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The Impact of Medical Marijuana in the Workplace

By Sarah C. Matt – August 13, 2014

On July 7, 2014, New York became the twenty-third state, along with the District of Columbia, to enact legislation allowing for a comprehensive medical-marijuana and cannabis program and legalizing the use, possession, manufacture, and distribution of marijuana for medical purposes.

Although these same activities remain unlawful under the federal Controlled Substances Act (CSA), as marijuana continues to be classified as a Schedule I drug—listed among those other drugs that are considered to have the highest potential for abuse and no accepted medical use—an increasing number of states are enacting medical-marijuana laws and establishing comprehensive medical-marijuana programs that provide direct access to the drug. The rise in state medical-marijuana laws, and the resulting increased use of medical marijuana among state citizens, is causing growing concern for both employers and employees struggling to understand how these laws will impact the workplace and workplace policies and procedures.

The recent enactment of state medical-marijuana legislation has potentially created myriad complex legal issues for employers attempting to ensure compliance with both federal and state employment laws. Although, at present, no state medical-marijuana law expressly requires employers to permit employees to use marijuana in the workplace or allow employees to work while under the influence of marijuana, individual rights under state medical-marijuana laws and employers’ obligations under a number of state and federal employment laws appear to be headed for collision.

For example, will employers now be required by the Americans with Disabilities Act (ADA), as amended, to accommodate qualified individuals who use medical marijuana to treat or alleviate symptoms of a known disability by waiving their drug-free workplace policies? Will employers be required to offer clemency and forbearance in the enforcement of their drug-free workplace policies to employees who lawfully use medical marijuana? Can an employer now be held liable under state statutes prohibiting discrimination against employees for off-duty use of lawful products or engaging in lawful activities? Do state medical-marijuana statutes provide a basis for an employee who is terminated in connection with medical-marijuana use to bring a claim for wrongful termination in violation of public policy? The answers to these questions will vary from jurisdiction to jurisdiction and as the law regarding this topic develops. While state and federal courts, including the Ninth Circuit, have taken up some of these issues and have largely found in favor of employers on these issues, there are a number of states that have not yet addressed these issues, and employers and their counsel in those states should be aware of how courts are beginning to develop the legal landscape in this context.

Brief Overview of State Medical-Marijuana Statutes
In 1996, California became the first state to enact a law (or constitutional amendment) permitting the use of marijuana for medical purposes. With California’s Compassionate Use Act as a prototype, 23 states and the District of Columbia followed suit by adopting similar statutes or amendments that remove criminal sanctions for the use and possession of marijuana for medical purposes, identify who is eligible for such use, and provide some means of access to marijuana, whether allowing for dispensaries, permitting home cultivation, or, in some states, both. Most state medical-marijuana laws protect both qualified patients who suffer from or are undergoing treatment for certain diseases or illnesses (such as cancer, anorexia, AIDS, glaucoma, arthritis, migraines, Crohn’s disease) and the patient’s primary caregiver.

While each state medical-marijuana statute or amendment has its own nuances, many medical-marijuana laws specify that employers are not required to permit any individual to use marijuana while on the employer’s premises or permit employees to work while impaired by or under the influence of marijuana. For example, Illinois’s Compassionate Use of Medical Marijuana Pilot Program Act expressly provides that the law does not “prohibit an employer from enforcing a policy concerning drug testing, zero-tolerance, or a drug free workplace provided the policy is applied in a nondiscriminatory manner.” 410 Ill. Comp. Stat. 130/50(b). Along with a number of other protections for employers, the Illinois medical-marijuana law also expressly permits employers to adopt reasonable regulations concerning the consumption, storage, or timekeeping requirements for qualifying patients related to the use of medical marijuana, and to discipline a qualifying patient for violating a workplace drug policy or for failing a drug test where that failure would place the employer in violation of federal law or cause the employer to lose a federal contract or funding. 410 Ill. Comp. Stat. 130/50(a)–(d).

A number of other state medical-marijuana laws have provisions that protect and limit liability for employers for actions taken by the employer against its employees or other individuals related to the use or possession or being under the influence of marijuana during working hours. For example, some state statutes, such as Alaska’s, expressly provide that the law shall not be construed to require an employer to accommodate the medical use of marijuana in the workplace, Alaska Stat. § 17.37.040(d)(1), or, like Arizona’s, provide that the law does not permit an individual to undertake any task under the influence of marijuana when doing so would constitute negligence or professional malpractice, Ariz. Rev. Stat. § 36-2802(A).

Medical Marijuana, the ADA, and Other State Fair-Employment Laws
With a number of states now permitting physicians to prescribe marijuana for medical purposes for certain identified medical conditions, illnesses, and diseases, a number of employers are wondering whether they have an obligation to accommodate a disabled employee’s use of medical marijuana, whether by waiving the employers’ policies regarding drug testing and use or possession of drugs in the workplace, or by refraining from disciplining or terminating employees who use or possess marijuana at work in accordance with state law. While some state statutes and amendments expressly provide that employers are not required to accommodate the medical use of marijuana in the workplace, employers are looking for guidance as to how they should interpret their state’s medical marijuana statute in light of the requirements to provide reasonable accommodations under the federal ADA and other state fair-employment laws.

The Ninth Circuit has addressed this issue within the context of the ADA’s prohibition on discrimination in the provision of public services, holding that the ADA does not protect individuals who use marijuana for medical purposes or require accommodation of such use. In James v. Costa Mesa, the Ninth Circuit reasoned that, because the ADA expressly excludes from its definition of “qualified individual with a disability” those individuals who currently engage in the illegal use of drugs, and because marijuana remains an illegal drug under the federal CSA, the ADA does not protect individuals who are using marijuana for medical purposes, even when such use is lawful under state law. 700 F.3d 394, 397 (9th Cir. 2012).

State courts have reached similar conclusions when interpreting state medical-marijuana laws within the context of employer obligations under state fair-employment laws. For example, in Emerald Steel Fabricators, Inc. v. Bureau of Labor & Industries, the Oregon Supreme Court held that, consistent with the ADA, employers have no obligation to reasonably accommodate an employee’s medical-marijuana use under Oregon’s disability-discrimination statute because marijuana is still considered an “illegal drug” under federal law, regardless of whether it is prescribed by a physician in accordance with state law. 230 P.3d 518, 535–36 (Or. 2010) (en banc).

Similarly, in Ross v. RagingWire Telecommunications, Inc., the California Supreme Court examined the intersection between the state’s medical-marijuana and fair-employment laws and found that an employee had failed to state a cause of action under California’s Fair Employment and Housing Act (FEHA) based on his employer’s alleged refusal to accommodate his use of marijuana to relieve chronic back pain. 174 P.3d 200, 208 (Cal. 2008). The employer in Ross refused to waive its policy requiring a negative drug test for all new employees, and terminated the employee for testing positive for marijuana in violation of that policy. The California Supreme Court held that the FEHA “does not require employers to accommodate the use of illegal drugs” as the FEHA did not speak to employment law or put an employer on notice that it would be required to accommodate medical-marijuana use in the workplace.

Not all states, however, are in agreement with the rulings out of California and Oregon, where those state courts have made clear that state medical-marijuana laws do not require employers to accommodate employees who use marijuana for medical purposes by waiving their policies and procedures regarding drug use. Nevada has established a different approach. In April 2014, the Nevada legislature passed a bill amending its existing medical-marijuana statute to expressly require employers to

attempt to make reasonable accommodations for the medical needs of an employee who engages in the use of marijuana if the employee holds a valid registry identification card, provided that such reasonable accommodation would not: (1) pose a threat of harm or danger to persons or property or impose an undue hardship on the employer; or (2) prohibit the employee from fulfilling any and all of his or her job responsibilities.

Nev. Rev. Stat. § 453A.800(3).

It is not clear and still remains to be seen whether the “undue hardship” exception and “threat of harm” exceptions under Nevada’s medical-marijuana statute will be interpreted and applied in a manner consistent with similar concepts under the ADA.

Medical Marijuana and State Lawful Products/Activities Statutes
Employers in states with medical-marijuana statutes may also question whether they may be subject to discrimination claims by employees who use medical marijuana while off duty and away from work under state statutes that protect employees’ rights to engage in certain off-duty activities. A number of states, including Illinois, Minnesota, Colorado, and Nevada, to name a few, have “lawful products” or “lawful activities” statutes that protect employees’ rights to engage in the use or non-use of a “lawful product” or to participate in “lawful activities” away from the workplace during non-working hours. The issue that arises when these lawful-product or lawful-activities statutes intersect with state medical-marijuana statutes is whether “lawful activity” or “lawful product” refers to those products or activities that are lawful under state law, federal law, or both.

A Colorado court of appeals weighed in on this very issue in a case where an employee was terminated for failing a random drug test in violation of his employer’s zero-tolerance drug policy. See Coats v. Dish Network, LLC, 303 P.3d 147 (Colo. App. 2013), cert. granted, 2014 WL 279960 (Colo. Jan. 27, 2014). The employee in Coats alleged he had never used marijuana at the workplace and was never under the influence of marijuana while at work. Although the employee acknowledged that medical-marijuana use is unlawful under federal law, he argued that his use was nonetheless protected under Colorado’s lawful-activities statute because the term “lawful activity” refers only to those activities that are lawful under state law, without regard to legality under federal law. The Colorado Court of Appeals disagreed, however, and concluded that because Colorado’s lawful-activities statute does not define the word “lawful,” activities conducted in Colorado, including medical-marijuana use, are subject to both state and federal law. Based on that conclusion, the Colorado Court of Appeals found that for an activity to be “lawful,” it must be permitted by, and not contrary to, both state law and federal law.

The Colorado Supreme Court granted certiorari in the Coats case on January 27, 2014, to clarify, and address for the first time, two important issues: (1) whether Colorado’s lawful-activities statute protects employees from termination for lawful off-duty use of medical marijuana where that use does not affect job performance, and (2) whether Colorado’s medical-marijuana amendment to its state constitution makes the use of medical marijuana “lawful” for registered users. The Colorado Supreme Court’s decision on this issue may serve as a template for other state courts that will inevitably be forced to consider these same issues.

Medical Marijuana and Wrongful Termination in Violation of Public Policy
Another important issue that may arise with respect to terminating employees who use marijuana for medical purposes pursuant to state medical-marijuana laws is whether an employer can be held liable for a claim for wrongful termination in violation of public policy when the employee is terminated for failing a drug test or for some other reason related to his or her use of medical marijuana. Could a common-law claim for wrongful discharge provide employees an alternative to the statutory claims under state and federal fair-employment laws that a number of courts have already rejected?

A number of states that have adopted the employment-at-will doctrine still recognize a narrow “public policy exception” to the general rule that employers have the right to terminate an employee at any time and for any reason, with or without cause or notice. This narrow public-policy exception prohibits an employer from terminating an employee when termination would violate a clearly established public policy. Although the standard for establishing the “public policy” exception differs from state to state, an employee must generally be able to point to a clear and well-established public policy of the state, which typically must be reflected in the state constitution, statutes, or administrative code. The question is whether state medical-marijuana statutes create or provide a clearly established public policy that could serve as the basis for a wrongful termination claim when an employee who uses medical marijuana pursuant to that state statute is terminated because he or she fails an employer’s mandatory drug test or uses, possesses, or is under the influence of marijuana in the workplace.

At least one state supreme court has addressed the issue and rejected the argument that the state’s medical-marijuana statute represents a clear mandate of public policy that would support an employee’s claim for wrongful termination in this context. In Roe v. Teletech Customer Care Management (Colorado) LLC, the Washington Supreme Court held that Washington’s State Medical Use of Marijuana Act (MUMA) “does not provide a private cause of action for discharge of an employee who uses medical marijuana, either expressly or impliedly, nor does MUMA create a clear public policy that would support a claim for wrongful discharge in violation of such a policy.” 257 P.3d 586, 588 (Wash. 2011) (en banc). The employee in Roe was terminated after her employer learned of her positive drug-test results, which violated the employer’s policy requiring all new employees to have a negative drug test. The employee sued her employer for wrongful termination, claiming that the employer terminated her employment in violation of a clear public policy that allowed medical marijuana use in compliance with Washington’s MUMA. In an effort to provide support for this alleged public policy, the employee argued that MUMA “broadly protects a patient’s ‘personal, individual decision’ to use medical marijuana.” Id. at 597.

The Washington Supreme Court did not find the employee’s argument persuasive and concluded that “MUMA’s language and court decisions interpreting the statute do not support such a broad public policy that would remove all impediments to authorized medical marijuana use or forbid an employer from discharging an employee because she uses medical marijuana.” Id. at 596. The court emphasized that MUMA’s narrow purpose in providing a defense to state criminal laws could not support the broad employment protections the employee asserted.

The potential expansive and far-reaching impact of state medical-marijuana laws on the variety of federal and state employment laws cannot possibly be captured within the confines of this article. To be sure, the states’ medical-marijuana laws are different in terms of both language and effect, and must be analyzed independent of one another. To date, a number of courts that have addressed the intersection between state medical-marijuana laws and both federal and state employment laws have overwhelmingly found in favor of employers. However, employers, particularly in those states that have yet to address these complex matters, should begin to consider how state medical-marijuana laws will affect their policies and procedures and how the legal landscape may begin to develop and change in the years ahead. Employers should begin to think now about establishing clear drug-testing and drug-free workplace policies and consult with counsel to ensure that their policies and procedures are in compliance with state and federal law.

Keywords: litigation, employment law, labor relations, medical marijuana, drug-free workplace, reasonable accommodation, drug test

Sarah C. Matt is an attorney with O'Neil, Cannon, Hollman, DeJong & Laing, S.C., in Milwaukee, Wisconsin.

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