Employer rights in the age of legal cannabis

MUNICIPAL MATTERS

With the legalization of cannabis and many of its by-products in California, employers now must wrestle with another type of employee behavior: What can be done when an employee reports to work having recently used some form of cannabis? As it turns out Proposition 64, the voter initiative entitled Adult Use of Marijuana Act, which legalized cannabis in California, includes protections for employers.

For decades, employers have struggled with employees who reported to work while intoxicated or under the influence of a legal or illicit intoxicant, which raised a question whether the employee could safely perform job tasks. Following passage of the Compassionate Use Act of 1996, which gives a person who uses cannabis for medical purposes on a physician's recommendation a defense to certain state criminal charges involving the drug, the situation for employers became significantly more muddled. Employees who used the drug pursuant to a physician's prescription claimed rights pursuant to the California Fair Employment and Housing Act alleging employers were not able to discipline an employee for medicinal use of cannabis.

In 2008, the California Supreme Court disagreed and ruled in Ross v. RagingWire Telecommunications, Inc., 42 Cal. 4th 920, that FEHA does not require an employer to accommodate an employee who uses medicinal cannabis. The court reasoned that the Compassionate Use Act did not gave cannabis the same status as any legal prescription drug, and that no state law could completely legalize cannabis for medical purposes because the drug remains illegal under federal law.

When Prop. 19 appeared as a ballot initiative in 2010, the proponents attempted to legalize cannabis and establish a framework for cannabis to be regulated. One of the major flaws of Prop. 19, which attracted much attention from the business community, was the lack of employer protections for legitimate workplace regulations. Prop. 19 attracted broad bipartisan opposition and was opposed by numerous business-based organizations, including the California Chamber of Commerce. Ultimately, 53.5 percent of the electorate opposed Prop. 19 and it failed.

Proponents of cannabis legalization were undeterred in their desire to again place a cannabis legalization measure on the ballot. In drafting the language found in Prop. 64, the sponsors of the initiative met with business organizations to draft language that would enable business interests to establish and enforce reasonable workplace policies related to the use of cannabis by employees regardless of the reason for its use. As a result, the business organizations who were opposed to the 2010 ballot measure were not opposed to Prop. 64 in 2016. Accordingly, Prop. 64 passed with 57.1 percent of the vote.

Employers who were concerned with regulating employee behavior related to cannabis can take a deep breath of fresh air: One of the stated purposes of the Adult Use of Marijuana Act is to "allow public and private employers to enact and enforce workplace policies pertaining to marijuana." The act also provides that it will not be construed or interpreted to amend, repeal, affect, restrict or pre-empt "[t]he rights and obligations of public and private employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growth of marijuana in the 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." Health and Safety Code Section 11362.45(f). While the provisions of the act have been incorporated into subsequent statutes authorized by the legislature in the Medicinal and Adult-Use Cannabis Regulation and Safety Act, the provisions of the Adult Use of Marijuana Act as passed by the voters have not changed.

Because the act gives employers the ability to enact policies regulating cannabis use by employees, employers should do exactly that. Regardless of the size of company, all employers should enact or update policies that delineate whether cannabis use by employees is acceptable. If the use is permitted, the policy should outline what type of use is allowed (e.g. medical or recreational), under what circumstances is the cannabis use permitted and timelines for non-use prior to reporting for duty.

Once an employer has adopted its policy, it must be applied uniformly and without exception. Subsequent modifications to the policy can be made, if necessary. However, if a cannabis policy is not fairly applied to all employees, it may subject the employer to claims of disparate treatment and/or discrimination in the workplace.

Perhaps most importantly, employers should clearly communicate their policies to employees. The proverbial "ounce of prevention" in ensuring that prospective and current employees are informed of an employer's expectations related to cannabis use may be worth much more than a "pound of a cure," which oftentimes comes at great financial expense and emotional sacrifice.