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NJ Court Rules Employees Can’t Bring Suits Under State’s Cannabis Law

Author: Daniel T. McKillop|July 11, 2023

NJ Court Rules Employees Can’t Bring Suits Under State’s Cannabis Law

NJ Court Rules Employees Can’t Bring Suits Under State’s Cannabis Law

In Zanetich v. Walmart, Inc., a New Jersey district court held that the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) does not empower applicants and employees to bring private lawsuits based on adverse employment actions by employers for their off-duty marijuana use. While the decision is good news for employers, it is likely to prompt action by the Cannabis Regulatory Commission or the New Jersey Legislature.

New Jersey Cannabis Employment Suit

On January 21, 2022, Plaintiff Erick Zanetich applied for a job in the Asset Protection Department in one of Walmart’s facilities in New Jersey. A few days after his interview, Walmart offered Zanetich the job, beginning on February 7, 2022, “subject to him submitting to and passing a drug test.” At the time, Walmart had a Drug & Alcohol Policy, that stated “any applicant or associate who tests positive for illegal drug use may be ineligible for employment,” which included marijuana.

Zanetich took a drug test on January 21, 2022, and tested positive for marijuana. On February 12, 2023, Walmart informed Zanetich that his job offer would be rescinded. Upon inquiry as to the reason for this decision, he was advised it was because he had tested positive for marijuana. Zanetich subsequently filed suit on behalf of himself and others similarly situated asserting two claims: (1) violation of the CREAMMA; and (2) failure to hire and/or termination in violation of New Jersey public policy.

Court Rules No Private Right of Action Under CREAMMA

Because there is no explicit private cause of action in CREAMMA, the question before the court was whether the statute confers an implied private cause of action. Judge Christine O’Hearn of the U.S. District Court for the District of New Jersey held that one did not exist and dismissed the suit.

In addition to legalizing cannabis, CREAMA established several employment protections. Of relevance to the suit, N.J.S.A. 24:6I-52 states that “[n]o employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee . . . because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items.”

New Jersey’s cannabis legalization law, however, does not state whether worker can file suit. “The express language of CREAMMA is less than helpful. On one hand, it explicitly prohibits employers from taking certain adverse actions on the basis of an individual’s use of marijuana (“the employment provision”),” Judge O’Hearn wrote. “On the other, however, the New Jersey Legislature did not state how this provision could be enforced, by whom, and what, if any, remedies would be available.”

In determining whether the CREAMMA included an implied private cause of action, Judge O’Hearn relied on the three-part test established by the U.S. Supreme Court in Cort v. Ash. The Cort test asks whether: (1) plaintiff is a member of the class for whose special benefit the statute was enacted; (2) there is any evidence that the Legislature intended to create a private right of action under the statute; and (3) it is consistent with the underlying purposes of the legislative scheme to infer the existence of such a remedy.

With regard to the first factor, O’Hearn concluded that Zanetich is a member of a class for whose special benefit the CREAMMA was enacted, as he is a cannabis user. Turning to the second prong, O’Hearn found that it did not weigh in favor of finding an implied private cause of action. “[T]here is simply no indication that the Legislature intended to allow an individual to pursue a private cause of action for a violation of CREAMMA,” she wrote. “Plaintiff has not pointed to any evidence of legislative intent to the contrary sufficient to overcome the reluctance to find an implied private cause of action when the Legislature has not explicitly created one.”

In support, Judge O’Hearn pointed to the establishment of the Cannabis Regulatory Commission (CRC) to enforce violations of CREAMMA. “Indeed, the Legislature specifically created the CRC and then empowered it with the authority to ‘investigate and aid in the prosecution of every violation of the statutory laws of this state relating to cannabis and cannabis items and to cooperate in the prosecution of offenders before any state court of competent jurisdiction,'” Judge O’Hearn explained.

As for the third factor, Judge O’Hearn similarly found that the legislative scheme does not support an inference that there is an implied private cause of action under CREAMMA. “The court recognizes that its decision leaves plaintiff without a remedy and essentially renders the language of the employment provision meaningless,” Judge O’Hearn wrote. “Yet, that is the outcome dictated by the law. It is not the function of the court to rewrite incomplete legislation or create remedies for a statutory violation where the Legislature did not.”

Key Takeaway for New Jersey Employers

At the moment, employers are protected from private suits under CREAMMA. However, it is important to note that Judge O’Hearn’s opinion calls on the Legislature, CRC, or the Supreme Court of New Jersey to act if the intent is for CREAMMA’s employment protections to not be illusory.

“If the Legislature intended for there to be a private cause of action, it should amend the statute to clearly evidence that intent, including how the provision can be enforced, by whom, and what remedies are available as it has previously done in many other employment related statutes,” she wrote. “If the Legislature intended for the CRC to enforce the employment provision, then the CRC should duly adopt regulations to exercise that power and provide much-needed guidance to employers and employees.” In the meantime, New Jersey employers should still be cautious when making adverse employment decisions based on cannabis use. For guidance, we encourage you to contact a member of the Scarinci Hollenbeck Cannabis Law Group at 201-896-4100.

NJ Court Rules Employees Can’t Bring Suits Under State’s Cannabis Law

Author: Daniel T. McKillop
NJ Court Rules Employees Can’t Bring Suits Under State’s Cannabis Law

In Zanetich v. Walmart, Inc., a New Jersey district court held that the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) does not empower applicants and employees to bring private lawsuits based on adverse employment actions by employers for their off-duty marijuana use. While the decision is good news for employers, it is likely to prompt action by the Cannabis Regulatory Commission or the New Jersey Legislature.

New Jersey Cannabis Employment Suit

On January 21, 2022, Plaintiff Erick Zanetich applied for a job in the Asset Protection Department in one of Walmart’s facilities in New Jersey. A few days after his interview, Walmart offered Zanetich the job, beginning on February 7, 2022, “subject to him submitting to and passing a drug test.” At the time, Walmart had a Drug & Alcohol Policy, that stated “any applicant or associate who tests positive for illegal drug use may be ineligible for employment,” which included marijuana.

Zanetich took a drug test on January 21, 2022, and tested positive for marijuana. On February 12, 2023, Walmart informed Zanetich that his job offer would be rescinded. Upon inquiry as to the reason for this decision, he was advised it was because he had tested positive for marijuana. Zanetich subsequently filed suit on behalf of himself and others similarly situated asserting two claims: (1) violation of the CREAMMA; and (2) failure to hire and/or termination in violation of New Jersey public policy.

Court Rules No Private Right of Action Under CREAMMA

Because there is no explicit private cause of action in CREAMMA, the question before the court was whether the statute confers an implied private cause of action. Judge Christine O’Hearn of the U.S. District Court for the District of New Jersey held that one did not exist and dismissed the suit.

In addition to legalizing cannabis, CREAMA established several employment protections. Of relevance to the suit, N.J.S.A. 24:6I-52 states that “[n]o employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee . . . because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items.”

New Jersey’s cannabis legalization law, however, does not state whether worker can file suit. “The express language of CREAMMA is less than helpful. On one hand, it explicitly prohibits employers from taking certain adverse actions on the basis of an individual’s use of marijuana (“the employment provision”),” Judge O’Hearn wrote. “On the other, however, the New Jersey Legislature did not state how this provision could be enforced, by whom, and what, if any, remedies would be available.”

In determining whether the CREAMMA included an implied private cause of action, Judge O’Hearn relied on the three-part test established by the U.S. Supreme Court in Cort v. Ash. The Cort test asks whether: (1) plaintiff is a member of the class for whose special benefit the statute was enacted; (2) there is any evidence that the Legislature intended to create a private right of action under the statute; and (3) it is consistent with the underlying purposes of the legislative scheme to infer the existence of such a remedy.

With regard to the first factor, O’Hearn concluded that Zanetich is a member of a class for whose special benefit the CREAMMA was enacted, as he is a cannabis user. Turning to the second prong, O’Hearn found that it did not weigh in favor of finding an implied private cause of action. “[T]here is simply no indication that the Legislature intended to allow an individual to pursue a private cause of action for a violation of CREAMMA,” she wrote. “Plaintiff has not pointed to any evidence of legislative intent to the contrary sufficient to overcome the reluctance to find an implied private cause of action when the Legislature has not explicitly created one.”

In support, Judge O’Hearn pointed to the establishment of the Cannabis Regulatory Commission (CRC) to enforce violations of CREAMMA. “Indeed, the Legislature specifically created the CRC and then empowered it with the authority to ‘investigate and aid in the prosecution of every violation of the statutory laws of this state relating to cannabis and cannabis items and to cooperate in the prosecution of offenders before any state court of competent jurisdiction,'” Judge O’Hearn explained.

As for the third factor, Judge O’Hearn similarly found that the legislative scheme does not support an inference that there is an implied private cause of action under CREAMMA. “The court recognizes that its decision leaves plaintiff without a remedy and essentially renders the language of the employment provision meaningless,” Judge O’Hearn wrote. “Yet, that is the outcome dictated by the law. It is not the function of the court to rewrite incomplete legislation or create remedies for a statutory violation where the Legislature did not.”

Key Takeaway for New Jersey Employers

At the moment, employers are protected from private suits under CREAMMA. However, it is important to note that Judge O’Hearn’s opinion calls on the Legislature, CRC, or the Supreme Court of New Jersey to act if the intent is for CREAMMA’s employment protections to not be illusory.

“If the Legislature intended for there to be a private cause of action, it should amend the statute to clearly evidence that intent, including how the provision can be enforced, by whom, and what remedies are available as it has previously done in many other employment related statutes,” she wrote. “If the Legislature intended for the CRC to enforce the employment provision, then the CRC should duly adopt regulations to exercise that power and provide much-needed guidance to employers and employees.” In the meantime, New Jersey employers should still be cautious when making adverse employment decisions based on cannabis use. For guidance, we encourage you to contact a member of the Scarinci Hollenbeck Cannabis Law Group at 201-896-4100.

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