etail employers may find themselvesdazed and confused by the cloud oflegislation legalizing marijuana. This

November, Colorado and Washington vot-ers passed measures to legalize marijuanafor recreational use by adults. Furthermore,Massachusetts joined 17 other states andthe District of Columbia by passing a med-ical marijuana law of its own. (Other stateswith some form of medical marijuana lawon the books are Alaska, Arizona, California,Colorado, Connecticut, Delaware, Hawaii,Maine, Michigan, Montana, Nevada, NewJersey, New Mexico, Oregon, Rhode Island,Vermont, Washington.) Voters in Oregonand Arkansas, on the other hand, rejectedsimilar measures on Election Day.

Colorado’s Amendment 64 permits thepersonal use and cultivation of marijuanaby adults at least 21 of age, though publicconsumption and unlicensed sales in thestate remain illegal. Amendment 64 pro-vides, “[n]othing in this section is intendedto require an employer to permit oraccommodate the use, consumption, pos-session, transfer, display, transportation,sale or growing of marijuana in the work-place or to affect the ability of employersto have policies restricting the use of marijuana by employees.” Accordingly,employers may continue to enforce other-wise lawful drug-testing policies againstemployees and applicants who test posi-tive for marijuana, to publish and enforcepolicies prohibiting the possession or consumption of marijuana during workinghours, and to discipline employees whosejob performance is impaired due to mari-juana use.

Washington’s Initiative 502 allows individ-uals at least 21 years old to purchase andpossess lawfully up to one ounce of use-able marijuana, or larger amounts of mari-juana-infused products, at licensed retailoutlets that have been approved byWashington’s state liquor control board.The new law does not contain any expressemployment protections for marijuanausers. The Washington Supreme Courtpreviously held that the state’s MedicalUse of Marijuana Act of 1998 (MUMA)

does not prohibit an employer from discharging an employee for failing arequired drug test and does not impose a duty to accommodate an employee’smedical marijuana use. It remains to beseen whether courts will apply the samereasoning in cases following implementa-tion of Initiative 502.

While possession of marijuana is not acriminal or civil offense under the new state laws, marijuana possession remainsunlawful under the federal ControlledSubstances Act. It is unclear how federalofficials will react to this conflict with statelaw. Although the Obama Administrationhas opposed such legalization in the past,it has so far declined official comment onthe initiatives passed on the Novemberballot. But with federal law on their side,employers may forbid their employeesfrom using marijuana at work or fromshowing up to work with the drug in theirsystem. To date, each court to address theissue has ruled that, as long as federal lawprohibits the use of marijuana, the statescannot require employers to accommo-date its use.

Retail employers should anticipate increas-ing issues related to marijuana use by applicants and employees, who maybelieve state regulations preclude adverseemployment action related to marijuanause. Employers should be prepared to communicate how the changing legallandscape impacts existing policies, if atall. Consider whether your workplace poli-cies clearly express your position and yourhuman resources personnel are prepared to handle marijuana-related issues whenthey arise. It may be necessary to includepolicy provisions prohibiting employeesfrom using or being under the influence ofeven lawful substances, including alcohol,prescription drugs or marijuana. The poli-cies must be consistent with applicablefederal and state laws prohibiting disabilitydiscrimination and regulating drug testing.In addition, unionized employers shouldconsider possible associated collective bargaining obligations.

INSIDE:

Winter 2012

Reefer Madness: Impact of EmergingMarijuana Regulations on Retailers’ Policies

The New Form I-9: A Gift Employers Don’t Want for the Holidays

Retailers Brace for Enforcementof Criminal Check Guidance

Jackson Lewis Blogs

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he Form I-9 must be executed by retail and other employers to show they haveverified the lawful work status of their

employees. The Form has become the ObamaAdministration’s main vehicle to enforce immigra-tion compliance through employers. This seem-ingly simple one-page form is accompanied by amanual of almost 70 pages of instructions andfrequently-asked-questions. Failure to executethe Form I-9 or comply with its complex require-ments has resulted in millions of dollars of sanc-tions against employers.

The current Form I-9 was set to expire on August31, 2012, but the United States Citizenship andImmigration Service (USCIS) has issued guidanceextending the validity of the current form untilfurther notice.

Why the extension? During the original 60-daycomment period after it released the proposedForm I-9, the USCIS received over 6,200 com-ments. Reasons for the extension include publicconcern over the proposed changes and the pro-posal’s failure to correct issues in the older ver-sion. After extending the public comment periodseveral times, the comment period ended onOctober 15, 2012. Of course, employers havebeen vocal about the additional paperwork, pho-tocopying and retention burdens under the pro-posed Form I-9. Now, questions involve the for-mat and timing of the release of the new Form I-9. Jackson Lewis has learned of concerns frommany human resources associations and clientson the proposed revisions to the Form I-9.

The National Retail Federation and others indus-try associations have expressed legitimate con-cerns as to whether USCIS will consider the practical consequences of major changes to the Form and timing of the roll out. Retail andhospitality industry employers around the coun-try in particular have expressed alarm over a newForm I-9 emerging during high levels of seasonalhiring. A successful holiday season can make amaterial difference to employers in these indus-tries and in the performance of the U.S. economy.Therefore, the timing of a release of the newForm I-9 potentially intersecting with year-end isa cause of anxiety among employers focused onincreasing revenue during a crucial period.

Employers are seeking 180 days’ advance noticeto phase in the new Form. This would allow boththe current and the new versions of the Form tobe used for a limited time. This approach is notunprecedented. It was allowed by the USCIS asrecently as 2009. It would permit employers timeto learn about the new form, train managers andemployees on its completion, and to adapt infor-mation technology to the changes. This couldavoid unforeseen and troubling consequences for businesses during the holiday season. Smallbusiness owners tend to have access to fewerlegal resources. They especially may be adverselyaffected by the proposed changes. Largeremployers may face difficulties, too. Employerswith thousands of employees may need to imple-ment new software and process changes, poten-tially taking their focus away from critical busi-ness objectives. In addition, with the number andtype of changes that are being suggested to theForm I-9, many corporate compliance systemswill require rapid, large-scale changes, which willcompete for resources with other internal tech-nology developments. This is especially true ofcompanies that utilize an electronic I-9 system orE-Verify.

While the new Form I-9 provides some welcomechanges, it may present additional implementa-tion problems for employers. Jackson Lewishopes USCIS will give employers time to adaptto the new Form so as not to impede businessduring economic recovery. Please contact DavisC. Bae, BaeD@jacksonlewis.com, or the JacksonLewis attorney with whom you regularly work ifyou have any questions.

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The New Form I-9: A Gift Employers Don’t Want for the Holidays

The full effect of the new laws on the workplaceremains to be seen. Jackson Lewis attorneys areavailable to advise you regarding the appropriatesubstance abuse policy considerations in this

evolving legal area. For more information aboutworkplace policies, please contact the JacksonLewis attorney with whom you regularly work.

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arlier this year, the Equal EmploymentOpportunity Commission approved arevised “Enforcement Guidance on the

Consideration of Arrest and Conviction Recordsin Employment Decisions under Title VII of theCivil Rights Act of 1964” (“Guidance”). TheCommission emphasizes in the Guidance thatbefore disqualifying an individual with a criminalrecord from employment, employers shouldengage in an individualized assessment involvinga dialogue with that individual. While theGuidance states that employers would not violateTitle VII if they disqualify an applicant based onseparate, federal restrictions on the employmentof persons with criminal records, the EEOC warnsthat an employer may not defend a decision todisqualify an individual solely on state restrictionson the hiring of persons with criminal records.

Previous EEOC Policy andGuidelines

The new Guidance replaces existing EEOC guid-ance on criminal background checks, which hasbeen in existence since 1987 (“1987 Guidance”).The 1987 Guidance detailed statistics showingAfrican-Americans and Hispanics are convictedat a rate disproportionately greater than theirrepresentation in the population, implying thatexcluding individuals from employment on thebasis of their conviction records had a disparateimpact on these groups. Under Title VII, anemployer may justify a practice that results in a disparate impact on protected groups bydemonstrating a “business necessity” for thepractice.

New Guidance: Targeted ScreensMay Satisfy Business Necessity

Large retailers often adopt an internal policyregarding the types of convictions that will dis-qualify an individual from employment. TheGuidance contemplates that an employer maysatisfy the “business necessity” requirementswith an internal policy that is “narrowly tailored.”It explains “narrowly tailored” as a “demonstrablytight nexus to the position in question.” TheGuidance further explains, “Title VII thus does not necessarily require individualized assessmentin all circumstances.” It states that a “targetedscreen” would pass muster if it considers at leastthe nature of the crime, the time elapsed and the nature of the job (these are the three Greenfactors, based on a Supreme Court decision bythat name).

Targeted Screens Accompanied byIndividualized Assessment

The Guidance clearly prefers a targeted screenaccompanied by notice to the individual underscrutiny and an individualized assessment of theindividual, the crime and the position in question.An individualized assessment would allow theapplicant or employee to explain the circum-stances of the conviction and why the convictionshould not exclude him or her from employment.

The Guidance states that if the individual doesnot respond to the employer’s inquiries, theemployer may make its decision without theinformation.

Persons Subject to Federal, StateProhibitions or Restrictions

The Guidance notes federal laws and regulationsprohibit the employment of persons with recordsof certain crimes in particular positions, e.g., childcare workers in federal agencies, bank employeesand port workers. It finds that Title VII does notpreempt these restrictions. However, perhaps ofgreatest concern for employer, the Commissionrefuses to allow employers to establish businessnecessity based on compliance with state orlocal laws prohibiting the employment of personswith certain criminal convictions. According tothe Guidance, an employer that takes adverseaction against an applicant or employee, asrequired by state law or local regulations,nonetheless must demonstrate that its policy is job-related and consistent with business necessity based on the Green factors.

“Ban the Box” by Fiat

As a so-called best practice, the Guidanceencourages employers not to ask applicantsabout their criminal records (this is often called“banning the box” for the question on employ-ment application forms). According to the EEOC,not asking about criminal records early in theapplication process is important because anemployer is more likely to assess objectively the relevance of an applicant’s criminal recordswhen it already knows about the applicant’squalifications and experience.

At least one EEOC regional office has begun targeting employers who do not heed this “best practice.”

Retailers Brace for Enforcement of Criminal Check Guidance

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Operating in the New LegalEnvironment

The Guidance shows the Commission acceptscriminal background checks as a commonemployment practice. Nevertheless, retailersshould review the Guidance and, with humanresources, loss prevention officials and in-houseor outside counsel, evaluate and revise their policies and practices, if necessary, in accordancewith the “Best Practices” provided in theGuidance to minimize becoming a target of the EEOC.

This is especially important for employers thathave multiple hiring locations and utilize back-ground checks frequently. The EEOC has taken

the position that it can expand any individualcharge into a systemic discrimination investiga-tion of the employer. Indeed, the EEOC hasbegun using its systemic discrimination authorityto target companies with multiple locations andemployees. “Big numbers are bad numbers” andlarge numbers of applicants are likely to producestatistically significant adverse impact trends.When that occurs, employers will be required to utilize individualized assessment, targetedscreens or conduct a validation study under the Guidance.

For more information about the Guidance orcriminal background checks, please contactGaren Dodge, DodgeG@jacksonlewis.com.

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The articles in this Update are designed to give general and timely information on the subjects covered. They are not intended as advice or assistance with respect to individual problems. This Update is provided with the understanding that the publisher, editor or authors are not engaged in rendering legal or other professional services. Readers should consult competent counsel orother professional services of their own choosing as to how the matters discussed relate to their own affairs or to resolve specificproblems or questions. This Update may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome. © 2012 Jackson Lewis LLP

Editorial Board: Mark S. AskanasDylan B. Carp

50 California Street9th FloorSan Francisco, CA 94111415-394-9400

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