After contentious negotiations, Governor Phil Murphy has signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (the Act) implementing the constitutional amendment embracing recreational marijuana ratified in November 2020.¹ When the framework created by the Act is in place, New Jersey will be the first state in the nation to protect employees from almost any adverse employment action triggered by off-work recreational marijuana activity.  Employer policies and drug-testing programs will have to be modified to comply with the broad requirements of the new law.

Last-minute changes to the legislation addressed marijuana/cannabis use rules and under-age-21 penalties for possession, but the severely restrictive employment-related rules are the same as those first passed in December.² The Act’s general employment provisions are effective immediately,³ but do not become operative until the New Jersey Cannabis Regulatory Commission’s adoption of initial rules and regulations (which must occur either within 180 days from the date of enactment or within 45 days of appointment of all members of the Commission, whichever is later).  Still, the road ahead does not look promising for employer discretion and employers should stand ready, when those regulations begin to take shape, to develop a compliance approach.

Employer Drug-Free Workplace Provisions. The Act continues certain fundamental employer prerogatives and rights, expressly providing:

• Workplace Use/Possession and Intoxication Can be Prohibited.  The Act does not require employers to permit employees to use or possess marijuana or marijuana products during work hours or to work while under the influence.

• Driving Under the Influence or Impaired Not Permitted.  The Act is not intended to allow driving under the influence of, or impaired by, cannabis or cannabis products, or supersede marijuana DUI/impairment laws.

• Drug-Free Workplace Obligations.  The Act does not restrict or preempt legal obligations to maintain a “drug-free workplace” (laws prohibiting illegal activity in the workplace, but not mandating testing) and employers may be able to test if compliance would lead to a “provable adverse impact” under “requirements of a federal contract.”

Prohibited Employer Conduct Under the Act.  The Act guts employer marijuana testing programs.  Although testing is not prohibited, employers cannot refuse to hire any person or take adverse action against an employee solely because they use or test positive for cannabis. Although the Act cannot preempt federal law or regulation prohibiting the use of marijuana and mandating testing (e.g., under DOT rules), it prohibits employers from acting on the basis of a positive test result unless the tested individual both tests positive and prior to the test exhibited objective signs of impairment.

In addition, New Jersey will permit adverse action following a positive test only if the employer’s testing program uses scientifically valid methods and a Certified Workplace Impairment Recognition Expert has deemed the individual to be impaired. The term “scientifically valid methods” is presently undefined, as are the necessary qualifications for Workplace Impairment Recognition Experts, although the Act directs the Commission created by the Act to work with the State Police on developing those standards.

The Calm (?) Before the Storm: Legal Uncertainty Until Regulations Issue

Absent regulation, it is unknown what steps employers will have to take to be compliant with the new law.  For example, although employers can prohibit employees from using, consuming, being under the influence of, or possessing marijuana or marijuana products in the workplace or during work hours, the law provides little to no guidance on how to determine that an employee is impaired while remaining in compliance with the significant employee protections. Even if a drug test is given under the circumstances enumerated by the law, employers cannot take action against an employee unless (a) “scientifically reliable objective testing methods and procedures,” such as blood, urine or saliva tests and (b) a physical evaluation by an individual certified as a Workplace Impairment Recognition Expert indicate that the employee is under the influence in the workplace or during work hours.  Similarly, while the law permits pre-employment testing, because an employer may not take adverse action based solely on a positive drug test, the utility is uncertain.  

While the Commission works on promulgating regulations, employers should review and update their policies and exercise caution when navigating this evolving area of law.