The Rapidly Evolving Cannabis Laws: It’s Time to Think About Your Drug Use Policy

Federal, state, and local laws regarding the legalization of marijuana, and medical use of marijuana, are rapidly changing, which puts employers in a tough situation when they learn of an employee’s marijuana use. Federal law still classifies marijuana as a Schedule 1 drug, but California has legalized both recreational and medical marijuana use. As of today, California employers are not required to accommodate an employee’s use of medical marijuana outside of work. Given the rapid changes in the laws, however, it’s a good idea to make sure that your company’s drug use policy is up to date.

In 1996, California became the first state to legalize the use of medical marijuana when Proposition 215 was passed and the Compassionate Use Act was signed into law. As a result, Californians were able to obtain medical marijuana prescriptions for seemingly any medically-related reason.

In 2008, the California Supreme Court held that the disability discrimination provisions of the Fair Employment and Housing Act (FEHA) did not require an employer to accommodate an employee’s use of medical marijuana. As stated by the Court, the operative provisions of the Compassionate Use Act “do not speak to employment law,” but rather “speak exclusively to the criminal law.” (Ross v. RagingWire Telecomms., Inc. (Cal. 2008) 174 P.3d 200.) Unlike California, several other states have passed laws that do prevent employers from terminating an employee for using medical marijuana—although the specifics vary from state to state.

Eight years after the Ross decision, California voters passed Proposition 64, which legalized the recreational use of marijuana in California as of January 1, 2018. Cities and counties have enacted a patchwork of regulations, and the legislature in Sacramento have introduced additional legislation that is currently still in committee but, if passed, would undoubtedly create a host of issues for employers with operations in California. (See AB-2069.)

Specifically, the proposed legislation provides that the medical use of cannabis by a qualified patient or person with an identification card is subject to reasonable accommodation by an employer. It contains two important limitations. First, it expressly states that employers may continue to discipline or terminate an employee who “is impaired” at work or during work hours. Second, AB-2069 acknowledges that California employers are not required to employ a person if it would “cause the employer to lose a monetary or licensing-related benefit under federal law or regulations.” This proposed legislation is intended to bring California in line with the other states that have enacted similar laws.

Employees continue to challenge the existing rules in the courts, although they have had little success. This may change. California labor law generally prevents employers from exercising control over an employee’s lawful off-duty conduct. (See California Labor Code sections, 96(k) and 98.6.) Under Lab. Code § 96(k), an employer may be held liable for “[c]laims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.” (Id.) California appellate courts have not yet decided whether recreational use of marijuana is “lawful conduct” pursuant to Labor Code 96(k). More generally, employees’ right to privacy may prevent employers from regulating off-duty conduct that is now authorized by state law, even if that conduct is still illegal under federal law.

What is certain is that: 1) California employers may discipline and/or terminate employees who are impaired at work; 2) for now, California employers may terminate and/or refuse to hire employees who use marijuana outside of work, even for a medical condition; and 3) employers should regularly review their drug use policy to ensure it conforms to the current, rapidly changing laws.

We have deep counseling and litigation experience on these and similar issues. If you would like to discuss these issues further, or have any questions about this blog, please contact us.