Third Circuit Predicts No Private Right of Action for Denied Job Applicants Under New Jersey Cannabis Law

On Dec. 9, 2024, a divided panel of the Third Circuit Court of Appeals affirmed the dismissal of a class action lawsuit by New Jersey job applicants denied employment by Walmart because they tested positive for cannabis. The putative class alleged violations of the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) and New Jersey public policy. The decision may prevent future plaintiffs from bringing employment discrimination lawsuits in federal court under the Act.

While CREAMMA expressly prohibits employers from refusing to hire job applicants based on cannabis use, the panel majority predicted, in a precedential opinion, that the Supreme Court of New Jersey would find no private remedy for job applicants who fail cannabis drug tests. The panel majority found a lack of evidence that (1) CREAMMA was enacted to confer a special benefit on a particular class; (2) CREAMMA was intended by the New Jersey legislature to provide a private remedy; and (3) private right of action would advance the principal purposes of CREAMMA. The panel majority also found that New Jersey’s common law public policy exception to at-will employment did not apply here.

Although the putative class sought certification of both issues to the New Jersey Supreme Court, the panel majority declined to certify based on the likelihood of resolving an uncertain legal issue, the importance of the issue and considerations of judicial economy. Judge Arianna J. Freeman dissented in part in this regard, predicting that the New Jersey Supreme Court would find a private right of action for failure-to-hire claims under CREAMMA, and concluding that the legal question should have been certified to New Jersey’s highest court for definitive resolution.

Unless and until a New Jersey state appellate court decides otherwise in a precedential decision, the panel majority’s decision is binding upon cases proceeding before the U.S. District Court for the District of New Jersey and all other federal courts within the Third Circuit. On the other hand, although it could carry significant persuasive weight, the panel majority’s decision is not controlling on New Jersey State Courts.

If you have any questions about how this or any other appellate litigation development may affect your business, please contact Alexander V. Batoff or the Stevens & Lee attorney with whom you regularly work.