New York bills to legalize recreational marijuana use and expand existing medical usage have created anxiety among business leaders in the state. Marijuana use protections in New York and other states and locales increasingly mean employers need to reconsider hard-line stances on drug use and drug-free workplace policies.

The state, as well as New York City, already has some of the widest protections for medical marijuana use. The latest proposals follow a nationwide trend showing the country is increasingly more open to marijuana legalization.

The New York recreational marijuana bill, which state lawmakers amended last week, would allow for the growing, selling, and use of cannabis by those age 21 and older and create a tax on certain sales. Another bill would expand access to the drug for medical users.

It’s unclear whether the bills will pass before the session ends June 19, but Gov. Andrew Cuomo (D) recently said in a radio interview that recreational marijuana legalization was among the top 10 items he hoped would pass in the remaining weeks.

And New York isn’t the only state taking recent action. In Illinois, the state Senate this week approved legislation to legalize recreational marijuana. Gov. J.B. Pritzker called on lawmakers in the House to pass the bill as well.

Illinois’ proposed law grants employers wide authority to restrict on-the-job cannabis use and punish employees who violate cannabis-related workplace policies. The bill specifies that nothing prohibits employers from adopting “reasonable employment policies” concerning smoking, storage or use of cannabis in the workplace or “disciplining an employee or terminating employment” for violating the employer’s policies.

‘Adding to the Complexity of Doing Business’

New York’s legislation adds to “the complexity of doing business here,” Frank Kerbein, director of the Business Council of New York State’s Center for Human Resources, said in a May 23 media call.

“It’s a long bill, and only a small portion affects employers, but it would have a significant impact.”

The business community says the proposals would create a legal gray area and uncertain standards for when one is considered under the influence, and would limit the ways an employer can take adverse employment action against an impaired employee.

These concerns mirror the landscape many companies around the country face as more states legalize marijuana. Ten states and the District of Columbia allow recreational marijuana use, and 33 states and D.C. have medical marijuana laws, according to Bloomberg Law data. Another six states have recently proposed recreational legalization, as well.

The evolution of marijuana legalization, where now the majority of states have enacted some sort of rules that allows medical or recreational use, and a spate of recent court rulings favoring worker use has employers showing signs of adopting more marijuana-friendly policies.

Many industries have seen an uptick in positive tests for marijuana, according to a study released this year by Quest Diagnostics, the largest U.S. drug testing laboratory. The group found that several industries saw double-digit increases between 2015 and 2017, including retail, transportation, insurance, and finance.

Employers need to recognize that there’s a new landscape regarding marijuana use, said Duane Morris partner Linda Hollinshead, who’s part of the firm’s Cannabis Industry Group. In several recent cases, employees won on motions that found state marijuana laws aren’t preempted by federal laws.

While several years ago, employers tended to stick with drug-free workplace policies, many now are deciding to be neutral on the issue or adapt policies to their specific location.

Pre-Hire Tests at Risk

Pre-hire employment screening can be a tricky area to navigate for employers. New York City passed an ordinance banning employers from conducting preemployment tests for medical marijuana. While it was one of the first jurisdiction to go that far, employers aren’t guaranteed they can successfully defend such tests in other locales, Hollinshead said.

Nevada lawmakers on May 28 also passed a measure, awaiting the governor’s signature, that also wouldn’t allow an employer to reject a job candidate for testing positive for marijuana. The state has allowed recreational marijuana for just under two years.

Another area that concerns employers is what it means to be “under the influence,” Hollinshead said. For alcohol, states have legal limits, but marijuana can stay in an individual’s system much longer and many factors contribute.

“Do you really want a nurse administering an IV on medical marijuana? Or someone operating heavy equipment to be under the influence?” Hollinshead said. “Some industries remain skeptical.”

In New York, for example, the recreational marijuana bill includes language that would put the burden on the employer to establish whether an employee was impaired on the job, a standard not in place for any other intoxicant, the Business Council’s Kerbein said. The council has 2,400 members including chambers of commerce, Fortune 500 companies, and sole proprietors.

Currently, if an employer in New York smells alcohol on the breath of an employee, it can send the worker home and possibly fire the person, Kerbein said on the call with members of the media. But under the new state bill, an employer wouldn’t be able to take any adverse employment action against an employee unless it established that the use of cannabis had impaired the employee’s ability to perform the job responsibilities.

There currently is no efficient way to test for whether a person is impaired by marijuana on the job, Kerbein said. “In a sense, it has created a sort of protected class for legal cannabis users,” he said.

The bill also would create a “gray area” for employers, as some employees, such as truck and delivery drivers, are required by federal law to be drug-tested. A large retailer with delivery drivers and cashiers, for example, would need to have two different standards and two different policies, Kerbein said.

The patchwork of state laws create uncertainty for employers in other jurisdictions, as well.

“The main issue clients are concerned about is the extent expected to accommodate medical marijuana use in the workplace,” Ballard Spahr partner Louis Chodoff said. “Certainty is always better, even if it’s bad certainty. At least you aren’t walking in a minefield. I have had several clients say I won’t test for it anymore,” Chodoff said.

Courts Back Users

A string of court decisions in recent years, meanwhile, have found in favor of employees who were either fired or not hired because of medical cannabis use. California became the first state to legalize marijuana in 1996, but even then, courts were rejecting worker lawsuits over marijuana use. Now, employers’ argument that they have the right to enforce drug-free policies because marijuana is illegal under federal law is no longer a guarantee of a legal victory.

A recent case in Arizona, Whitmire v. Walmart Stores, resulted in a win for an employee who was fired after testing positive for marijuana in a post-accident drug test. The court found that the company didn’t provide proper expert testimony to show that the employee had a sufficient concentration in his system to support termination.

Also this year, in a New Jersey case, Wild v Carriage Funeral Holdings, an employee was fired after disclosing that he used medical marijuana for a cancer treatment. The worker fought off the company’s motion to dismiss his wrongful termination claim, and his discrimination and failure-to-accommodate claims were also allowed to proceed under the New Jersey law that allows medical marijuana usage.

“There is by no means a body of case law that will give direction and guidance. The law can be nuanced enough to take difference approaches,” Hollinshead said. “A blanket failure to hire or termination based on marijuana use is fairly risky,” he said, as these cases show.

With contribution from Michael Bologna