A landmark New Jersey appellate court decision has fundamentally transformed the legal landscape for employers dealing with cannabis-related employment decisions. The May 2026 ruling in Sanders v. Levari Group establishes that employees and job applicants can now sue employers directly for cannabis-related workplace discrimination, marking a significant expansion of worker protections under state law.

Understanding the Sanders v. Levari Group Decision

The New Jersey Appellate Division's ruling in Sanders v. Levari Group (A-2715-23) represents a watershed moment for cannabis employment law. The court held that individuals can sue employers directly for cannabis-related employment discrimination under New Jersey's Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA).

This decision dramatically expands employer liability and confirms that job applicants and employees have a private right of action when employers violate New Jersey's cannabis employment protections. For organizations operating in the state, this ruling changes everything about pre-employment drug testing, hiring decisions, and workplace cannabis policies.

Key Findings from the Court

Private Right of Action Confirmed

The court confirmed that CREAMMA includes an implied private right of action, allowing individuals to file lawsuits directly against employers who violate New Jersey's cannabis employment protections. This means workers no longer need to rely solely on government enforcement agencies to protect their rights.

THC Tests Don't Prove Impairment

The court reinforced a critical scientific and legal principle: a positive cannabis metabolite test reflects prior cannabis exposure—not current workplace impairment. This distinction is crucial for employers who have traditionally relied on drug testing as a blanket employment screening tool.

Off-Duty Cannabis Use Is Protected

The ruling confirmed that employers cannot rescind job offers or take adverse employment action based solely on lawful off-duty cannabis use protected under New Jersey law. This protection extends to both current employees and job applicants.

The Case That Changed Everything

The facts of the Sanders case illustrate exactly how these protections work in practice. A job applicant received a conditional offer of employment from Levari Group but later tested positive for cannabis metabolites during the pre-employment screening process.

The applicant maintained that the positive result reflected lawful off-duty cannabis use permitted under New Jersey law. Despite this explanation, the employer rescinded the job offer based solely on the positive test result.

The applicant filed suit under CREAMMA. Although the trial court initially dismissed the case, the New Jersey Appellate Division reversed that decision and held that the applicant had the right to pursue legal action directly against the employer.

Why This Ruling Changes Everything for Employers

Easier Path to Litigation

By recognizing a private right of action under CREAMMA, the court significantly lowered the barriers for individuals seeking to challenge cannabis-related employment decisions. Employers may now face litigation arising from:

• Pre-employment drug testing
• Rescinded job offers
• Hiring decisions
• Disciplinary actions
• Terminations
• Zero-tolerance workplace policies

Expanding State Protections

The Sanders decision establishes important precedent regarding the strength of employee protections under state cannabis laws, the ability of individuals to pursue private lawsuits against employers, and the limitations of traditional workplace drug testing as a basis for employment decisions.

Drug Testing No Longer Sufficient

As workplace cannabis laws evolve, employers increasingly need policies that focus on actual workplace impairment rather than historical cannabis use. The legal question is no longer whether an employee used cannabis at some point in the past. The question is whether there is objective evidence of impairment affecting workplace performance or safety.

What Employers Should Do Now

Organizations operating in states with cannabis employment protections should immediately evaluate their workplace policies and procedures. A comprehensive review should include several critical areas.

Review Drug Testing Policies

Examine your current drug testing protocols to ensure they comply with state cannabis laws. Consider whether blanket pre-employment cannabis testing remains appropriate for your organization, particularly for positions that don't involve safety-sensitive duties.

Update Reasonable Suspicion Procedures

Develop clear, documented procedures for reasonable suspicion determinations. These procedures should focus on observable signs of impairment rather than assumptions based on cannabis use alone.

Implement Impairment Observation Protocols

Create standardized protocols for supervisors to observe and document potential workplace impairment. These protocols should be objective, consistent, and focused on job performance and safety concerns.

Invest in Supervisor Training

Train supervisors and managers on how to recognize signs of impairment, document observations properly, and follow legally defensible procedures when addressing fitness-for-duty concerns.

Strengthen Documentation Practices

Ensure all employment decisions related to potential impairment are thoroughly documented with objective observations, timestamps, and witness statements when available.

Develop Fitness-for-Duty Frameworks

Create comprehensive fitness-for-duty decision-making processes that can withstand legal scrutiny. These frameworks should clearly distinguish between evidence of impairment and mere detection of cannabis metabolites.

The Broader Implications

The Sanders decision reflects a broader national trend toward protecting employees who use cannabis lawfully during their personal time. As more states legalize cannabis for medical or recreational use, employers must adapt their policies accordingly.

Traditional approaches that treated any positive cannabis test as grounds for adverse employment action are increasingly legally risky. Employers who fail to update their policies may find themselves facing costly litigation and potential liability.

Looking Ahead

The legal landscape surrounding cannabis and employment continues to evolve rapidly. Employers should stay informed about developments in their jurisdictions and be prepared to update policies as new laws and court decisions emerge.

For organizations seeking to develop legally defensible workplace impairment programs, professional guidance can help navigate these complex issues. Comprehensive approaches including supervisor training, impairment observation protocols, documentation tools, and fitness-for-duty decision-making frameworks are essential for adapting to this changing legal landscape.

The Sanders v. Levari Group decision serves as a clear warning to employers: the days of relying solely on drug testing to make employment decisions are over. Those who adapt quickly will protect themselves from liability while maintaining safe, productive workplaces.