New York Legalizes Recreational Marijuana: Altered States for Employers

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

On March 31, 2021, New York Governor Andrew Cuomo signed into law the Marihuana Regulation and Taxation Act (MRTA), which legalizes the adult recreational use of marijuana and revises Section 201-d of the New York Labor Law. The MRTA’s antidiscrimination employment provisions took effect immediately.

Under existing law, Section 201-d of the New York Labor Law prohibits discrimination in employment based on a person’s lawful, off-duty “[r]ecreational activities” or “[p]olitical activities.” The MRTA amends the law to make it unlawful for an employer to refuse to hire, discharge, or otherwise discriminate against persons who legally use cannabis before or after working hours, off the employer’s premises, and without the use of the employer’s property. The MRTA specifies, however, that an employer is not in violation of Section 201-d where:

  • “the employer’s actions [are] required by state or federal statute, regulation,” or other mandate;
  • “the employee is impaired by the use of cannabis” at work or while performing his or her job duties or using the employer’s equipment;
  • the employer’s actions would result in the employer violating federal law or losing a federal contract or federal funding.

The MRTA does not modify the existing provisions of Section 201-d, which state that an employer does not violate the law where the employer’s actions are based on a belief that they are “permissible pursuant to an established substance abuse or alcohol program or workplace policy, professional contract or collective bargaining agreement,” or the belief that “the individual’s actions were deemed by an employer or previous employer to be illegal or to constitute habitually poor performance, incompetency or misconduct.”

Testing and Possession at Work

Pursuant to the law, New York employers may still enact policies that prohibit marijuana use and possession in the workplace. The MRTA also does not forbid employers from testing applicants or employees for marijuana. (However, pre-employment screening for marijuana is generally prohibited in New York City under existing law.)

Further, an employer will not violate Section 201-d if it takes action against an employee because the employee is impaired by the use of cannabis. Pursuant to the MRTA, an employee is “impaired” when “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.”

It appears from the law (though it is less than clear) that an employer may not take disciplinary action against an applicant or employee based solely on a positive test for marijuana, absent evidence of impairment. It is also unclear how the existing protections available under Section 201-d for employer actions taken pursuant to an established substance or alcohol abuse program or workplace policy, professional contract, or collective bargaining agreement will be interpreted and applied in light of the MRTA.

Labor Peace Agreements

The law also requires any applicant for a license to grow, distribute, or sell cannabis products to enter a “labor peace agreement” with any union that seeks to organize its workers. Further, the New York State Office of Cannabis Management, which will take part in overseeing and regulating the legalization programs, will give licensing priority to unionized facilities or employers that already have these types of agreements in place.

Key Takeaways

Regulatory guidance regarding the MRTA is not yet available. In the meantime, given the uncertainty surrounding how Section 201-d protections interact with the MRTA, employers may wish to consider the benefits and drawbacks of testing for marijuana. An employer’s reliance on positive test results alone to take adverse action may be open to challenge because employees and job candidates can test positive for marijuana, even if they are not manifesting symptoms of impairment on the job.

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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