Megan is an experienced employment law attorney who works in Harris Bricken's Portland office. Her practice is focused on employment advising, employment and labor litigation, and business litigation.

marijuana federal employment cannabis
Will the laws change for federal worker marijuana use?

Could the federal government protect the rights of federal employees to use marijuana in states where its legal?

Possibly. A bipartisan bill was introduced in Congress on July 28 proposing to protect federal employees’ personal and private use of marijuana in states where it is legal. Congressmen Charlie Crist (D-Fl) and Drew Ferguson (R-Ga) jointly introduced the “Fairness in Federal Drug Testing Under State Laws Act”, which would prohibit federal employers from denying employment or subjecting federal employees to adverse personnel action if they test positive for marijuana and live in a state where it is legal.

Today, because marijuana remains an illegal substance under the Controlled Substance Act, federal employees can be terminated or denied employment if they test positive for marijuana on a drug test (and many federal agencies require regular or periodic testing). The bill would not apply to individuals occupying or seeking positions requiring top-secret clearance (meaning, they could still be tested), and the bill would allow federal employers to terminate employees for being impaired at work.

The bill, while incredibly important for federal employees, could also significantly impact private employers in states with legal cannabis. A majority of states have some form of legal marijuana, either medical or recreational. However, many of those states still allow employers to terminate employees for off-work use of marijuana, even medical marijuana patients. Several states, including Oregon and California, have attempted to pass legislation protecting employees’ off-work marijuana use, but the bills have failed in committees or did not garner enough votes to pass. Thus, both Oregon and California currently have statutes and/or case law allowing employers to terminate employees for off-work use.

So why are the state proposals failing? One big reason is that they have not made exceptions for private employers who contract with the federal government. Private employers who contract with the federal government are required to have drug-free workplace policies in place—meaning they have to terminate employees for positive drug tests to maintain their federal contracts. If the Fairness in Federal Drug Testing law passes, it likely would extend to private employers contracting with the government. And if the federal law passes, states may have a clearer path to protecting off-work use.

It is also important to note that the state laws and cases permitting employers to terminate employees for off-work marijuana use rests on marijuana’s continued classification as a Schedule I controlled substance under the federal Controlled Substance Act. While the Fairness in Federal Drug Testing act would not change marijuana’s status as controlled substance, states would at least be able to rely on the federal government’s position that it will not fire employees for off-work use. It seems more likely that the states where marijuana is legal in some form would be successful in passing legislation protecting employees’ off-work use of marijuana.

It will certainly be interesting to see if the Fairness in Federal Drug Testing bill gains momentum in committee and in front of Congress. We will be sure to keep you posted for any movement on the bill after Congress returns from their August recess.

oregon cannabis employment sick leave
Tell sick employees to stay home! And don’t skirt pay laws.

Oregon was one of the first west coast states to require employers to provide sick leave to employees. Oregon law requires cannabis business (as well as all other businesses) to provide at least 40 hours of protected sick leave a year to its employees. The law is still relatively new and therefore there have been few reported violations. However, on July 3, 2018 Oregon Bureau of Labor and Industries (BOLI) issued sanctions against Lioness Holdings, LLC DBA Tan Republic for violation of the sick leave laws. The BOLI order gives us an idea of what kind of penalties we can expect against businesses that fail to comply with the law.

Tan Republic’s employee handbook required employees to find coverage for their duties in the event of illness and to obtain a physician’s note. Sarah Levin, an employee of Tan Republic, requested to use her sick leave in mid-October. She was unable to find coverage for her shift and her manager requested she appear as scheduled for work. She did so and her illness progressed. The next day Ms. Levin again requested sick leave accommodations. Her manager requested she provide a physician’s note the same day.  Ms. Levin was unable to do so and the same day her employer emailed her informing her that she was suspended for 30 days due to misuse of paid time, insubordination, and lack of professionalism. Ms. Levin could not afford a 30 day suspension and did not return to Tan Republic after she received the email.

The Oregon sick leave law forbids employers from requiring employees to search for or find a replacement worker as a condition of the employee’s use of accrued sick time. BOLI easily determined Tan Republic violated the Oregon sick leave law by requiring employees to find coverage.

BOLI also determined Tan Republic took adverse employment action against Ms. Levin for her use of protected sick leave. BOLI determined Ms. Levin’s suspension was related to her request for sick leave rather than actual merit based misuse of paid time or insubordination.

Most significantly, BOLI linked Oregon sick leave law with Oregon retaliation laws. BOLI determined Ms. Levin was constructively discharged. Constructive discharge occurs when employment conditions are so awful an employee has no choice but to end the employment relationship. Here, BOLI determined Tan Republic should have reasonably known that Ms. Levin would end her employment relationship with them when they suspended her for thirty days. BOLI treated this as retaliation for Ms. Levin’s lawful use of sick leave. The constructive discharge finding is significant because BOLI used it to increase damages awarded to Ms. Levin. In total based on violations of Oregon sick leave laws and Oregon’s anti-retaliation laws BOLI awarded Ms. Levin $20,000 plus interest, payable by Tan Republic. Of note, BOLI did not break down the award based on the amount related to the violation of the Oregon sick leave law versus violation of the anti-retaliation laws. Regardless of the breakdown, this case is important going forward. Employers have been warned: comply with sick leave or face big penalties.

There is an easy yet important lesson to be learned from the Tan Republic case: it is much cheaper to allow your employees to take leave in accordance with Oregon sick leave laws rather than face a $20,000 bill plus attorney fees. As we have discussed in the past, employee handbooks are a necessity for every cannabis business. If yours has not been updated recently or does not contain a sick leave policy, now is the time to update.

Now required by OMMP.

Back in March 2018, the Oregon Health Authority (OHA) issued temporary rules outlining the requirements for Oregon Medical Marijuana Program (OMMP) grow sites to track the propagation and production of medical marijuana. The deadline to start tracking in the Cannabis Tracking System (Oregon uses METRC) is today, July 1. You can view the OHA Notice of Proposed Rulemaking, which contains a draft of the new rule, here.

The temporary OHA rules required medical marijuana grow sites that service three or more patients to designate someone as the “grow site administrator” by May 31, 2018. The grow site administrator is responsible for signing up for METRC, successfully complete all required METRC training; and ordering unique identification tags and tagging all marijuana items. Oregon Medical Marijuana Program notified grow sites regarding the requirement to designate a grow site administrator by May 31, 2018, so hopefully no registrants missed this deadline. Failure to meet this deadline could result in revocation of the grow site and revocation of the registration of all persons responsible for the marijuana grow site.

The other important deadline is today. Required growers (those who grow for three or more patients) must start using METRC at all times going forward. Medical marijuana producers must also have an approved grow site administrator capable of entering required information in METRC (meaning you must have completed the training); an active METRC user account; unique identification tags for the plants; and all medical marijuana items tagged with UID tags and all inventory recorded in METRC. Not coincidentally, today is also the cut-off under Oregon Liquor Control Commission (OLCC) rules for nondisclosure of “start-up” inventory by new producer licensees. Previously, that inventory could be from “any source in Oregon” under OAR 845-025-2060(1)(a).

Beyond having inventory recorded in METRC, required grows must use METRC to record all transfers of marijuana items to patients, designated primary caregivers, registered medical marijuana dispensaries, processing site, and laboratories. The rules require the following be entered into METRC:

  1. the amount of usable marijuana transferred to each patient or designated primary caregiver, the patient or caregiver’s OMMP card number, and the date of the transfer;
  2. the amount of usable marijuana, seeds and number of immature plants transferred to each registered dispensary, the dispensary’s OMMP registration number (if any still exist!) and the date of transfer;
  3. the amount of usable marijuana transferred to each registered processing site, the processing site’s OMMP registration number and the date of the transfer; and
  4. the amount of usable marijuana transferred to each laboratory for testing, the laboratory’s license number, and the date of the transfer.

METRC must be reconciled at the end of each day. That means, each day, METRC needs to be updated an essentially perfect. Failure to meet the requirements of the temporary rules caould mean registration revocation.

This might seem like a lot—and it is for medical marijuana growers that have not seen the regulation the recreational growers have. These rules are one of the responses the OMMP and OLCC have adopted to curtail the black-market and out of state transfers. If all goes well, compliance with the rules just might keep the federal government out of Oregon’s legal marijuana market.

cannabis marijuana intern
Is your “intern” really an intern?

A simple google search for “Cannabis Intern” turns up around 340,000 results. As an employment attorney, the word “intern” is a major red flag for me — right up there with “independent contractor.”  Why? Because “intern” positions are often misused and many businesses, even sophisticated ones, believe labeling someone an intern means you do not have to pay them.

Employers can—and in certain situations encouraged to—hire interns. Properly classified interns do not have to be paid minimum wage. Employers may have the best intentions hiring an unpaid or low-paid intern. They truly believe the worker will obtain important training and education from the position. That might even be true. But, if a person is providing a service for an employer and is not paid or is paid under minimum-wage, employers could be in a lot of trouble for violation of both state and minimum wage laws.

What makes an intern actually an intern rather than an employee of a company? The U.S. Department of Labor has a seven-part test for determining the status of interns . When evaluating the employment relationship between an employer and an intern a court will consider:

  1. How similar the training is to that which the worker would receive in an educational environment;
  2. The extent to which the training is tied to a formal education program with integrated coursework and academic credit;
  3. The extent to which the program accommodates academic commitments by corresponding to the academic calendar;
  4. The extent to which the internship’s duration is limited to the period of beneficial learning;
  5. The extent to which the internship complements rather than displaces the work of paid employees while providing significant education benefits;
  6. The interns are not necessarily entitled to a job at the conclusion of the training period; and
  7. The employer and the intern understand that the intern is not entitled to compensation for the time spent in training.

No single factor is determinative, but as you can tell there is a common theme of education. Typically, if the worker is receiving some sort of educational credit for the work, they are an intern. If the worker is improperly classified as an intern and has not been receiving pay, then wage and hour laws apply. As previously discussed, failing to pay minimum wage can come with hefty penalties.

If you’re considering hiring an “intern” for your marijuana business, its best to consult with an employment law expert beforehand to provide a legal analysis of whether the position is truly one fit for an intern. After all, even if a state agency considers the “intern” qualified to work in your marijuana business, that doesn’t necessarily mean you can have them work for free.

Oregon safety marijauana
The OSHA model. And a good look for cannabis business.

So, what is Oregon OSHA (“OR OSHA”)?

OR OSHA is the Oregon Occupational Safety and Health Act. This law requires employers to “furnish employment and a place of employment which are safe and healthful for employees.” In other words, employers are required to maintain safe workplaces. This means that employers are required to identify potential workplace hazards, prevent such hazards, and provide safety measures to employees to protect their health and safety, in all situations where hazards are inherent in the job or otherwise unavoidable. Does this law apply to cannabis employers? You bet.

OR OSHA also identifies certain conditions as inherently hazardous or unsafe, and regulates the condition or practice by imposing employer requirements to mitigate the condition or practice (think fall protection when on a ladder). The kind of marijuana business you run will dictate what OR OSHA regulations are triggered.

For example: marijuana producers are subject to the OSHA agricultural rules. These rules require employers to protect employees from things such as machine hazards, mold, electrical hazards, and heat exposure, among other things agricultural employees are subject to.  Marijuana processors must comply with special requirements for employees handling extraction chemicals. Retail operators must ensure employees are safe from slips, trips, and falls. Etc.

In addition to protecting employees from hazards at work, OSHA imposes reporting requirements on employers. Employers must report to OR OSHA within eight hours epodes like the death of an employee or a catastrophe. A catastrophe is defined as two or more employees fatally injured or three or more employees admitted to a hospital or an equivalent medical facility. Employers must report to OR OSHA within 24 hour of any employee being hospitalized, losing an eye or an amputation, or avulsion that results in bone loss. In addition to these reporting requirements, employers with 10 or more employees must record their injuries and illnesses that are a result of the work environment on a form called the OSHA 300 Log. Employers must also summarize the 300 log on a form called an OSHA 300-A.

Somewhat similar to the Oregon Liquor Control Commission (“OLCC”) — which is the state agency that administers marijuana licenses — OR OSHA has the power to investigate employers to determine whether or not they are compliant with OSHA requirements. OR OSHA does not have to provide advance notice of inspections, and the agency may randomly show up at an employer’s place of business to conduct an inspection.

So where might the agency show up? OR OSHA prioritizes inspections at locations that are determined to be the most unsafe. An OR OSHA investigator will investigate the employer’s property to determine if there are any violations. If there are violations, the investigator can issue a citation based on the type of violation. As with OLCC citation powers, the type of penalty associated with the citation depends on how serious the violation is.

OR OSHA safety requirements are comprehensive. The agency encourages employer compliance and has a series of free tools available to employers to assist with that compliance. OR OSHA’s most significant tool is its consultation services. Free of charge, an OSHA consultant will inspect a work site and provide safety, health, and ergonomic hazard assessments, recommendations to control and eliminate hazards, a written program evaluation, industrial hygiene services, training on health and safety topics, and assistance with safety and health programs. In short, a consultant will come out and point out potential OSHA violations and provide a plan to help with compliance.

Pro tip: A consultant is a great and free way to assess your compliance with OSHA prior to an inspector coming to your place of business.

Like with most employer regulations, compliance in the first place is the best way to avoid a hefty civil penalty or litigation. However, citations happen even when the best intentions are in place. This post has only scratched the surface of OSHA requirements. If you have additional questions, give us a call.

marijuana cannabis gay
Be inclusive with your business — cake or cannabis.

What do cake and cannabis have to do with each other? Besides the obvious late-night munchies or a great recipe for an edible, a recent Supreme Court decision involving cake impacts cannabis businesses across the nation.

The Masterpiece Cakeshop case garnered a lot of media attention—and for good reason. Not only are the facts enticing but the outcome is even more surprising.

In 2012, Masterpiece Cakeshop owner, Jack Phillips, refused to create a cake for David Mullins and Charlie Craig’s same-sex wedding. He said he would not use his talents to convey a message of support for same-sex marriage at odds with his religious beliefs. Colorado, like most states, prohibits businesses from discriminating against individuals on the bases of sex or sexual orientation. This means that Colorado businesses who are open to the public cannot refuse to serve someone because of their sexual orientation.

Mr. Mullins filed a complaint with Colorado’s Civil Rights Commission contending Masterpiece Cakeshop discriminated against him and his partner based on their sexual orientation. Mr. Mullins prevailed in front of the Commission and in state courts. Masterpiece Cakeshop appealed to the United States Supreme Court and argued Mr. Philips’ right to free speech would be violated if he were required to create a cake for the couple. Somewhat shockingly, the Supreme Court agreed with him.

The Supreme Court focused on the Civil Rights Commission treatment of Mr. Phillips and determined that the Commission had ignored and dismissed his religious freedom and freedom of speech rights. Justice Kennedy, who wrote the majority opinion, determined that “the neutral and respectful consideration to which Mr. Phillips was entitled was compromised here….The Civil Rights Commission’s treatment of [this] case has some elements of a clear and impermissible hostility toward the sincere religious beliefs that motivated his objection.”

What’s does Justice Kennedy’s opinion mean for cannabis businesses? The decision should not be read as a license to discriminate against patrons or employees based on sexual orientation (or any other protected class). The Supreme Court’s decision was very narrow and likely only applies to the facts of this case. What that means is that although Mr. Phillips’ free speech rights may have been violated, not all cases will turn out this way.

Cannabis businesses that are open to the public are prohibited from discriminating against patrons on the basis of a protected class. The Supreme Court’s ruling did not change that. Cannabis businesses, like other businesses, must provide the same services to all individuals regardless of their race, color, national origin, age, sex, or sexual orientation. Refusing to serve a customer or to provide the same services could result in hefty fines from your state’s civil right enforcement agency, lawsuits by customers, and customer boycotts.

The bottom line is to treat each customer with respect and dignity—a requirement by state governments and a good way to run a business.

marijuana cannabis oregon initiative
The goal of your ballot initiative is to get to a vote.

Oregon successfully legalized the use, sale, processing, and production of recreational marijuana in 2014 through the initiative process. The initiative process is a method of direct democracy that allows people to propose laws outside of the normal legislative process. Oregon’s marijuana statute (ORS 475B) allows cities and counties to “opt-out” of commercial recreational marijuana. In other words, cities and counties do not have to allow for the sale, processing, or producing of marijuana within their jurisdictional borders. ORS 475B, as originally written, allowed cities and counties to automatically opt-out if registered voters in the jurisdiction voted at least 55% against the legalization. All other cities or counties could either create reasonable time, place, and manner restrictions for marijuana businesses or could put up an opt-out vote to the public at the next general election.

Many cities and counties chose to opt-out from legalized recreational marijuana. In these jurisdictions, citizens can still use and possess marijuana, but licensed recreational businesses are not allowed to operate in jurisdictions that opted-out. Still, citizens can use the initiative process to change these local laws. The initiative process allows for citizens to propose a city or county ordinance allowing Oregon Liquor Control Commission (OLCC) licensed marijuana businesses within the jurisdiction. We have expertise in navigating this process and we are, in fact, running one initiative in an “opt out” jurisdiction right now.

The initiative process, much like many forms of our government, is overly complicated with a host of rules and technical requirements. It requires a lot of steps, careful planning, patience, and organization. Once an entrepreneur decides he or she wants to change the laws, the initiative process starts by filing a prospective petition with the local elections official. The prospective petition includes the language of the proposed ordinance. The language is an opportunity to develop a local ordinance that fulfills your goals and the citizens goals for licensed marijuana businesses.

After the prospective petition is submitted, the city or county will approve it for circulation. This is when the real work starts. Initiative petitions are not automatically guaranteed a spot on the ballot. Instead, initiative petitions must gather the support of the public to be included on the next election’s ballot. Almost all of us have been accosted by a circulator on the MAX or downtown in Portland asking if we are a registered voter and if we’ll sign the petition sheet to get a measure on the ballot. City initiative petitions require valid signatures from 15% of the registered voters in the city and County initiative petitions require 8% of registered voters.

If the local elections official determines enough valid signatures were received, the initiative will be referred to the local governing body. The local governing body has the option to adopt the petition without sending it to the ballot. They can also choose to allow the petition to be voted on in the next election. If it makes it onto the ballot, the initiative must receive a majority of approval from the voters to pass. If it receives a majority of votes, the initiative will be enacted as law.

Initiative petitions are one way to attempt to change local laws surrounding marijuana businesses. These petitions can be drafted in favor of their drafters, who may attempt to set themselves up for success once an initiative passes. Over the past few years, some citizens in Oregon have attempted and failed, while others have successfully changed local law to allow for recreational marijuana licensees. The process is long and complex, but the upside can be tremendous.

marijuana cannabis employment
Treat employees the same, regardless of age.

We have recently been exploring employment laws that only kick in once your cannabis company employs a certain number of employees. In the first part of this series, we discussed California’s sexual harassment policy requirements and last week we discussed federal and state leave requirements. This week we will look at age discrimination laws.

Federal ADEA

Federal and state age discrimination laws vary greatly, so it is important to know both the federal requirements and the state requirements. Both will apply to your cannabis business. The Federal Age Discrimination in Employment Act (ADEA) only applies to employers who employ at least 20 employees. The ADEA only protects employees over the age of 40. Under the ADEA, employers are prohibited from discriminating against employees in any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, benefits, and any other term or condition of employment.

Employment claims under the ADEA typically arise when younger employees are frequently promoted over older employees or when an employee is terminated and replaced by a younger person for the same position. So if your cannabis business has at least 20 employees and some of those employees are over the age of 40, be careful!

State Age Discrimination Laws

Oregon

Oregon’s anti-discrimination statute is one of the broadest in the countries. Unlike the federal ADEA, the Oregon statute applies to any employer who employs at least one person. Further, the Oregon statute protects all employees 18 and over. Like the federal ADEA, the Oregon act prohibits employers from taking adverse employment actions against employees based on their age. Employers are allowed to set bona fide occupational qualifications necessary for the normal operation of the employer’s business. An example of a lawful bona fide occupational qualification would be cannabis companies refusing to hire anyone under 21.

As previously discussed, Oregon recently passed equal pay legislation. The equal pay legislation extends to pay discrepancies based on age. Employees performing substantially similar work must be paid the same, regardless of their age, unless one of the exceptions described in the act is met. Age is likely to play a big role in the equal pay legislation since older employees likely have more experience and earn more than new hires in the same position.

Washington

Washington’s anti-discrimination statute has similar parameters to the federal ADEA. The Washington statute applies only to employers with at least eight employees and prohibits discrimination against employees aged 40 and over. Like the ADEA, all employers, including cannabis employers, are prohibiting from taking an adverse employment action against an employee because of that employees age.

California

California prohibits employers with at least five employees from discriminating against employees aged 40 and over. Like the other states, employers are prohibited from discriminating against employees in any aspect of employment, including, hiring, firing, pay, job assignments, promotions, layoff, training, benefits, and any other term or condition of employment.

Age discrimination lawsuits can come with hefty awards. It is important to know the local and federal statutes and even more important to include an anti-age discrimination statement if your employee handbook. Best bets are to review pay practices, hiring, promoting, and termination practices to ensure you are complying with both federal and state requirements. Often times an outside expert can provide a neutral analysis of your practices and how to improve in weak areas.

Some employment laws are applicable to all businesses, such as minimum wage and hour laws. Other employment laws and regulations only kick in once a business employs a certain number of employees. Last week, we discussed when California’s sexual harassment laws kick in for cannabis employers. Today we will explore the Federal Family Medical Leave Act and its state equivalents.

marijuana employment
50 is the magic number for the FMLA.

Federal Family Medical Leave Act

Although marijuana is a federally controlled substance, cannabis businesses are subject to federal employment laws like any other business. The Family Medical Leave Act (“FMLA”) is one of those laws. The FMLA is a complicated piece of legislation and frequently trips up employers, especially ones without a human resources department.

To determine if FMLA applies, employers need to ask themselves two important questions: 1) Do we have enough employees for FMLA to apply?; and 2) Does FMLA apply to this particular employee?

FMLA only applies to employers who have at least 50 employees in 20 or more work weeks in the current or previous year. If the employer meets this, then FMLA applies as to the employer.

Only eligible employees are entitled to FMLA leave. An eligible employee is an employee who:

  1. Works for a covered employer;
  2. Has worked for the employer for at least 12 months;
  3. Has at least 1,250 hours of service for the employer during the 12-month period immediately preceding the leave; and
  4. Works at a location where the employer has at least 50 employees within 75 miles.

Employees who meet all of those criteria may take up to 12 work weeks of leave in a 12-month period for any of the following reasons:

  • The birth of a child or placement of a child with the employee for adoption or foster care;
  • To care for a spouse, son, daughter, or parent who has a serious health condition;
  • For a serious health condition that makes the employee unable to perform the essential functions of his or her job; or
  • For any qualifying exigency arising out of the fact that a spouse, son, daughter, or parent is a military member on covered active duty or call to covered active duty status.

If an employee is eligible and uses FMLA leave, the employee must be restored to their original job or an equivalent job with equivalent pay, benefits, and other terms and conditions of employment. Like all employers, cannabis employers cannot punish employees for using FMLA leave.

State Family Leave Acts

Many states, including Oregon, Washington, and California, where recreational marijuana has been legalized, have state family leave acts that are substantially similar to the FMLA.

The Oregon Family Leave Act (OFLA) applies to employers with at least 25 or more employees working in the state of Oregon. Oregon employees become eligible for OFLA leave after 180 days of employment if they averaged 25 hours per week during the 180-day period. OFLA allows eligible employees to use OFLA leave for the employees own serious health condition; a family member’s serious health condition; the birth or adoption of a child; the non-serious health condition of a child requiring home care; and bereavement leave for a family member. If an employee qualifies for both FMLA and OFLA leave, the leave runs concurrently, meaning the employee still only gets 12 weeks of protected leave. Employers are not required to pay employees for the leave under either act.

The Washington Family Leave Act (WFLA) mirrors the FMLA. Employers are covered if they employ more than 50 employees in Washington and employees are eligible under the same requirements as FMLA.

The California Family Rights Act (CFRA) allows eligible employees 12 weeks of leave in a 12-month period. CFRA kicks in for employers with at least 20 employees within a 75-mile radius. Similar to FMLA, to be eligible, employees must have worked at least one year and worked at least 1,250 hours for the employer.

Cannabis companies continue to grow and need to be aware of laws like the FMLA and their state equivalent. Cannabis companies should have a leave policy that meets the requirements of the FMLA and the state equivalent in their employee handbook. It’s best to have an expert familiar with the laws draft a leave policy.

california cannabis employee
More employees. More laws.

Cannabis companies are subject to both state and federal employment laws and regulations. Certain employment laws only kick in once your cannabis business employs a certain number of employees. This post will the first in a series to explore when different employment laws take effect, relative to the size of your workforce. Today’s post focuses on California’s Sexual Harassment Requirements.

As we have discussed in the past, sexual harassment policies and trainings are very important for every cannabis business. California’s anti-discrimination and harassment statutes and implementing rules are some of the most comprehensive in the country. California has strict anti-harassment requirements and is one of the few states that requires certain private sector employers provide sexual harassment training for managers and supervisors. The anti-discrimination and harassment statute has different requirements depending on the size of the employee workforce.

California’s Fair Employment and Housing Act (“the Act”) requires all California employers to take reasonable steps to prevent discrimination and harassment from occurring. This requirement means that employers have to: 1) distribute the Department of Fair Employment and Housing’s brochure on sexual harassment (or a writing that complies with statutory requirements); 2) post an anti-discrimination poster and; 3) develop and distribute a written harassment, discrimination, and retaliation prevention policy. The requirements of the anti-harassment and discrimination policy are extensive and specific. In general, the policy must prohibit discrimination and harassment; create a complaint process; create an investigation process; and make clear that employees will not be exposed to retaliation for reporting discrimination or harassment. To put it simply—an expert should draft your anti-harassment policy.

California cannabis businesses that employ at least 50 employees must provide at least two hours of sexual harassment training every two years to each supervisor employee and to all new supervisor employees within six months of the assumption of a supervisory position. The training must be “effective interactive training” and includes: in-person instruction; e-learning; webinars; or a using audio, video, or computer technology with any of those training methods. The trainer must be a qualified trainer which is defined as “attorneys, professors or instructors, HR professionals or harassment prevention consultants.”

The California Department of Fair Employment and Housing enforces the Act and rules. DFEH can impose a civil penalty on any employer that fails to follow the above requirements. Those penalties can range from the moderate to the severe, depending on the violation and attending circumstances. Suffice it to say that you do not want to be caught up in a state-level enforcement action.

Although Act provisions go take effect at the 50 employee threshold, any new cannabis company should have an anti-discrimination and harassment policy in place as soon as it intends to hire its first employee. As cannabis business grow, additional requirements are placed on them. California’s requirements are strict and its best to get in front of these requirements before its too late.

Stay tuned for Part 2 of this series, where I will discuss state and federal family leave requirements for marijuana businesses.