Unfortunately, associated labor and employment violations in the cannabis industry are on the rise. Our firm has a 50-year history of helping employees enforce their workplace rights and ensuring that they receive the pay to which they are entitled under the law.
In 2012, Colorado and Washington became the first two states to decriminalize cannabis for both medicinal and recreational use. As of mid-2023, thirty-eight states and the District of Columbia have legalized cannabis for use by medical patients, and nine states (North and South Carolina, Georgia, Iowa, Tennessee, Texas, Wisconsin, and Wyoming) have legalized the medical use of low THC, high cannabidiol (“CBD”) products. All forms of medical cannabis are illegal in Idaho, Kansas, and Nebraska. Twenty-two states (along with Washington, D.C.) have legalized or decriminalized cannabis for both medical and recreational use. Some cities, including Atlanta, Philadelphia, Baltimore, and Richmond, now afford protections to medical or recreational cannabis users as well. As a result, the medicinal and recreational cannabis industry is a rapidly growing segment of the U.S. economy.
The industry includes a wide range of jobs titles and responsibilities, such as, dispensary retail and cashier staff, budtenders, couriers, packagers, extraction technicians, testers, quality-control inspectors, edibles chefs, cultivators, growers, trimmers, and harvesters.
Common Cannabis Workplace Violations
Cannabis employees are often:
- Improperly classified as Exempt from the FLSA.
- Not receiving overtime pay when working over 40 hours in a week.
- Paid overtime at a lower rate than is required under the FLSA.
- Not paid for all hours of work, for example, not getting properly compensated for working before or after a shift.
- Not paid for time spent during training or while training others, and others have not been compensated while promoting the business.
- Not paid the overtime hours that they have worked in a timely matter.
- Not paid a final paycheck after they move on to another job or are terminated.
Cannabis employees have also suffered reduced hours, termination, or general retaliation by employers due to making complaints about workplace violations.
Common Tip Violations
Many budtenders and other cannabis retail employees receive tips for their services. Examples of these violations include:
- Tipping pools that include people who should not be included under the FLSA.
- Paying employees the tip credit rate when performing work that earns no tips.
- Not following state laws regarding the tip credit amount.
For more information, email us at info@mselaborlaw.com or call (202) 833-8855 to set up a free consultation with an experienced employment attorney today (one who is familiar with the cannabis industry), or click the link to access the Contact Us form in the menu header above.
State Specific Discrimination Protections
Most states that have legalized medical cannabis afford protections against discrimination to employees who are registered medical cannabis users/cardholders, or who care for someone who is a registered patient, including Arizona, Arkansas, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Virginia, and West Virginia. California will extend protections to medical cannabis users beginning on January 1, 2024. The Cannabis Employment Protection Amendment Act of 2022 will require employers in Washington, D.C. to treat a medical cannabis patient’s use of medical cannabis to treat a disability in the same way they would treat legal use of a controlled substance beginning on July 1, 2023.
Appellate court decisions protect workers from discrimination for medical cannabis use in Massachusetts, New Hampshire, and Vermont. Importantly, employers in these states are not prohibited from disciplining employees who use cannabis, or are impaired, while on duty or on company property.
Additionally, some states have afforded protection to off-duty certain cannabis users, prohibiting personnel actions based on off-duty recreational use, including Connecticut, Montana, Nevada, New Jersey, and New York. California will add such protections effective January 1, 2024. States such as Delaware and Rhode Island have explicitly stated that a positive drug test is not enough to determine that an employee is impaired while on duty.
Beginning July 1, 2023, Washington, D.C. will prohibit employers from firing, failing to hire, or taking other personnel actions against a worker for use of cannabis, participation in the District’s or another state’s medical cannabis program, or failure to pass an employer-required or requested cannabis drug test unless the position is designated safety sensitive.
Washington state recently enacted a law prohibiting discrimination in initial hiring decisions based on a job applicant’s lawful, off-duty use of cannabis or test results indicating the presence of non-psychoactive cannabis, effective January 1, 2024.
Employees who legally use recreational cannabis while off-duty in states where such use is protected may have legal recourse if they are terminated, disciplined, or subjected to other personnel actions as a result of their legal, off-duty cannabis use.
Because cannabis remains a Schedule I drug under federal law, employees who are subject to Department of Transportation (DOT) drug testing (i.e., employees with commercial drivers’ licenses) are unlikely to be protected from discipline if they test positive for cannabis. Additionally, federal contractors are similarly unlikely to have claims.
States including Colorado, Florida, Georgia, Hawaii, New Hampshire, North Dakota, Ohio, and Oregon, DO NOT prohibit employers from taking adverse employment actions against medical cannabis users. Therefore, we cannot pursue claims in these states.
For more information, email us at info@mselaborlaw.com or call (202) 833-8855 to set up a free consultation with an experienced employment attorney who is familiar with the cannabis industry, or click the link to access the Contact Us form in the menu header above.
Discriminatory Hiring Process – Zanetich v. Wal-Mart Stores East, Inc.
In February 2021, the New Jersey Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (“Cannabis Act”) went into effect, making it unlawful for employers in the state to refuse employment to job candidates solely because they have received a positive drug test result indicating they have cannabis/marijuana in their body. However, a New Jersey man alleges in a putative class action lawsuit that Wal-Mart and Sam’s Club recently did just that.
On June 13, 2022, Erick Zanetich filed suit against Wal-Mart and Sam’s Club in New Jersey state court, alleging that the stores violated the Cannabis Act when they rescinded an offer of employment for a security-related position on the grounds that he had tested positive for marijuana during a mandatory pre-employment drug test. Zanetich brought the case on behalf of himself and a class of all persons who were denied employment by Wal-Mart in the state of New Jersey because they tested positive for marijuana in a pre-employment drug screen or were subject to any other adverse employment action because of testing positive for marijuana. Wal-Mart removed the case to the federal court on September 2, 2022, in part because Zanetich’s allegations demonstrate that the damages sought in the case exceed $75,000. The case, which is still in the early stages, is now pending under the caption Zanetich v. Wal-Mart Stores East, Inc., Case No. 1:22-cv-05387 (D.N.J.).
If you believe you have suffered an unlawful adverse employment action or have been wrongfully denied employment on prohibited grounds, please contact MSE today to learn more about your rights.
Incorrect Payment of Overtime – Spriggs et al. v. Merling et al.
Two cannabis workers and a Maryland dispensary have agreed to a $45,000 settlement of the workers’ unpaid overtime lawsuit. Last Friday, the two parties asked a federal judge to approve the settlement, which would put an end to the workers’ claims of wage theft and discrimination. The workers alleged that they had frequently worked more than 40 hours a week without compensation, and were owed at least $31,000 in unpaid overtime. Because the dispensary failed to maintain accurate time records, this amount was based on the workers’ own recollections and limited documentation.
The $45,000 settlement addresses the overtime claim, as well as an additional claim that one of the plaintiffs was fired for complaining about racist and sexist comments made to her in the workplace. The dispensary did not admit wrongdoing as part of the settlement.
Cannabis is a young and fast-growing industry, but one to which wage & hour laws nevertheless apply in full force. McGillivary Steele Elkin has recovered millions of dollars for workers in cases where employers have failed to pay overtime, including those where, as here, there is little documentation of the amounts owed. If you believe your employer is not properly compensating you for the overtime you are working, contact us at info@mselaborlaw.com.
