On May 25, 2023, the U.S. District Court for the District of New Jersey granted an employer’s motion to dismiss a putative class action in Zanetich v. Wal-Mart Stores E., Inc. Addressing an issue of first impression, the Court held that job applicants do not have a private right of action under the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (the “CREAMMA”), the state’s recreational marijuana law. The Court also held that there is no common law claim for wrongful failure to hire in violation of public policy in New Jersey.
The plaintiff, an applicant for a position in the employer’s Asset Protection Department, received an offer of employment conditioned on him passing a drug test. According to the applicant, the employer’s drug and alcohol policy provided that an applicant who tested positive for illegal drugs may be ineligible for employment. The applicant alleged the employer included marijuana within its definition of “illegal drugs.” After he tested positive for marijuana, the employer rescinded his job offer.
The applicant filed a complaint in state court, but the employer removed the case to federal court. The complaint alleged two causes of action, which the applicant brought as a class action: (1) violation of the CREAMMA; and (2) common law failure to hire in violation of New Jersey public policy. The employer moved to dismiss both counts, arguing that the complaint failed to state a claim upon which relief could be granted.
The Court’s Order
In support of its motion to dismiss the applicant’s CREAMMA claim, the employer argued that the law did not have an express or implied right of action. While the applicant conceded that the CREAMMA lacks an express private right of action, he argued that a private right of action is implied. The Court disagreed.
The Court observed that the CREAMMA contains an express prohibition against adverse employment action based on recreational use of marijuana. But the Court also observed that the New Jersey Legislature crafted the CREAMMA with no language stating how the anti-discrimination provision can be enforced, who can enforce it, or what remedies are available, if any. In fact, the Court pointed out that the CREAMMA designates the New Jersey Cannabis Regulatory Commission as having the power to “regulate, investigate, and prosecute all violations of the statute[.]” Meanwhile, the Court noted that the CREAMMA expressly allows employers to test applicants and employees for marijuana, and that employers can use such test results to support an adverse employment action.
The Court, however, acknowledged the three-factor test—established by the United States Supreme Court and adopted by the New Jersey Supreme Court—for determining whether an implied private right of action exists under a statute:
(1) whether the “plaintiff is a member of the class for whose special benefit the statute was enacted”; (2) whether “there is any evidence that the Legislature intended to create a private right of action under the statute”; and (3) whether “it is consistent with the underlying purpose of the legislative scheme to infer the existence of [a private action]”.
The Court held that the first factor weighed in favor of finding a private right of action given the anti-discrimination provision in the law. Regarding the second and third factors, though, the Court held that they weighed against finding a private right of action. Guiding the Court’s conclusion in this regard were several factors. The Court acknowledged appellate precedent establishing that the judiciary should be reluctant to infer a private right of action absent a clear right of action or the availability of private remedies in the statute. Here, neither a private right of action nor private remedies are clear in the CREAMMA.
The Court also reasoned that inferring a private right of action is especially ill-advised when the statute in question grants “pervasive” regulatory authority to a government agency. And, in this case, the Court held that “as presently written, there is evidence that the Legislature intended for the [New Jersey Cannabis Regulatory Commission] to handle all aspects of the enforcement of” the CREAMMA.
Next, the Court found compelling that the Legislature crafted other employment statutes containing express private causes of action. This fact, the Court reasoned, is evidence that when the Legislature intends to create a private action in the employment context, it does so with clear language. By implication, the absence of any such clear language in the CREAMMA reflects the Legislature’s intent not to create a private right of action.
Finally, the Court found unpersuasive the applicant’s reliance on decisions from courts in other states which have found implied private causes of action under different marijuana-related legislation. The Court reasoned that the statutes at issue in those decisions were distinct because they—unlike the CREAMMA—did not create or task a government agency with enforcement of the statute.
Regarding the applicant’s purported common law claim for failure to hire in violation of public policy, the employer argued that no such claim exists under New Jersey law. The Court agreed. In fact, the Court pointed out that it and New Jersey appeals courts “have time and time again found that there is no cause of action under common law for failure to hire.” The applicant argued that his common law claim included a wrongful termination component. While the Court acknowledged that a common law claim for wrongful termination exists under New Jersey law, it rejected the claim because the applicant was claiming failure to hire—not wrongful termination.
While this decision represents a victory for employers in New Jersey, some courts in other jurisdictions have found an implied private right of action under the marijuana laws in their states. In states where it is unclear whether a marijuana law has a private right of action, employers should work with counsel before making hiring or other employment decisions based on marijuana use or a positive marijuana drug test. In addition, employers with a large geographic footprint must be mindful of variations in marijuana-related legislation and court decisions from state-to-state. There have been many legislative and regulatory developments in this area, and more are anticipated. Now, more than ever, employer vigilance is important.