By Lindsay Reynolds
New employment-related laws reflect a growing tolerance for an individual’s choices regarding consumption of cannabis and marijuana outside of the workplace. Nevada, for example, was the first state to pass a law that prohibits employers (with a healthy exemption list) from rejecting a job applicant because of a failed marijuana test.
More states have laws that protect off-duty marijuana use, with differing degrees of accommodation for medical or recreational use. In Oregon's most recent legislative session, a bill was proposed which would prohibit Oregon employers from conditioning employment on refraining from using any substance that is lawful to use in the state, i.e., marijuana.
While that bill ultimately failed, Oregon passed a number of laws in 2019 that will significantly affect workplace policies and practices for a majority of employers. Although none specifically call out marijuana or cannabis use, the following three laws are notable for their required compliance by all employers.
Additional requirement to enforce noncompetition agreements
There is a growing trend amongst states to further restrict an employer’s ability to enforce noncompete agreements against employees. Many cannabis businesses employ noncompetes as a tool to protect trade secrets and intellectual property, so this should be of particular interest to cannabis employers.
Effective Jan. 1, 2020, Oregon’s already robust noncompetition statute will require that, in order for an existing noncompetition agreement to be enforceable, an employer must provide the employee with a signed, written copy of the terms of the noncompete agreement within 30 days after the date of termination of employment. Employers should implement this practice immediately to effectively put departing employees on notice of their obligations under an existing noncompetition, nonsolicitation, or nondisclosure agreement. A more in-depth discussion about Oregon’s noncompete law can be found here.
Many are predicting that Oregon and Washington, which also made significant changes to noncompete enforcement, will eventually follow California law – prohibiting noncompete agreements all together, except in very narrow circumstances.
Sexual harassment and the Workplace Fairness Act
The regulated cannabis industry is young, and it’s maturing in the #MeToo era. The Oregon Workplace Fairness Act (WFA) was signed into law in June 2019 to help address concerns of ongoing harassment in the workplace. The WFA requires employers to provide written anti-harassment policies to employees that include reporting and investigation procedures. The new law also increases the statute of limitations for claims. For any sexual assault, discrimination, or retaliation claim for an occurrence that happened on or after Sept. 29, 2019, employees have five years to file a claim instead of one year under current law.
Beginning Oct. 1, 2020, the WFA makes it unlawful for Oregon employers to enter into agreements with employees that contain any nondisclosure provision that has the purpose or effect of preventing employees from discussing or disclosing conduct that constitutes sexual assault as defined by the WFA, or discrimination on the basis of a protected status.
Employers may not require employees to sign such agreements as a condition of employment, continued employment, promotion, compensation, or the receipt of benefits. This means that employers who settle discrimination claims with employees will no longer be able to ask for confidentiality as part of the agreement.
For any violation under the WFA, employees may file a complaint with the Oregon Bureau of Labor and Industries or they may file a private lawsuit in court and recover their attorneys’ fees if they prevail.
Every employer should have a written anti-harassment policy in place no later than Oct. 1, 2020 that includes language required by the WFA. Employers are also encouraged to provide an updated anti-harassment training, and to update document retention policies to reflect the increased statute of limitations period.
Paid Family and Medical Leave
Effective Oct. 1, 2019, Oregon’s newly enacted Paid Family and Medical Leave law allows eligible employees to take paid leave from work for up to 12 weeks for qualifying reasons. The law applies to all employers with one or more employees working in Oregon.
Provisions and protections vary with the size of a company, but in general employees returning from a protected leave are entitled to be restored to their same (or an equivalent) position. Employers must also maintain any health care benefits the employee had prior to taking leave for the duration of the leave.
The law also establishes a state-managed insurance program with employers and employees paying into a paid leave insurance fund. Employers will not be required to begin contributing to the fund until Jan. 1, 2022, and employees will become eligible for benefits beginning in January 2023.
Employers should start preparing now for implementing this new law. A good first step is to inquire with insurance companies about coverage related to the new law.
The national trend to legalize the use of cannabis and marijuana is obviously good for any business in the industry. However, as employee numbers grow within the sector, employers will need to understand and comply with relevant state employment laws as well as national trends to avoid significant impact to a growing workforce.
Contant an attorney in Tonkon Torp's Labor & Employment Practice Group if you have questions on how these changing employment laws may affect your business. Or reach out to one of our Cannabis Industry Group attorneys, who bring deep business expertise and relevant cannabis/hemp industry experience, to advise owners and operators on forming and sustaining successful businesses in the cannabis and hemp industries.
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