Resolving prior uncertainty as to whether Nevada law provides workplace protections to employees who use medical cannabis away from work, the Nevada Supreme Court has decided that NRS 678C.850(3), a statute in the NRS Chapter on the Medical Use of Cannabis, provides employees with a private right of action to claim an employer has failed to seek reasonable accommodations of off-work medical marijuana use. However, the court also held that employees in these circumstances may not bring a claim for tortious discharge (in violation of public policy) or unlawful discrimination for engaging in the lawful use of a legal product protected by NRS 613.333, or for negligent hiring, training, or supervision.

In Freeman Expositions, LLC v. Eighth Judicial District Court, the plaintiff accepted a journeyman position with the employer, dispatched through a union. After an incident occurred on the worksite, the employee was required to take a drug test, and tested positive for cannabis. The employer terminated his employment, consistent with a collective bargaining agreement with a zero-tolerance provision for drug use, and also sent the union a letter stating that the employee was no longer eligible for dispatch to the employer's worksites. At the time of the termination, however, the employee held a valid medical cannabis identification card issued by the state of Nevada.

The employee filed suit, asserting multiple causes of action against the employer. The defendant employer moved to dismiss all claims, but the district court allowed the following claims to proceed: (1) unlawful employment practices under NRS 613.333, the state's law against discrimination for lawful use of any product outside work which does not adversely affect job performance or safety of others; (2) tortious discharge; (3) negligent hiring, training, and supervision; and (4) violation of the medical needs of an employee pursuant to the state's medical marijuana law. The employer filed a petition with the Nevada Supreme Court, seeking dismissal of all remaining claims.

The Nevada Supreme Court ruled that the district court had properly denied the employer's motion to dismiss the claim brought pursuant to NRS 678C.850(3), finding the statute implied a private right of action to enforce its provisions. Specifically, the statute requires employers to:

attempt to make reasonable accommodations for the medical needs of an employee who engages in the medical use of cannabis if the employee holds a valid registry identification card, provided that such reasonable accommodation would not:

(a) Pose a threat of harm or danger to persons or property or impose an undue hardship on the employer; or

(b) Prohibit the employee from fulfilling any and all of his or her job responsibilities.

In concluding that a private right of action exists, the court looked to the Legislature's intent and held that the plaintiff was part of the class for whose benefit the statute was enacted. The Nevada Supreme Court also noted that the legislative history of the statute demonstrates that the Nevada law was modeled on Arizona's medical cannabis statute and that a federal district court in Arizona concluded that the analogous Arizona law included an implied right of action to implement the statutory directive.

The Nevada Supreme Court also reasoned that because no other Nevada statute provides medical cannabis users with a cause of action against employers that violate the directives of the state's medical cannabis law, Nevada, like other jurisdictions with statutes directing employers to accommodate employees using medical cannabis, would recognize a private right of action even where the legislators did not expressly include such a remedy in the statutory scheme. The court concluded that recognizing an implied right of action would give force to the public policy sought to be advanced by the statutory scheme.

Notably, since the issue before the Nevada Supreme Court was essentially an appeal of the trial court's resolution of a motion to dismiss for failure to state a claim, the court declined to address the merits of the case, as for example whether an employer must attempt to accommodate an individual who uses marijuana after the individual has been involved in a workplace incident. In a footnote, the court explicitly declined to speculate as to what the defendant employer owed the plaintiff under NRS 687C.850(3) to "attempt to make reasonable accommodations for the medical needs of an employee who" uses medical cannabis.

As for the claim for tortious discharge, the Nevada Supreme Court held that the public policy of prohibiting discrimination against medical marijuana users was qualified, in that it does not mandate a particular response by employers, and therefore is not a public policy sufficiently compelling to support claims for tortious discharge.

In regard to the claim for unlawful discrimination against an individual who engages in the lawful off-work use of a product that does not affect work performance, pursuant to NRS 613.333, the Nevada Supreme Court extended its holding in Ceballos v. NP Palace, LP to hold that that law does not provide a basis for a claim for employment discrimination for the use of medical cannabis outside of the workplace because medical cannabis remains illegal under federal law.

Finally, as to the plaintiff's negligent hiring, training, and supervision claims, the Nevada Supreme Court held the alleged wrong related to the employer's decision to end the plaintiff's employment because he used medical cannabis, and therefore the plaintiff had failed to state a claim for negligent hiring, training, or supervision. The Nevada Supreme Court accordingly concluded that the district court erred by not dismissing the claims for tortious discharge, unlawful employment practices under NRS 613.333, and negligent hiring, training, and supervision.

Employers in Nevada should be prepared to engage in the interactive process if an employee discloses medical cannabis use outside of the workplace or tests positive for cannabis use, absent cause to discipline the employee for other reasons. However, NRS 678C.850 does not require employers to allow the medical use of cannabis in the workplace or to "modify the job or working conditions of a person who engages in the medical use of cannabis that are based upon the reasonable business purposes of the employer." NRS 678C.850(2)-(3). Employers should confer with knowledgeable counsel as needed regarding these issues.

Posted: January 6, 2023

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