Ending years of discussion about the scope of state law employment protections for individuals who use marijuana recreationally, the Nevada Supreme Court has upheld a lower court's decision to dismiss a complaint by an employee who was fired for testing positive for marijuana on a post-accident drug test. In Ceballos v. NP Palace, LLC, the employee asserted that the positive drug result was due to his use of recreational marijuana at home, that he was not intoxicated or impaired at work, and he had complied with state law. After his termination, the employee brought a complaint against his employer for damages under Nevada's law protecting the off-work use of a lawful product and common-law tortious discharge.

The employee's first proposed cause of action alleged a violation of NRS 613.333(1), which makes it unlawful for employers to "[d]ischarge . . . any employee . . . because the employee engage[d] in the lawful use in this state of any product outside the premises of the employer during the employee's nonworking hours" so long as "that use does not adversely affect the employee's ability to perform his or her job or the safety of other employees." The Nevada Supreme Court rejected the employee's argument that the phrase "lawful use in this state" meant lawful under state law, and found that the statute refers to the use of products lawful under both state and federal law. In reaching this conclusion, the Nevada Supreme Court examined the language of the statute, noting the meaning of the prepositional phrase "in this state" is different from "under state law," and that latter of which signals the Legislature's intent to focus on state law. The Nevada Supreme Court cited with approval a 2015 opinion from the Colorado Supreme Court, which similarly held that "lawful activity" did not include marijuana use that is illegal under federal law but legal under state law.

The court also rejected the employee's claim for tortious discharge in violation of public policy. Considering whether policies prohibiting marijuana use violate public policy, the court examined the interplay between the recreational marijuana statutes and employment law, and concluded that state law expressly permits employers to adopt and enforce workplace policies prohibiting or restricting recreational marijuana use. The court emphasized that the Legislature had authorized employers to prohibit or restrict recreational marijuana use by employees, and held that for the court to conclude otherwise would intrude on the prerogative of the Legislature.

The Nevada Supreme Court's decision provides clarity for employers about how evolving marijuana laws impact workplace rules prohibiting recreational marijuana use. Individuals who use marijuana for medical reasons as permitted by state law may, in contrast, may be entitled to accommodations provided that they do not use marijuana at work and their off-duty marijuana use will not pose a safety risk. Employers are encouraged to consult with knowledgeable counsel in drafting and implementing drug testing policies and procedures.

Posted: September 1, 2022