State Marijuana Laws and their Inconsistent Impact on Employment

Although marijuana remains illegal under federal law, there has been a trend towards legalization at the state level. Currently, 33 states and the District of Columbia have enacted laws legalizing the medicinal use of marijuana, while 11 states and the District of Columbia have legalized the recreational use of marijuana. In addition to the enactment of these laws, numerous "reeferendum" ballots across the country indicate a shifting, more accepting public attitude towards marijuana.

For employers that maintain drug-free workplace policies, navigating the conflicts between federal and state marijuana laws has been an understandable cause for concern. Exacerbating these concerns, the impact that various state marijuana laws have on the workplace is anything but uniform. Numerous states' laws contain built-in employment protections for individuals whose marijuana use occurs outside of the workplace, during non-working hours, and is compliant with state law. Conversely, other states permit employers to discipline employees or refuse to hire applicants who test positive for marijuana components, regardless of its legal status under state law. Such inconsistency has proved to be especially troublesome for employers who are federal contractors or are subject to certain federal regulations, multi-state employers, and employers with employees who travel from state to state as part of their job. Companies planning to expand their operations to other states and employers who are revisiting their drug policies in anticipation of marijuana legalization in their states have also experienced frustration in confirming the extent their rights, limitations, and obligations under these laws as they relate to drug testing in employment.

Until recently, the Illinois Cannabis Regulation and Tax Act (the "Act" or the "Cannabis Act") arguably contributed to employers' confusion more than any other state marijuana law. However, recent eleventh-hour amendments to the Act provide much needed clarity for Illinois employers. This Legal Update summarizes the impact these amendments will have on drug-free workplace programs in Illinois, and it offers practical insight for employers with employees in Illinois as they prepare for the Act to take effect on January 1, 2020.

The Illinois Cannabis Regulation and Tax Act: As Initially Enacted

On June 25, 2019, Illinois Governor J.B. Pritzker signed the Cannabis Regulation and Tax Act into law. Taking effect on January 1, 2020, the Act legalizes the use, possession, and cultivation of marijuana by adults in Illinois who are 21 and older for recreational purposes. As initially enacted, the Act specified numerous provisions that established certain protections for employers that conduct drug testing of their employees and applicants. In particular, the Act permitted employers to maintain reasonable zero tolerance or drug-free workplace programs. It also allowed employers to prohibit the possession and use of marijuana in the workplace or while on the job, and it identified various objective factors that employers could rely upon in determining an employee's on-the-job impairment.

While the above-mentioned protections appear at first glance to be beneficial for employers wishing to continue to prohibit any and all marijuana use by their employees, Illinois employers must continue to comply with the Illinois Right to Privacy in the Workplace Act, which prohibits discrimination in employment because of an individual's use of a "lawful product" off the premises of the employer during non-working hours. The Cannabis Act amended the Illinois Right to Privacy in the Workplace Act's definition of "lawful product" to mean products that are lawful under Illinois law, which as of January 1, 2020, includes marijuana.

When read in conjunction with the employer protection provisions of the Cannabis Act, the amended definition of "lawful products" appeared to prohibit employers from taking adverse employment actions against individuals based on their use of marijuana outside of the workplace. Under this interpretation, the right to implement "reasonable zero tolerance or drug-free workplace policies" would be limited to prohibiting the use, sale, distribution, and possession of marijuana in the workplace or while an employee was performing services for the employer.

As initially enacted, the Cannabis Act left Illinois employers scratching their heads in confusion. Many employers reluctantly revised their Illinois drug policies by relaxing prohibitions against marijuana use, opting to disregard positive marijuana test results instead of risking discrimination liability under the Cannabis Act and the Illinois Right to Privacy in the Workplace Act.

The Illinois Cannabis Regulation and Tax Act: As Amended

Amidst the confusion caused by the seemingly incompatible provisions of the Cannabis Act and the Illinois Right to Privacy in the Workplace Act, on November 14, 2019, both houses of the Illinois Legislature passed Senate Bill 1557. On December 4, 2019, Governor Pritzker signed SB1557 into law. The Cannabis Act's provisions relating to employment, as amended, now provide employers with a clearer understanding of their ability to implement and enforce drug-free workplace policies.

Under the amendments, employers may take adverse employment actions against individuals for testing positive for marijuana pursuant to an employer's reasonable workplace drug policy. Moreover, they clarify that reasonable workplace drug programs may include, but are not limited to, "reasonable and nondiscriminatory random drug testing, and discipline, termination of employment, or withdrawal of a job offer due to a failure of a drug test." 410 ILCS 705/10-50(e)(1).

The Illinois Compassionate Use of Medical Cannabis Pilot Program Act ("Compassionate Use Act") has not been changed. The Compassionate Use Act permits and regulates the use of medical marijuana in Illinois. While the Compassionate Use Act does not require employers to accommodate on-the-job use of medical marijuana, it does prohibit employers from "penaliz[ing] a person solely for his or her status as a registered qualifying patient" for medical marijuana in Illinois. Accordingly, any zero-tolerance drug policies applied in Illinois should take into consideration and reflect these protections.

Bringing in the New Year: Employer Action Items for 2020

As recreational marijuana will be legal in Illinois on January 1, 2020, it is important that employers communicate their expectations and workplace rules to employees and applicants as they relate to marijuana use. Under the recent amendments, employers will have greater flexibility and more options available as to how to manage their employees' use of marijuana in Illinois. Employers who proactively modified their existing drug testing policies in anticipation of being subject to the Cannabis Act's apparent anti-discrimination employment provisions should revisit those policies prior to their implementation.

It is also important to note that the challenges associated with understanding the impact that state marijuana laws have on the workplace are not unique to federal contractors, multi-state employers, or employers who only have employees in states where marijuana has been legalized. Wisconsin employers, in particular, have had to consider how other states' marijuana laws may affect their workforce. Two of Wisconsin's neighboring states, Illinois and Michigan, recently legalized the recreational use of marijuana. These close-to-home developments have caused many Wisconsin employers to express concern regarding their ability discipline employees who fail drug tests because of their marijuana use that occurred outside of work in a state where it is legal. Importantly, marijuana is illegal under Wisconsin and federal law, and Wisconsin employers may continue to base employment decisions on individuals' positive drug tests resulting from their use of marijuana. This is true regardless of whether the individual consumed marijuana in a state where it is legal. Wisconsin employers are encouraged to reiterate to employees any consequences that they will be subject to because of a positive marijuana test in advance of Illinois' Cannabis Act taking effect.

Likewise, given the rising trend towards legalization, employers in all states are well advised to familiarize themselves as to the various ways in which other states' marijuana laws have restricted employers' abilities to base employment decisions on an individual's off-duty use of marijuana. Doing so will provide employers with insight as to how marijuana use in the employment context may be regulated in the event it is legalized in their state.