Ceballos v. NP Palace, LLC
138 Nev. Adv. Op. 58 (Nev. 2022)
Nevada Supreme Court
Overview
The plaintiff Danny Ceballos was terminated from his job after testing positive for marijuana. The plaintiff asserted that he did not use marijuana in the twenty-four hour period before his work shift and that he was in compliance with Nevada’s recreational cannabis laws.
The issue addressed by the Nevada Supreme Court was whether adult recreational cannabis use qualified for protection under Nev. Rev. Stat. 613.333 which states that an employer may not terminate an employee for “engaging in lawful use in [Nevada] of any product outside the premises of the employer during the employee’s non-working hours.” The Nevada Supreme Court opined that recreational cannabis use was not considered “lawful” behaviour outside of the work premises. While recreational cannabis is legal in Nevada, the possession of cannabis remains illegal under the federal Controlled Substance Act as cannabis is still classified as a Schedule I controlled substance. Under the principles of reading statutes generally, the tension between the Nevada and Federal statutes did not allow for a reading of the Nevada statute to mean that cannabis was lawful in Nevada for the purposes of advancing a private right of action under the Nevada employment legislation for wrongful termination due to the consumption of recreational cannabis outside of the workplace.
Furthermore, the Nevada Supreme Court held that an employee who was terminated after testing positive for recreational cannabis did not have a common-law tortious discharge claim based upon public policy grounds as the Plaintiff’s claim was personal to him as opposed to having a public dimension or illegal working condition that was required to make out a claim under this tort.
Facts
Danny Ceballos worked as a full-time table dealer for the Defendant. In the early morning of June 26, 2020, Ceballos was on break when he slipped and fell on a wet substance in the employee dining room. Ceballos hit his lower back, buttock, and left elbow, he claimed that he was fine and did not need assistance, but security was called anyway. They placed him in a holding cell for post-accident processing and interrogated him. He reiterated to the security manager and his district supervisor that he did not require any medical attention. Regardless, Ceballos was required to take an alcohol and drug detection test. The alcohol detection test came back negative, but he did test positive for cannabis use and was suspended from his job. On or about July 16, 2020, the Defendant terminated Ceballos for testing positive for cannabis use. Ceballos had not consumed any cannabis in the twenty-four hours before his scheduled shift. Additionally, Ceballos was not under the influence or impaired during his shift, any cannabis that was consumed happened at his home.
Lower Courts
The Defendant’s Motion to Dismiss was granted on the fact that adult recreational marijuana use does not constitute the lawful use of a product in accordance with NRS. 613.333. Furthermore, Nevada employers can terminate employees for the use of cannabis even if the cannabis did not affect the employee’s job performance or even if the cannabis was consumed in the privacy of their home. Ceballos appealed this decision.
Issues
Is the use of recreational marijuana considered “lawful” under NRS 613.333 (Employment Practices)
Does the employer’s right under NRS 678D. 510 (Adult Use of Cannabis) take precedence over an employee’s right under NRS 613.333?
Does the Plaintiff have a common-law tortious discharge claim?
Analysis
The Plaintiff was terminated because of his positive drug test for marijuana. The Defendant argued that the termination complied with Nevada laws because marijuana use is not lawful under the federal Controlled Substance Act and therefore, not protected under NRS 613.333. Also, it was within the defendant’s right under NRS 678D.510 to enforce a workplace marijuana use policy.
Ceballos asserts that the language of NRS 613.333 deems cannabis use as lawful because the only appropriate consideration is that recreational cannabis is lawful under Nevada law. Ceballos also argued that the Controlled Substance Act does not pre-empt NRS 678A-D.510 and as a result recreational cannabis remains lawful under NRS 613.333.
Ceballos tried to argue that he was not impaired during his shift and had not used marijuana within the 24 hours prior. He also tried to assert that NRS 613.333 protected him from being terminated as he was lawfully using a product outside of work premises and during non-working hours. The Court also stated that when a product is lawful in the state, it means lawful under both state and federal law. The language of NRS 678D.510 allows employers to prohibit or restrict in some way recreational cannabis use by its employees. The exact language is “the provisions of this chapter, Chapter 678D decriminalize adult recreational marijuana use - do not prohibit a public or private employer from maintaining, enacting and enforcing a workplace policy prohibiting or restricting actions or conduct otherwise permitted under this chapter.” The Court found that the dispute between recreational marijuana use and employment law can be answered by NRS 678D.510. This was relied upon by the respondent to defend against the claim made by Ceballos. The Court concluded that it was fully within the employer’s right to restrict its employee’s recreational cannabis use.
A common law tortious discharge occurs when an employer terminates one of their employees for reasons which violate public policy. Ceballos argued that his termination violated two public policies. The first policy is that Nevada has a strong interest in protecting the statutory rights of its citizens. In this case, the statutory right that should be protected is NRS 678D, which is the right to engage in marijuana consumption in accordance with state guidelines. The second policy that Ceballos brought forward to support his claim is that the state of Nevada has a strong interest in ensuring that its citizens can support themselves and their families if they take part in ‘statutory protected and completely lawful activities.’ The Nevada Supreme Court ruled that the public policies identified by Ceballos do not meet the threshold required to establish a tortious discharge claim. The Court found that a right to a tortious discharge claim can be justified when an employer terminates an employee: (1)”for refusing to work under conditions unreasonably dangerous to the employee,” (2) “for refusing to engage in illegal conduct,” (3) “for filling a workers’ compensation claim,” (4) “for reporting the employer’s illegal activities to outside authorities,” and (5) for performing jury duty.” As a result, an employee that’s been terminated for testing positive for recreational marijuana does not have a common-law tortious discharge claim.
In affirming the trial court’s decision that dismissed the action, the Nevada Supreme Court opined that NRS 613.33 requires the product being used to be “lawful under both state and federal law, not just lawful under Nevada law.” Since marijuana remains illegal on the federal level, Ceballos cannot rely on NRS 613.33 to support his claim of wrongful termination. The Nevada Supreme Court also cited to the 2015 Colorado Supreme Court case of Coats v Dish Network, LLC where it was held that cannabis use could not be considered a lawful activity because it remains illegal at the federal level, even though recreational use is legal in Colorado.
As a result of this decision, employers in the state of Nevada have no obligation to accommodate their employee’s recreational use of cannabis outside of the workplace, which is distinct from the obligation of employers to accommodate the needs of employees who use medicinal cannabis.
The language and legislative history of NRS 613.333 affirms that marijuana use is lawful under ordinary state laws. However, under federal law, this is not the case since the Nevada Supreme Court declined to recognize recreational marijuana use as “lawful” activity for the purpose of the state’s law.
While the Court acknowledged that recreational cannabis use is legal within the state of Nevada however, the state has enacted statutes that allow employers to prohibit their employees from taking part in such activities. These statutes do not violate any public policy grounds as cannabis would have to be legal on the federal level for employers to allow their employees to consume it.
Kentish Ramasawmy I CansultEd Summer Intern