The U.S. Court of Appeals for the 3rd Circuit issued an opinion earlier this week that will have significant ramifications on the abilities of plaintiffs to bring employment-related disputes arising out of New Jersey’s recently enacted Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (CREAMMA).
In Erick Zanetich v. Walmart Stores East, Inc. and Sam’s East Inc., the plaintiff Erick Zanetich, filed a complaint against Walmart and Sam’s Club Fulfillment Center (defendants) on behalf of himself and a putative class of job applicants because his offer of employment was rescinded after a positive pre-employment marijuana test. Zanetich filed a two-count complaint where he alleged that the recission of his job offer violated CREAMMA, as well as New Jersey public policy. Zanetich initially filed his complaint in New Jersey state Superior Court, but the defendants removed the case to the District of New Jersey based on diversity jurisdiction. Once the case was removed, the defendants filed a motion to dismiss for the plaintiff’s failure to state a claim, asserting that the causes of action that Zanetich was alleging did not state a claim. The District Court granted the motion and Zanetich appealed, thereby bringing this dispute to the 3rd Circuit.
The 3rd Circuit first conducted a comprehensive review of CREAMMA. It noted that CREAMMA outlaws discrimination based on a person’s use or non-use of cannabis. Second, the Act protects employees from an adverse employment action that is based solely on a positive test. The Court highlighted additional employment related protections. It noted that the Act does not prevent an employer from maintaining a drug-free workplace, does not require an employer to accommodate cannabis use in the workplace, and does not “amend or affect in any way any State . . . law pertaining to employment matters.”
The Court then undertook a lengthy analysis to determine whether, merely because CREAMMA created rights, the Act also provided remedies to potential plaintiffs like Zanetich. To solve this issue, the Court discussed the United States Supreme Court precedent that controlled this case. In Cort v. Ash, 422 U.S. 66 (1975), the Supreme Court held that private remedies for statutory rights could be implied, but not presumed. The 3rd Court then discussed the four factors for courts to consider whether a remedy exists for the perceived violation of the statute. Those four factors are:
- Whether the plaintiff is “one of the class for whose especial benefit the statute was enacted.”
- Whether there is “any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one.”
- Whether it is “consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff.”
- Whether the cause of action has been “traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law.”
The Court’s review of New Jersey law confirmed that New Jersey courts currently use this test. The Court thus turned to the four factors to ascertain whether Zanetich could state a cause of action.
Regarding the first factor, the Court concluded that CREAMMA did not confer a benefit on any special class of people because the Act protects both users and non-users of cannabis. The Court also noted that although the Act does protect against employees suffering adverse employment actions as a result of a positive test, that protection applies only to current employees — not to applicants like Zanetich. Therefore, job applicants who test positive for cannabis are not conferred a special benefit by the Act.
Regarding the second factor, the Court noted Zanetich provided no legislative history to support an intention by the drafters to provide a private remedy for a job applicant who fails a cannabis test. The Court also relied on CREAMMA’s alternate enforcement mechanism — that the commission created by statute to oversee the implementation of CREAMMA has the authority to bring enforcement actions against employers for perceived violations of CREAMMA. The Court also highlighted that CREAMMA expressly says the Act does not “amend or affect in any way any State . . . law pertaining to employment matters.” And although the New Jersey Legislature has repeatedly over time amended the New Jersey Law Against Discrimination to establish new protected classes (for example, discrimination on the basis of tobacco use) the legislature did no such thing since the passage of CREAMMA.
Finally, the Court reviewed the third factor and concluded that finding a private remedy did not advance the principal purposes of the Act. Although the first purpose of the Act was to regulate cannabis “in a similar fashion to the regulation of alcohol for adults,” there is no private cause of action for employment discrimination based on alcohol use. The second purpose of the Act was to prevent the sale or use of cannabis by persons under the age of 21, which a private remedy did not advance. And finally, the third principal purpose of the Act was to eliminate crime that grew out of the unregulated and illegal marijuana manufacturing and distribution in the state. A private remedy did not advance this purpose, either.
Having found that Zanetich could not state a claim under CREAMMA, the Court next considered whether rescinding his offer of employment violated New Jersey public policy, a claim also known as aPierce claim, named after the New Jersey Supreme Court’s opinion in Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58 (1980) that created this cause of action. The Court concluded it did not, for the simple reason that New Jersey precedent established that a Pierce claim could only be brought by employees of a company, and not applicants arising out of the pre-employment process.
The last remaining issue of note dealt with certification of the issue to the New Jersey Supreme Court. When a federal court reviews a case that deals with a unique aspect of state law that has not yet been decided by a state court, the federal court can certify a question of state law to the New Jersey Supreme Court to decide that unique question of law. The New Jersey Supreme Court has the discretion to take the case or not. The 3rd Circuit here declined Zanetich’s attempt to certify this question to the New Jersey Supreme Court because it found that its decision was based on well-settled New Jersey precedent.
This decision is significant for employers who are currently facing CREAMMA actions in federal court. A binding 3rd Circuit decision would likely extinguish any current claims arising out of a failure to hire for a positive marijuana test. With respect to pending or future claims in New Jersey state court, this opinion will provide helpful guidance and analysis, but state courts are free to ignore opinions from federal courts that address questions of state law. Therefore, although the 3rd Circuit declined to certify this question, this issue very well may still make its way through the New Jersey courts and up to the New Jersey Supreme Court.
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