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By: David E. Morrison and Meredith S. Kirshenbaum

On Tuesday, June 25, 2019, Governor J.B. Pritzker signed into law the Cannabis Regulation and Tax Act (the "Cannabis Act"), making Illinois the 11th state to legalize recreational marijuana use. Governor Pritzker has touted the legalization of marijuana as a measure that he hopes will provide taxation revenue, while reducing opioid overdoses and decreasing disparities in incarceration. For Illinois employers, however, the legalization of marijuana may cause changes to existing employment policies and practices, including with respect to zero-tolerance and drug testing policies and pre-employment inquiries. Information about the Cannabis Act, its effect on employer policies and key implementation insights for Illinois employers are summarized below.

Employer Rights Protected

As a result of the Cannabis Act, effective January 1, 2020, individuals who are 21 years of age or older may lawfully possess, consume, use, purchase, obtain, and transport cannabis for personal use (expanding upon the 2013 Illinois law legalizing medical cannabis in Illinois). Notably, however, cannabis continues to be illegal under federal law and the Cannabis Act does not preempt any obligations employers might otherwise have given their status as a federal contractor or pursuant to U.S. Department of Transportation regulations.

While the Cannabis Act legalizes recreational marijuana use for individuals, the Illinois legislature specifically recognized the need for employers to ensure a safe and productive work environment, and the challenges that legalizing marijuana might pose in that regard. In order to safeguard employers' rights, the Cannabis Act specifically:

  • Preserves employers' rights to enforce zero-tolerance or drug-free workplace policies
  • Preserves employers' rights to implement and enforce employment policies concerning drug testing, smoking, consumption, storage, or use of cannabis in the workplace or while on call, provided that the policy is applied in a non-discriminatory manner
  • Allows employers to prohibit employees from being under the influence or using cannabis in the workplace (broadly defined to mean the employer's premises, including any building, real property, and parking area under the control of the employer, as well as employer vehicles), while performing job duties or while on-call
  • Largely restricts employees' ability to sue their employers for violations of the Cannabis Act, specifically with regard to an employer's reasonable drug testing under a drug testing policy and employer discipline/discharge decisions based on the employer's good faith belief that the employee was in violation of workplace drug policies
  • Forecloses third-party causes of action against an employer for injury, loss or liability to a third party caused by an employee, provided that the employer neither knew nor had reason to know that the employee was impaired

Notably, however, despite the Cannabis Act's recognition of these specific employer rights, their breadth is limited by other provisions within the Cannabis Act. Those limitations are described in more detail below.

Employer's Burden on Employee Discipline

Despite the Cannabis Act's express permission for employers to issue discipline or discharge employees who use marijuana in violation of workplace policies, the Cannabis Act requires employers to meet certain thresholds before doing so. Specifically, prior to issuing any discipline to an employee that is perceived to be under the influence or impaired by cannabis, the Cannabis Act requires employers to harbor a "good faith belief that the employee manifests specific, articulable symptoms while working that decrease or lessen the employee's job performance." The Cannabis Act specifies that such symptoms may be evidenced by the employee's speech, physical dexterity, agility, coordination, demeanor, irrational or unusual behavior, or negligence or carelessness in operating equipment or machinery, disregard for the safety of the employee or others, or involvement in any accident that results in serious damage to equipment or property, disruption of a production or manufacturing process, or carelessness that results in an injury to the employee or others. 

In addition, the Cannabis Act creates strong procedural rights for employees in the event an employer does discipline an employee for cannabis use. In particular, the Cannabis Act requires that employers "afford the employee a reasonable opportunity to contest the basis of the determination." 

Importantly, by imposing the "good faith belief" standard and such procedural rights for employees, in some regards, the Cannabis Act can be seen as creating an exception to at-will employment for cannabis-related terminations. Moreover, despite the legislature's intent to limit employers' exposure to litigation, as highlighted above, it remains to be seen whether employees will attempt to litigate claims challenging whether or not their employer met the "good faith belief" standard or contesting discipline or termination where employers have not complied with the Cannabis Act's procedural requirements.

Employees' Off-Duty Use of Marijuana & Implications for Employee Drug Testing

One of the Cannabis Act's most significant implications for employers, is that the Cannabis Act amends the Illinois Right to Privacy in the Workplace Act ("IRPWA"), which generally prohibits employers from discriminating against employees for their off-duty use of lawful products – now including cannabis. Not only does the IWPRA grant a private right of action for employees to recover for damages, it also permits recovery for statutory penalties, attorneys' fees and costs. As a result, taking adverse action against an employee for their off-duty and off-premise cannabis use may be a costly source of liability for employers. Beyond discipline, this means that employers are legally prohibited from refusing to hire, or otherwise disadvantaging any individual with respect to compensation, terms, conditions or privileges of employment because s/he uses cannabis during off-duty periods.

This presents a particular challenge for employers who drug test employees or applicants. On the one hand, the Cannabis Act explicitly permits employers to maintain and enforce non-discriminatory drug testing and zero-tolerance drug policies. On the other hand, drug tests can easily reflect an employee's off-duty cannabis use, as urinalysis and hair specimens can detect THC, as well as other cannabinoids, for several days or weeks after consuming or using cannabis. For this reason, even a positive drug test should not be considered conclusive evidence that an employee was under the influence or impaired by cannabis while at work. As a result, employers making disciplinary decisions based on cannabis use should rely primarily on symptoms of impairment (set forth above), and utilize drug testing subsequently, as evidence supporting their good faith beliefs.

Preparing for 2020: Best Practices for Employers to Implement Now

Employers have an opportunity to use time over the next six months to prepare for the Cannabis Act's implementation. In preparation, employers should consider taking the following actions now:

  • Review existing drug testing policies in view of the significant changes in the law, update policies accordingly and train managers and supervisors in any such policy changes
  • Develop discipline policies specifically for cannabis use and train managers and supervisors on the appropriate grounds for discipline and procedural requirements for implementing discipline
  • Develop processes and procedures for documenting concerns that an employee is under the influence of cannabis and the impact on job performance
  • Train managers and supervisors on how to recognize symptoms of cannabis use/impairment and how to document those observations in order to provide evidentiary support of "good faith."
  • Review policies with respect to pre-employment applicant drug testing and be wary of using positive cannabis results as the basis for employment decisions

As highlighted above, employment decisions going forward will invariably be fact- and circumstance-specific. If you have questions regarding the Cannabis Act's implications for employers or would like assistance in reviewing or drafting policies or training employees, please contact David E. Morrison or Meredith S. Kirshenbaum or any principal in the firm's Labor & Employment Group.