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California Employers Must Now Prepare to Comply with New Marijuana Law

Attorney: Mary Watson Fisher | Published 5.11.23

Ever since California legalized marijuana, first for medicinal use, and later for recreational use, California employers have grappled with the effects of these laws on drug-free workplace policies.

Starting on January 1, 2024, California employers will be faced with a new law, AB 2188, that will prohibit employers from discriminating against employees who use marijuana away from the workplace during non-working hours. AB 2188 also precludes employers from taking adverse action against applicants and employees when results of drug tests reveal traces of nonpsychoactive cannabis metabolites, but not the presence of active levels of tetrahydrocannabinol (THC) or current impairment. While the new law does not prevent employers from maintaining drug-free workplaces, it will change the way employers enforce their policies.

History of California Law Addressing Marijuana Use

In 1996, California voters passed Proposition 215 (the Compassionate Use Act), which legalized the use of marijuana for medicinal purposes for the first time in the United States. Twenty years later, California voters passed Proposition 64 which legalized marijuana for recreational use. Neither of these laws imposed any limits on California employers from enforcing drug-free workplace policies or provided any protection to California employees who used marijuana medicinally or recreationally.

In 2008, the California Supreme Court ruled that California employers are not required to accommodate the medicinal use of marijuana in the workplace. Specifically, in Ross v. RagingWire Telecommunications (Cal. 2008) 42 Cal.4th 920, the court found that an employer was justified in firing an employee who failed a drug test that revealed the presence of marijuana, even though he used the marijuana to treat back spasms at the recommendation of his doctor. Similarly, in 2012, the Ninth Circuit Court of Appeals ruled in James v. City of Costa Mesa (9th Cir.2012) 700 F.3d 394, that the Americans with Disabilities Act did not authorize medical marijuana use, even when supervised by a doctor. The Ross and James decisions remain good law, even after California legalized recreational marijuana.

The New Marijuana Law that Goes Into Effect on January 1, 2024

In October, 2022, California Governor Gavin Newsom signed AB 2188, which amends the California Fair Employment and Housing Act to make it unlawful for a California employer “to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalizing a person, if the discrimination is based upon any of the following:

(1) The person’s use of cannabis off the job and away from the workplace. This paragraph does not prohibit an employer from discriminating in hiring, or any term or condition of employment, or otherwise penalize a person based on scientifically valid preemployment drug screening conducted through methods that do not screen for nonpsychoactive cannabis metabolites.

(2) An employer-required drug screening test that has found the person to have nonpsychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.”

Nonpsychoactive cannabis metabolites refers to THC that is stored in the body after it has metabolized. THC is the substance in cannabis that causes users to experience psychoactive effect, i.e. to feel “high.” The body stores THC for days or even weeks after it has been metabolized, and the “high” has worn off.

Currently, the most commonly administered drug tests detect the mere presence of cannabis molecules in the body including THC that may be present long after the user no longer feels the effects of, or is impaired by marijuana. For this reason, the California Legislature concluded that “the presence of the nonpsychoactive cannabis metabolite [has] no correlation to impairment on the job.” Accordingly, AB 2188 will prohibit employers from disciplining employees or refusing to hire applicants based solely on the results of a drug test detecting the presence of nonpsychoactive cannabis metabolites.

Exceptions to the Application of AB 2188

AB 2188 does not apply to employees who work in the building and construction trades. Nor does it apply to applicants or employees hired for positions that require a federal government background investigation or security clearance. While the law does not specify, presumably this exception applies to employees in aviation, railroads, trucking, or maritime trades.

The law also does not apply to employees who are required by state or federal law to be tested for controlled substances in connection with the employer’s receipt of federal funding, federal licensing-related benefits, or entering into a federal contract.

What does the New AB 2188 Mean for California Employers?

An important takeaway for California employees is that AB 2188 does not allow employees to use, possess, or be impaired by marijuana while at work. Rather, it prohibits employers from punishing applicants and employees who use marijuana outside of work hours and away from the workplace by disciplining or refusing to hire them.

Thus, while AB 2188 prohibits an employer from terminating an employee simply because, for example, the employee uses marijuana on his day off, it is still legal under AB 2188 for an employer to terminate an employee who is under the influence of marijuana while at work.

However, AB 2188 will change the way California employers may respond to the results of drug testing. For example, if the results of an applicant’s pre-employment drug test show the presence of nonpsychoactive cannabis metabolites, the employer cannot legally use these results as a reason for refusing to hire the applicant. Nor would finding such metabolites when testing an employee based on reasonable suspicion of impairment justify disciplining the employee. Rather, the testing must show the presence of psychoactive traces or traces of THC that are at a level which actually cause impairment in order for the employer to legally take adverse action against the applicant or employee.

Thus, in the wake of AB 2188, employers should consult with their testing providers or laboratories to ensure drug testing detects only applicants’ and employees’ current impairment or active THC levels. Also, employers should communicate to applicants and employees that it drug tests for current impairment and active THC levels only, and does not test for the presence of nonpsychoactive cannabis metabolites.

Further, employers should revise their drug and alcohol policies to provide that they do not take adverse action against applicants solely because they use marijuana outside the workplace during non-work hours. Nevertheless, employees are prohibited from using, possession, and being under the influence of marijuana at work, and will be subject to discipline if they are found to violate the employer’s drug-free workplace policy.

For more information or specific guidance, please contact Mary Watson Fisher.