Quick Hits

• The Third Circuit court ruled that New Jersey’s CREAMMA does not grant job applicants the right to sue employers for rescinding job offers after a positive marijuana drug test.
• The appellate court emphasized there was no legislative intent to allow individuals to sue for failure to hire based on cannabis use.
• The appellate court also rejected the job applicant’s claim based on New Jersey’s public policy exception to at-will employment.

In a 2–1 published decision on December 9, 2024, the U.S. Court of Appeals for the Third Circuit affirmed the dismissal of a job applicant’s lawsuit against a retailer. The applicant alleged that the retailer had violated the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA), a 2021 law that legalized recreational marijuana use for adults aged twenty-one and older in New Jersey.

The court stated, “In this case, the applicant must demonstrate that CREAMMA specifically benefits job applicants like himself who test positive for cannabis use. However, CREAMMA does not provide such benefits.”

Additionally, the court denied the applicant’s request to amend his lawsuit and declined his request to certify a question to the New Jersey Supreme Court regarding state law issues.

CREAMMA

In 2020, New Jersey voters approved an amendment to the state constitution to legalize recreational marijuana possession and use. Governor Phil Murphy signed CREAMMA into law in February 2021 to establish a statutory and regulatory framework. The law delegated authority to the New Jersey Cannabis Regulatory Commission, which has since issued regulations and guidance regarding employer drug testing.

Specifically, CREAMMA set forth specific job protections. Under the law, employers are prohibited from taking adverse employment action against any employee “because that person does or does not smoke, vape, aerosolize or otherwise use cannabis.” Employers are also prohibited from taking adverse employment action against an employee “solely due to the presence of cannabinoid metabolites in the employee’s bodily fluid.” However, CREAMMA does not provide an express right of action for individuals to redress alleged violations.

Implied Right of Action

In examining the case under diversity jurisdiction, the Third Circuit determined that since CREAMMA does not explicitly provide a private right of action, New Jersey courts must decide whether there is an implied private right of action under the law.

The court stated, “By protecting both users and non-users of cannabis, this provision sweeps very broadly, as every member of the public is either a cannabis user or a cannabis non-user. And without an unmistakable textual focus on cannabis users specifically, this provision does not confer a special benefit on any particular class.”

Additionally, the job applicant had “identifie[d] no legislative history for CREAMMA that indicates an intention to provide a private remedy for a prospective employer’s failure to hire a job applicant based on a positive drug test for cannabis,” according to the Third Circuit.

The job applicant argued that CREAMMA must offer an implied private right of action because it does not provide any other means to enforce its employment protections. However, the Third Circuit found that “employment protections may be enforced by alternative means,” noting that CREAMMA empowers the Commission to regulate and enforce “cannabis-related employment matters,” and that the Commission has issued regulations in this regard.

Finally, the Third Circuit concluded that “implying a private remedy for rescission of a job offer based on a failed cannabis drug test does not further” CREAMMA’s stated purposes of preventing the sale and distribution of marijuana to underage individuals and addressing the issues caused by the unregulated manufacture and distribution of illegal marijuana. The court also pointed out that “New Jersey does not provide a private cause of action for employment discrimination based on the consumption or non-consumption of alcohol.”

Third Circuit Judge Arianna Freeman partially dissented, arguing in a separate opinion that the New Jersey high court likely would “discern an implied cause of action for failure to hire in violation of CREAMMA.”

Public Policy Exception

The Third Circuit also denied the applicant’s claim under New Jersey’s public policy exception to at-will employment, finding that the “exception protects only employees—not job applicants—and thus it does not encompass claims for failure to hire in violation of public policy.”

“There is no realistic likelihood that the New Jersey Supreme Court would expand [the public policy exception] to permit failure-to-hire claims by prospective employees,” the court stated.

Next Steps

The ruling comes as a growing number of states have passed laws or amended existing off-duty conduct laws to protect citizens from adverse employment action for legal, outside-of-work marijuana use as legalization of the drug is on the rise.

However, the Third Circuit’s ruling underscores the limitations on job applicants’ legal recourse under New Jersey’s CREAMMA, highlighting the absence of a private right of action for individuals negatively impacted by pre-employment drug testing for cannabis, which may influence future interpretations of employment protections in the context of recreational marijuana use.

Still, employers may want to note that the ruling comes from a federal court exercising its diversity jurisdiction and New Jersey courts could interpret the law as creating an implied right of action.