Employer Liability in Cannabis Cases


Since 2012, states across the United States have been legalizing cannabis either for recreational use or medical use. The trend continues to grow as states that haven’t enacted any legal use of cannabis are expected to see revised legislation on the ballot this fall.

Legalizing cannabis has opened the door to potential business deals, economic growth, and questions around how employers should treat use among their employees. Should they punish those who use medical cannabis? Are they within their rights? These questions and more like them are causing some confusion, making it hard to understand on whose side the law rests and how employers can avoid costly claims from employees.

Looking at Employer Liability Among Cannabis Cases

Currently, cannabis is a schedule 1 drug classified under the federal Controlled Substances Act (CSA). It’s the most commonly detected illicit drug in employment drug testing. But regardless of the federal legality of cannabis, 33 states and the District of Columbia have legalized the commodity for recreational or medical use.

Since 2012, when cannabis was legalized in Colorado, the state has boasted a tax, license, and fee revenue of $1.02 billion in cannabis sales. Many state and local jurisdictions have begun enacting anti-discrimination laws around cannabis use. These laws are aimed at protecting employees who have the right to use cannabis, depending on the state they live in, and who have been reprimanded by their employers for usage or testing positive for cannabis after a drug test. From New Mexico to New Jersey, these laws are typically siding with employees, bringing major financial claims against businesses.

This being the case, a market for employment practices liability insurance is growing among employers looking to keep their business and reputations safe during a claim. Even if an employee is impaired at work due to some form of legal cannabis use, proving so can be a challenge for employers, making it even more of a liability to fire or demerit employees.

Recent federal and state court decisions have shown that employers need to change the way they make employment decisions based on drug tests and cannabis use. In Arizona, for example, it’s illegal for an employer to terminate an employee because of a positive drug test for cannabis components.

Across the country, local legislatures are enforcing harsher rules against employers, taking the side of employees in cannabis cases. In New York City, the city’s council passed a law in April of 2019 that prohibits employers from testing applicants for cannabis use, and, beginning this year, employers in Nevada are not able to refuse to offer someone a position if they have failed a cannabis test.

It’s important for employers to stay aware of their state laws and local jurisdiction when it comes to cannabis use among their employees. As businesses review their workplace drug use policies, they should be sure to tread lightly and review local laws that protect cannabis use specifically.

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axis insurance services, employment practices liability insurance, EPLI, Employment Practices Liability (EPLI), Cannabis in the Workplace, Cannabis Claims, Employer Liability for Cannabis

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