Articles Posted in Employment Discrimination

A major new decision by the New Jersey Appellate Division has strengthened the rights of employees fighting workplace sexual harassment and discrimination. In C.S. v. Brick Recycling Company, the court clarified a critical standard regarding the “investigation shield” that employers frequently use to hide evidence in New Jersey Law Against Discrimination (LAD) cases. Under New Jersey law, when an employer claims they acted in “good faith” by conducting an internal investigation, they cannot use the attorney-client privilege to hide behind-the-scenes documents that could expose a flawed or biased process.

The case involved C.S., a truck driver who reported that he was being stalked and subjected to unwanted sexual advances by the company’s Corporate Financial Controller, M.R. Although the company president ordered no contact, M.R. immediately retaliated by leaving an angry note on C.S.’s car. The company eventually hired an outside attorney to conduct an investigation, but C.S. was forced to resign while the investigation was still ongoing. C.S. filed a constructive discharge and sexual harassment lawsuit under the LAD, and in response, the employer asserted a “good faith” defense. However, when C.S.’s attorneys attempted to evaluate whether the investigation was actually conducted in good faith, the company refused to turn over 36 pages of the investigator’s personal notes, internal emails, and draft reports, claiming they were protected by attorney-client and work-product privileges.

Under the landmark New Jersey Supreme Court decision in Payton v. New Jersey Tpk. Auth., an employer who relies on an internal investigation as an affirmative defense waives the privilege for documents related to that investigation. However, Payton left a loophole, stating that documents only “tenuously related” to the defense could still be withheld. In C.S., the Appellate Division defined “tenuously related” for the first time. The court ruled that any document is discoverable if it could either substantiate the employer’s defense or impeach it. If a document shows that the employer unduly curtailed the investigation, interfered with the attorney’s independence, or undermined the integrity of the process, it is sufficiently related to the defense and must be disclosed.

A groundbreaking new decision by the New Jersey Appellate Division has clarified that job applicants and employees have the right to sue employers who discriminate against them for recreational cannabis use. In the recent case of Sanders v. The Levari Group, LLC, decided on May 26, 2026, the court determined for the first time that the Cannabis Regulatory, Enforcement Assistance, and Market Modernization Act (CREAMMA) provides an implied private right of action for individuals.

The plaintiff, Darlene Sanders, applied and interviewed for a customer service position with the defendant. After receiving and accepting a job offer, she submitted to a pre-employment drug screening as part of the company’s standard hiring process. The test revealed the presence of cannabis from recreational use within the past thirty days, although Sanders was not under the influence at the time of her application. When Sanders followed up on her start date, a human resources representative told her she could take a repeat drug test within a week at her own expense. Unable to afford the retest, she declined, and the company rescinded the job offer and refused to hire her. Sanders sued the company, alleging it violated her rights under CREAMMA by refusing to hire her on the basis of her recreational cannabis use.
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Federal and New Jersey employment laws protect employees and job applicants from disability discrimination. Disability discrimination encompasses refusing to hire or firing someone because of a disability, providing different pay or other forms of compensation due to a disability, or refusing to provide reasonable accommodations that would enable an individual with a disability to perform their job duties. The U.S. Supreme Court recently issued a ruling in a case alleging disability discrimination in compensation, specifically employer-sponsored health insurance, under the Americans with Disabilities Act (ADA) of 1990. The allegedly discriminatory act did not affect the plaintiff until after she had retired. The court ruled that she was no longer an “employee” as defined by the ADA and did not have standing to file a lawsuit.

The ADA states that employers may not “discriminate against a qualified individual on the basis of disability in regard to… employee compensation” and other matters. The statute defines a “qualified individual” as someone who can “perform the essential functions” of a job the person “holds or desires,” either without assistance or with reasonable accommodations. The meaning of the words “holds or desires” was at the center of the Supreme Court case.

The plaintiff in Stanley v. City of Sanford began working as a firefighter for a city fire department in 1999. She was diagnosed with a chronic illness in 2016, and as a result had to retire from the fire department in 2018 after approximately nineteen years on the job.
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New Jersey has allowed the use of cannabis for at least some reasons for the last fifteen years. Still, the relationship between New Jersey employment law and cannabis law remains uncertain. Employees in New Jersey who use cannabis for medical purposes with a doctor’s prescription may have rights under state laws prohibiting disability discrimination. A much newer law allows recreational use of small amounts of cannabis. This law specifically states that employers may not discriminate against employees based on legal cannabis use outside of work, provided they are not under the influence of cannabis while at work. A job applicant filed suit against a major retailer after it rescinded a job offer because a drug test was positive for cannabis. The Third Circuit Court of Appeals ruled in late 2024 that the recreational cannabis law does not give job applicants or employees the right to file a private cause of action for alleged discrimination. This leaves employees with legal rights against discrimination but no clear means of enforcing those rights.

The New Jersey medical cannabis law took effect in 2009. It originally stated that employers did not have to accommodate medical cannabis use. Subsequent amendments to that section of the law have removed that language. Currently, the medical cannabis law does not contain any explicit employment protections. A 2020 ruling by the New Jersey Supreme Court, however, held that the New Jersey Law Against Discrimination’s prohibition on disability discrimination applies to medical cannabis use outside of work. The case involved an employee who lost his job after his employer discovered he used cannabis with a prescription to treat the symptoms of cancer.

The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) became law in 2021. It states that an employer may not refuse to hire or fire someone, nor may it discriminate in other ways because a person does or does not use cannabis for lawful recreational purposes. It also states that employers may not take adverse actions solely based on “the presence of cannabinoid metabolites” in a drug test resulting from lawful cannabis use. Employers may, however, require drug testing to ensure employees are not working under the influence. The statute does not state that employees may file suit for alleged violations, although some courts have allowed discrimination claims to proceed.
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