Nevada High Court Rules Recreational Marijuana is Not Lawful "Off-Duty Conduct"

Nevada employees who consume cannabis off-the-job for non-medical purposes can be fired by their employers for failing a drug test, according to a recent ruling by the Nevada Supreme Court.

Summary of the Decision

The Nevada Supreme Court recently handed employers a win when it upheld the dismissal of a lawsuit brought by an employee who claimed that his termination for testing positive for recreational cannabis violated the state’s lawful off-duty product law. (Ceballos v. NP Palace, LLC d/b/a Palace Station Hotel & Casino, 138 Nev. Adv. Op. 58 (Nev. 2022)).

The plaintiff worked as a table games dealer at a casino for more than a year without performance or disciplinary issues. After he slipped and fell in the employee breakroom, the employer required him to submit to a drug test. The test came back positive for cannabis. The positive test result led to the plaintiff’s termination.

The plaintiff sued, claiming that the employer had violated a Nevada’s "Off-Duty Conduct" law, which prohibits employers from taking action against employees who engage in "the lawful use in this state of any product outside the premises of the employer during the employee's nonworking hours." NRS 613.333. Because the state decriminalized recreational cannabis in 2017, the plaintiff argued that his employer could not terminate him for his off-duty use of the drug. The district court dismissed his complaint in its entirety, on the grounds that, because the drug continues to be illegal under federal law, its use is not "lawful . . . in this state."

The Supreme Court, in upholding the dismissal, rejected the plaintiff’s interpretation of the statute, concluding  that by using the phrase "in this state," rather than "under state law," the legislature intended for the law to require that the product be legal under both state and federal law. The Court also rejected the plaintiff’s tortious discharge claim because it did not involve one of the "rare and exceptional cases" where Nevada courts have recognized such a claim. The Court emphasized that the state’s decision to decriminalize cannabis in 2017 expressly preserved employers’ rights to enforce workplace policies prohibiting or restricting employees’ recreational cannabis use. The Court reasoned that, if the legislature had wanted all use of marijuana by off-duty employees to be protected, it wouldn’t have included this carve-out.

Key Takeaways

The Court’s holding in Ceballos means that Nevada’s "lawful off-duty conduct" statute does not protect employees’ off-duty recreational marijuana use, at least for now. However, the holding and result would be called into question if marijuana becomes legal under federal law.