, a cannabis item or other intoxicating substance, and for assisting in the investigation of workplace accidents.” A WIRE can be an employee or another who “contract[s] to perform services on behalf of an employer.”
Employers may “use the results of” the drug test—which must include the physical evaluation by the WIRE—when “determining the appropriate employment action concerning the employee, including, but not limited to dismissal, suspension, demotion, or other disciplinary action.”
The above-described employment provisions of NJCREAMMA will not be immediately enforceable. Section 87 of the law provides that these provisions will “take effect immediately” but “shall only become operative upon adoption of the [Cannabis Regulatory Commission’s] initial rules and regulations” in accordance with Section 6.d(1)(a) of the law. Those initial rules and regulations are to be issued within 180 days following the enactment of NJCREAMMA as law or 45 days from the appointment of all five members of the Cannabis Regulatory Commission, whichever is later.
No Express Private Right of Action
The law does not contain an express private right of action. That silence likely will lead to litigation regarding whether an implied right of action exists under the three-part test adopted in R. J. Gaydos Ins. Agency v. Nat’l Consumer Ins. Co., 168 N.J. 255, 271 (2001): “To determine if a statute confers an implied private right of action, courts consider whether: (1) plaintiff is a member of the class for whose special benefit the statute was enacted; (2) there is any evidence that the Legislature intended to create a private right of action under the statute; and (3) it is consistent with the underlying purposes of the legislative scheme to infer the existence of such a remedy.”
EMPLOYMENT ASPECTS OF THE DECRIMINALIZATION LAW
Section 15 of the decriminalization law addresses prohibitions on considering an employee or applicant’s marijuana-related criminal history for employment decisions:
An employer shall not be permitted to, when making an employment decision, rely solely on, or require any applicant to disclose or reveal, or take any adverse action against any applicant for employment solely on the basis of, any arrest, charge, conviction, or adjudication of delinquency [for certain marijuana-related offenses].
Of note, the phrase “rely solely on” and the later reference to “solely” were not in prior versions of the law. Those qualifications will give employers some leeway to argue that they may take into account—at least in part—an employee or applicant’s marijuana-related criminal history when making a hiring or other employment decision. In addition, Section 15’s prohibitions do not apply to employment decisions for positions in law enforcement, corrections, the judiciary, homeland security, or emergency management.
Employers who violate Section 15 are subject to civil penalties collectible by the Commissioner of the New Jersey Division of Labor and Workforce Development: up to $1,000 for the first violation, $5,000 for the second violation, and $10,000 for each violation after that.
These civil penalties are the sole remedy for violations of this provision. The law provides that nothing in this nondiscrimination provision is to be construed as creating a private cause of action against employers who violate it, that it does not establish a standard of care or duty for employers regarding any other law, and that evidence that employers have violated this provision is not admissible in any legal proceeding other than one to enforce the civil penalties.
Limited Private Cause of Action
Section 17 of the decriminalization law creates a private cause of action for those who allege discrimination in “public or private housing, real property, or a place of public accommodation,” based on a prior arrest, charge, conviction, or adjudication of delinquency related to certain marijuana-related offenses.
While seemingly unconnected to employment, the provision provides that, if the discrimination in public or private housing, real property, or a place of public accommodation “impacted the person’s employment,” a court may order, among other relief, reinstatement of employment, reinstatement of benefits and seniority rights, and compensation for lost wages, benefits, and other remuneration. It is unclear how these employment-related remedies would work in practice, particularly in light of the law’s separate civil penalties provision described above applicable to employers. For example, is an individual who is unlawfully denied housing because of a prior conviction and, as a consequence loses their job, entitled to seek reinstatement of employment even if the employer was uninvolved in the housing discrimination? Would the employer be a party to such a proceeding?
Sections 15 and 17 will not take effect immediately. Rather, it appears they will be effective five months after the enactment of NJCREAMMA, to coincide with related provisions of that law. See Section 21 (these sections will take effect “on the same date as the date that actions occur on matters based on provisions in any sections in [NJCREAMMA], in which those actions are to occur on the first day of the fifth month next following the date of enactment of that act”). We expect that there may be further legislative clarification in the interim.
RECOMMENDATIONS FOR EMPLOYERS
New Jersey employers should consider taking the following steps:
- Update policies to ensure compliance with the nondiscrimination portions of the law
- Hiring and/or training an employee(s) to become a WIRE to perform on-the-job physical evaluations to determine impairment and use
- Update drug-testing protocols with vendors
- Train managers and human resources employees on the proposed laws and ensure that they are aware of their nondiscrimination provisions, but also that employees are still prohibited from using, possessing, or being impaired by cannabis in the workplace or during work hours
 The law defines “cannabis item” as “any usable cannabis, cannabis product, cannabis extract, and any other cannabis resin.” Each of those four terms have their own definitions in NJCREAMMA. But “cannabis item” does not include any form of medical cannabis dispensed to registered qualifying patients under the Jake Honig Compassionate Use Medical Cannabis Act or hemp or a hemp product cultivated, handled, processed, transported, or sold pursuant to the New Jersey Hemp Farming Act. Medical marijuana is regulated separately.