Background
In December 2022, Darlene Sanders interviewed for a customer service representative position with The Levari Group, LLC, d/b/a First Choice Freezer, and received a job offer. As part of the standard hiring process, the company required a drug test. The results indicated Sanders had used cannabis within the past thirty days, though she was not under the influence at the time of her application. When Sanders contacted the company about her start date, she was offered the chance to retake the drug test at her own expense within a week, but she could not afford to do so. The company then rescinded the offer.
Sanders sued under New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Market Modernization Act (CREAMMA), N.J.S.A. 24:6I-31 to -56, which prohibits employers from refusing to hire individuals based on positive tests for cannabinoid metabolites from lawful recreational cannabis use. She also brought claims for wrongful refusal to hire under Pierce v. Ortho Pharmaceutical Corp., breach of contract, negligence, and invasion of privacy.
The trial court dismissed the CREAMMA claim, concluding that the Cannabis Regulatory Commission (CRC) — not the courts — was the proper forum for enforcement. It also dismissed the Pierce claim and denied leave to add the negligence and privacy counts. The breach of contract claim was later dismissed as well. Sanders appealed.
The Court’s Holding
In a matter of first impression, the Appellate Division held that CREAMMA impliedly creates a private right of action for individuals who suffer employment discrimination based on their lawful use of cannabis. Applying the three-factor test from Cort v. Ash, 422 U.S. 66 (1975), adopted by the New Jersey Supreme Court, the panel found all three factors favored the plaintiff.
First, the court determined that Sanders was “one of the class for whose especial benefit the statute was enacted,” because N.J.S.A. 24:6I-51(b)(1) and -52(a)(1) specifically prohibit employment-related discrimination against individuals who test positive for cannabinoid metabolites. Second, the court found that the Legislature intended to create a private remedy, noting that CREAMMA contains “rights-creating language” and that the CRC has no statutory authority to enforce the anti-discrimination provisions against non-licensed employers like the defendant. The Attorney General, participating as amicus curiae, supported this conclusion. Third, a private right of action was consistent with CREAMMA’s purpose — without one, the anti-discrimination provisions would be “meaningless and unenforceable.”
The panel rejected the Pierce claim, however, because that doctrine is limited to wrongful discharge by an existing employer and does not extend to failure-to-hire situations. The court reversed the dismissal of the CREAMMA, negligence, privacy, and breach of contract claims and remanded for further proceedings.
Key Takeaways
- New Jersey employees and job applicants now have a judicially recognized private right of action under CREAMMA against employers who discriminate based on positive cannabis tests — even though CREAMMA does not expressly provide one. This is the first New Jersey state court to so hold.
- The decision diverges from the Third Circuit’s ruling in Zanetich v. Wal-Mart Stores East, Inc., 123 F.4th 128 (3d Cir. 2024), which found no private right of action under N.J.S.A. 24:6I-52(a)(1). The Appellate Division noted it is “not bound” by federal courts on state law questions and additionally relied on N.J.S.A. 24:6I-51, which Zanetich did not examine.
- Employers conducting pre-employment drug testing in New Jersey should review their policies to ensure compliance with CREAMMA’s prohibitions on adverse action based solely on cannabinoid metabolite results from lawful recreational use.
Why It Matters
This published opinion resolves a significant gap in New Jersey’s cannabis regulatory framework. Since CREAMMA’s enactment in 2021, it has been unclear whether employees and applicants had any meaningful recourse when employers violated the statute’s anti-discrimination protections, because the CRC lacks authority over non-licensed businesses. By recognizing an implied private right of action, the Appellate Division gives teeth to a statutory promise that the Legislature made when it legalized recreational cannabis: that lawful users would not face employment discrimination for exercising their rights.
The decision is particularly significant for New Jersey’s plaintiff-side employment bar, which now has a new cause of action to pursue alongside traditional LAD claims. Defense-side practitioners should advise employer clients to revisit drug-testing protocols and ensure that no adverse employment action rests solely on the detection of cannabinoid metabolites from lawful off-duty use.