By UpCounsel Employment Attorney Josh Garber

Companies often struggle with developing policies around their employees’ alcohol and drug use. This is especially true with startups and tech companies, particularly those who offer alcohol on-site during business hours and who do not view drug use as necessarily bad for business or productivity.

As an employment attorney based in San Francisco, I’ve seen it all – from founders wanting to encourage LSD use among marketing employees (protip: probably not the best idea from a liability standpoint) to CEOs wanting to make sure that all employees are drug tested regularly and that they don’t consume alcohol at company events.

Companies should consider the following when developing their alcohol and drug-related employment policies:

1) Balance your desired company culture with liability risks.

Sure, you may want to allow your employees to have a beer with lunch and do whatever they see fit in their spare time, so long as they bring their A-game while at work. That said, a drug and alcohol policy that specifically allows for imbibing at work could harm the company. For example, what if an employee gets drunk at a company event and punches another employee? This actually happened to a client of mine, and it ended up costing the company a fair amount to settle.

On the flip side, if your company bans all alcohol and drug use, there may be liability related to that, particularly if your policy-in-practice differs from the written one. An example here is a company that in its employee handbook specifically does not allow for any alcohol or drug use while at work, but regularly reimburses employees for drinks purchased over lunch while at business meetings with clients and has alcohol at company-sponsored events. Despite a policy drafted to protect your liability, the company’s actions can override the written policy, putting the company at risk.

Alcohol and drug-related policies should be drafted with the company thinking about these and other types of “what ifs?” The desire for a certain company culture should be balanced against the liability inherent in these scenarios.

2) Consider limits on prescription drug use.

Often enough, I’ll come across employee drug and alcohol policies that completely ignore prescription drug use. However, prescription drugs, just like any other drugs or alcohol, can decrease an employee’s ability to function properly at work. If a company has no provision against prescription drug use at work and an employee comes in to work while on prescription drugs and gets into an accident, the employer may be liable and/or forced to defend a suit against the employee and any accident victim.

Employers are often best served by having alcohol and drug policies that specifically state that employees are not allowed to work while under the influence of any drug that inhibits the employee’s performance of their job duties. The policy should also clearly state that this applies not only to alcohol and illegal drugs, but also to prescription drugs.

Because prescription drugs are usually tied to an illness, employers without HR teams should be sure to consult with an employment attorney or HR professional for help with specific cases related to employees who want to work, but need to be on prescription medicine which could inhibit their ability to perform their job duties.

3) Although marijuana laws are changing, your company’s policy probably doesn’t have to.

Marijuana decriminalization, legalization, and medicinal use is spreading across the country. Many companies come to me asking how changing marijuana laws affect their alcohol and drug-related policies, and the answer is usually that employers do not need to update their policies, even with these new laws in place.

Why? Because even if you use marijuana for medicinal purposes, marijuana users are not a protected class. Employers generally have the right to terminate employees for using marijuana even outside of business hours.

It might seem irrational for an employer to ban employees from using marijuana or other drugs even on their own free time, but for certain types of employees, such a policy might make sense. Marijuana isn’t like alcohol in the sense that marijuana shows up in a person’s system for weeks (and sometimes months) after a single use.

If your job is to drive a truck and you use marijuana only on your free time but get into a car accident at work, you may be drug tested and have no way of proving that you weren’t under the influence when you got into the crash. Thus, the employer would be protecting themselves from liability if they had a strict policy prohibiting drug use even after hours for employees, and the company could attempt to use this policy as a shield against any liability.

That said, employers wishing to implement such a policy should connect with an employment attorney or HR professional. In doing so, you’ll want to make sure that your policy doesn’t discriminate against employees who may need marijuana for medicinal purposes.

4) Develop a sensible policy around alcohol use.

If you know that your company will allow employee alcohol use on company time, you’ll want to make sure you have a policy that still limits your liability. This is often best done through a sensible alcohol-use employee policy, which both acknowledges that employees may, at times, be allowed to drink on company premises/at company events, but in which employees are still required to abide by the company’s policies and to behave in accordance with usual business standards.

Here, it’s not only important to have a policy like this written, but to enforce it – so, if at a company-sponsored event, a manager sees an intoxicated (or any other) employee acting inappropriately and counter to the company’s business standards, the employee should be asked to leave.

The Takeaway

Many companies, especially startups and technology companies, want to create a workplace environment that is fun and progressive. While this ethos works fine for many companies, to help limit potential liability, companies should, at the very least, ensure that their drug and alcohol policy requires employees to maintain professional conduct while at work and spells out the consequences if they don’t.

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About the author

Josh Garber

Josh Garber

Josh has worked on nearly 200 projects through the UpCounsel marketplace and all 100 of his clients who have reviewed his work gave him 5 Stars. Josh, a graduate of the University of Pennsylvania Law School, regularly represents businesses in employment matters, business transactions and formations, contract drafting and management, and IP and corporate governance matters. Though he is dedicated to helping his clients avoid litigation, Josh has extensive trial experience and has obtained favorable outcomes in state and federal courts, mediations, arbitrations and DLSE hearings. Josh's clients include HotelTonight and Tesla.

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