California employers wrestle with drug testing after cannabis legalization

Is legal cannabis having an altering effect on how businesses manage pre-employment drug-testing policies?

The answer is yes and no, depending on how an individual business wants to handle the matter.

“With more and more states permitting medical marijuana use and some states permitting recreational use, employers are now considering whether to even test applicants for (the drug),” said Debra Friedman, a labor and employment attorney with Cozen O'Connor in Philadelphia. “So basically, if you don't test for it, then you can't run afoul.”

However, there is one important caveat to that, she said.

“If you are in certain regulated industries, such as an industry that's subject to the U.S. Department of Transportation regulations, then you can reject an applicant who tests positive, and part of that is because (cannabis) is still illegal under federal law,” Friedman said.

Erika Frank, CalChamber general counsel and vice president of legal affairs, said she tells customers, employers and members that even though cannabis is legal in California, employers still have the right to do testing - but also should be mindful of federal law.

Joe Madigan, CEO of Nelson Staffing and Higher Growth Search, a cannabis-staffing firm Nelson acquired earlier this year, also provided his expertise to the Business Journal.

With cannabis now legal, are you finding more businesses are deciding to abandon - or require - pre-employment drug testing?

Madigan: Since this legislation is still relatively new, many companies have not yet changed their old policies or implemented new ones. It often comes down to where the company is headquartered: If they're based outside of California, they may be subject to a more restrictive state law, in addition to the federal law.

Companies can choose which drugs to test or exclude from their results, but this may be a development to watch in years to come. In our experience at Higher Growth Search, no one has yet required drug testing of employees.

What are the pros and cons to hiring someone who tests positive for cannabis?

Madigan: There are cases when, if an employee is upfront about their usage and reasons, it is not an issue. One pro to hiring an employee who uses cannabis themselves is the firsthand knowledge, which may be useful in positions like product management and sales (in the cannabis industry).

Just like drinking, cannabis can be a recreational after work activity - the only difference is that traces of alcohol don't show up on a drug test days later. Responsible recreational or medical cannabis users who partake after work should be treated the same as responsible drinkers: You wouldn't choose not to hire top talent because they had a beer on the weekends, so why let top talent go to the competition because they use marijuana after work? The only caveat would be if the employee is under the influence during work hours.

In many cases, employers may exclude cannabis from their pre-employment drug-testing panel but may choose not to exclude cannabis where injury and investigation could be required.

Overall, how are businesses trying to navigate this issue?

Madigan: Businesses are navigating this case-by-case - and how they handle the issue varies a great deal by industry. We tell prospective candidates that it is treated the same as alcohol is - don't use before, during, or on-premises at work, because that is grounds for immediate dismissal.

Many cannabis companies are choosing to hire from outside the industry for this reason. Many of the skills needed for growing a cannabis business are transferable from other industries and, by introducing people who do not yet have cannabis-specific experience into the industry, they may bring a work ethic and sense of professionalism that had previously not been present in the cannabis field.

Are there any sticking points that might be ironed out over time?

Madigan: A big issue with legal cannabis and testing is centered around how long it stays in your system and will show up on a test, as opposed to alcohol. A potential employee can be sober at work, and their usage will have no bearing on their performance or demeanor at work - yet they will still have a positive test result.

Navigating that dichotomy between presence in the system and usage at work can be tricky; however, we may see in time that employers become better at having conversations with employees about acceptable use and professional behavior, and employees come to treat this recreational substance as they do alcohol - as a nonwork pastime.

Since cannabis legalization is still very new in certain states, there are a lot of gray areas still pending for employers to navigate. Until cannabis formularies are more defined and regulated, we may continue to uncover challenges in the workplace.

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