What the Legalization of Recreational Marijuana Means For NY Employers

By Joseph S. Brown, Esq.

On March 31, 2021, Governor Cuomo signed the “Marihuana Regulation and Taxation Act” (“MRTA”) which legalized the recreational use of marijuana for individuals over the age of 21. The MRTA significantly impacts the ability of New York employers to maintain a drug-free workplace.  More specifically, the MRTA amends New York Law Labor Law Section 201-d, which protects employees’ right to engage in certain recreational activities outside of work.  This alert summarizes the changes to Section 201-d and discusses what steps employers should take to prepare themselves for compliance with the new legislation.

Amendments to Section 201-d

Section 201-d, also known as the Lawful Activities Act, prohibits employers from discriminating against employees because of their legal, political or recreational activities when conducted outside the workplace and outside working hours.

Generally speaking, Section 201-d prohibits an employer from refusing to hire, employ, license, or discharge an employee because of his or her: (1) legal political activities outside of working hours and off the employer’s premises; (2) legal use of consumable products prior to and after the conclusion of the employee’s working hours and off the employer’s premises; (3) legal recreational activities outside work hours and off the employer’s premises; and (4) membership in a union or any exercise of rights created under the federal Labor Management Relations Act or New York’s Taylor Law.

As amended by the Act, Section 201-d provides that the recreational use or consumption of marijuana outside of work hours and off an employer’s premises, constitutes lawful recreational activity.  Based on the definition of “work hours” in the law, it is clear that an employee’s use of recreational marijuana is protected only to the extent it occurs prior to the beginning, or after the completion, of an employee’s work hours.  In other words, an employee using recreational marijuana during break time or rest periods, whether or not they are paid, would not be protected.

The amendments also state that it is not a violation of Section 201-d when the employer takes action related to the use of cannabis based on the following:

  1. The employer’s actions were required by a state or federal statute, regulation, or mandate;
  2. The employee is impaired by the use of cannabis, “meaning the employee manifests specific articulable symptoms while working that decrease or lessen the employee's performance of the duties or tasks of the employee's job position, or such specific articulable symptoms interfere with an employer's obligation to provide a safe and healthy work place, free from recognized hazards, as required by state and federal occupational safety and health law”; and
  3. The employer’s actions would require the employer “to commit any act in violation of federal law or would result in the loss of a federal contract or federal funding.”

It remains to be seen how these exceptions will be interpreted by the courts.  For example, determining whether an employee is “impaired” or “manifests specific articulable symptoms” in the workplace related to cannabis use may prove challenging.  Unlike testing for alcohol, the most commonly used marijuana test cannot pinpoint whether an employee used cannabis on their way to work, or at a party several weeks ago.  Similarly, post-offer, pre-employment testing for cannabis, will have little or no value as recreational marijuana use is now a protected activity and employment decisions cannot be based on a protected activity.  Unless an employer has a legal requirement to conduct pre-employment drug tests, this type of testing is likely no longer a useful applicant screening method and could increase an employer’s exposure to a retaliation claim.

In addition, the intersection of the MRTA with federal law – which classifies marijuana as a Schedule 1 controlled substance – remains murky until Congress officially acts to decriminalize marijuana.  The MRTA includes a general exception for acts which would result in the loss of a federal contract or federal funding; however, it is unclear how this will be interpreted by the courts.

Next Steps for Employers

While legal sales of marijuana may only occur once the state begins issuing licenses for cultivation, processing and distribution, there are a number of practical things that employers can do to prepare for this changing legal landscape such as reviewing their employee handbooks and drug testing policies and training managers on the implications of MRTA.

Please contact any member of the firm’s Labor & Employment team for guidance on these evolving issues at 716-849-8900, by e-mail, or visiting our website at www.hurwitzfine.com.

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Joseph S. Brown – [email protected]

Ann E. Evanko – [email protected]

Katherine L. Wood – [email protected]

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