New Jersey Opens the Door to Cannabis Hiring Litigation: Appellate Division Recognizes Private Right of Action Under CREAMMA

Seyfarth Synopsis:  In a significant and unprecedented ruling, the New Jersey Appellate Division held in Sanders v. The Levari Group, LLC that job applicants may sue prospective employers under the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”). Unless and until the State Supreme Court weighs in, the Sanders decision transforms CREAMMA from a largely regulatory statute into a direct source of civil liability—placing pre-employment drug testing and hiring practices squarely in the litigation crosshairs.

What NJ Employers Need to Know:

• Private lawsuits are now permitted: applicants can sue covered employers directly for adverse hiring decisions based on cannabis test results.
• Immediate litigation risk: covered employers face increased exposure tied to rescinded offers and pre-employment drug testing protocols.
• Broad implications likely: although the case involves hiring, its reasoning may extend to discipline and termination decisions.
• Policy updates required: employers hiring in New Jersey should promptly audit drug testing, hiring processes, and documentation practices.

Background on CREAMMA

CREAMMA (N.J. Stat. § 24:6I-31 et seq.) was signed into law by former New Jersey Governor Phil Murphy on February 22, 2021.  Under the law, individuals over twenty-one years of age may legally purchase, use, and possess up to six ounces of regulated cannabis.  In legalizing recreational cannabis use, the legislature sought to eliminate the collateral consequences of cannabis-related arrests and to encourage individuals to seek treatment for substance use disorders.  CREAMMA also significantly impacts New Jersey employers.  With certain federal exceptions (e.g., federally-regulated contractors), employers may not take adverse employment action against applicants or employees solely because they have tested positive for cannabis.  While employers may maintain a drug-free workplace and conduct drug testing to determine whether an employee is impaired on the job, they may not refuse to hire, terminate, or otherwise retaliate against an employee based solely on evidence of cannabis use.

Under CREAMMA, employers can conduct drug testing as a part of pre-employment screening, upon reasonable suspicion of cannabis use in the workplace, through random testing of employees in safety-sensitive positions or post-accident testing.  If an employee is found to be impaired or using cannabis while working, an employer can take an appropriate employment action.  Critically, however, no adverse action can be taken solely because an employee used cannabis recreationally during off-hours.  Instead, an employer is required to support any adverse actions with both objective testing results and documented physical or behavioral indicators of impairment.

The Decision: A Landmark First for New Jersey

On May 26, 2026, the Appellate Division issued its published decision in Sanders v. The Levari Group, LLC (the decision can be found here), addressing whether CREAMMA provides an implied private right of action that allows a job applicant to sue a prospective employer for refusing to hire the applicant based on a positive cannabis drug test.

The plaintiff, Darlene Sanders, applied for a customer service position with the defendant company.  After interviewing, she received and accepted a job offer that was contingent on her completing a pre-employment drug test.  Sanders tested positive for cannabis metabolites, which indicated prior cannabis use within the previous thirty days.  However, she maintained she was not under the influence at the time of testing or during the hiring process.  The employer offered Sanders the chance to retake the test at her own expense, which Sanders declined citing financial constraints.  As a result, the employer rescinded the offer.

Sanders filed suit asserting claims for violations of CREAMMA, as well as negligence, invasion of privacy, breach of contract, and wrongful discharge under New Jersey common law.  The trial court dismissed the complaint, concluding that CREAMMA did not provide a private right of action and enforcement authority rested with regulators (the New Jersey Cannabis Regulatory Commission (“CRC”)), not the courts. The Appellate Division disagreed.

As a matter of first impression, the Appellate Division held that CREAMMA implicitly provides a private right of action for individuals who claim they were denied employment because of cannabis use.  The decision effectively permits job applicants to bring claims against employers for adverse hiring decisions based on cannabis test results. 

Applying New Jersey’s established framework for implied causes of action, the court concluded that recognizing a private right is consistent with the legislative intent behind CREAMMA.  Specifically, the Court held that:

• Applicants who test positive for cannabis are the precise group CREAMMA was designed to protect;
• The statute uses rights-creating language and does not establish an exclusive administrative enforcement scheme; and
• Without a private remedy, the law’s anti-discrimination protections would be effectively unenforceable. Thus, the remedy is consistent with the statute’s underlying purpose.

Based on these factors, the court reinstated Sanders’ statutory claim and revived related claims for negligence, invasion of privacy, and breach of contract. However, the court affirmed dismissal of the plaintiff’s common law wrongful discharge claim, limiting that doctrine to termination—not hiring—decisions.

The Impact

Before Sanders, many employers viewed CREAMMA as lacking real enforcement teeth. That assumption is no longer viable. The decision effectively creates a new category of employment claims in New Jersey.

Covered employers that rescind offers based solely on a positive cannabis test—without evidence of impairment—may now face direct liability. This is especially significant given that cannabis metabolites may remain detectable long after use.

Further, although Sanders arose in the hiring context, the court’s reasoning is not limited to applicants. Plaintiffs may attempt to extend the holding to decisions related to discipline, termination and workplace investigations involving suspected cannabis use.

What Employers Should Do Now

Until the State Supreme Court weighs in, Sanders is considered the law of the land.  Employers looking to minimize any associated risk presented should consider:

• Reevaluating drug testing programs by assessing whether pre-employment cannabis testing is necessary for all roles, and ensuring testing policies align with roles that may legitimately require impairment-related safeguards;
• Modifying hiring practices by avoiding automatic disqualification based solely on cannabis test results, implementing individualized assessments where possible, and carefully documenting legitimate, non-discriminatory reasons for hiring decisions;
• Strengthening policies/handbooks, onboarding materials and training protocols; and
• Identifying high-risk categories by conducting targeted analysis for safety-sensitive roles and evaluating whether additional compliance steps or exceptions may apply.

We will continue to monitor developments and provide updates. Please reach out to the authors or your Seyfarth attorney with any questions.

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*Emily Cronin is a Summer Associate on Seyfarth’s Labor & Employment team. Many thanks for her contribution to this update.