Marijuana and the Workplace: It's Complicated

Cannabis has long been heralded for its calming properties. But lately it’s having quite the opposite effect on HR professionals, as they navigate the myriad state laws and court cases affecting the controversial substance to create drug-testing policies and procedures.

Possession or use of marijuana remains illegal under federal law. But state laws are changing at a dizzying speed, including some that now limit a company’s ability to fire an employee for failing a drug test. Courts have begun siding with workers who say their off-duty use of cannabis for medical reasons led to their unfair dismissal. Recent court cases have left employers facing discrimination charges for taking action against workers who flunk marijuana tests. Nevada in June limited rejecting job applicants for failing a test. Even cities are getting into the act, with the New York City Council voting in April to ban marijuana testing for job applicants (with exceptions for such jobs as public-safety workers).

State laws aside, experts agree that employers have a right to implement drug-free workplace policies. 

“From a legal perspective, it’s fascinating,” says Lauraine Bifulco, president and CEO of Vantaggio HR Ltd., a human resources consulting firm in Orange County, Calif. “From an HR perspective, it’s, ‘Oh my gosh, could you do anything to make my life more complicated?’ Every day we turn around and find out there’s a state or city that legalizes some form of marijuana use. The challenge for HR is keeping up to speed with the current climate and what an employer can and cannot do with regard to marijuana and the workplace. It’s changing extremely fast.”

Californians voted to legalize medical marijuana in 1996. Now at least 33 states have a comprehensive medical marijuana program. Colorado and Washington legalized cannabis for recreational use in 2012; nine other states, and Washington, D.C., followed suit.

“There has been a significant cultural and political shift with regard to how most Americans approach [marijuana] use,” says Paul Armentano, deputy director of NORML, a group that advocates national legalization of cannabis.

About 66 percent of Americans favor legalizing marijuana—the highest measure in 50 years of polling—according to Gallup.

About 24 million Americans ages 12 and older are current users of marijuana, according to a 2016 Substance Abuse and Mental Health Services Administration survey. The numbers have increased mostly due to more marijuana use by adults 26 and older.

The widespread use is evidenced by the increasing number of people failing marijuana tests, especially in states where recreational use is legal. Barry Sample, Ph.D., director of science and technology for the employer solutions division of Quest Diagnostics, says the rate of positive tests has increased 35 percent since 2010 in places where marijuana is illegal and has risen even faster in states where it’s legal—in those areas it jumped 71 percent during that period. (Although the rates are increasing, the percentage who flunk in the general workforce was just 2.8 percent nationwide last year, according to Sample.)

Whom to Test?

Some employees fall under federal regulations that require testing for marijuana and other substances. Workers covered by Department of Transportation rules, such as trucking, mass transit, and airline and rail workers, must be screened for drug and alcohol use if they’re in safety-sensitive jobs.

Testing can provide benefits by removing those under the influence who may pose safety risks or hurt productivity. Individuals who test positive for marijuana have 55 percent more industrial accidents, according to a study published by C. Zwerling, J. Ryan and E.J. Orav in JAMA: The Journal of the American Medical Association, as well as 85 percent more injuries and 75 percent more absenteeism.

The National Academies of Sciences, Engineering and Medicine found substantial evidence that marijuana use increases the risk of motor vehicle crashes but insufficient evidence to say whether it causes more occupational injuries and accidents. However, Curtis Graves, an attorney with the Employers Council, which represents 4,000 companies in Colorado and nearby states, says the impact of legalization hasn’t been what was feared.

“It was a bit of panic when we got recreational marijuana for sale, but it hasn’t been much of an impact,” Graves says. “It’s like alcohol. It’s not like a bunch of people are coming to work stoned.”

Armentano says he doesn’t see legalized marijuana stoking trouble in the workplace. “Most of these people use cannabis responsibly and hold jobs and go to work like everyone else,” he says.

The ABCs of THC

Testing for marijuana is different from testing for alcohol, creating complications for HR. There’s no consensus over just how much THC—the drug’s psychoactive component—means a person is impaired. With alcohol, “impairment” is more clearly defined. Federal rules set .04 percent blood alcohol readings as a violation for workers in jobs such as driving trucks or forklifts. Sample adds that private companies generally use a range somewhere between .02 and .04 percent.

Alcohol is burned off at a rate of about one drink per hour, though the comparable rate for marijuana varies dramatically, based on factors like whether the person is a casual smoker or a heavy user. Those in the latter group may test positive for a month or more after use.

 “What companies really wrestle with is the quality of the drug test and what [the results] mean,” says Eric B. Meyer, an employment lawyer at FisherBroyles in Philadelphia. “Just because a drug test comes back and is positive for THC,” he says, “doesn’t mean the individual was high at the time of the test.

 “We need to get away from this fixation on using drug tests as detection tests,” Armentano says. Instead, companies should look for tests that measure performance impairment—some of which specifically target marijuana’s impact on qualities such as short-term memory. “That’s the direction things are going,” he says.

Bifulco says companies need to figure out whether they care if an employee used marijuana on the weekend and then came to work sober but failed a drug test. Her clients are saying, “Don’t come to work impaired. But if you do marijuana on your own personal time, as an employer I’m not going to make myself crazy figuring that out.” Her company has never used pre-
employment tests for marijuana because they don’t necessarily show recent use, she says.

The Hiring Squeeze

The labor market is further complicating employers’ decisions. They’re weighing the upside of drug testing against the downside of losing talented people who can’t pass those tests. 

It’s the employers who are inhaling now—holding their breath and hoping their best employees and candidates can pass a drug test, Graves says. 

Many companies have dropped pre-employment testing because it hurts their ability to compete in the labor market, Meyer says. He tells clients: “Think long and hard about, ‘What good reason do I have to drug test?’ ” 

Delaney McKinley, senior director of government affairs and membership at the trade group Michigan Manufacturers Association, says the companies she hears from among the group’s 1,700 members struggle because they want to ensure their workplaces are safe, but they’re also desperate to find workers.

Chris Beckage, senior vice president for North America at Acara Solutions Inc., a Buffalo, N.Y.-based staffing agency, says more companies he works with are dropping marijuana testing, especially for light assembly jobs not directly tied to safety. One electronics manufacturer, for instance, had 40 production openings before it dropped the marijuana test and filled the slots. Six months later, a worker was fired for using and distributing cannabis on the job. Still, the company kept the no-
testing policy. Many companies that don’t test believe that helps them fill jobs and meet production goals, he says.

Last year, Caesars Entertainment stopped marijuana screening for prospective employees. “We believed we were losing too many otherwise qualified candidates,” says Richard Broome, the company’s executive vice president of communications and government relations. “We still screen for marijuana if we have reason to believe an employee is under the influence at work.”

Apple used to test all prospective employees but now tests only those applying for jobs with safety risks, according to a spokesperson. The company still forbids employees from being under the influence of alcohol or drugs while performing their jobs and tests employees if there’s an accident at work that requires an investigation by the Occupational Safety and Health Administration. 

A range of employers with higher-than-average turnover rates, including hospitality and construction, have stopped all drug testing, including for marijuana, because it inhibited their ability to attract enough job applicants to stay in business. “If we had to turn away every applicant who tested positive for marijuana, we’d lose 80 percent of our potential hires,” says the talent acquisition director at a national fast-food chain who requested anonymity. 

But manufacturers sometimes see the testing differently from companies that have dropped it. “It’s safer if you’re using a computer than if you’re using a knife to cut things,” points out Bea Rodriguez, HR manager for Bravo, a Commerce, Calif.-based manufacturer of secondary containment systems for fuel handling. Last year, a manufacturing worker was in an accident and turned out to be under the influence of marijuana, she says.

“You don’t want anyone to suffer an accident because they were under the influence,” she adds. “[Testing] is too important for manufacturing.”

Rodriguez spoke a day after finding a candidate with just the right skills and ability to get along with colleagues for a job in sanding and grinding. But after being asked to take a drug test, he became unreachable. “We spend a lot of time interviewing and making sure the candidates are a good fit,” she says. “It’s disappointing … when they don’t show up for the drug screen or for the job.”

Some companies adopted “second-chance” policies, where employees who test positive are sent for treatment instead of fired, McKinley says, “partially for compassion, partially for business reasons—we need to fill these jobs.” 

Peter Cappelli, head of the Center for Human Resources at The Wharton School at the University of Pennsylvania, says many companies are dropping testing but don’t want to talk about it publicly. “They don’t want to be seen as the only place in town where stoners should apply,” he says.

To be sure, a growing number of employees rely on legally obtained marijuana to treat, alleviate or counteract a range of medical conditions. For that reason and others, Cappelli doubts many companies will return to marijuana testing, because there’s little evidence that is has proven useful from a business outcome standpoint. 

Drug testing can be done for a variety of reasons. Some companies test randomly; some only when there’s reasonable suspicion that a person is under the influence; and some after accidents, since many insurance companies require post-accident testing. The rates for those categories haven’t dropped as much as for pre-employment testing, Meyer says. 

Reasonable-suspicion tests often still include marijuana, Graves says. The last thing an employer wants is to test someone it believes is high and then have the test come back negative and end up with an employee lawsuit, he says.

Here Comes the Judge

For years, courts ruled that employers could have zero-tolerance policies and fire, or not hire, based on positive marijuana tests. That has been changing, however.

For instance, in a 2017 case (Barbuto v. Advantage Sales), the Massachusetts Supreme Judicial Court said a registered medical marijuana patient could bring suit against her employer for disability discrimination after she was fired for a positive marijuana test. Employers must explore reasonable accommodations if an employee is registered for medical marijuana use to treat a condition that’s covered under the state’s anti-discrimination law, the court said. A federal district court decision in Connecticut last year could be a game changer, Bifulco says, because a federal (not state) court held that failing to hire an applicant with a medical marijuana card was a violation of state nondiscrimination laws. 

Bifulco says some companies have dropped marijuana testing because they don’t want to get sued by a medical marijuana user claiming disability. “Who wants to be a legal guinea pig?” she says.

McKinley’s trade group provides reasonable-suspicion training to instruct managers on what to look for, what to document and how to handle tests. A recent Michigan case (Braska v. Challenge Manufacturing) that went to the state appeals court found that employers could face economic consequences. The court ruled that a medical marijuana user could be fired for failing the test but still be eligible for unemployment compensation. A federal district court judge in Arizona found that Walmart had discriminated by firing an employee who failed a drug test. She was tested  and fired after being injured on the job, although she had a medical marijuana card. 

The New Jersey Supreme Court recently said it will hear the case of Justin Wild, a funeral director who uses medical marijuana as part of his cancer treatment. State law says companies don’t have to allow marijuana use on the job, but Wild argued that he’s using it outside the workplace. The appellate court sided with Wild, saying he could sue for discrimination after being fired.

The whirlwind of changes has created a lot of confusion. “It’s left employers perplexed about how to protect their businesses and their employees and stay competitive in a global economy,” Delaney says.  

Tamara Lytle is a freelance writer in the Washington, D.C., area.

Illustrations by Benjamin Marra.

​LIFE ON THE INSIDE By Theresa Agovino Workers at cannabis companies such as Garden Remedies generally earn salaries lower than those in other industries.

​Like other HR professionals, Holly Hodgman examines resumes and cover letters to learn about candidates’ experience and skills. She’s also looking for signals that her brethren likely don’t consider: Are people just applying because they think work is going to be one big party? Hodgman is an HR generalist at Garden Remedies, a Concord, Mass.-based cannabis company, and one of her responsibilities is smoking out applicants who expect the workplace to resemble a scene from “Dazed and Confused.”  “There are people who think they’re going to be high all day,” she says. It’s just one of the challenges faced by HR in the cannabis industry. Finding talent and vendors, including banks, can be difficult, as there’s a stigma that comes with producing a product that’s still illegal under federal law. Jobs often require employees to work long hours in a heavily regulated field for salaries that are less than they could earn at mainstream companies. On top of that, many applicants have unrealistic salary expectations based on hearing tales of investments pouring into the industry as marijuana becomes legal in more states. Hodgman says an IT executive who was excited about being part of a new industry agreed to take an entry-level grower’s job even though the $16-an-hour rate required him to take a substantial pay cut. The allure disappeared after a few months when he didn’t get a huge raise. “He thought we were all millionaires,” she recalls. Cannabis company employees typically receive discounts on their employer’s products, though everyone is expected to be sober while at work. Salaries are generally lower than those in other industries, as many owners invest in nonsalary elements of the business, according to Samantha Ford, senior vice president of business development for cannabis at Protis Global, a Miami-based executive search firm. But she adds that owners can also become intoxicated by the industry hype. “They think people should want to work in cannabis,” she says.  Shanon Farney, vice president of people at Coliva, took a 40 percent pay cut to work at the San Jose, Calif.-based cannabis company because she wanted to enter a new, expanding field that’s changing the American landscape. Farney says she’s been working at a breakneck pace as she tackles multiple tasks, including establishing HR and compliance policies and procedures. “We’re in the toddler phase,” she says of the 4-year-old company. “There’s a lack of process and structure.” Finding vendors, including health insurance companies and parking garages, has also demanded significant portions of Farney’s time, along with hiring staff. Competing with companies like Google for talent has been a struggle, as has hiring individuals for the finance department. The accounting rules governing cannabis aren’t the same as those in other industries. On top of that, much of the business is conducted in cash, because many banks shun cannabis companies to avoid attracting attention for financing a federally illegal product.  “It can be maddening,” Farney says. “But you’re making a difference in people’s lives.” Theresa Agovino is the workplace editor for SHRM.