Legal and effective hiring practices for high-risk businesses

Clarence Belnavis

Business is booming for marijuana ventures, and onboarding trustworthy and competent employees in the substantially cash-based environment of the marijuana industry, is critical. While the right hire can be an asset to a growing business, the wrong hire could just be a liability. Below are some hiring tips for employers to keep in mind.

Alex Wheatley
Alex Wheatley Fisher Phillips

Applicants’ Legal Rights

Federal law prohibits discrimination in hiring on the basis of race, national origin, gender, pregnancy, age, disability or religion. Many states and localities protect additional characteristics – such as sexual orientation and family status. Therefore, it is important that employers avoid questions that relate to these protected classes. It is also important to develop job descriptions so that there is no question about the position’s essential functions. The goal, both from the legal and the business points of view, should be to determine the applicant’s ability to perform the job. Thus, the focus of interview questions should be on work-life rather than personal-life.

Don’t go digging

Employers need to be familiar with laws that restrict digging into an applicant’s past. Stick to the requirements of the Fair Credit Reporting Act when obtaining a background check. Many municipalities now restrict employers’ ability to ask about past criminal convictions before a conditional offer of employment is made. These are often called “ban the box” laws. While no law prohibits “Googling” an applicant, doing so can be risky because it may reveal protected information. States may also restrain an employers’ ability to require access to the employee’s social media accounts.

Employment-related contracts

The employment relationship is contractual in nature. Absent an agreement to the contrary, the employment relationship is “at-will,” meaning that both the employer and the employee can terminate the relationship for any or no reason at all. However, this could change if the employer makes any promises or guarantees. Avoid saying things like “as long as you do good work, you will always have a job here,” “we will give you the tools to succeed” or “we are hiring you for a one-year project.”

NDA, non-compete or non-solicitation

During the hiring process, the employer should also consider whether to enter into a non-competition, non-solicitation or non-disclosure agreement. Generally, a non-competition agreement is a contract in which the employee agrees not to conduct any business in competition with the employer’s business for a period of time after the employment relationship ends. It is the most restrictive of the three agreements and the most difficult to enforce. Indeed, some states impose severe restrictions on non-competition agreements, making them far less useful than they used to be.

In a non-solicitation agreement, an employee promises to not solicit other employees or customers of the business, and a non-disclosure agreement, where the employee agrees to keep any confidential information (e.g., customer or supplier lists) confidential after they leave employment. Employers should consult an employment law expert to make sure any agreements are both useful and legal before using them.

Practical considerations

While employers must understand the legal considerations of the hiring process, the goal is to hire the best possible employee, which is more of a personnel issue than a legal problem. Having the right procedures in place, and taking the process seriously, reduces the odds of hiring a problem employee.

Beware of red flags

Employers should require that all applicants submit a written application, and take the time to carefully review it for red flags, such as gaps in employment, lack of information for past employers, sloppiness and history of declining pay, etc. Contact the applicant’s prior employers and other references. They may not share anything, but taking 30 minutes to make those calls may payoff in the long run.


Interview the applicant personally and let the applicant do 80 percent of the talking. Be creative, but avoid asking about the prohibited areas listed above. Get to know the applicant and make sure he or she will do the job well and get along with others. Consider taking the applicant on a tour of the workplace to see how he or she interacts with other employees. Make sure the applicant is curious and interested in the business – not just the product!

There is always a bit of luck involved in hiring. However, following these procedures, and working with an expert during the sticky situations, will minimize the chance of making the wrong choice.

This Tip of the Week was written by Clarence Belnavis and Alex Wheatley of the regional law firm Fisher Phillips. Belnavis is a trial attorney with a primary emphasis in employment litigation, including disability, racial and gender discrimination, retaliation, sexual harassment and wrongful discharge. Wheatley is an attorney representing employers of all shapes and sizes. He also advises and provides training on issues relating to workplace discrimination, family leave, wage and hour laws, and non-competition, non-solicitation and non-disclosure agreements.


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