Lisa M. Casa – Partner Forchelli Deegan Terrana, LLP : Cannabis In The Work Place


by Lisa M. Casa

On March 31, 2021, the Marijuana Regulation and Taxation Act (“MRTA”) was signed into law in New York State.  The MRTA set out a framework to permit a legal adult use recreational and medical cannabis market in New York. The MRTA immediately permitted the possession of cannabis and decriminalized its recreational use. Also, the MRTA set out a framework to allow for the cultivation, processing and sale of cannabis and cannabis derived products.  Starting in Summer 2022, the State has provided for its first seeding of the regulated adult use market by licensing cultivators, processors and retail dispensaries. On November 21, 2022, the State issued 36 retail dispensary licenses under its CAURD program. Five of these retail licenses holders are located in the Long Island region. 

While New York State has legalized recreational and medical use of cannabis, cannabis remains a Schedule I drug under the federal Controlled Substances Act (“CSA”). Drugs that are classified as Schedule I drugs are deemed substances, or chemicals with no currently accepted medical use and a high potential for abuse.  

With this backdrop, many employers are questioning how they should handle the recreational and medical use of cannabis by their employees. To further the MRTA’s goal to allow the recreational and medical use of marijuana, the MRTA amended Section 201-d of the New York Labor Law.  Section 201-d of the New York Labor Law applies to all employers in New York with one or more employees. “Section 201-d was enacted in 1992 to ‘prohibit employers from discriminating against employees for engaging in certain off-duty activities,’ including ‘political or recreational activity, use of legal consumable products[,] or union activities.’” The MRTA expanded the Section 201-d of the Labor Law to prohibit an employer from taking an adverse action against an employee for the employee’s use of “cannabis in accordance with state law, outside work hours, off of the employer’s premises and without use of the employer’s equipment or other property.”   The MRTA does provide a carveout, and will permit an employer to take an adverse employment action with respect to an employee’s use of cannabis where:

(i) the employer’s actions were required by state or federal statute, regulation, ordinance, or other state or federal governmental mandate;

(ii) the employee is impaired by the use of cannabis, meaning the employee manifests specific articulable symptoms while working that decrease or lessen the employee’s performance of the duties or tasks of the employee’s job position, or such specific articulable symptoms interfere with an employer’s obligation to provide a safe and healthy work place, free from recognized hazards, as required by state and federal occupational safety and health law; or

(iii) the employer’s actions would require such employer to commit any act that would cause the employer to be in violation of federal law or would result in the loss of a federal contract or federal funding.

With respect to the articulable signs of impairment, the Department has provided an FAQ to assist employers with complying with the statute. The Department of Labor advises that articulable signs of impairment are “objectively observable indications that the employee’s performance of the duties of the position of their position are decreased or lessened.” With respect to drug testing, the Department of Labor advises that “a test for cannabis usage cannot serve as a basis for an employer’s conclusion that an employee was impaired by the use of cannabis, since such tests do not currently demonstrate impairment.”  There is a limitation on testing because marijuana and its metabolites can remain detected in a person’s bloodstream for a prolonged period of time, and typically a drug test may only detect past drug use, but have not been found to be an accurate measure of impairment. Additionally, the smell of cannabis, on its own, may not be used to allege impairment.  

Marijuana has been found to effect areas of the brain that control movement, balance, coordination, memory and judgment. With the limitation on drug testing, employers should be mindful of the other “articulable signs of impairment” that employers may point to when they suspect that an employee is impaired by marijuana. Such signs include, but are not limited to: 

  • altered perception
  • altered sense of time
  • bloodshot or red eyes
  • decreased problem-solving abilities
  • disorientation
  • drowsiness
  • euphoria or enhancement of mood 
  • impaired motor coordination and body movements
  • impaired memory
  • impaired concentration
  • impaired perception-reaction time
  • increased appetite
  • increased heart rate
  • relaxed inhibitions
  • Hallucinations or delusions
    (when taken in high doses)

A study by the National Institute of Justice found that the timing and length of impairment varied by the dose of THC present and the manner in which the cannabis product was consumed. Typically, with vaped doses of THC over 5 mg, peak impairment was found zero to two hours after consumption with most participants back to baseline after four hours. For oral THC, impairment was typically observed one hour after consumption, with peak effects at five hours after consumption, and participants returning to baseline eight hours after consumption. Therefore, employees, even if they do not consume cannabis while at work, could still be impaired. It is for this reason the employers should take care to properly document every potential instance of impairment if that is the reason for terminating an employee.  

Should an employee be improperly terminated for their legal off-duty usage of cannabis, they may bring a private cause of action seeking damages and equitable relief. Additionally the New York State Attorney General may bring a cause of action seeking equitable relief on behalf of the employee.  

With respect to prohibiting cannabis during working hours, this may include any time an employee is on call or expected to be engaged in work. Additionally, an employer may prohibit use of cannabis on company property, including leased vehicles.  Further, for remote workers, while an employer may not prohibit the use of cannabis at the employee’s home, an employer may take actions against the employee if they have articulable sign of impairment. Drug testing is permitted where such testing is a requirement for a position under federal or state law. These positions may include drivers of commercial vehicles. 

Additionally, in May 2020, the New York City Human Rights Code was amended to prohibit pre-employment testing of marijuana or THC for job applicants. There are exceptions to this prohibition where such testing is:

  1. Required by the U.S. Department of Transportation under 49 C.F.R. Part 40 or related state and local rules (e.g., flight crew and train dispatchers) (as defined in the applicable DOT rules);
  2. Required by the federal government as a condition of receiving a contract or grant;
  3. Required by federal or state law “for purposes of safety or security;”
  4. A collective bargaining agreement includes terms related to pre-employment drug testing of job applicants;
  5. The position falls into one of the categories of jobs provided for by the Commission on Human Rights.

As New York’s legal recreational cannabis market is established, employers should be mindful that they may not take any adverse employment actions against employees for the employees legal off-duty consumption of cannabis. It is only when an employee is impaired while on-duty that an employer may take an adverse employment action. However, impairment is not easily defined, and employers should take care to properly document all suspected symptoms of that impairment before taking any adverse actions. 

By: Lisa M. Casa, Esq., a Partner with the Labor and Employment and Cannabis Practice Group at Forchelli Deegan Terrana, LLP 

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