Is Everyone Going to Be High Is Everyone Going to Be High? Recreational Marijuana in the Employment Context after Proposition 64 Burke A. Dunphy Renne Sloan Holtzman Sakai LLP November 14, 2017

Agenda Impact of Proposition 64 on Workplace Drug Policies Medical Marijuana Usage in the Employment Context Common Pitfalls for Public Employers in Developing and Enforcing Drug & Alcohol Policies

Impact of Proposition 64 on Workplace Drug Policies

Proposition 64 Also known as the Adult Use of Marijuana Act (or the AUMA), Proposition 64 legalizes The possession and use of up to one ounce of marijuana by persons aged 21 and older The smoking of marijuana in private homes and licensed businesses Proposition 64 also outlines regulations for the cultivation, distribution, sale and use of marijuana

Proposition 64 Critically, though, it does not require employers to eliminate “drug-free workplace” policies or make accommodations for employee marijuana usage

Proposition 64 “Nothing in [this law] shall be construed or interpreted to amend, repeal, affect, restrict, or preempt: . . . The rights and obligations of public and private employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of marijuana in the workplace, or affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees, or prevent employers from complying with state or federal law.” Cal. Health & Safety Code, §11362.45

Proposition 64 So what does the new law mean for employers? Not a significant legal change Employers may still engage in pre-employment drug testing and are not obligated to hire individuals who test positive for THC Employers may still maintain drug-free workplace policies The AUMA – much like the Compassionate Use Act of 1996, which legalized marijuana for medicinal use – does not alter federal law, which still treats marijuana as a controlled substance This is especially important in the case of classifications covered by federal DOT regulations and subject to more stringent drug testing requirements

Proposition 64 So what does the new law mean for employers? Practical impacts There may be confusion among employees about what impact Proposition 64 has on workplace drug and alcohol policies E.g. they may not be aware that the new law allows employers to maintain drug-free workplace policies

Medical Marijuana Usage in Employment Context

Medical Marijuana Usage Legalized in California under the Compassionate Use Act of 1996 Individuals with valid prescription for marijuana are not subject to criminal prosecution However, the Compassionate Use Act “does not speak to employment law” California Supreme Court held in 2008 that employers need not make accommodations for employees who use medical marijuana in its decision in Ross v. RagingWire Telecommunications, Inc. (2008) 42 Cal.4th 920 Similarly, employers may discipline employees for use of marijuana, up to and including termination Key factor – marijuana remains illegal under federal law But be careful – employees may argue that disciplinary action was taken due to underlying disability or medical condition, not marijuana use

Medical Marijuana Usage What does the apparent conflict in state and federal law mean for public employers? At least 25 states presently have medical marijuana statutes Protections for employees with valid prescriptions differ from state-to-state, some states have separate laws/bills protecting users of medical marijuana based on their status as cardholders What if an employee uses medical marijuana offsite and employer does not have “reasonable suspicion” of drug usage while at work?

Medical Marijuana Usage In 2008, the California Legislature passed a bill (AB2279) that would have overturned RagingWire and prohibited adverse actions against employees for medical marijuana use – the bill was vetoed by Gov. Schwarzenegger Currently, there is not much citable precedent in California aside from RagingWire as to medical marijuana use in the workplace Some employers have policies prohibiting discrimination against (1) holders of valid prescriptions based on their status alone and (2) positive drug tests for marijuana metabolites where the disciplinary decision is based solely on the test results Law is still very uncertain and inconsistent – need to proceed with caution Key concern: Disciplining or failing to hire employee based solely on medical marijuana use outside of work could elicit claims for disability discrimination or failure to accommodate based on the underlying medical condition rather than the marijuana use

Medical Marijuana Usage Example: Employee with valid prescription for medical marijuana for anxiety comes to supervisor with pressing need to use marijuana at work in order to calm down and finish his or her assignment. Options for Response: (1) Allow employee to go outside and use medical marijuana in designated smoking area (2) Have employee leave worksite to go home and use from there (3) Send employee for drug testing and terminate him if test comes back positive (Shepherd v. Kohl’s Dep’t Stores, Inc.)

Medical Marijuana Usage Shepherd v. Kohl’s Dep’t Stores, Inc. (E.D. California, August 2, 2016) Decision on summary judgment motion Dismissed five out of seven causes of action Largely relied on RagingWire precedent Allowed two to move forward to trial Breach of contract and implied covenant of good faith and fair dealing Defamation What does this mean?

Medical Marijuana Usage Breach of contract claim likely has little applicability in public sector context Based on question of whether change to Kohl’s non- discrimination policy to protect medical marijuana usage altered Shepherd’s at-will employment status Defamation claim If plaintiff succeeds, it could be impactful in discipline processes, regardless of whether employees are at-will or subject to just cause for discipline/termination

Medical Marijuana Usage Basis for defamation claim HR assertion that plaintiff was under the influence while at work Plaintiff disputed this THC can stay in the system for up to 30 days after usage Plaintiff testified he had not used marijuana for several days prior to drug test and had a “personal policy” of not using marijuana within several days of working Takeaway for employers: Do not assert that an employee is under the influence at work unless this assertion can be sustained by reasonable suspicion

Common Pitfalls for Public Employers in Developing and Enforcing Drug & Alcohol Policies

Common Pitfalls Summary Treating prescription medication in the same manner as illegal drugs Engaging in random drug testing Punishing employees who enter rehabilitation programs

Common Pitfalls Prescription Drugs In general: Prescription medication ≠ Illegal drugs Key exception: Medical Marijuana

Common Pitfalls Prescription Drugs Avoid this pitfall by: Including exceptions in drug & alcohol policy for legally prescribed medications but Clarifying that use of medical marijuana – regardless of whether an employee has a valid prescription – is a violation of the drug & alcohol policy when used at the worksite (or where employee is under influence at the worksite)

Common Pitfalls Prescription Drugs Avoid this pitfall by: Not lumping in prescription drugs with workplace drug and alcohol policies with respect to prohibitions or restrictions on use Do not define “drugs” as expressly or implicitly including lawfully- prescribed medications Do not prohibit employees from taking prescription medications in the workplace or require them to disclose the existence of a disability or the use of medications Do not preclude the use of any prescription drugs that may hypothetically increase the “potential” for accidents, absenteeism or substandard performance

Common Pitfalls Random Drug Testing Using random drug tests as part of employer-wide drug policy Random drug testing is allowed of current employees only in strictly defined circumstances: Collection and testing of blood and urine is considered a search under the Fourth Amendment Standard for public employers is less than probable cause, but still need reasonable, individualized suspicion based on objective factors (e.g., slurred speech, bizarre conduct, uncharacteristically poor work performance, and excessive accidents or tardiness) Some public employees (such as drivers and transportation operators) are subject to broader testing

Common Pitfalls Random Drug Testing Avoid this pitfall by: Establishing a clear policy setting forth when drug or alcohol testing will be required Generally, it should be limited to cases of individualized suspicion except for situations where other statutes apply (e.g., transportation and other safety-sensitive positions) Having a manager/supervisor keep a clear record and promptly put in writing the specific circumstances giving rise to a drug or alcohol test Making clear the exceptions that apply to transportation and other safety sensitive employees Drug testing pre-hire is subject to lesser standards

Common Pitfalls Rehabilitation Programs Punishing employees who enter rehabilitation Current use of illegal drugs is not considered a disability under ADA or FEHA Therefore, a public employer may take into consideration an employee’s current illegal drug use in disciplinary decisions Nevertheless, under the ADA, an individual may have a disability where he/she (1) successfully completes a rehabilitation program and is no longer engaging in illegal drug use or (2) is currently participating in a supervised rehabilitation program and no longer engaging in illegal drug use While FEHA does not specifically include similar language, it would similarly protect such individuals based on its broad definition of “disability” (e.g., any physical or mental conditions that “limit” any major life activities)

Common Pitfalls Rehabilitation Programs Avoid this pitfall by: Granting employees leave to attend rehabilitation programs Providing an Employee Assistance Program and including reference to it in the drug & alcohol policy

Closing Thoughts/Tips

Closing Thoughts/Tips DOs: Include language in workplace drug and alcohol policies carving out exceptions for use of lawfully-prescribed medications Establish a clear policy for when you will require drug or alcohol testing Grant leave for employees to attend rehabilitation programs Make clear that medical marijuana use (at the worksite) constitutes a violation of the drug-free workplace policy Acknowledge drug and alcohol testing exceptions for transportation and other “safety-sensitive” positions Reference your drug and alcohol policy in your employee assistance program (EAP) DON’Ts: Lump together (legal) prescription medication use with illicit drug use Use random drug testing (with limited exceptions) Punish employees who enter rehabilitation programs Discriminate against (or fail to accommodate) employees based on their underlying medical conditions irrespective of their use of medical marijuana

Questions?

Renne Sloan Holtzman Sakai LLP Burke Dunphy Renne Sloan Holtzman Sakai LLP San Francisco: (415) 678-3800 Berkeley: (510) 995-5800 bdunphy@publiclawgroup.com