A Door Opens For NJ Worker Medical Marijuana Bias Claims

This article was originally posted on Law360, and expanded from a piece written on Obermayer’s HR Legalist blog.

On March 27, 2019, the New Jersey Appellate Division issued a published decision in Wild v. Carriage Funeral Holdings,[1] addressing whether disabled employees who use medical marijuana can bring discrimination and failure-to-accommodate claims under the New Jersey Law Against Discrimination. Wild marks the first time that a New Jersey state appellate-level court has addressed this issue.

The decision is favorable to employees who use medical marijuana off-duty pursuant to New Jersey’s Compassionate Use Medical Marijuana Act,[2] or CUMMA, and it increases the level of risk for employers who test for marijuana.

Background

Like many medical marijuana laws across the country, CUMMA primarily focuses on setting up a framework for legal marijuana use for certain medical conditions, and does not provide much guidance in the area of employment law. CUMMA includes only one sentence addressing the workplace: “[n]othing in this act shall be construed to require … an employer to accommodate the medical use of marijuana in any workplace.”[3]

Over the past decade, courts across the country have considered whether medical marijuana users should enjoy workplace protections, and have reached different conclusions depending upon the legal claims involved and the language of the applicable state medical marijuana law. Because the NJLAD has a very broad definition of “disability,” employees who are approved to use medical marijuana to treat medical conditions are potentially protected under that law.

Until now, employees have not had much success with NJLAD claims based on medical marijuana use. For example, in August of 2018, the U.S. District Court for the District of New Jersey decided Cotto v. Ardagh Glass[4] and dismissed an NJLAD claim brought by an employee who used medical marijuana. However, since Cotto was a federal court addressing an issue of New Jersey state law, Wild effectively overruled that decision.

The Wild Decision

Justin Wild was a funeral director for Carriage Funeral Holdings Inc. During his employment, Wild was diagnosed with cancer and prescribed medical marijuana, which he used in the evenings after work for pain. Wild did not disclose his marijuana use to Carriage, but he was later involved in a workplace accident.

When he disclosed his medical marijuana license at the hospital, Wild was told by the attending doctor that no tests would be required because it was clear that he was not under the influence. However, after Carriage told him that testing was required, Wild took a urine and breathalyzer test. Within a few weeks after the test, Carriage terminated him.

Wild filed suit in state court for disability discrimination, perceived disability discrimination and failure to accommodate under the NJLAD. After a series of preliminary motions, Carriage filed a motion to dismiss, which the court granted.

Addressing the NJLAD discrimination claim, the trial court held that since marijuana remained illegal under federal law, a failed drug test was a legitimate business reason for termination. Turning to the failure-to-accommodate claim, the trial court held that Wild failed to properly allege that he requested an accommodation from Carriage for his disability (cancer). Finally, the court cited to the language in CUMMA, stating that no workplace accommodations are required for medical marijuana use.

Wild appealed, arguing, among other things, that the trial court should not have relied on CUMMA to dismiss his NJLAD claims. The Appellate Division held that CUMMA neither creates nor prohibits a private cause of action for employees who use medical marijuana, then moved on to address the NJLAD claims.

The court framed the remaining issue as fairly routine: whether or not Wild’s complaint properly stated a claim under the NJLAD. In so doing, the court did not rule that Wild would ultimately prevail, but stated only that he had alleged enough to survive a preliminary motion to dismiss both his discrimination and failure-to-accommodate claims.

The Impact of the Wild Decision

The narrow nature of the Appellate Division’s holding in Wild is a double-edged sword for employers.

On the one hand, the fact that Wild did not address some of the thornier issues in this area (such as the interplay between the federal Controlled Substances Act and state law) leaves open the possibility that the New Jersey Supreme Court, or even another appellate panel addressing a different case, could rule differently in a case with more developed facts. However, Wild provides a blueprint for employees and their counsel to bring NJLAD claims in medical marijuana cases, and to avoid early dismissal of those claims.

Once disability discrimination cases survive the motion to dismiss stage, the employer’s next chance to prevail is typically via a motion for summary judgment at the close of fact discovery. Because it is relatively easy for an NJLAD plaintiff to establish a prima facie claim of discrimination, employers often must rely on a legitimate business reason to justify an employee’s termination or other adverse employment action.

While the Wild decision leaves open the possibility that a “zero-tolerance” drug policy could provide a legitimate business reason for termination, employees can defeat summary judgment and push a case to trial if there is evidence that the employer’s reason was a pretext for discrimination. For instance, pretext can be shown if the employer provides inconsistent reasons for the termination. If the employee’s underlying disability is unknown to the employer until a positive drug prompts the employee to disclose it, the close timing between the disclosure of the disability and termination could also be considered evidence of pretext.

Failure-to-accommodate claims can also pose unique challenges for employers in the context of medical marijuana use. In order to successfully defend a failure-to-accommodate claim under the NJLAD, employers need to show that they engaged in the “interactive process” with employees to find a reasonable accommodation for a disability, and that a rejected accommodation would have posed an undue hardship to the employer.

On this point, the Massachusetts Supreme Court’s 2017 decision in Barbuto v. Advantage Sales[5] is instructive. The Barbuto court held that an exception to an employer’s drug policy to permit off-duty medical marijuana use was a “facially reasonable accommodation” under that state’s anti-discrimination law, and outlined a two-step framework for accommodating such use: (1) if an employee is taking medical marijuana outside of work for a disability, an employer with a policy prohibiting this use (or requiring a clean drug test as a condition of continued employment) has a duty to engage in the interactive process to see whether or not there are other equally effective alternative medications that would not violate the policy; and (2) if there is no equally effective alternative, the employer would need to show that the off-duty use would cause an undue hardship to its business.

By allowing Wild’s accommodations claim to proceed, the Appellate Division has moved New Jersey closer to Massachusetts when it comes to accommodating off-duty medical marijuana use. Post-Wild, a New Jersey employer who terminates an employee due to a positive drug test for marijuana, with knowledge of the medical use, but without having discussions with the employee about potential accommodations, will face an uphill battle.

Takeaways for Employers

Wild is a signal to employers that New Jersey courts — especially state courts — will treat employees who use medical marijuana to manage medical conditions the same as employees who use other legal medications for a disability. When it comes to the NJLAD, employers in New Jersey can no longer rely on the fact that marijuana is illegal under federal law.

Wild is also significant because it represents an ideal “test case” for a medical marijuana employment claim. Employers facing all of the key elements of the Wild case (an employee with a disability, who uses medical marijuana off-duty, works for an employer not subject to a federal law or contract, and who has no discernable workplace impairment or performance issues) should tread very carefully before taking any adverse employment action.

On the other hand, Wild does not prevent employers from taking appropriate action to address employees who possess or use marijuana at work. Employers who are subject to federal regulations or who have federal contracts should generally be able to take a stricter approach to marijuana use — at least with respect to employees who are subject to those regulations or who work on federal contracts.

Workplace impairment and safety violations remain legally defensible reasons to take action against an employee, and Wild does not prohibit employers from conducting drug tests in response to workplace accidents. However, because drug tests for marijuana measure metabolites still in the body from past marijuana use, not current impairment, employers should exercise caution when relying on a positive drug test for marijuana.

As medical marijuana use becomes more prevalent, drug testing is more likely to reveal that an employee has tested positive because they are treating a medical condition that is protected under the NJLAD. In the case of an employee with performance or conduct issues, the better course may be to simply take action based on those issues, without delving into the underlying cause. As is the case with many workplace issues, consistent and contemporaneous documentation of performance and safety issues is critical to the defense of any later-filed claims.

Finally, while Wild does not require employers to jettison their workplace drug policies, employers should make sure that these policies leave room for exceptions for off-duty legal medical use that does not cause workplace impairment or undue hardship. Employers should be prepared to engage in the interactive process with legal medical users prior to taking action based on any such policies.

Looking Ahead

New Jersey’s recent headline-grabbing efforts to legalize adult-use recreational marijuana have not yet come to fruition. On March 25, 2019 — two days before the Appellate Division issued its decision in Wild — New Jersey lawmakers called off a vote on a pair of bills that would have legalized recreational use (the recreational bills), due to a shortfall of votes.[6] Legislators simultaneously postponed a vote on a companion piece of legislation that would have expanded CUMMA, the Jake Honig Compassionate Use Medical Cannabis Act, or Jake’s Law.[7]

While New Jersey Gov. Phil Murphy supports both measures, both bills remain in limbo for now. In the meantime, the Murphy administration is taking steps to expand the medical marijuana program under the existing law, including expanding physician access and dispensaries.

If signed into law, the recreational bills and Jake’s Law could both have significant employment law implications in New Jersey. Although the recreational bills would not prevent New Jersey employers from maintaining a “drug-free workplace,” they would prohibit New Jersey employers from taking any adverse employment action (e.g., hiring, firing, disciplinary action, etc.) against current and potential employees because they are cannabis users, or because they test positive on a urine test for cannabis.

The recreational bills would also prohibit an employer from considering cannabis-related arrests, charges and convictions related to possession and/or sale of cannabis when making hiring decisions. Jake’s Law includes an anti-discrimination framework to protect an employee’s off-duty medical cannabis use — including a requirement that employers allow medical users to explain a positive drug test and submit documentation of authorized medical use. It contains exceptions for employers who are subject to federal law, who receive federal funding or who have federal contracts.

The recreational bills and Jake’s Law could go a long way toward clarifying how employers should approach employees who use marijuana off-duty, for recreational or medical purposes. In the meantime, employers need to carefully consider the Wild case when confronted with these issues.