Lawful Off-Duty Recreational Marijuana Use in Nevada is Still Not Lawful for Employees
On November 8, 2016, Nevada voters approved the Regulation and Taxation of Marijuana Act. The Act permitted adults 21 and over to lawfully possess up to one ounce of marijuana in a private residence effective January 1, 2017. The legalization of recreational marijuana in Nevada followed the trend of many states before us and was followed by many states after us. However, like all laws, the new law caused and continues to cause a great deal of confusion. When recreational use was legalized, it was interpreted in tandem with NRS 613.333, which prohibits the discharge of an employee for engaging in the lawful use of any product outside the premises of the employer during the employee’s nonworking hours. In other words, the general belief of employees was: “You’re not the bossame when I’m not at work, as long as what I’m doing is legal. Since marijuana is now legal, you cannot prohibit me from using it away from work.” The argument is logical.
Notwithstanding that logic, lawyers like me advised our employer clients that while marijuana was legal in Nevada, it was still illegal under federal law. Consequently, we advised that if your policy prohibits use under state or federal law, that superseded an argument under NRS 613.333 that it was lawful off-duty conduct. Employers who wished to continue with a policy which prohibited outside use and wanted to continue to test for marijuana, reviewed their policies to make sure they included “state and federal law.”
In a brand new opinion dated August 11, 2022, the Nevada Supreme Court held that an employee who tests positive at work based on recreational use does not have a common-law tortious discharge claim. In Ceballos v. NP Palace, 138 Nev. Adv. Op. 58, Danny Ceballos was a games dealer at the Palace Station with no performance or disciplinary issues. Towards the end of his shift on June 25, 2020, he slipped and fell in the employee breakroom. Security responded, first assisting Mr. Ceballos, then requiring him to submit to a drug test. The test came back positive for marijuana, and on July 16, 2020, Mr. Ceballos was terminated based on the positive test result. Mr. Ceballos sued. He argued that he was not intoxicated or impaired during his shift, and he was at home, not at work, when he engaged in the recreational use that produced the positive test result.
The Court looked at the language of the statute to determine what the phrase “lawful use in this state” means. Does it mean lawful under state law, or does it mean generally lawful, under both state and federal law? The Court addressed and acknowledged the federal illegality as supporting the employer’s position, noting that “lawful.. in this state” is general and encompasses state and federal law applicable to conduct occurring within the state. But the Court also relied on NRS 678D.510(1)(a), which authorizes employers to prohibit or restrict recreational marijuana use by employees. The Court observed that if the Legislature meant to require employers to accommodate employees using recreational marijuana outside the workplace but who thereafter test positive at work, it would have done so. It did not. It referred, e.g., to NRS 678C.850(3), which requires employers to accommodate the medical needs of employees who use medical marijuana unless certain exceptions exist, where the Legislature expressly carved out other situations. Mr. Ceballos’ recreational use was not the same. Based primarily on the Court’s interpretation of the Legislative intent, it affirmed the lower court’s decision, which upheld the termination.
The Ceballos case brings very helpful guidance for employers. I continue to advise that if you intend to test for the use of recreational marijuana by your employees, you should review your policies to make sure they include state and federal law. But I anticipate that before too long, the federal government will remove marijuana from the Schedule 1 controlled substance list. When that happens, it might change the protections that employers have under a “state and federal law” argument. However, the Ceballos case might provide an argument that employers nonetheless can act if an employee tests positive for use of recreational marijuana.
If you have any questions, or need help with developing policies, you are invited to contact any of the employment lawyers at Lemons, Grundy & Eisenberg.