Evolving Cannabis Laws: 3 Common Mistakes Companies Should Avoid

Regardless of how companies or managers may feel about the topic, cannabis (including recreational and medical marijuana, and any product containing THC) is becoming ubiquitous – and is approaching a $30 billion per year industry.

Marijuana is “legal” for adults in 24 states and Washington, D.C. — and medical marijuana is legal in 38 states and D.C. This creates a dilemma for many employers who do not want employees operating under the influence of THC (the psychoactive drug in cannabis) any more than they want them at work drunk. 

The confusion regarding marijuana legalization and the rapidly changing landscape of state-specific laws has created a minefield for employers.

Here is a summary of the major issues employers face, and how best to avoid stepping on one of those mines.

Mistake #1 – Believing marijuana is ‘legal’ and ignoring its potential impact in the workplace

Perhaps one of the most important things to understand, is that cannabis is not legal anywhere in the United States.

Marijuana is a Schedule I controlled substance under the federal Controlled Substances Act, right along with Heroin, LSD, Ecstasy, Crystal Meth and Peyote.

If you perform federal contracts, have employees working on federal property, or have employees subject to federal regulations (e.g. interstate truck drivers or airline pilots), you have no leeway with cannabis – your employees can never possess it or have any amount in their system.

Many states have passed laws stating that individuals will not be prosecuted under state law if they possess or grow a small amount of marijuana.

One of the biggest mistakes an employer can make, however, is believing these state laws reduce potential liability for the bad acts of a stoned employee. Cannabis impairs judgment, and this is exacerbated when someone is driving or operating machinery. 

Numerous studies are showing how THC impairment is likely to significantly increase the risk of an accident on the job. Your workers’ comp carrier is going to expect you to be proactive in this regard, and to have policies to minimize the risk of cannabis-related accidents. It is also fairly well-established that people under the effects of THC are not violent, but they tend to sexually harass each other – a lot. 

People have a tendency to lose their internal filters and inhibitions and may say or do things that can lead to discrimination or retaliation claims. The one thing that is universally true in any sort of litigation involving cannabis-fueled conduct, is that if the employer is perceived as having tolerated an employee to be high at work, even jurors that could make Cheech and Chong envious of their use of cannabis will have no problem hanging the employer out to dry for contributing to the accident or misconduct.

In some respects, cannabis is similar to alcohol – it is legal to buy alcohol, but few people will argue that allowing employees to be drunk on the job is a good idea.

The problem with cannabis, however, is that it is not as easy to detect when someone is under the influence.  People can be getting impaired using a vape pen, drinking tea or eating a cookie. They may never smell like pot, or they may smell like it because they were at a concert the night before and wore the same jacket. It can be extremely difficult to tell if someone has THC in their system because they ingested cannabis at work, as opposed to at home, where it was “legal.”

Mistake #2 – Not keeping up with cannabis laws in your state

The reaction to cannabis’ federal status, and the risk of serious liability associated with cannabis intoxication at work, leads many employers to want to adopt a “zero tolerance” policy with regard to drug testing employees (i.e. any THC in one’s system is grounds for discharge). 

It is fine – everywhere – to have a policy that says employees cannot possess, use or be under the influence of THC on company property or on working time – but the “under the influence” part is subject to state law. 

Similar to alcohol – where legal intoxication is at a blood alcohol level of .08% – many states have determined when a person is deemed “intoxicated” from cannabis. This is necessary because cannabis can be prescribed medication for people suffering from conditions such as cancer, glaucoma and chronic pain. Also, cannabis is stored in fat cells in the body and can be detectable for weeks after the person was actually intoxicated. Some states, such as California, have enacted laws prohibiting discrimination against someone for off-duty cannabis use, which means they cannot be fired for having minimal amounts of THC in their system. 

All of this taken together means that an employer is taking a large risk by claiming they have “zero tolerance” with respect to cannabis.

The better solution is to tell applicants (post-offer, pre-employment) that they have to pass a standard drug screen and have all testing done by a lab certified by the National Institute on Drug Abuse (NIDA).  Such labs will test for impairment based on the industry standard, and will only tell you if the employee was impaired, not whether there was any trace amount of THC in their system.

The other two typical testing scenarios: (1) when you have “reasonable suspicion” someone is under the influence at work; or (2) after an accident where the employee’s conduct cannot be ruled out as the cause, should also be handled with care based on the applicable state law. (Random testing may also be a possibility, but do not implement such a procedure until it has been reviewed by employment counsel with good malpractice insurance.) 

Some states do not allow workers’ compensation to apply to accidents if the employee was under the influence of THC. Other states do not allow an employee to be fired just because they failed a drug test – there has to be unsafe or improper conduct as well. 

You also want to be very careful with employees where they may have consumed THC under the express direction of their doctor. Sending all such employees to a NIDA-certified lab can reduce liability because the lab personnel will ask the employee about medications, and any prescriptions they have – rather than your manager, who may accidentally fall into a disability discrimination lawsuit by inquiring about the employee’s underlying health conditions.

It also can substantially reduce risk by having a member of your HR team trained to detect when someone is under the influence of THC. Such courses can be taken online and at local medical clinics – particularly those interested in obtaining your drug testing business. It is extremely impactful to a jury for the person who sent the employee to get tested to be able to say they have taken a course and been certified to detect THC intoxication. 

Speaking of sending employees to get tested, it should go without saying that if you do send an employee to the clinic because you suspect they are under the influence, do not let them drive themselves to the testing facility. Use a taxi, ride service, or better yet, have a manager drive them to make sure they actually go. You need to pay employees for the time spent getting tested, so it is best to minimize the trip.

Mistake #3 – Not updating your policies and procedures

One of the most avoidable mistakes employers can make is failing to update their policies to reflect the changing cannabis legal landscape.

For example, most employers have a policy that says the company conducts drug testing to ensure applicants and employees are not under the influence of “illegal” drugs at work. Employers do this to put applicants and employees on notice of testing that would otherwise be an invasion of their privacy.

Savvy applicants or employees who may have lost an employment opportunity because of that policy may argue that they failed the test because of a “legal” drug and that they did not give consent to be tested for cannabis. To avoid this potential problem, employers should update their drug testing policy to define an “illegal” drug as including improper use of prescription or over-the-counter drugs, as well as “all forms of marijuana and any product containing THC.”

Another policy that needs to be updated is the smoking policy. Most employers prohibit smoking in the workplace, and many states do not allow smoking in any work area or within 50 feet of an entrance. 

The policy needs to be updated to specifically prohibit the use of e-cigarettes and vaping devices.  Not only is it unsightly for employees to be smoking or vaping, but you have no idea what’s in that e-cigarette or vaping device. The vapor can smell like bubble gum, but it can contain enough THC to make an elephant believe it is pink. Making smoking and vaping more difficult for employees is permissible, and a good idea.

It is also vitally important to train managers that any medical issues – including cannabis-related questions – are directed solely to HR.  Saying the wrong thing to an employee can create liability and hard feelings. For example, an employee tells their manager “I’m going through chemotherapy, and the only thing that relieves my nausea is smoking a bowl – you’ll accommodate me right?”  If the manager responds with something like “I didn’t know you were a stoner,” or “You need to go work someplace else,” a nasty lawsuit is probably coming your way. 

After all, the employee actually just asked if they could be accommodated – which is legally required – not if they could come to work under the influence.  The proper response to such an employee would be: “We will absolutely provide a reasonable accommodation for any underlying medical condition, but the accommodation cannot include you possessing, using or being under the influence of marijuana at work.”  Appropriate accommodations might include letting the employee leave early some days or changing their schedule after chemo treatments.

As the foregoing indicates, the rules regarding marijuana as it relates to the workplace have dramatically changed in the last decade – and it is important to keep in mind that so have perceptions about marijuana use. There is a great deal more social acceptance of marijuana, particularly for medical use. 

In addition to all the legal risks above, businesses need to factor in their reputation and ability to recruit and retain employees when it comes to marijuana testing and messaging. If your business is seeking millennials and Gen-Z’ers, being perceived as intolerant or old-fashioned may deter applicants and put off existing employees. Be aware of your industry, your state and local laws, and your employee demographics; and adopt policies and procedures that are in the best interest of your business, that provide the maximum legal protection, because marijuana is here to stay, and so is the risk of employment lawsuits associated with it.

Further muddying workplace drug policies is the question of employee morale. Many employees argue that legal usage of cannabis off the clock should not be grounds for their termination if they fail an employer drug test. Employers need to keep in mind the attitude of their workforce when making disciplinary decisions related to drug testing.