Louisiana’s Latest Legislative Session Includes New Laws on Preemployment Background Checks, Natural Gas Pipeline Reporting Obligations, and Industrial Hemp

Foley & Lardner LLP

Foley & Lardner LLPThe Louisiana State Legislature adjourned earlier this month, completing three months of legislative work in which legislators filed more than 1,400 separate bills. As of June 23, 2021, 448 bills have officially become law after passing both legislative chambers and receiving Gov. John Bel Edwards’ signature.

The recently enacted laws cover an incredibly wide range of issues. For those conducting business or owning property in Louisiana, below are three notable new laws of importance.

Act No. 406

Act No. 406 (HB 707) takes effective on August 1, 2021, and affects any business that conducts a background check on candidates before offering them a job. Act No. 406 prohibits employers from requesting or considering an arrest record or charge that did not result in a conviction when a background check reveals that information.

Act No. 406 also addresses employers’ consideration of other criminal history records, requiring employers to individually assess candidates’ criminal histories and determine if there is a direct and adverse relationship with the specific duties of the job to deny the candidate the position. The standard employers must apply has three factors:

                        (1) The nature and gravity of the offense or conduct;

                        (2) The time that has elapsed since the offense, conduct, or conviction; and

                        (3) The nature of the job sought.

Lastly, Act No. 406 authorizes candidates, upon written request, to obtain any background checks used by employers in their hiring decisions.

Employers should become familiar with this new law and timely update their hiring policies and practices to address these new changes.

Act No. 246

Act No. 246 (HB 549) addresses hazardous material reporting obligations of natural gas pipeline operators and owners under Louisiana’s Right-to-Know Law, codifying the existing practice of some natural gas pipeline operators. Act No. 246 becomes effective on August 1, 2021.

Act No. 246 clarifies that natural gas pipelines are “facilities” as defined under the Right-to-Know Law. It requires operators and owners to report unauthorized releases from pipelines if such releases total 1,000 pounds or more. The act further clarifies natural gas pipeline operators are not subject to the reporting requirements related to transporting hazardous materials.

Businesses that may be affected should take a careful look at their current procedures related to public disclosures of hazardous materials releases under the Right-to-Know Law and ensure they have the necessary protocols in place to comply with this new law.

Act. No. 336

Act. No. 336 (HB 640) eases restrictions on economic activity related to industrial hemp, reflecting states’ growing recognition of hemp as an economically useful agricultural product. The following highlights some key provisions, which take effect on August 1, 2021.

Act. No. 336 adds to existing law by authorizing licensees to possess, store, trim, and cure industrial hemp. Whereas current law requires that industrial hemp contract carriers obtain a license, Act. No. 336 eliminates that requirement, creating a handler license in its place. The act sets forth a definition for “handler.” Further, the act extends the window from 15 days to 30 days to harvest approved industrial hemp.

Act. No. 336 replaces “industrial hemp-derived CBD product” with “consumable hemp product,” and prohibits consumable hemp products from containing any cannabinoid not naturally occurring. Consumable hemp products include commercial feed, pet products, and floral hemp material. Floral hemp material will require packaging to be tamper-evident and not be labeled or marketed for inhalation. The Office of Alcohol and Tobacco Control is responsible for issuing wholesaler permits for consumable hemp products for a fee of up to $500, while also creating civil penalties for selling such products without a permit.

Act. No. 336 bans consumable hemp products from containing a dry weight with more than a 0.3% concentration of delta-9 THC or a 1% total THC concentration. To discourage unlicensed processing of consumable hemp, the act creates criminal penalties for unlicensed processors, including up to 20 years’ imprisonment at hard labor and a fine of up to $50,000. Act. No. 336 also imposes an excise tax on CBD products.

Moreover, the act contains various provisions related to research and development of industrial hemp. For example, it empowers the University of Louisiana at Monroe Agribusiness Program to cultivate, handle, and process industrial hemp in connection with product research and development, while also exempting the Monroe Agribusiness Program from industrial hemp licensure requirements. In addition, the LSU AgCenter will be required to develop a centralized industrial hemp website together with regulators and stakeholders.

The takeaway here is that Louisiana has signaled increasing openness to the economic benefits of industrial hemp. Businesses operating or planning to operate in this arena should become familiar with the provisions of Act. No. 336 to ensure they are compliant with its provisions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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