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Smoking Hot New Court Decision: Marijuana and the Workplace

by Erin Ebeler, Woods & Aitken LLP

On Monday, June 15, 2015, the Colorado Supreme Court issued a decision regarding the use of medical marijuana that is likely to have a reach broader than Colorado’s borders. Namely, the Court held that use of medical marijuana could be grounds for termination by the employer of that employee.

Across the country, employers and lawyers have been watching this case because it involves, in many respects, the “perfect” plaintiff. Brandon Coats is a quadriplegic who has been confined to a wheelchair since he was a teenager and suffers painful muscle spasms as a result. Mr. Coats obtained a medical marijuana license through the State of Colorado, and used medical marijuana at home on the weekends and after completing his work as a customer service representative at Dish Networks. According to his complaint, Mr. Coats never used marijuana on the employer’s property or came to work “high.” However, Dish Networks’ drug policy included random drug testing, and when Mr. Coats was selected for that random test, he tested positive for tetrahydrocannabinal (“THC”), which is a chemical contained within marijuana. Mr. Coats told the employer that he was a registered and licensed medical marijuana patient and that he intended to continue using the drug. The Company fired Mr. Coats for violating its drug policy, and Mr. Coats sued Dish Networks for wrongful termination.

In affirming Dish Networks’ right to terminate Mr. Coats, the Court analyzed several laws, including the following:

  1. Colorado’s Lawful Activities Statute (C.R.S. § 24-34-402.5). This statute generally prevents Colorado employers from terminating an employee who is engaged in “lawful activities” outside of working hours when not on the employer’s premises. Notably, approximately 30 states throughout the country have similar statutes on the books, although many of those statutes are restricted to “lawful tobacco use.” (Neither Nebraska nor Iowa have either type of statute.)

    Colorado’s lawful activities statute is not unlimited, though. Namely, the statute allows employers to act in situations where the employer’s restriction (i) relates to a bona fide occupational requirement or is reasonably and rationally related to the employment activities and responsibilities of a particular employee or a particular group of employees, rather than to all employees of the employer; or (ii) is necessary to avoid a conflict of interest with any responsibilities to the employer or the appearance of such a conflict of interest.

    The primary issue in the Coats case surrounded whether Mr. Coats’ medical marijuana use was a “lawful activity” under this statute. As the Court held, if Mr. Coats’ use of medical marijuana was illegal under either federal or state law, then his actions would not be protected under the state’s lawful activities statute. Since the Court concluded that Mr. Coats’ use of medical marijuana violated federal law, his termination was upheld.

  2. Federal Controlled Substances Act (21 U.S.C. § 801 et seq.). This federal law prohibits marijuana usage and classifies marijuana as a Schedule 1 drug. Notably, in 2005, the United States Supreme Court rejected attempts by California residents to prevent the application of this federal Controlled Substances Act to their private use of marijuana under California’s “compassionate use”/medical marijuana law. In doing so, the United States Supreme Court upheld the actions of the federal Drug Enforcement Administration (“DEA”), which including seizing a plaintiff’s marijuana plants which were being grown for use in connection with her own medical condition. Under the federal Controlled Substances Act, the use, possession, or manufacture of marijuana is a federal criminal offense, except where used for federally-approved research projects.
  3. Colorado’s Medical Marijuana Amendment. The Colorado Supreme Court expressly refused to consider whether Mr. Coats’ use of marijuana would be lawful under this amendment because the Court had already determined that the use violated the federal Controlled Substances Act. As such, the Colorado Supreme Court did not address the Medical Marijuana Amendment, which (among other things) creates an affirmative defense for a medical marijuana patient who is criminally charged with a violation of state law in connection with his or her use of marijuana.

    Although criminal prosecution under state law is banned by the Amendment, nothing in the Amendment provides protection in employment situations. Indeed, quite the opposite is true. With regard to employment situations, section 10(b) of the Medical Marijuana Amendment expressly states: “Nothing in this section shall require any employer to accommodate the medical use of marijuana in any work place.” Colo. Const. art. XVIII, § 14. Thus, although Mr. Coats’ claim for wrongful termination focused on Colorado’s lawful activities statute, it appears unlikely that allowing off-premise/off-work use of medical marijuana would be an accommodation that an employer would be required to make in the context of what constitutes a reasonable accommodation for a disability under Colorado law.

Although not discussed in the context of the Coats decision because it involved medically-based marijuana usage, it is important to note that Colorado’s Constitution also has a specific amendment relating to recreational or personal use of marijuana. Colo. Const. art. XVIII, § 16. However, that amendment also states that “[n]othing in this section is intended to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees.

Clearly, this is a significant decision for Colorado employers that have been uncertain about drug policies prohibiting the usage of marijuana. It is also a decision of some note, though, for employers in other states whose work crosses into Colorado or whose states have also engaged in some form of marijuana legalization. This decision even has relevance in Nebraska—where marijuana use is still considered a crime by the state courts and where medical-marijuana usage is not permitted as a general matter.

During its last legislative session, the Nebraska Unicameral passed LB 390, which allows medical professionals to conduct certain limited-scope, evidence-based studies exploring the use of cannabidiol (a drug containing THC) for the treatment of seizures. While LB 390 provides an affirmative defense from criminal prosecution to patients involved in the studies, the bill is silent on whether an employer must allow an employee participating in the study to continue working or whether the employer may consider the employee’s use of the drug to be in violation of a drug policy prohibiting the use of Schedule 1 drugs under the federal law. LB 390 does not contain language pertaining to employer’s rights that is found in either of the Colorado Constitutional Amendments relating to medical or recreational marijuana use. As such, there are arguments to be made that an employee’s use of cannabidiol during the study should be treated in a manner similar to other prescription drug use. However, the counterargument will be that other prescription drugs are not prohibited by federal law, and an employer should not be required to accommodate illegal drug use. Notably, LB 390 contained an “emergency clause,” which means that this bill became law in Nebraska on May 28, 2015.

Key Considerations for Employers
This decision and the varying state laws on this topic demonstrate that an employer needs to think about its position on marijuana usage by employees. Will it have a random drug testing policy that potentially identifies the employer’s best employees as individuals who smoke marijuana for medical or recreational purposes? Or, will the employer implement a drug-testing policy that allows testing only in limited situations such as (i) the start of employment; (ii) when there is reasonable suspicion to suspect an employee is under the influence of drugs or alcohol; or (iii) when an on-the-job accident occurs in which the employee is at fault? Will the policy test for any amount of THC in an employee’s system, or will the testing facility be instructed to only test for amounts of THC above a certain level (thereby eliminating many “occasional” users from having a positive test result)?

The answers to these questions are not black and white. Rather, they will likely turn on the employer’s personal viewpoints regarding marijuana use as well as the level of government regulation to which an employer is subject. For instance, employers with DOT-certified drivers or public employers who are subject to restrictions based on the Fourth Amendment to the Constitution (the right to be free of unreasonable government searches or seizures) will face unique legal obligations.