Seyfarth: Clearing the Haze: The Method and the Madness Behind the New Cannabis Laws in California and Washington

On September 18, 2022, California amended its primary employment discrimination law to specifically regulate the drug testing methodologies that employers may use when making hiring, termination, and other employment decisions relating to cannabis users. More recently, on May 9, 2023, Washington Governor Jay Inslee signed similar legislation relating to initial hiring decisions. Both laws, which will be effective January 1, 2024, are the first of their kind because they require employers to have a basic understanding of a somewhat complicated issue – the science behind cannabis testing.  

Testing for THC

The primary psychoactive agent – the thing that gets people high – in cannabis is delta-9-tetrahydrocannabinol (THC). At present, most employers use urine drug tests, which target the cannabis metabolite THCA, which is nonpsychoactive. Thus, when an employer receives a urine test result, all the employer knows is that the person has used cannabis at some time in the recent past (from days to several weeks); exactly when, however, is unknown. THC is the primary target and is found in greater concentrations in drug tests that use saliva specimens, which in turn leads to test results that are tied to or related to psychoactive effect. None of the scientifically valid drug tests, including those that use saliva specimen, inform an employer whether a person is impaired at or near the time they provide a specimen for testing.

California’s AB 2188

On September 18, 2022, California Governor Gavin Newsom signed AB 2188, which amended the Fair Employment and Housing Act (FEHA) to essentially make cannabis users a protected class in California. Effective January 1, 2024, it will be unlawful for most employers to discriminate against a person in connection with hiring, termination, or another employment decision if the discrimination is based upon either:

(1) The person’s use of cannabis off the job and away from the workplace. This paragraph does not prohibit an employer from discriminating in hiring, or any term or condition of employment, or otherwise penalize a person based on scientifically valid preemployment drug screening conducted through methods that do not screen for nonpsychoactive cannabis metabolites.

(2) An employer-required drug screening test that has found the person to have nonpsychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.

There are several exceptions to the new employment discrimination prohibitions: (1) employees in the building and construction trades; (2) applicants or employees hired for positions that require a federal government background investigation or security clearance in accordance with Department of Defense regulations, or equivalent regulations applicable to other agencies; and (3) applicants and employees required to be tested under state or federal laws and regulations or as a condition of an employer receiving federal funding or federal-licensing benefits or entering into a federal contract. What does this mean? Subparagraph (2) focuses solely on the type of test. More specifically, employers cannot take an adverse employment action against an applicant or an employee based on a drug test that targets nonpsychoactive cannabis metabolites. As explained above, this effectively makes urine tests useless (and unlawful) to California employers. As a result, covered employers who wish to test for cannabis should consider discontinuing urine testing on or before January 1, 2024, regardless of whether the test is for a job applicant or a current employee. What about saliva/oral fluids testing? The answer seems to depend on whether the test is for a job applicant or a current employee. Subparagraph (1) states that an employer can reject a job applicant if the cannabis test does not screen for nonpsychoactive metabolites, suggesting that an employer can rely on a pre-employment saliva/oral fluids test that targets the parent drug THC.  The same may hold true for hair testing. However, even if an employer uses a saliva/oral fluids test for a current employee that complies with subparagraph (2), it still must consider the first sentence of subparagraph (1), which prohibits employers from taking action against someone because of their “use of cannabis off the job and away from the workplace.” Oral fluids tests might provide a close-in-time correlation as to when employees use cannabis, but they do not prove that employees actually are impaired or used cannabis on the job or at work. As a result, even if an employer uses a lawful testing methodology for a current employee, an employer that takes action against an employee for cannabis use still has significant risk under FEHA because it likely will be difficult to rebut the employee’s assertion that they used “off the job and away from the workplace.”

Washington’s SB 5123

SB 5123, which takes effect January 1, 2024, states that a Washington employer cannot discriminate against a person in the initial hiring for employment if the discrimination is based on: their use of cannabis off the job and away from the workplace or an employer-required drug test that has found the person to have nonpsychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids. However, the law does not “[p]rohibit an employer from basing initial hiring decisions on scientifically valid drug screening conducted through methods that do not screen for nonpsychoactive cannabis metabolites.” Accordingly, Washington employers can reject job applicants for cannabis use if the employer uses the appropriate drug testing methodology. From a testing methodology perspective, Washington’s SB 5123 is the same as California’s AB 2188. It differs, however, insofar as the Washington law only regulates pre-employment cannabis testing, leaving in place the right of an employer to maintain a drug-free workplace and policy and to test current employees for cannabis using any scientifically-valid methodology. This is consistent with the Washington legislature’s intent – “to prevent restricting job opportunities based on an applicant’s past use of cannabis.” SB 5123 contains a broad list of exceptions, including for positions: (1) requiring a federal government background investigation or security clearance; (2) law enforcement, fire department, or other first responder positions; (3) corrections officers; or (4) in the airline or aerospace industries. The law also does not apply if the applicant will work in a “safety sensitive position for which impairment while working presents a substantial risk of death.” If an employer takes advantage of this exception, it must provide notice to the applicant prior to their application for employment that the position sought is “safety sensitive.” Moreover, the law does not preempt state or federal laws requiring applicants to be tested for controlled substances. A practical provision was added to the bill as it made its way through the legislative process: an employer can continue to test applicants for cannabis, presumably irrespective of the methodology utilized by the employer, as long as the cannabis results are not provided to the employer.

Next Steps for Employers

Employers have little more than six months to prepare for these new laws, both of which are effective on January 1, 2024. The California Civil Rights Division is expected to issue regulations, but whether those regulations will be finalized before the end of 2023 is unclear. In the meantime, California and Washington employers would be well-advised to consult with their drug testing laboratories to ensure their drug testing methodologies will comply with these new laws. This is especially true in California where cannabis users (applicants and employees) are essentially a protected class, which makes them eligible for the full range of FEHA damages available (e.g., compensatory damages, attorneys’ fees, and costs) if an employer is determined to have violated the law.