Marijuana Legalization and Drug Testing Reform

Legislation to legalize recreational marijuana, S.241, took another step forward at the end of last week with approval by the Senate Finance Committee. The bill will be reviewed by the Senate Appropriations Committee this week.

AIV testified to a number of concerns for employers, especially manufacturers, before the Senate Economic Development Committee. This Committee has been reviewing employer issues for potential amendments to the bill, although it is not going to be voting on the bill directly as a committee. AIV highlighted four areas of concern:

Hiring new employees. Although there has been growing and appreciated attention to the difficulty manufacturers and other employers are having finding new employees who are qualified for the jobs needed to be filled, for several years there has been another serious hiring problem. The number of potential new hires who fail initial drug tests can often be alarmingly high. To the extent that marijuana usage might become more widespread, frequent, or considered acceptable behavior, the availability of qualifying new hires in Vermont could become even more limited than it already is.

Workplace safety. Impairment under the influence of drugs and alcohol is a significant contributing factor in workplace accidents. This is not only a direct health and safety issue – workers’ compensation costs in Vermont are high compared to other states, especially for manufacturers, and the small size of the insurance pool makes insurance rates especially sensitive to a comparatively small change in incident rates. To the extent that marijuana usage might become more widespread, frequent, or considered acceptable behavior, workplace safety and workers’ compensation costs could be negatively impacted.

This issue also highlights and gives greater weight to long-standing concerns of employers that Vermont statutes unduly restrict drug testing and the options employers have to respond to drug use and to try to ensure a safe and productive workplace, regardless of legalization.

Labor litigation. As has already been seen in other states, the perception and expectation disconnect between state legalization of marijuana, acceptable workplace behavior and policies, and federal law can lead to conflict and litigation over workplace policies and managerial and disciplinary decisions. Even as some legal issues are resolved in other states that have legalized marijuana, differences in relevant state statutes and appeal court circuits make it reasonable to assume that Vermont employers would be exposed to unwarranted and unreasonable litigation costs and risks should Vermont legalize marijuana.

Economic development. In light of the issues outlined above, as well as other issues associated with drug legalization, it is reasonable to be concerned that marijuana legalization could negatively influence economic development in Vermont. There are many factors that employers weigh in deciding where to locate and where to direct investment and production. Availability of new hires, workplace safety, and litigation costs and risks are clearly among these many factors. For manufacturers and others engaged in federal contracts or otherwise subject to federal requirements, the disconnect between state and federal laws on marijuana can enhance some of these potential concerns.

New Interest in Reforming Drug Testing?

In response to the concerns raised by AIV and other employer representatives, the Economic Development Committee has expressed interest in considering changes to Vermont’s drug testing laws. Although reforming drug testing rules would not resolve all of the serious problems and concerns with marijuana legalization and AIV would not support S.241 even with the inclusion of such provisions, AIV has provided the Committee with recommended revisions and will testify on them this coming week.

Apart from testing job applicants and testing under preempting federal rules (such as for CDL drivers, defense and other federal contract work, etc.), Vermont’s workplace drug testing rules can easily be argued to be the most restrictive in the nation. Many states do not even have specific state laws, giving employers full discretion within the bounds of federal laws for non-discrimination, ADA protections, and the like. Those states that do have their own laws tend to allow or even require testing on reasonable suspicion, after accidents, and other circumstances – in some cases even at random.

In contrast, Vermont employers can only test employees when they can show probable cause (a much higher standard than reasonable suspicion). If an employee tests positive, the employer cannot discharge them and instead must put them through a drug rehabilitation program. After rehabilitation, an employer cannot test the employee again unless they can again show probable cause. Only after failing such a test after rehabilitation can an employer discharge the employee for violating the employer’s drug policy.

AIV is recommending to the Committee that employers who have a written drug testing policy and clear notice to employees of what that policy entails be allowed to test in cases of reasonable suspicion, as part of scheduled company-wide testing, as a follow up on rehabilitation, and after accidents. Referral to rehabilitation would be optional for the employer. Discipline up to and including discharge would be allowed for any failed test or refusal to submit to a test. The existing disqualification for workers’ compensation for accidents caused in part by intoxication would be clarified, as would be the category of disqualification for UI benefits for someone discharged for violating an employer’s workplace drug policy.

If AIV is successful in winning support for making positive changes to Vermont’s drug testing laws in S.241, AIV will still not support that overall bill, as noted above. However, we will seek additional opportunities to advance the reforms in addition to S.241 so that they might be enacted even if the marijuana bill fails to pass the Senate or the House this year. Members interested in more information or in weighing in on this issue are encouraged to contact us at