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Appeals Court OKs Employer Enforcement of Outdated Marijuana Policies

Updated: Aug 16, 2023

Summary: When the New York Legislature legalized marijuana for recreational use in 2021, it made sure to clarify that marijuana is a "legal consumable product," which generally means that employers cannot discriminate against employees for using it, so long as they do so off the job and are not impaired at work. Unfortunately, the law was ambiguous enough to leave open the possibility that employers could utilize an old (and gaping) loophole: an employer could discipline an employee pursuant to an established workplace drug policy, even if that policy prohibited now-lawful use outside work hours. In Moran-Ruiz v. Ontario County, the Appellate Division, Fourth Department blew open that loophole by ruling that a no-drug policy contained in a CBA remained enforceable – surprising even the Department of Labor, which had indicated that such policies were generally superseded by the new law. Under Moran-Ruiz, an employer may be able to discipline employees for off-the-job marijuana use that does not impact their ability to work simply because the employer "believes" such use constitutes misconduct. The Legislature has the power to – and should – overrule Moran-Ruiz by passing a law clarifying that employers have no business regulating their employees' legal off-the-clock activities, at least so long as the employer's business is not affected. In the meantime, employees who choose to indulge must be aware of their employers' policies and the risk that those policies could be enforced.


Disclaimer: The discussion contained herein may not apply to the specific facts of your situation. Moreover, posts may not reflect subsequent developments in the law.

As such, nothing contained in any blog post is meant to constitute legal advice. There is no substitute for the tailored advice of a qualified attorney who has listened to your story and investigated your case.


Under Labor Law Section 201-d(2), it's illegal for an employer in New York State to discriminate against an employee for that employee's "legal use of consumable products" or "legal recreational activities" that the employee engages in "outside work hours, off of the employer's premises[,] and without use of the employer's equipment or other property."

When New York State passed the Marihuana Regulation & Taxation Act of 2021 ("MRTA"), it amended Section 201-d(2) to make crystal clear that "cannabis use in accordance with state law" is a legal consumable product as well as a legal recreational activity.


That should mean that employees can't be discriminated against for off-the-job marijuana use. Of course, employers don't have to allow marijuana on the job, nor must they tolerate employees who are impaired at work. Instead, we're talking here about what an employee does at home, off the clock, where the employer has no business poking in. And that makes sense. The purpose of the MRTA was to reverse draconian drug-war policies and treat marijuana use as a personal choice – a minor vice, perhaps, but not a scarlet letter.


But it's never that simple. Labor Law Section 201-d(4) ("Subdivision 4") contained a gaping loophole: the employer was always allowed to


take[] action based on the belief either that:

(i) the employer's actions were required by statute, regulation, ordinance or other governmental mandate,

(ii) the employer's actions were permissible pursuant to an established substance abuse or alcohol program or workplace policy, professional contract or collective bargaining agreement, or

(iii) the individual's actions were deemed by an employer or previous employer to be illegal or to constitute habitually poor performance, incompetency or misconduct.


Let's break this down in plain English. An employer could "act" – that is, take adverse employment action, up to and including termination – if the employer believed that (i) it was legally required to do so; (ii) it was allowed to do so based on some existing workplace policy; or (iii) it had "deemed" the employee's actions to be illegal, incompetence or misconduct.


These are broad exceptions. On its face, Subdivision 4 gives license to employers to ban employees from using just about any "consumable substance" (including alcohol). The employer just has to "establish" a substance abuse policy that strictly prohibits all use. Or the employer might say it "believed" that it was legally required to fire the person; Subdivision 4 doesn't care if the employer was wrong, so long as the employer genuinely "believed" it was right! Even worse, the employer might simply "deem" substance use to "constitute... misconduct" in all cases. The exception seems to swallow the rule. Maybe that's why, pre-MRTA, there wasn't very much litigation under this section regarding "legal consumable substances" (i.e., alcohol).


When MRTA passed, the Legislature took a look at Subdivision 4 and wanted to make sure this loophole couldn't be abused. So it passed a new subdivision, Subdivision 4-a, which applies "[n]otwithstanding the provisions of subdivision... four," and which provides specific exceptions when an "employer takes action related to the use of cannabis." Under Subsection 4-a, an employer can take action (again, that means fire or otherwise discipline someone) if (i) the employer is actually required to do so; (ii) the employee is actually impaired on the job; or (iii) the employer's failure to act would cause it to lose a federal contract or federal funding.


The exceptions in Subdivision 4-a are narrower than those in Subdivision 4. There's none of this wishy-washy "belief" language. The employer has to comply with the law; it can't write itself a policy or agreement saying it gets an exception. Subdivision 4-a seemed to put forward a simple rule: no illegal activity, nothing that violates a government contract, and no impairment at work; otherwise, what you consume at home is your business, not your boss's.


I say "seemed" because there's a snag. (Again, it's never that simple!) Subdivision 4-a, like so many provisions of New York statutory law, was written a little ambiguously. It applies "notwithstanding" Subdivision 4. Does that really mean it applies instead of Subdivision 4, at least as far as it relates to cannabis use, so that an employer can take action only for the three reasons above? Or does it really apply in addition to Subdivision 4, so that an employer can still fire someone for violating a pre-MRTA policy or because they "believe" the employee's actions constituted misconduct?


A lot of smart lawyers thought the former: after all, the point of the MRTA was to reverse harmful drug-war policies by protecting people who choose to lawfully use marijuana. And when I say "smart lawyers," I'm not talking about myself: the New York State Department of Labor ("DOL") wrote in no uncertain terms that, after MRTA came into effect, employers could no longer "prohibit the use of cannabis outside of the workplace" and that "existing policies" to the contrary were void unless an exception applied. That clearly meant that the DOL was not planning to apply Subdivision 4 to cannabis, since Subdivision 4 allowed action pursuant to any established workplace policies; there would be no need to look for an additional exception.


For two years, employers, employees and unions argued over the interpretation of Subdivision 4-a without guidance from the courts. That guidance came in Moran-Ruiz v. Ontario County, 2023 NY Slip Op 04062 (4th Dep't July 28, 2023), and it was squarely employer-favorable. There, the employee was working under a collective bargaining agreement ("CBA"), drafted before MRTA, that "strictly prohibited the use of, inter alia, marijuana – even when medically prescribed." The employee was prescribed – you guessed it – medical marijuana, which she used discreetly at home for three years without incident. Eventually, though, the employer found out. There was no law requiring the employer to do anything; it wasn't in danger of losing a federal contract; and there was no allegation the employee had been impaired at work. Nevertheless, the employer demanded she stop using what her doctor had prescribed, and it put her on unpaid leave until she did. The only reason it gave was that that was the policy in the CBA.


The employee went to court, arguing – consistent with the DOL guidance – that the existing policy in the CBA was unenforceable and that the employer had violated Section 201-d by discriminating against her. But the court didn't buy it. Taking a hard-line, pro-employer stance, the court "conclude[d] that the exemption contained in Labor Law § 201-d(4-a) does not conflict with the exemption contained in Labor Law § 201-d(4) and merely provides an additional basis for an employer to justify actions that would otherwise be discriminatory." Because the CBA prohibited all marijuana use, the court said, Moran-Ruiz was just not protected by the new law. The privately drafted CBA exempted the employer from any legal obligation not to discriminate against employees who use marijuana, even medically.


Although Moran-Ruiz involved an agreement between the employer and the union, the case will have consequences beyond the organized labor context. Under the court's reasoning, an employer can unilaterally – i.e., without any agreement – exploit Subdivision 4 to prohibit its employees from using marijuana off the clock. The employer just has to "deem[]" marijuana use to be misconduct, and boom, Section 201-d doesn't apply.


I believe the Moran-Ruiz case was wrongly decided. It conflicts with the Legislature's clear intent to legalize marijuana in fact as well as on paper. But Moran-Ruiz is the law now – at least in the Fourth Department, which includes Onondaga County – until the Court of Appeals overrules it or the Legislature passes a new law. When the Legislature gets to work, we can only hope that it passes a clear and unambiguous law that strikes a common-sense balance: ensuring that employers can maintain order and productivity in the workplace, while also ensuring that employees retain agency over personal decisions, whether recreational or medical. (Legislators, if you're reading this, call me!)


If you have been discriminated against in the workplace – whether for your legal use of consumable substances or your political activities, or your race, gender, sexual orientation, or religion, you need a lawyer who can navigate the complex and ever-changing landscape of New York antidiscrimination law. Call Burdick Law PLLC today for your employment law needs.

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1 Comment


Illan Halpern
Illan Halpern
Sep 06, 2023

Thanks for the write-up! Has this decision been appealed?

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