New York Passes Employment Protections for Recreational Cannabis Use

On March 31, 2021, Governor Andrew Cuomo signed the Cannabis/Marijuana Regulation and Taxation Act (the “Act”), which legalizes recreational cannabis use for adults aged 21 and over.  The Act provides the framework for the New York adult-use cannabis market, including the creation of the Cannabis Control Board and Office of Cannabis Management, and also expands the State’s existing medical cannabis and cannabinoid hemp programs.  While the sale of cannabis will likely not become legal until sometime in 2022, individuals aged 21 and over are immediately permitted to use cannabis without violating New York State law.  In addition to legalizing the use of cannabis, the Act permits adults aged 21 and over to possess, display, purchase, obtain, or transfer without compensation, up to three (3) ounces of cannabis or twenty-four (24) grams of concentrated cannabis (i.e., like an oil).

Effective immediately, the Act also institutes employment protections for cannabis users.  Section 201-d of the New York Labor Law (“NYLL”) has long prohibited New York employers from discriminating against an employee based upon the employee’s lawful outside, off-duty work activities.  The Act amends this Section of the NYLL to expressly include the use of “cannabis in accordance with state law” as a lawful outside work activity.  Therefore, except as described below, the Act prohibits employers from discriminating against employees based solely on the employee’s legal use or possession of cannabis products while off duty and outside of the workplace.  The Act also provides a private right of action for employees to sue their employers for any alleged violation of the law.

Due to the above non-discrimination obligation, New York employers will not be able to make any hiring decision based upon a positive cannabis drug test.  While the Act does not prohibit drug testing for cannabis, employers cannot reject an applicant based solely on the positive cannabis test results.  While New York City employers have been banned from conducting pre-employment drug testing for cannabis since May 10, 2020, employers in the rest of the State may now decide to stop testing applicants for cannabis use altogether (unless a federal regulation or contract/grant states otherwise, as described below).

Except as otherwise noted below, the employment protections apply to all employees, including those who work in safety-sensitive job positions. Other states that have legalized recreational adult-use cannabis enacted an exception for employees who work in safety-sensitive job positions from employment protections, but no such exception is included in the Act.

Importantly, the Act limits the above employment protections in the following ways:

• Employers are still permitted to enact and maintain substance-free workplace policies that prohibit cannabis use during working hours, on company property, and while using an employer’s equipment or other property.
• Employers may prohibit and take adverse action due to an employee’s workplace “impairment.” The Act states that an employee is “impaired” by cannabis use 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 obligations to provide a safe and healthy work place, free from recognized hazards, as required by state and federal occupational safety and health law[.]”
• Employers may continue taking adverse employment actions against applicants and employees who use cannabis off-duty if: (1) such action is “required by state or federal statute, regulation, ordinance, or other state or federal governmental mandate;” or (2) failure to do so “would require such employer to commit any act that would cause the employer to be in violation of federal law or would result in the loss of a federal contract or federal funding.” Notably, these federal safe harbor provisions are limited as they only apply to specific obligations an employer has (if any) under federal law or regulation (i.e., obligations arising under federal government contracts/grants or drug-testing requirements, like those imposed by the United States Department of Transportation).

Further, the Act does not permit driving while under the influence of cannabis or smoking cannabis in locations where smoking tobacco is prohibited.

Overall, many issues remain open in terms of the application of the Act.  New York employers should consult with counsel to update drug- and alcohol-free workplace policies and drug testing protocols. As noted above, unless mandated by federal law, employers should consider whether to continue testing applicants for cannabis use considering that a positive test result cannot serve as a basis for any hiring decision. Further, New York employers should carefully review their drug testing programs and protocols for current employees as a positive test for cannabis use does not necessarily equate to workplace “impairment,” as defined above.  Employers should also speak with counsel before taking any adverse action against employees for workplace “impairment” due to the lack of guidance regarding how to demonstrate that an employee is “impaired” by cannabis in the workplace.   Employers should also stay up-to-date on any developments with respect to the Act and its impact on the workplace.