New Jersey has expanded its medical marijuana program and—for the first time since the state enacted the law—adopted formal protections for employees and job applicants who use what is now called “medical cannabis.” The amendments took effect on July 2, 2019, when New Jersey Governor Phil Murphy (D) signed Assembly Bill (AB) 20, the Jake Honig Compassionate Use Medical Cannabis Act, into law.

The newly amended law provides that employers cannot take adverse employment action solely because an individual is a registered qualifying medical cannabis patient. The law defines adverse employment action as: (1) refusing to hire or employ an individual; (2) barring or discharging an individual from employment; (3) requiring an individual to retire from employment; or (4) discriminating against an individual in compensation or in any of the terms, conditions, or privileges of employment. In a nod to federal law, which continues to prohibit the use of marijuana and marijuana products, these restrictions on employer action do not apply if the employer would violate federal law, lose a licensing-related benefit pursuant to federal law, or lose a federal contract or federal funding as a result.

New Jersey’s expanded medical cannabis law does not prohibit employers from taking adverse action, in appropriate circumstances, based on test results. The law does, however, prescribe a process for both parties following a positive test result.  If an applicant or employee tests positive for cannabis, the employer now must provide the tested individual with a written notice advising of the right to offer a legitimate medical explanation for that result and, independently, the right of the tested individual to obtain a confirmatory re-test of the original sample at the individual’s expense.  Medical cannabis users are entitled to three days in which to respond to the notice, and in responding, may present authorization for medical cannabis issued by a health care practitioner, proof of registration with New Jersey’s Cannabis Regulatory Commission, or both. Once the individual has had the opportunity to respond, the employer presumably can decide whether to take adverse action based on the positive test result, provided that the employer’s decision does not turn solely on the individual’s status as a marijuana patient.  Earlier versions of the bill that would have prohibited employer action based on medical cannabis use were defeated.

Before the amendments, the law stipulated that employers were not required to accommodate medical marijuana use in the workplace. AB 20 deleted this provision, but created a similar provision that allows employers to prohibit, or take adverse employment action for, possessing or using intoxicating substances during work hours or on workplace premises outside of work hours.

NJ Courts Grapple With Marijuana Use

The Jake Honig Compassionate Use Medical Cannabis Act constitutes only part of the New Jersey legal landscape for employers struggling to cope with the expanded use of cannabis products.  Although New Jersey courts have recognized that the original Compassionate Use of Medical Marijuana Act contained no employment protections for medical marijuana users, in March 2019, a state appellate division court concluded in Wild v. Carriage Funeral Holdings that a former employee of a funeral services company who allegedly lost his job because of his use of medical marijuana could instead state a claim for disability discrimination and failure to accommodate in violation of the New Jersey Law Against Discrimination (LAD).

Prior case law had recognized an employer’s right to take adverse action under the LAD based on the employer’s good-faith belief that an individual was engaged in the illegal use of drugs.¹ The Wild court distinguished its prior precedent by concluding that the use of marijuana in accordance with state law must be considered lawful, despite continued limits on the drug’s use pursuant to federal law.  That decision is now under review. On July 11, 2019, the New Jersey Supreme Court granted certification of an appeal in this case.² At issue is the lower court’s conclusion that adverse action against cannabis-using workers may constitute disability discrimination absent evidence that cannabis use would render the employee unable to perform his or her job duties, would raise demonstrable safety concerns, or would otherwise jeopardize the employer’s legitimate business interests.

Inasmuch as the New Jersey medical marijuana law on which the Wild decision turned has now been amended (although the language of the LAD has not), employer obligations remain murky even after the legislative changes to the law, and employers should act with caution and advice of counsel until the outlines of New Jersey’s new cannabis law protections are clear.