“Dazed and Confused”: What Multi-State Employers Need to Know About the Current Trend of California and Several Other States Prohibiting Discrimination of Off-Duty Cannabis Use

In 2022, 39 states, including Washington, D.C., legalized medical cannabis and 19 of those states have legalized cannabis for medicinal and recreational use.  In 2012, when Colorado and Washington became the first two states to legalize cannabis for both medicinal and recreational use, the focus of the legislation was on decriminalization and not prescribing employment rights to cannabis users.[1]  Ten years later, 22 states[2] had passed legislation with a focus on private rights of action and the employer’s obligation to accommodate employees who use cannabis for medicinal purposes.[3]  Within the past year, seven states and several cities[4] across the country have expanded these protections to include recreational use of cannabis, with California being the most recent state to pass such a law.  With the passing of AB-2188, California now joins Nevada,[5] New York, New Jersey, Connecticut, Montana, and Rhode Island to make it “unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, . . . [for] the person’s use of cannabis off the job and away from the workplace.”  Ch. 32, § 12954 (a).

What Are Employer Obligations Under AB-2188?

AB-2188 prohibits employers from making employment decisions based on whether the employee uses cannabis while off-duty.  The off duty term is important because employers are not being asked to condone cannabis use on their property or while employees are working a shift. Rather, employers are being restricted from not hiring an employee because that person holds a medical marijuana card, or terminating a worker when the employer learns that the employee smoked cannabis on his day off.

AB-2188 carves out specific exceptions to the protections afforded to cannabis users.  AB-2188 will not apply to (1) any employee in the building and construction trades; (2) applicants and/or employees whose positions require them to go through a federal background investigation or security clearance; or (3) applicants and/or employees who under state or federal laws must be tested for controlled substances as a condition of employment, receiving federal funding or federal licensing, or entering into a federal contract.  § 12954 (c) – (e).  These exceptions recognize that the law cannot apply to those who hold safety-sensitive positions and addresses the conflict that continues to exist between state legalization and federal prohibition of cannabis use.  For example, “The Omnibus Transportation Employee Testing Act of 1991” mandates drug testing for all employees required to hold a commercial driver’s license; and “The Federal Contract Compliance – Drug Free Workplace Act” applies to federal contractors and grant recipients and their employers are required to maintain a drug-free, zero tolerance workplace.

May California Employers Continue to Conduct Drug Testing for Cannabis?

AB-2188 also sets out when drug testing could be deemed to be discriminatory. AB-2188 provides that an employee may face adverse action based on a positive drug test for cannabis when the method used to test the employee was “based on scientifically valid pre-employment drug screening conducted through methods that do not screen for non-psychoactive cannabis metabolites.”  But, if an employer takes adverse action based on a drug test that finds “the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids” then it will be deemed discrimination. It is very likely that this area will be the focus of significant litigation because determining whether an employee is under the influence is based upon “subjective” observations and “objective” testing that will identify if THC is in an employee’s system, but cannot provide data on whether the employee is currently under the influence. This is important because AB-2188 protects off-duty cannabis use. This means even if an employee uses cannabis for medicinal reasons, the employee cannot be under the influence while at work.  

AB-2188 uses the term “non-psychoactive cannabis metabolites” twice in the drug testing section. This term is referencing cannabidiol commonly known as “CBD” and typically does not contain psychoactive cannabis metabolites like it’s sister tetrahydrocannabinol or more popularly known as “THC.”[6]  When cannabis is absorbed by the body the metabolic enzymes are not effective at breaking down either CBD or THC so they stay in a person’s system for up to 30 days. If an employer is not educated on the difference between CBD and THC and terminates the employee who had CBD in his system, the employer will have violated the law. The employer will also need to understand what type of methods the lab is using for drug screening and confirming that the lab is only screening for THC and not CBD. 

The larger concern for employers is using drug testing to determine whether an employee is currently impaired on the job.  This can be a challenge for employers because of the fact that THC stays in one’s system for up to 30 days, and there are no tests that accurately indicate intoxication levels from cannabis. For example, if an employee ingests cannabis and 20 days later is involved in an accident at work and the post-accident drug test is positive for cannabis, the employer should be wary of terminating the employee based solely on the test. The employer should also confirm from observations that at the time of the accident the employee was under the influence.  In 2019, a Walmart employee who tested positive on a post-accident drug test sued Walmart for wrongful termination because she claimed she was not under the influence at work and any THC in her system was from off-duty use.  Walmart submitted no evidence that any employee or manager had observed the employee acting as she was under the influence prior to the accident. The Arizona District Court found without any subjective observations of the employee being under the influence prior to the accident, Walmart could not simply rely on the positive drug test to support the employee’s termination.[7]   

New Jersey is another state that protects off-duty use and places significant emphasis on subjective observations along with a positive drug test to support terminating an employee for cannabis.  In its statute, New Jersey defines drug testing for cannabis to include, “scientifically reliable objective testing methods and procedures, such as testing of blood, urine, or saliva and a physical evaluation.” [8] New Jersey takes it one step further and requires that the individual conducting the “physical evaluation” 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 as a WIRE, one must receive education and training, “in detecting and identifying employee’s usage of, or impairment from, a cannabis item or other intoxicating substance, and for assisting in the investigation of workplace accidents.” [9]

AB-2188 drug testing language is far less instructive than New Jersey’s statute and will most likely require the California courts to interpret the extent of the drug testing provision.  For liability purposes, employers should put a policy in place that includes documented observations of possible impairment followed immediately by a drug test.  Provided the drug test is positive for THC the employer will be in a stronger position to support the termination of the employee then relying solely on the positive drug test. 

Recommended Practices for Employers

California employers have one year before this law takes effect in January 2024.  During this year employers should take the following steps in preparation:

(1)       Review your drug and alcohol policy with counsel, and if you do not have a drug and alcohol policy then use the time to create one.

(2)       Meet with the drug testing lab that processes your employees’ drug tests to ensure the lab is only testing for THC and not CBD.  Receive in writing from the lab the drugs they test for and details on the testing process.

(3)       Identify managers who could take on the duty of observing employees who may be under the influence at work and invest in training them on how to observe for potential impairment and the steps to take if impairment is suspected.  

(4)       Update your employee handbook to include off-duty cannabis use as a protected category.

(5)       Conduct training sessions with your employees on AB-2188 and that it only protects off-duty use and not for all employees. 

(6)       Consult with counsel to ensure all the protections are in place by January 2024.

Please contact the Gordon & Rees Employment Law practice group to understand the implications of this new legislation for you and your organization.