What Employers Need to Consider in the Era of Legalized Marijuana

On Nov. 8, 2016, the world watched in awe as Donald Trump defied the odds to become president-elect of the United States. Since then, his victory has rightfully dominated the headlines and the public's attention as we all prepared for his upcoming presidency.

In the meantime, however, another major story — one that is also of particular relevance to American businesses — has flown under the radar: Voters in eight states approved ballot measures related to marijuana. To be precise, four states approved recreational marijuana use and four gave the green light to medical applications.

Now, a grand total of 28 states — plus the District of Columbia, Guam, and Puerto Rico — allow some (or all) of their populations to legally ingest marijuana. On top of that, more than half of all U.S. citizens believe marijuana use should be legalized everywhere.

Although the drug is still classified as Schedule I and remains illegal at the federal level, growing momentum in the legalization movement means one thing: For better or for worse, marijuana is becoming one of the country's fastest-growing industries, and it's becoming a substance more and more citizens choose to use.

Because of its federal classification, most employers continue to have the right to keep their workplaces drug free, regardless of marijuana's status in the state. However, the new laws have certainly created a conundrum for employers and human resource departments. Do they maintain their drug testing and zero-tolerance policies? Or do they ease up on employees who ingest marijuana?

Drug Testing in the Age of Legalization
Most companies are opting to continue drug testing employees and prohibit marijuana use. However, they may soon be forced to reevaluate those policies in order to stay fully staffed.

As states across the country relax their drug laws, employers find themselves struggling to find job candidates who can pass pre-employment drug tests. Businesses may feel compelled to revise their standards in order to access a wider pool of eligible workers. While such an approach would align with public sentiment, employers also must consider how loose drug policies would impact workplace safety. Drug testing is one of the most effective ways to protect workers, clients, and customers from harm.

Currently, many employers have ill-defined strategies for mitigating drug use among their teams. One survey indicated that 42 percent of small businesses fail to create written policies against marijuana possession or use on the job, let alone arriving for work while under the influence. Further, nearly 75 percent of small businesses say they do not require employees to submit to drug tests at all.

Businesses that do implement strict drug policies should seek legal advice before continuing to enforce them. Navigating the new regulations is a complicated endeavor, and employers would do well to involve their legal counsels as they proceed through this evolving climate. What employers can and cannot do varies according to the fine print of each state's particular laws.

Answering Complex Legal Questions
Companies in states where recreational use is legal — such as California, Nevada, Massachusetts, and Maine — are allowed to preserve their drug-free workplace programs. But the issue isn't that cut-and-dried.

Maine's law, for example, has some gray area when it comes to pre-employment screening: "A school, employer or landlord may not refuse to enroll or employ or lease to or otherwise penalize a person 21 years of age or older solely for that person's consuming marijuana outside of the school's, employer's or landlord's property."

Business owners in Maine can prohibit drug use on the company's premises, but how far their power extends beyond that is relatively unclear. Can they discriminate against someone who smoked prior to a job interview but did so off site? The answer is uncertain without deeper legal investigation.

When it comes to medicinal marijuana, the waters only become murkier. In Arkansas, for example, employers are not required to accommodate the ingestion of marijuana in the workplace or permit employees to work under the influence. North Dakota's medical marijuana legalization initiative, however, does not mention how state regulations apply to work environments.

Even in places where the law is on the side of employers who choose to enforce zero-tolerance policies, companies are still exposed to lawsuits. For instance, California's Supreme Court affirms employers' rights to discriminate against job candidates who don't pass drug tests, even those who use physician-prescribed marijuana to treat disabilities. However, employers could face disability discrimination lawsuits if they exercise that right.

Here's an example of why legal clarity is so critical. In 2015, a California judge ruled in favor of two employees who sued their employer over a random drug test. The company's leadership had sent out new employee guidelines but failed to highlight which areas had been updated. When the company's management initiated random drug tests, the two employees resisted.

Management pursued the tests even though there was no evidence that these workers were using drugs. The plaintiffs said they were intimidated into complying, leading them to sue for "breach of implied covenant of good faith and fair dealing and intentional infliction of emotional distress." They ultimately received $15,000 each in damages. Had the company been more transparent and rigorous about its policies, it might have avoided the lawsuit.

This illustrates why legal counselors are essential to protecting both workers and owners. Employers and human resources teams must understand what they can and cannot do within the parameters established by their states.

Creating Better Policies
Given the ongoing changes in state drug laws, it's a good time for companies everywhere to revisit their testing policies, specifically as they relate to marijuana use. Clarifying expectations around safety, impairment, usage, and termination standards will help business leaders avoid legal trouble. Updated drug testing policies should be comprehensive and include the following information:

1. Program goals: Defining goals and parameters for drug testing policies allows leaders to shape these programs to achieve the best results. Employers and HR managers should ask themselves what they are truly trying to accomplish. Do they aim to prioritize a safe work environment by continuing to prohibit marijuana use? Or do they want to support workers who rely on the drug as medicine? Whatever the goal, it should be documented and shared with all employees. When people understand the logic behind drug testing policies, they’re more likely to comply.

2. Specifics on how policies will be enforced: As new laws impact increasing numbers of businesses, leaders should revisit who they target with drug testing policies, why someone might qualify for testing, and how often tests occur. What rights do employees have? Will they be subject to random searches and tests? Who will administer these programs, and do these appointees need special qualifications? Answering these questions will bring focus and clarity to revised policies.

??Some companies might require that only employees operating heavy machinery be tested, while other organizations will take a blanket approach. Companies that employ or contract individuals in safety-sensitive jobs — such as machine operation or patient care — must be especially thoughtful about how they implement drug-testing policies. New Jersey Institute of Technology, for instance, prohibits drug use among safety-sensitive employees whether they're on or off duty, except when the drugs have been prescribed by doctors.??

Employees who handle money also might come under increased scrutiny. It's important that businesses define exactly how their policies will be applied and that they explain their expectations to current and prospective workers.

3. Consequences for violating company policies: Disciplinary action must be outlined in the drug testing regulations. Leaders must decide whether they will enforce zero-tolerance policies even for employees who use marijuana medicinally. They'll also need to consider how to approach workers who are repeat offenders in legal states. Will they offer rehabilitation for drug abuse or simply fire them outright? In light of changing regulations, companies may shift from strictly punitive policies to encouraging employees to disclose drug problems and seek treatment.??

Clearly defined consequences provide employees with important information about how their actions around marijuana will impact their relationships with employers. People will be more thoughtful about their marijuana use if they know it could compromise their unemployment benefits.

Companies are less likely to face legal trouble if they have clearly spelled out their drug policies and made them known to all hires. It's more difficult to bring litigation against organizations that educate employees about the consequences before disciplining or firing them.

Employers must keep a constant watch on the legal landscape as more states address the question of marijuana legalization. Businesses that update their drug testing policies protect themselves against lawsuits and gain access to a wider pool of eligible job candidates. The question of how companies should respond to marijuana legalization isn't going away, so it's best to be proactive.

Originally from Turkey, Zeynep Ilgaz and her husband co-founded Confirm Biosciences and TestCountry, where Ilgaz serves as president and CEO. Confirm Biosciences is a national provider of diagnostic products for human wellness, animal health, and environmental testing. She received the Most Admired CEO Award in San Diego in 2016, and Confirm Biosciences was recognized as one of the Best Places to Work in 2014 and 2015. Most recently, she has been honored as a finalist for EY Entrepreneur of the Year 2016 in San Diego.

Posted on Jan 23, 2017

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