CEBALLOS v. NP PALACE LLC ( 2022 )

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IN THE SUPREME COURT OF THE STATE OF NEVADA
DANNY CEBALLOS, No. 82797
Appellant, .
vs. A ~
NP PALACE, LLC, D/B/A PALACE F LL E D 3
STATION HOTEL & CASINO,
Respondent. AUG 11 202 4
EME, SOURT
Appeal from a district court judgment in an employment action.
Eighth Judicial District Court, Clark County; Bita Yeager, Judge.
Affirmed.
@ Stieb
Lagomarsino Law Office and Andre M. Lagomarsino, Henderson,
for Appellant.
Fisher & Phillips LLP and Scott M. Mahoney, Las Vegas,
for Respondent.
BEFORE THE SUPREME COURT, EN BANC.
OPINION
By the Court, PICKERING, J.:
NRS 613.333 creates a private right of action in favor of an
employee who is discharged from employment for engaging in “the lawful
use in this state of any product outside the premises of the employer during
the employee’s nonworking hours.” The question presented is whether
adult recreational marijuana use qualifies for protection under this statute.
We agree with the district court that it does not. Although Nevada has
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decriminalized adult recreational marijuana use, the drug continues to be
illegal under federal law. Because federal law criminalizes the possession
of marijuana in Nevada, its use is not “lawful .. . in this state” and does not
support a private right of action under NRS 613.333. Further, because NRS
678D.510(1)(a) authorizes employers to prohibit or restrict recreational
marijuana use by employees, an employee discharged after testing positive
at work based on recreational marijuana use does not have a common-law
tortious discharge claim. We therefore affirm.
I.
Danny Ceballos worked as a table games dealer at Palace
Station for more than a year, with no performance or disciplinary issues.
But toward the end of his shift on June 25, 2020, he slipped and fell in the
employee breakroom. Palace Station security responded, first assisting
Ceballos, then requiring him to submit to a drug test. The test came back
positive for marijuana, and on July 16, 2020, Palace Station terminated
Ceballos based on the positive test result. Ceballos sued, and the district
court dismissed the complaint under NRCP 12(b)(5) for failure to state a
claim upon which relief can be granted.
Because this appeal challenges the grant of a motion to dismiss,
our review is de novo, and we accept as true all well-pleaded facts alleged
in the complaint. Buzz Stew, LLC v. City of North Las Vegas, 124 Nev. 224,
228, 181 P.38d 670, 672 (2008). Per the complaint, Ceballos was not
intoxicated or impaired during his June 25 shift; he did not use marijuana
in the 24 hours before that shift; and he was at home, not at work, when he
engaged in the recreational marijuana use that produced the positive test
result. The complaint also alleges facts establishing that Ceballos’s
marijuana use complied with Nevada’s recreational marijuana laws.
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Ceballos frames his complaint in two counts. The first count
asserts a claim for damages under NRS 613.333. This statute makes it an
unlawful employment practice for an employer to:
Discharge... any employee . . . because the
employee engages in the lawful use in this state of
any product outside the premises of the employer
during the employee’s nonworking hours, if that
use does not adversely affect the employee’s ability
to perform his or her job or the safety of other
employees.
NRS_ 613.333(1)\(b) (emphasis added). “An employee who is
discharged ...in violation of subsection 1...may bring a civil action
against the employer” for “[dlamages equal to the amount of the lost wages
and benefits.” NRS 613.333(2)(d).
Nevada decriminalized adult recreational marijuana use by
voter initiative effective January 1, 2017. See Secretary of State, Statewide
Ballot Question No. 2, 14 (Nev. Nov. 8, 2016). Consistent with the original
initiative statutes, NRS 678D.200(1) provides that adult recreational
marijuana use “is exempt from state prosecution” so long as such use
complies with the conditions stated in NRS Chapter 678D.' Since the
'The initiative statutes were initially codified as NRS Chapter 453D.
The 2019 Legislature added to and amended these statutes and recodified
them as NRS Chapter 678D, effective July 1, 2020. See 2019 Nev. Stat., ch.
595, § 245, at 3896; id. § 246(4)(a), at 3896. Ceballos’s marijuana use and
subsequent termination straddle the July 1, 2020, date when NRS
Chapter 678D replaced NRS Chapter 453D. The parties analyze the
issues on appeal under NRS Chapter 678D, and so do we. The
recodification/amendment process did not materially change the provisions
in NRS Chapter 678D addressed in this appeal.
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complaint sufficiently alleges facts establishing that the marijuana use that
produced Ceballos’s positive test result complied with NRS Chapter 678D,
such use qualifies as “lawful” under Nevada state law. But marijuana
possession remains illegal and federally prosecutable under the federal
Controlled Substances Act (the CSA). See 21 U.S.C. § 844(a) (2018). So, we
must decide what the phrase “lawful use in this state” means for purposes
of NRS 613.333(1)—does it mean lawful under state law, or does it mean
generally lawful, under both state and federal law?
The general-terms canon is a basic rule courts follow in
interpreting statutes. Antonin Scalia & Bryan A. Garner, Reading Law:
The Interpretation of Legal Texts 101 (2012). Under this canon, “general
terms are to be given their general meaning.” Jd. Ceballos posits that,
because NRS 613.333 was enacted in 1991, decades before Nevada
decriminalized recreational marijuana use, the drafters did not think about
the state-federal split that exists today as to marijuana. On this basis, he
urges us to infer an exception for federal illegality in NRS 613.333 and read
lawful “in this state” to mean lawful “under Nevada state law.” But this
runs directly contrary to the general-terms canon, which holds that “the
presumed point of using general words is to produce general coverage—-not
to leave room for courts to recognize ad hoc exceptions.” Id.“Lawful” means “legal; warranted or authorized by the law;
having the qualifications prescribed by law; not contrary to nor forbidden
by the law; not illegal.” Lawful, Black’s Law Dictionary 885 (6th ed. 1990);
see also Lawful, Merriam-Webster’s Collegiate Dictionary 705 (11th ed.
2019) (defining “lawful” as “being in harmony with the law” and
“constituted, authorized, or established by law”). The prepositional phrase
“in this state” is not synonymous with “under state law”’—-when the
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Legislature means to specify state law, it does so. See, eg., NRS
451.556(1)(b) (allowing a minor to be an organ donor where the minor is
“lajuthorized under state law to apply for a driver’s license”); NRS
624.920(1) (requiring that a contractor be licensed “under state law”).
Instead, the phrase connotes geographical boundaries and indicates that
laws applicable to conduct occurring in Nevada are to be considered in
assessing the legality of an employee’s product use. One of these laws is the
federal criminal prohibition against marijuana possession. See Ross v.
RagingWire Telecomms., Inc., 174 P.3d 200, 204 (Cal. 2008) (explaining that
state laws cannot completely legalize marijuana use “because the drug
remains illegal under federal law”) (citing the CSA, 21 U.S.C. $§ 812, 844(a)
(2006)).
The Colorado Supreme Court confronted a similar issue in
Coats v. Dish Network, LLC, 350 P.3d 849 (Colo. 2015). The statute
considered in Coats made it an unfair employment practice to discharge an
employee “due to that employee’s engaging in any lawful activity off the
premises of the employer during non-working hours.” Colo. Rev. Stat. § 24-
34-402.5(1) (2012) (emphasis added). Coats’s employer fired him after he
tested positive for marijuana on a random drug test, in violation of the
employer’s drug policy. Coats, 350 P.38d at 850-51. Like Ceballos’s
marijuana use, Coats’s marijuana use was legal under state law but illegal
under federal law. See id. at 850, 852. Because “lawful activity” signifies
an activity that is permitted by law, or, conversely, not contrary to or
forbidden by law, the court held that the statute did not apply to Coats
because his marijuana use, though legal under state law, was illegal under
federal law.
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Nothing in the language of the statute limits the
term “lawful” to state law. Instead, the term is used
in its general, unrestricted sense, indicating that a
“lawful” activity is that which complies with
applicable “law,” including state and federal law.
We therefore decline Coats’s invitation to engraft a
state law limitation onto the statutory language.
Id. at 852 (emphasis added). Ceballos notes that the statute in Coats
referred to “lawful activity,” whereas NRS 613.333(1)(b) refers to activity
“lawful ...in this state.” But this difference in phrasing does not alter the
analysis—the phrase “lawful ...in this state” is general and encompasses
state and federal law applicable to conduct occurring within the state. Acts
committed in Nevada that violate federal law are not “lawful...in this
state” under the general phrasing in NRS 613.333(1).
Ceballos cites two additional statutes—NRS 613.132 and NRS
678D.510(1)(a)—that he contends support reading “lawful in this state” to
mean “lawful under state law.” Enacted in 2019, NRS 613.132(1) addresses
hiring, not discharge; it provides that, with certain exceptions, “[i]t is
unlawful for any employer in this State to fail or refuse to hire a prospective
employee because the prospective employee submitted to a screening test
and the results of the screening test indicate the presence of marijuana.”
2019 Nev. Stat., ch. 421, § 2, at 2625. NRS 678D.510(1)(a) was one of the
original initiative statutes decriminalizing adult marijuana use that took
effect January 1, 2017. See Statewide Ballot Question No. 2, supra, at 27;
supra note 1. NRS 678D.510(1\a) provides that “[t]he provisions of this
chapter’>—NRS Chapter 678D, decriminalizing adult recreational
marijuana use—“do not prohibit... [a] public or private employer from
maintaining, enacting and enforcing a workplace policy prohibiting or
restricting actions or conduct otherwise permitted under this chapter.”
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NRS 613.132 and NRS 678A.510(1)(a) recognize and address
the policy tensions between the statutes decriminalizing marijuana and
employment law. But these statutes do not support Ceballos’s reading of
NRS 613.333(1)(b) and, in fact, confirm our reading of it. Subsection 1(a) of
NRS 613.333 extends the “unlawful employment practice” it establishes to
reach employers who “[flail or refuse to hire a prospective employee,”
equally with those who discharge an employee, based on product use that is
“lawful...in this state.” If Ceballos is right and NRS 613.333 only
addresses product use that is lawful under Nevada law, passing NRS
613.132 in 2019 would have served little purpose, since NRS 613.333(1)(a)
would already reach the employer who refuses to hire a prospective
employee who tests positive for marijuana. And read as Ceballos urges,
NRS 613.333(1)(b) would conflict with NRS 678D.510(1)(a), which expressly
permits employers to enforce workplace policies prohibiting or restricting
employees’ recreational marijuana use. Whenever possible, this court
interprets separate statutes harmoniously. See Watson Rounds, P.C. v.
Eighth Judicial Dist. Court, 131 Nev. 783, 789, 358 P.3d 228, 232 (2015).
Read in harmony with NRS 613.333, NRS 613.132 and NRS 678D.510
support that when NRS 613.333(1) refers to product use that is lawful in
this state, it means lawful under both state and federal law, not just lawful
under Nevada law.
B.
The second count of the complaint asserts a common-law
tortious discharge claim. “An employer commits a tortious discharge by
terminating an employee for reasons which violate public policy.” D’Angelo
v. Gardner, 107 Nev. 704, 712, 819 P.2d 206, 212 (1991). Ceballos argues
that his termination offends public policy in two ways. First, he maintains
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that “Nevada has a strong public policy interest in protecting the statutory
rights of its citizens” and that “[i]t is [his] statutory right, under NRS
[Chapter] 678D, to engage in [marijuana] consumption pursuant to the
”
chapter’s guidelines.” Second, he avers that “Nevada has a strong public
policy interest in ensuring its citizens are not denied the ability to support
themselves and their families due to engagement in statutorily protected
and completely lawful activities.”?
The public policies Ceballos identifies do not rise to the level
required to establish a tortious discharge claim arising out of a
presumptively at-will employment relationship. In Nevada, “tortious
discharge actions are severely limited to those rare and exceptional cases
where the employer’s conduct violates strong and compelling public policy.”
Sands Regent v. Valgardson, 105 Nev. 436, 440, 777 P.2d 898, 900 (1989).
This court has found a sufficient violation of “strong and compelling public
policy” to justify a tortious discharge claim when an employer terminated
an employee (1) “for refusing to work under conditions unreasonably
dangerous to the employee,” D’Angelo, 107 Nev. at 718, 819 P.2d at 216;
(2) for refusing to engage in illegal conduct, Allium v. Valley Bank of Nev.,
114 Nev. 13138, 1323, 970 P.2d 1062, 1068 (1998); (3) for filing a workers’
compensation claim, Hansen v. Harrah’s, 100 Nev. 60, 64, 675 P.2d 394, 397
(1984); see also Dillard Dep’t Stores, Inc. v. Beckwith, 115 Nev. 372, 378, 989
P.2d 882, 885-86 (1999); (4) for reporting the employer’s illegal activities to
outside authorities, Wiltsie v. Baby Grand Corp., 105 Nev. 291, 293, 774
P.2d 4382, 433 (1989) (dictum); and (5) for performing jury duty, D’Angelo,
“The complaint and the record of proceedings in the district court do
not support that Ceballos’s complaint asserted, or tried to assert, a privacy-
based tort claim.
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107 Nev. at 712, 819 P.2d at 212 (dictum). Conversely, in Chavez v. Sievers,
this court declined to allow an employee to pursue a tortious discharge claim
for race discrimination against an employer too small for the state anti-
discrimination laws to apply. 118 Nev. 288, 293-94, 43 P.3d 1022, 1025-26
(2002). And in Sands Regent, the court held that “age discrimination, as
objectionable as it may be,” does not justify allowing an employee to recover
compensatory and punitive damages on a tortious discharge theory, where
the statute prohibiting age discrimination in employment created a private
right of action that limited the relief available to reinstatement and two
years of lost wages. 105 Nev. at 439-40, 777 P.2d at 900.
Applying this law to the publie policies Ceballos has identified,
his tortious discharge claim falls short. Ceballos asserts a statutory right
to engage in adult recreational marijuana use under NRS Chapter 678D
when not at work, despite that use being detected by a drug test
administered at work. Even setting aside its federal illegality, this asserted
right is personal to Ceballos. It does not concern employer-coerced criminal
activity, workers’ compensation for an on-the-job injury, or public service,
like jury duty or whistleblowing. With no public dimension or tie to
dangerous or illegal working conditions, Ceballos’s claim differs
fundamentally from the “rare and exceptional cases” discussed above, in
which this court allowed a public-policy-based tortious discharge claim to
proceed because not allowing the claim would offend “strong and compelling
public policy.” Jd. at 440, 777 P.2d at 900; see 2 Mark A. Rothstein et al.,
Employment Law § 9:9 (6th ed. 2019) (noting that most states have
recognized public-policy-based tortious discharge claims and that the acts
vindicated fall “into one or more of four broad categories|:] ... (1) refusing
to perform unlawful acts, (2) exercising legal rights, (3) reporting illegal
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activity (whistleblowing), and (4) performing public duties”) (footnotes
omitted); id. at § 9:11 (addressing tortious discharge claims falling into
category 2—claims by employees terminated for exercising legal rights—
and noting that “Iclourts generally require that this right relate to
employment; employees must enjoy the right because of their status as
employees, and not because of some other status they may have, such as
citizen or taxpayer”).
The interplay between adult recreational marijuana use and
employment law, moreover, is one the Legislature has addressed in NRS
678D.510(1)(a) and, to a lesser extent, in NRS 613.132. Palace Station
terminated Ceballos for failing a workplace drug test after engaging in adult
recreational marijuana use before his shift. NRS 678D.510(1)(a) specifically
authorizes employers to adopt and enforce workplace policies prohibiting or
restricting such use. If the Legislature meant to require employers to
accommodate employees using recreational marijuana outside the
workplace but who thereafter test positive at work, it would have done so.
Cf. NRS 678C.850(3) (requiring employers to accommodate the medical
needs of employees who use medical marijuana unless certain exceptions
exist). It did not. It also did not extend the protections afforded by NRS
613.333 and NRS 613.132 to reach the circumstances giving rise to
Ceballos’s termination. See supra Section II.A. (discussing the limits the
Legislature has set on the protections NRS 613.333 and NRS 613.132
afford). This court declined to allow the employees in Chavez and Sands
Regent to pursue common-law tortious discharge claims to redress the
discrimination they alleged, because doing so would intrude on the
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prerogative of the Legislature, which had enacted statutes addressing the
same subject matter. See Chavez, 118 Nev. at 294, 43 P.3d at 1026; Sands
Regent, 105 Nev. at 440, 777 P.2d at 900. Doing so would be even less
appropriate here.
We affirm.
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