Case Law and Statutory Updates on the Legalization of Marijuana in New Jersey

Employers continue to navigate the consequences of the use of medicinal marijuana within the workplace. With the passing of Senate Bill No. 21, which went into effect on January 1, 2021, the legalization of the use, possession and distribution of recreational marijuana will only add another layer to the reverberating effects on the workplace. It is important for employers to familiarize themselves with the evolving statutory and case law.  

The New Jersey Supreme Court is already finding in favor of employees when it comes to questions surrounding the use of medical marijuana at the workplace. In Wild v. Carriage Funeral Holdings Inc., 241 N.J. 285 (March 10, 2020), Wild, a licensed funeral director, was diagnosed in 2015 with cancer and prescribed marijuana under the NJ Compassionate Use Medical Marijuana Act (“Compassionate Use Act”). In May 2016, while working, Wild’s vehicle was struck by another vehicle that ran a stop sign. At the hospital, he informed the treating doctor of his license to possess medical marijuana. While the doctor concluded that Wild was not under the influence of marijuana at the time of the accident, he was terminated from his employment.

Wild sued the employer for unlawful discrimination based on his disability, which required him to use medical marijuana off-site. The employer argued that the Compassionate Use Act did not include employment-related protection. Specifically, the employer relied on language in the Compassionate Use Act that states “nothing in this Act shall be construed to require an employer to accommodate the medical use of marijuana in any workplace.”  While the court agreed that the employer was not required to accommodate the use of medical marijuana in the workplace, it found that the employer cannot discriminate against an employee for utilizing medication off-site.  

This is the first case where the New Jersey Supreme Court addressed the right of an individual who uses medical marijuana to pursue employment litigation for unlawful termination. While this case did not arise out of workers' compensation, the case is instructive to practitioners because many injured workers are using medical marijuana in New Jersey.  

The New Jersey Workers’ Compensation Court first faced questions arising out of the Compassionate Use Act in Hager v. M&K Construction, 462 N.J. Super. 146 (January 13, 2020).[1] Here the court determined that an employer or carrier is responsible for the reimbursement to an injured worker for their out-of-pocket costs for medical marijuana. The appellate court affirmed this decision and on May 12, 2020, the Supreme Court granted certification for review. We await the Supreme Court’s decision, but should it affirm it will have enormous effects on the employer.  

Regardless of the court’s final decision in Hager, the New Jersey legislature has taken the matter into its own hands. The State Assembly Appropriations Committee introduced Bill A1708 which requires workers’ compensation and personal injury protection auto insurance benefits to cover medical marijuana under certain circumstances. It’s important to remember that this has not yet been enacted into law.

With the execution of the legalization of marijuana, lawmakers have the potential to affect decisions similar to Wild and Hager in the future. Senate Bill No. 21 introduces employee protections and employer policies for the use and consumption of recreational marijuana. The bill states that employers cannot refuse to hire, discharge, or take any adverse action against an employee because of their use or non-use of cannabis items. However, employers will now be able to require employees to undergo drug testing under reasonable suspicion of cannabis use while performing an employee's work duties, findings of any signs of intoxication, or following a work-related accident. While many of the potential policies will be similar to policies regarding alcohol use, employers could require random and regular testing of employees or pre-employment candidate screenings for marijuana use.

Employee drug testing for marijuana will come with interesting requirements. The bill requires an employee drug test to include scientifically reliable objective testing methods such as the testing of blood, urine, or saliva, in addition to a physical evaluation to determine an employee's state of impairment. The testing would be performed by a certified workplace impairment recognition expert. This expert would be required to complete a certified program created by the Cannabis Regulatory Commission. The expert would be responsible for detecting and identifying an employee's use of cannabis items and assist in the investigation of workplace accidents. As these testing requirements are implemented, it will be interesting to see what employers will constitute as reasonable suspicion, parameters for regular testing, states of impairment, and what protections will employees have against presumed suspicion of intoxication.

Despite the new law on recreational marijuana use, there is still one significant issue. The legislation does not address the conflict of law between state and federal government. There is no exemption for an employer to comply with the state laws if the federal government intervenes to enforce the Federal Controlled Substances Act. This is one of the issues that the appellate division does discuss in Hager. In Hager, the court states that as long as an employer is not possessing, manufacturing, or distributing marijuana, they are not in conflict with the Federal Controlled Substances Act. But again, Hager is currently under review by the New Jersey Supreme Court. 

While Senate Bill No. 21 removes marijuana from the Schedule 1 list of controlled substances at the state level, it remains a Schedule 1 controlled substance at the federal level, making any consumption of marijuana illegal under federal law. The 2019 MORE Act (H.R. 3884) would remove marijuana from the Controlled Substances Act, effectively decriminalizing it and eliminating criminal penalties for an individual who manufactures, distributes, or possesses marijuana. The 2019 MORE Act was passed by the House on December 4, 2020, but has not been passed by the Senate, therefore, it continues to remain illegal at the federal level.

As this new area of law continues to develop, employers will be on the verge of trial and error when it comes to handling both medicinal and recreational use of marijuana in the workplace. It will be important to stay updated on the progression of these laws and the effect that they have on employer policies and practices.