NJ Marijuana Law Does Not Create Private Right of Action

Takeaway: Many states have legalized marijuana and added employment protections for individuals who use it, despite ongoing federal prohibitions. Thus, the impact of these laws on traditional employer restriction of and testing for marijuana use is unclear in many cases.

The 3rd U.S. Circuit Court of Appeals affirmed a district court ruling that the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) did not give applicants for employment a private right of action against employers that revoke an employment offer based upon a positive drug test showing cannabis use.

In January 2022, less than a year after the enactment of CREAMMA, a New Jersey resident applied for an asset protection position at a Walmart facility in Swedesboro, N.J. A week later, he was offered a job there—subject to the condition that he take and pass a drug test. That condition reflected a corporate policy in effect even after CREAMMA under which all job applicants and employees were ineligible for future employment upon testing positive for drugs. The employee tested positive for cannabis, and his job offer was rescinded.

Prompted by the rescission of his job offer, the employee filed a two-count putative class action complaint in Superior Court of Gloucester County against Walmart and one of its affiliated corporations. For relief, the employee sought back pay, front pay, punitive damages, and an injunction ordering rescission of the corporate drug policy, among other remedies. As allowed by New Jersey law, his complaint did not demand a sum certain. 

Walmart and the affiliate corporation, neither of which has corporate citizenship in New Jersey, moved the case to federal court, invoking the district court’s diversity jurisdiction on the grounds that the employee was not a citizen for legal purposes of the same states as Walmart and that the amount being contested exceeded $75,000.

Although both of the employee’s claims rested on the same underlying fact, the rescission of his job offer based on his positive marijuana test, they relied on different legal theories. Count 1 depended on the legal conclusion that CREAMMA contains an implied remedy for violations of its pre-employment protections. Count 2 hinged on the applicability of New Jersey’s public policy employment exception to the rescission of a job offer based on the positive drug test for cannabis.

Walmart moved to dismiss both counts for a failure to state a claim upon which relief can be granted. The district court granted the motion and dismissed the case. The employee timely appealed. On appeal, the 3rd Circuit noted that CREAMMA was enacted in part to eliminate the negative effects of marijuana arrests on future employment. The statute outlawed employment discrimination based on a person’s use or non-use of cannabis. It also protected employees from adverse employment actions based solely on a positive cannabis drug test.

Yet the 3rd Circuit considered whether CREAMMA created an implied private right of action based on a 1975 U.S. Supreme Court case, Cort v. Ash, setting forth factors for determining whether a private right of action is created by a statute. These include whether the plaintiff is one of the class or whose special benefit the statute was enacted for, any indication of legislative intent either to create or remedy or deny one, and the underlying purposes of legislative scheme.

In considering these factors, the 3rd Circuit found that New Jersey did not clearly articulate cannabis usage as a protected class, did not make clear that a private right of action was intended by the statute, and created a legislative scheme in which a new regulatory agency, the Cannabis Regulatory Commission, would enforce its provisions. 

The 3rd Circuit further noted that a New Jersey wrongful discharge in violation of public policy claim could not rely upon a failure to hire, as it is only available when an employee is discharged from existing employment.

In a dissenting opinion, one 3rd Circuit judge argued that the court should certify the question to the New Jersey Supreme Court for determination, as the statute clearly sought to protect individuals such as the plaintiff. Nevertheless, the majority upheld the dismissal of the claim.

Zanetich v. Wal-Mart Stores East Inc., 3rd Cir., No. 23-1996 (Dec. 9, 2024), petition for en banc and panel rehearing denied (Jan. 10, 2025).

Jeffrey Rhodes is an attorney with McInroy, Rigby & Rhodes LLP in Arlington, Va.