Marijuana Rescinded Job Offer
How will changes to marijuana laws affect employment in Missouri? It is hard to tell if there will be much of an impact but there will always be litigation and examining litigation in other states can be very informative. A case in New Jersey may provide a useful framework for arguments that could arise in the future.
In 2021 New Jersey enacted the Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (CREAMMA). An article in CREAMMA prohibits employers from refusing to hire a job applicant for the use of cannabis. Specifically, it provides that:
No employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee with respect to compensation, terms, conditions, or other privileges of employment because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items . . . . Id. § 24:6I-52(a)(1).
The state law also stated:
[A]n employee shall not be subject to any adverse action by an employer solely due to the presence of cannabinoid metabolites in the employee’s bodily fluid from engaging in conduct permitted under [CREAMMA].
After the passage of CREAMMA Erick Zanetich (Zanetich) applied for a job with Wal-Mart. Wal-Mart made an offer to Zanetich subject a pre-employment screening. Zanetich tested positive for marijuana during the screening process. After Zanetich tested positive, Wal-Mart rescinded the offer to Zanetich. Since he was denied employment because of the positive test for marijuana Zanetich filed a lawsuit individually and on behalf of a putative class.
Zanetich sought redress on the theory that CREAMMA implied a private cause of action for violations of its employment protections and Zanetich pursued a claim for pre-employment discrimination in violation of public policy. Wal-Mart’s motion to dismiss was granted on the grounds that there existed no legally viable claim. While CREAMMA prohibits discrimination it does not provide a private remedy for redressing employment discrimination against cannabis users.
To create a private cause of action, a law must provide not only a private right but also a private remedy. New Jersey in previous court cases adopted a modified version of the Cort test to determine if there exists a private remedy that can be implied from a state statute when the private remedy was not expressed in the statute. Under the modified Cort test the plaintiff must show (1) “whether the plaintiff is one of the class for whose especial benefit the statute was enacted”; (2) whether there is “any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one”; (3) whether it is “consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff”
The court began its analysis by trying to determine if there was a special benefit for a singular class. The statute provides that it prohibits adverse employment action because a person “does or does not” use cannabis items. Applying the modified Cort test there was no conferral of a special benefit on a particular class. A statute that confers a benefit to the public at large does not confer a special benefit on a particular class. The court concluded without an unmistakable textual focus on cannabis users the provision does not confer a special benefit on any class. While other provisions in the legislation protected employees from adverse actions from a positive test the plaintiff in this matter was not an employee but only an applicant. The defendant failed to satisfy the first factor in the Cort test.
The second factor in the Cort test required the court to consider the explicit or implicit legislative intent to provide a private remedy. The court examined the statute and the legislative history, but the court did not find language in the legislative history or in the statute to support the claim the legislature intended to provide a private remedy. Instead of creating a private remedy the statute places the enforcement mechanisms within an administrative agency. When the legislature passed CREAMMA the state created the Cannabis Regulatory Commission which was empowered to regulate employment actions that violate CREAMMA. Additionally, CREAMMA stated expressly its cannabis-related provisions should not be construed to amend or affect in any way any state law pertaining to employment matters. When the state creates an agency to seek remedies and when provisions of the law provide that the law would not amend or affect other state laws the language strongly supports the claim that there does not exist a private remedy.
The final factor to consider was whether permitting a private cause of action would further the purpose of the legislation. The state provided three underlying purposes for CREAMMA which was to regulate cannabis in a similar fashion to alcohol, prevent the sale to people under the age of 21, and eliminate problems caused by the unregulated manufacturing and distribution, The court looked at the language and did not find that CREAMMA was furthered by providing a private cause of action when a person had a job offer rescinded after testing positive for cannabis.
One of the final issues considered was whether there existed a public policy exception to New Jersey’s at-will employment doctrine. The court found that the public policy doctrine in New Jersey did not extend to job applicants and only applied to employees. Zanetich v. Walmart, (3rd Fed Circuit 23-1996, 12/9/2024)
Comment: The Missouri constitutional amendment has significantly different language from CREAMMA. There remains some ambiguity because the Missouri amendment only provides that it does not prohibit any employment action taken when an employee or applicant is working under the influence of marijuana or using marijuana in the workplace. The language at issue for recreational use of marijuana in Missouri is under XIV Section 2 and it provides:
(3) This section does not require an employer to permit or accommodate conduct otherwise allowed by this section in any workplace or on the employer’s property. This section does not prohibit an employer from disciplining an employee for working while under the influence of marijuana. This section does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because that person was working while under the influence of marijuana.
Short Term Rentals
We return to STR cases and examine a recent case from our state.
In 2018, Kansas City adopted an ordinance regulating short term rentals. In 2023, the city received feedback from the community about issues related to short-term rentals the city amended the city code by adopting two new ordinances (2023 Ordinance). The changes to the short-term rental code created different classes of short-term rentals, one type was “resident”, and the other was “non-resident” short-term rentals (STR). A Resident STR is a dwelling unit where the registrant or proposed registrant resides on the property for at least 270 days per year and the person certifies that property will be their primary residence for a period of 12 months or more. A Non-Resident STR is any dwelling where the registrant has not demonstrated they are a long-term resident of the dwelling. The “registrant” does not have to be the property owner.
The 2023 Ordinance prohibited Non-Resident STRs from operating in residential zones and applied density restrictions on Non-Resident STRs in non-residential zones. Properties with valid STR permits issued before 2023 were exempt from its restrictions. The 2023 Ordinance required third-party booking sites like Airbnb and VRBO to require a City STR Registration number for all properties listed on their platforms. Properties without registration numbers are to be de-listed from these platforms.
Administrative Exhaustion: The list of claims and issues raised by MDKC was extensive. The court disposed of many of those issues without reaching a decision because the City ordinance provides for administrative remedies and many of claims raised by MDKC were not ripe for adjudication because MDKC had failed to exhaust the administrative remedies provided by the city. The court provided that: “The exhaustion of administrative remedies is a jurisdictional requirement for a declaratory judgment action.” The City’s Zoning and Development Code authorizes the BZA “to hear and decide appeals where it is alleged there has been an error in any order, requirement, decision, or determination made by an administrative official of the City in the administration, interpretation, or enforcement of this zoning and development code.”
Unlawful Taking: MDKC alleged that the ordinance resulted in an unlawful taking of property in violation of the Fifth and Fourteenth Amendments and Article 1 Section 26 of the Missouri Constitution. While some claims were not considered by the court, with regard to the claims the court could consider the court found there was not an unlawful taking. Total regulatory takings are those that deny a property owner all economically beneficial use of the property. Simply because a plaintiff has been denied the most profitable use of the property does not mean a taking has occurred. MDKC could still lease their properties on a long-term basis, live at the properties themselves, or sell the properties.
Dormant Commerce Clause: The defendant alleged the ordinance violated the Dormant Commerce Clause because it discriminated against out-of-state owners by treating them differently than in-state owners. The Dormant Commerce Clause is only implicated when the discrimination is between “substantially similar entities.” Out-of-state owners were not precluded from the whole-home market. It is possible for an out-of-state owner to lease their property to a long-term tenant and for ninety-five days of the year to separately lease as a whole-home STR. The 2023 Ordinance applied equally to out-of-state owners and in-state-owners who reside in Kansas City, Missouri. Additionally, any owners who obtained a valid STR permit before the 2023 Ordinance went into effect (whether they live in-state or out-of-state) are exempt and can continue operating their STRs as they did under the 2018 Ordinance.
Contract Clause: The Contract Clause of the Constitution forbids states from interfering with contractual obligations.” Heights Apartments, LLC v. Walz, 30 F.4th 720, 728. There is a two-prong test to determine whether a state has impermissibly interfered with a contract: (1) whether the state law substantially impairs a contractual relationship, which takes into consideration the extent to which the law undermines the contractual bargain, interferes with a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his rights; and (2) if the first prong is met, whether the state law is drawn in an ‘appropriate’ and ‘reasonable’ way to advance ‘a significant and legitimate public purpose.”
The plaintiffs argued that the 2023 Ordinance is substantially impairing the contractual relationship between the Plaintiffs and future guests. Many of the plaintiffs in this matter did not have a valid 2018 permit. At the time of the passage of the 2023 Ordinance any expectation they could contract with any guest was inherently unreasonable when they would not have been operating lawfully under the 2018 Ordinance. Additionally, the 2023 Ordinance exempts any property that already obtained a valid 2018 permit, which means that group of owners still had the ability to enter into contracts. Under those facts the plaintiff cannot show that the 2023 Ordinance substantially impaired their contractual rights. Not only did the plaintiff fail to satisfy the first prong. The plaintiff would fail to satisfy the second prong. It has long been recognized that zoning ordinances are a lawful exercise of police power and the City articulated a significant and legitimate purpose in the 2023 Ordinance. MDKC v. City of Kansas City, (4:23-CV-00395-DGK, 10-02-2023)
What Doctrine Should Be Applied To Use Of Force
The Supreme Court of the United States is considering what doctrine courts should apply to determine if an officer should be entitled to the affirmative defense of qualified immunity when an officer uses deadly force. The 5th Circuit and three other federal circuits apply the “moment of threat doctrine” which provides that courts should only consider the moment an officer felt threatened and used force rather than consider the entire sequence of events that resulted in the use of deadly force. The plaintiff believes the appropriate doctrine that should be applied is the “the totality of the circumstances” doctrine which has been applied in eight other circuits. Under the “totality of the circumstances” doctrine the court considers the totality of the circumstances and even evaluates the officer’s actions leading up to the use of force. We will have to see what happens. Barnes v. Roberto Felix, (SCOTUS 22-20519, Heard 1/22/2025)
Takings Claim Must Show The State Court Is Unavailable For Claim
This decision was the most recent in a matter that has moved back and forth between the trial court and the appellate court.
During the COVID-19 pandemic the governor of Minnesota issued emergency executive orders that restricted the ability of landlords to evict non-paying tenants. Heights Apartments, the owner of three residential properties, brought claims against Tim Walz, the governor of Minnesota, alleging the emergency order resulted in violations of the Takings Clause and the Contract Clause. After the case was remanded to district court from a prior appeal the district court granted judgment on the pleadings because sovereign immunity bars recovery against state officials in their official capacity and qualified immunity shields state officials in their personal capacity. Heights argued the self-executing damages remedy in the Just Compensation Clause overrides the State’s Eleventh Amendment immunity. The 8th Circuit held that based on prior precedent the court has held the Eleventh Amendment bars a just compensation claim against the State in federal court as long as state courts remains open to entertain the action. Heights failed to allege the Minnesota courts were unavailable for its claim. Heights Apartments v. Walz, (8th Circuit 23-2686, 11/21/24)
Expungement Of Resisting Arrest
Missouri State Highway Patrol (MSHP) appealed the expungement of an arrest record. The party seeking expungement (driver) previously pled guilty to a Class-D felony resisting arrest and twelve years after the events that resulted in the felony charge the driver requested the expungement of all records related to his arrest, plea, and conviction. MSHP argued that the Driver was not eligible for expungement under Section 610.140 which excludes felony offense where death is an element of the offense and MSHP argued death is an element of resisting arrest in Section 575.150.5. The Southern District did not agree with MSHO but instead agreed with the trial court which concluded that MSHP needed to show that actual death was an element of the case being expunged and not simply show there was a mere risk of death. DD v Missouri State Highway Patrol, (SD38372, 12/31/24)
No Knock Warrant
The Little Rock Police Department obtained a no-knock search warrant for Derrick Davis’s residence. Davis sued the city, the police officers that obtained the search warrant, and the officers that executed the search warrant alleging the police officers violated his 4th Amendment constitutional rights under 42 U.S.C. 1983.
The matter at issue began when the Little Rock narcotic officers received an email about drug activity at a townhouse. The officers contacted neighbors and arranged a control buy using a confidential informant. After the buy the confidential informant provided the officers with a small bag of cocaine which the confidential informant stated had been purchased from a person at the townhouse, Davis’s residence. Based on the information collected during the investigation the officers obtained a search warrant recounting the investigation and provided that the no-knock entry would reduce the risk to officers and occupants. The state court issued the no-knock search warrant.
The 8th Circuit on appeal determined that it did not even need to consider if the detectives violated Davis’s rights because the alleged right raised by Davis was not clearly established at the time of the challenged conduct. The 8th Circuit explained that it has previously provided that at the time the no-knock warrant was issued there was not any law clearly establishing that is would be unreasonable to execute a no-knock warrant using a SWAT team. As a result, the officers are entitled to qualified immunity as to the execution of the no-knock warrant. Davis v. City of Little Rock, (8th Circuit 23-1636, 12/3/2024)
Important Events
Missouri Municipal Attorney Association Summer Seminar is schedule for July 11-July 13, 2025, at Margaritaville Lake Resort in Osage Beach, Missouri. For additional information follow this link about the event. MMAA Summer Seminar
IMLA Events: IMLA has several upcoming events. I have provided links to those events below.
Virtual Code Enforcement Program February 27 – February 28, 2025
IMLA Mid-Year Seminar April 25-April 28, 2025
IMLA Annual Conference In New Orleans October 17- October 21, 2025
MMAA Newsletter 