Getting Into the Weeds: What the Legalization of Recreational Cannabis Means for New Jersey Employers

New Jersey recently joined a growing number of states and territories — including Alaska, Arizona, Colorado, California, Washington, D.C., Illinois, Maine, Massachusetts, Montana, Nevada, Oregon, South Dakota, Vermont and Washington — legalizing recreational marijuana or cannabis. New Jersey Gov. Phil Murphy enacted the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) on February 22, 2021 — legalizing the recreational use of cannabis for adults ages 21 and older — after New Jersey voters overwhelmingly passed a ballot initiative last November. The law comes with new employment protections for off-duty cannabis users that will significantly change how employers screen and conduct drug testing of job applicants and employees.

Expanded Employment Protections to Recreational Cannabis Users

Most significant, under the new law, employees and job applicants who lawfully use recreational cannabis off premises and during non-working hours are now expressly protected from discrimination. Under CREAMMA, “[n]o 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.” This affords employees a new protection not previously available under New Jersey law.

How Will This Impact Drug Testing?

Employers are still permitted to conduct workplace drug testing in accordance with state law. Covered reasons include:

• Pre-employment screening
• Reasonable suspicion of use or impairment while working
• Post-accident testing
• Random testing for safety-sensitive positions

However, the new law clarifies that such testing must include scientifically reliable objective testing methods, such as blood, urine or saliva, and must include a physical examination to determine the employee’s level of impairment. The physical evaluation must be conducted by an individual certified to opine on the employee’s state of impairment with respect to the suspected use of cannabis. CREAMMA directs the New Jersey Cannabis Regulatory Commission to issue standards and regulations for a Workplace Impairment Recognition Expert (WIRE) certification program in consultation with the Police Training Commission. Once implemented, the WIRE certification can be issued to employees and/or third-party contractors based on “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.”

In other words, testing alone is insufficient to justify termination or other adverse action based upon a positive THC result for cannabis. The new law provides that “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 [CREAMMA].” There must be some other objective, good-faith basis of on-the-job impairment from the certified WIRE examiner to support an adverse action.

What Does This Mean for New Jersey Employers?

Fortunately, nothing in the state law requires an employer to allow or accommodate employees using, consuming, possessing or being under the influence of cannabis during work hours or on company premises. Therefore, employers can maintain a drug- and alcohol-free workplace. However, employer policies and drug testing programs will have to be modified to comply with CREAMMA’s requirements. In addition, hiring managers, HR professionals and supervisors will need to be trained about the law’s prohibition on any adverse employment action triggered by off-duty recreational cannabis use. To the extent that employers want to continue to conduct drug testing as permitted by state law, employers will need to have an employee receive the WIRE certification training and/or retain a workplace impairment consultant who has received such training as a part of the process of evaluating whether an employee was impaired on the job.

Is There an Exception for Safety-Sensitive Positions?

No. Unlike several other states’ and territories’ medicinal and recreational cannabis laws, CREAMMA does not contain any exemptions based on job duties and responsibilities. Therefore, the employment protections discussed above apply to all positions, including those designated as safety-sensitive positions.

Do Federal Contractors Have to Comply With CREAMMA?

CREAMMA provides a carve-out for employers that are federal contractors, providing that if the requirements of the law “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.” Federal contractors that are subject to U.S. Department of Transportation (DOT) drug testing requirements for safety-sensitive and other DOT-regulated positions, which prohibit the use of cannabis and other Schedule I drugs for any reasons, will likely be permitted to continue to enforce zero tolerance drug policies, irrespective of CREAMMA’s nondiscrimination provisions.

The Drug-Free Workplace Act requires certain federal contractors and all federal grantees to agree that they will make a good-faith effort to maintain drug-free workplaces as a precondition of receiving a contract or grant from a federal agency. However, the Drug-Free Workplace Act does not expressly prohibit federal contractors from hiring or employing a person who lawfully uses cannabis outside of the workplace and does not actually require drug testing. While New Jersey has not squarely addressed this issue, other federal courts have rejected government contractors’ arguments that they were exempt from following state law employment protections for cannabis users because their zero tolerance drug policies complied with the Drug-Free Workplace Act. See e.g., Noffsinger v. SSC Niantic Operating Co., LLC, d/b/a Bride Brook Nursing & Rehab. Ctr., D. Conn., No. 3:16-cv-01938 (Sept. 5, 2018). Therefore, federal contractors should proceed with caution and consult employment counsel as to whether CREAMMA’s employment protections apply.

Key Takeaways

• CREAMMA specifically allows employers to maintain a drug- and alcohol-free workplace. So, workplace use, possession and intoxication can be prohibited.
• Employers will not be able to take adverse action against an employee or applicant solely because that person uses cannabis recreationally outside of working hours.
• Employers will not be able to take any adverse action against an employee or applicant due solely to the presence of cannabinoid metabolites in their system.
• Employers are allowed to continue to prohibit employees from driving under the influence or while impaired while on duty or while conducting business on behalf of the employer.
• An employer can take adverse action against an employee who violates the employer’s drug-free workplace policy so long as: 1) the employer’s testing program uses scientifically valid methods, and 2) a certified WIRE examiner conducts a physical exam of the employee and determines the individual was impaired while working.
• CREAMMA cannot preempt federal law or regulation prohibiting the use of cannabis and mandating testing, such as DOT-mandated drug testing policies for certain federally regulated positions.

When Does CREAMMA Go Into Effect?

While many aspects of CREAMMA became effective immediately, the employment provisions are not yet operative. The employment-related provisions of CREAMMA will become operative when the New Jersey Cannabis Regulatory Commission adopts initial rules and regulations (which must occur either within 45 days of appointment of all members of the Commission, or within 180 days from the date of enactment — whichever is later). Thus, while employers in the Garden State are waiting on standby for the relevant rules and regulations, it is prudent that employers start reviewing their drug screening and testing policies with employment counsel and prepare for upcoming changes.