Quick Hits
- A New Jersey federal district court rejected a concrete company’s bid to overturn an arbitrator’s award in favor of an employee who was discharged after testing positive for marijuana.
- The court found that the odor of marijuana alone is not sufficient to establish reasonable suspicion of cannabis use, possession, or impairment as required for an adverse action under CREAMMA.
- Under CREAMMA, an employer may take an adverse employment action against an employee based on—but not solely due to—the presence of cannabinoid metabolites in the employee’s bodily fluids.
Under CREAMMA, marijuana is legal for recreational use. The law prohibits employers from taking adverse employment actions solely based on a positive marijuana test. Employers can require an employee to undergo a drug test when there is reasonable suspicion of an employee’s use of marijuana while on duty, when there are observable signs of marijuana intoxication, or following a work-related accident subject to investigation by the employer.
Background on the Case
In April 2025, as an employee for County Concrete Corp. drove his personal vehicle during a lunch break past a supervisor and coworker on company property, the supervisor and coworker claimed that they detected a strong smell of marijuana from the vehicle. The supervisor ordered the employee to take a drug test, which returned positive for marijuana. The company fired the employee, who had previously tested positive for marijuana in December 2023. The employer had a two-strike policy, stating that two positive drug tests could result in termination of employment. The employee was represented by the International Brotherhood of Teamsters Local 863, which filed a grievance that proceeded to arbitration.
In December 2025, the arbitrator awarded the employee reinstatement to his former position with full back pay, seniority, and benefits. She found that the company failed to establish the employee’s use of, possession of, or impairment from cannabis at the workplace.
County Concrete filed a petition to vacate the arbitrator’s award. It argued that the arbitrator disregarded controlling New Jersey law and exceeded her contractual authority derived from the collective bargaining agreement.
The company argued that the arbitrator ignored CREAMMA when she, in issuing her decision, considered the nonbinding best practices for employers published by the New Jersey Cannabis Regulatory Commission, including relying on observable, physical signs of impairment while on duty and documenting evidence within twenty-four hours or before drug test results arrive, and designating a point person with sufficient training to determine impairment. The union and the employee argued that an odor on clothing or in a car only established that marijuana may have been present at some prior time, not that an employee consumed the drug on an employer’s property or was impaired while on duty.
Federal District Court Ruling
The U.S. District Court for the District of New Jersey noted that, in cases like this one concerning a collective bargaining agreement, courts must give deference to the arbitrator’s decision even if the arbitrator made errors in law or fact. An arbitrator’s award can only be vacated if it was procured by corruption, fraud, or undue means; if there was evident partiality or corruption in the arbitrator; if the arbitrator was guilty of misconduct in refusing to postpone a hearing or hear evidence; or if the arbitrator exceeded his or her powers.
In reviewing the arbitrator’s decision, the district court concluded that the arbitrator did not manifestly disregard CREAMMA or exceed her contractual authority. In confirming the award, the court explained that odor, standing alone, does not establish reasonable suspicion that an employee was using cannabis while performing his or her job duties or that the employee was impaired on employer property. Rather, “[a]n odor, standing alone, establishes only that cannabis may have been present at some point.” The court noted that, in this case, “[t]here was no testimony that Grievant slurred his speech, no evidence that his eyes were glassy, and no evidence that he was impaired while on duty, and no report or evidence of poor work performance.” Further, the employer “allowed the Grievant to complete his shift until 4:30 pm that day without any reports of being impaired.”
The court made further reference to the fact that, contrary to best practices identified by the New Jersey Cannabis Regulatory Commission, the employer did not document the observance until more than a week later, and neither the supervisor nor coworker who observed the marijuana smell were trained in drug impairment recognition. The court found the arbitrator’s award was aligned with established legal precedent and was “rationally derived” from the collective bargaining agreement.
Next Steps
This case shows that, in New Jersey, the odor of marijuana and a positive drug test, without additional evidence, is not sufficient to justify an adverse employment action against an employee suspected of cannabis use, possession, or impairment. It also highlights the importance of drug impairment recognition training for individuals assessing an employee’s potential marijuana use.
Employers in New Jersey may wish to review their employee handbooks and collective bargaining agreements to ensure compliance with state laws regarding drug testing and off-duty marijuana use. Courts in New Jersey are likely to show deference to an arbitrator’s interpretation of a collective bargaining agreement except in rare circumstances.
Ogletree Deakins’ Arbitration and Alternative Dispute Resolution Practice Group and the Drug Testing Practice Group will continue to monitor developments and will post updates on the Arbitration and Alternative Dispute Resolution, Drug Testing, and New Jersey blogs as additional information becomes available.
Leslie A. Lajewski is a shareholder in Ogletree Deakins’ Morristown office.
Steven J. Luckner is a shareholder in Ogletree Deakins’ Morristown office.
This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.
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