November 26, 2022

Volume XII, Number 330

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November 23, 2022

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California Expands Employees’ Right to Off-Duty Cannabis Use

Beginning January 1, 2024, and following the passage of Assembly Bill 2188, the California Fair Employment and Housing Act (FEHA) will add employee protections against discrimination based on off-the-job cannabis use with a few, limited exceptions. Governor Newsom signed Assembly Bill 2188 into law on September 18, 2022. AB 2188 focuses on employee impairment from cannabis use, which it correlates only to the psychoactive component of cannabis, tetrahydrocannabinol (THC) and places new requirements on employer-required drug screening tests. AB 2188 is significant because it is the first time that California’s permissive cannabis-use laws have been incorporated into the employment realm. California employers should consider reviewing their job application process and any pre-employment drug screening protocols, as well as their policies and practices relating to drug screening in connection with hiring, discipline, and termination to ensure they will comply with the new law. 

To understand the transformative effect of AB 2188, a brief review of federal law and current California state law with respect to cannabis is instructive. Since 1971, cannabis (marijuana) has been classified as a Schedule 1 drug by the federal government under the Controlled Substances Act. Schedule 1 drugs, like cannabis, are described as having “no currently accepted medical use,” “a high potential for abuse,” and “a lack of accepted safety for use . . . under medical supervision.” 21 U.S.C. § 812(b)(1). Federal law remains unchanged, and cannabis is still classified as a Schedule 1 drug. However, California law conflicts with federal law when it became the first state to legalize medical marijuana through Compassionate Use Act of 1996 which exempted patients and their primary care givers from criminal prosecution for obtaining and using cannabis for medical purposes with a physician’s recommendation. 

Although the Compassionate Use Act protected an individual from criminal prosecution, that protection did not extend to the workplace. In a disability discrimination case based on the use of medical marijuana and brought under the FEHA, the California Supreme Court upheld the employee’s termination for cannabis use and found that “[n]othing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and duties of employers and employees” and “[u]nder California law, an employer may require preemployment drug tests and take illegal drug use into consideration in making employment decisions.” Ross v. Ragingwire Telecommunications, Inc., 42 Cal.4th 920, 923-24 (2008). Even when California legalized the recreational use of cannabis by enacting the Medicinal and Adult-Use Cannabis Regulation and Safety Act in 2016, Ross v. Ragingwire remained binding authority. A concurrently enacted provision in the Health and Safety Code confirmed that public and private employers could “maintain a drug and alcohol free workplace,” they were not required “to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of cannabis in the workplace,” and employers could have “policies prohibiting the use of cannabis by employees and prospective employees.” Health & Safety Code § 11362.45(f).

AB 2188 adds Section 12954 to the Government Code and directly addresses the rights of employers and employees. In the new law, the Legislature finds and declares that tetrahydrocannabinol (THC)—the psychoactive chemical compound in cannabis—is stored in the body as a nonpsychoactive cannabis metabolite after it is metabolized. The law further states that these metabolites do not indicate impairment, but only that an individual has consumed cannabis in the last few weeks.

Presently, according to the Legislature, the intent of employment-related drug tests is to identify employees who may be impaired or under the influence of THC at a worksite. However, most cannabis drug tests tend to only show the presence of the nonpsychoactive cannabis metabolites that have no correlation to present impairment. Further, the Legislature observed that because the science has improved, alternative drug tests that better correlate to impairment are more readily available and do not rely upon the presence of nonpsychoactive cannabis metabolites to identify the presence of recently consumed THC.

AB 2188 aims to address that perceived disconnect. In particular, the bill amends FEHA to make it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalize a person, if the discrimination is based upon the person’s “use of cannabis off the job and away from the workplace.” Specifically, FEHA will now prohibit discrimination in hiring or any term of employment based upon an employer-required drug screening test that has found the person to have nonpsychoactive cannabis metabolites in their hair or bodily fluids. But, that rule would not prohibit an employer from discriminating in hiring or any term of employment based on a “scientifically valid preemployment drug screening conducted through methods that do not screen for nonpsychoactive cannabis metabolites.”

In all events, Government Code Section 12954 does nothing to permit an employee to possess, be impaired by, or use cannabis on the job, or affects the rights or obligations of an employer to maintain a drug and alcohol free workplace. In other words, it does not invalidate or conflict with Health & Safety Code § 11362.45.

AB 2188 also contains some wholesale exceptions for certain industries. For example, it does not apply to employees in the building and construction trades. AB 2188 also recognizes it conflicts with current federal law and, accordingly, has carve-outs for “applicants or employees hired for positions that require a federal government background investigation or security clearance” and does not preempt “federal laws requiring applicants or employees to be tested for controlled substances . . . as a condition of employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.”

AB 2188’s changes to FEHA are effective as January 1, 2024. Once in effect, they will substantially alter how and when employers can drug test employees for cannabis, and what they can do with those results. Employers may want to consider reviewing existing employment hiring, discipline, and termination policies and practices now to ensure they are in compliance upon the law taking effect. And, employers who utilize pre-employment drug screening will need to identify and source compliant testing methods in order to continue pre-employment screenings consistent with the new requirements. Employers should consult with their labor and employment counsel to ensure that they are ready, able, and prepared to comply with the new law once it takes effect.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 280
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About this Author

Tyler Z. Bernstein Employment Attorney Sheppard Mullin
Associate

Tyler Z. Bernstein is an associate in the Labor and Employment Practice Group in the firm's Orange County office.

714.424.2806
Susan Haines Attorney Labor Law Sheppard Mullin
Associate

Susan Haines is an associate in the Labor and Employment Practice Group in the firm's San Francisco office.

Areas of Practice

Susan’s practice focuses on the defense of employers in a variety of employment matters, including trade secret misappropriation, wage and hour disputes, unfair business practice, and other employment-related litigation. She has decades of experience litigating complex matters and single plaintiff lawsuits in state and federal court, and is involved in all stages of litigation...

415-774-3228
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