Article: In the Weeds: Marijuana Legalization & Employment Laws

Network of Trial Law Firms – July 29, 2019

Over the last several years, attitudes towards marijuana use have rapidly changed in the United States. According to a 2018 Pew Research Survey, 62 percent of U.S. respondents said marijuana use should be legal, compared to 31 percent who supported legalization in the year 2000.[1] As of the date of this article, thirty-three states and Washington D.C. have legalized medical marijuana use, and 11 states have legalized recreational marijuana use.[2]

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In this rapidly changing landscape, many employers are left wondering how marijuana legalization will impact their workplaces, including (1) whether employers can deny employment to applicants or discipline employees who test positive for marijuana, even in a state where marijuana use is legal; (2) whether employers need to modify their workplace policies to address marijuana use; or (3) whether employers have a duty to accommodate medical marijuana use, either at work or outside the workplace. This article summarizes the current, confusing framework of federal statutes, state statutes, and judicial decisions addressing employers’ rights and obligations relating to marijuana use, and provides practical advice for employers in states where medical or recreational marijuana use has been legalized.

Background on Marijuana Legalization

In 1970, Congress passed the Controlled Substances Act (“CSA”), which banned or regulated certain controlled substances.[3] The CSA established five schedules of controlled substances, with Schedule I substances defined as those which have a high potential for abuse, no currently accepted medical use in the United States, and a lack of accepted safety for use under medical supervision.[4] Under the CSA’s classification system, cannabis remains a Schedule I drug which is illegal to possess , use, cultivate, or sell.[5]

In 1996, California became the first state to allow medical marijuana use when it passed the Compassionate Use Act.[6] Since then, 32 more states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands have passed laws allowing medical marijuana use.[7] Medical marijuana statutes vary considerably concerning requirements for medical marijuana use, including residency requirements, whether home cultivation is permitted, registration obligations, and limits on the amounts and types of marijuana products that can be used.

In 2012, Washington and Colorado became the first two states to legalize marijuana for recreational use.[8] Since then, nine other states – including Alaska, California, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, and Vermont – and the District of Columbia have also legalized recreational marijuana use.[9]

In August 2013, amid various states’ marijuana legalization efforts, the U.S. Department of Justice (“DOJ”) updated its marijuana enforcement policy and announced that while marijuana remained illegal under federal law, the DOJ was “deferring its right to challenge” state marijuana legalization laws.[10]The DOJ further stated that it expected states to establish “strict regulatory schemes” in alignment with eight enforcement priorities established by the DOJ, but that the DOJ would not prioritize enforcement of the federal prohibition on marijuana beyond those eight priorities.[11] But in 2018, the DOJ reversed course and announced a further update to its marijuana enforcement policy, including “a return to the rule of law and the rescission of previous guidance documents.”[12] The DOJ’s 2018 memorandum specifically stated that prosecutors would continue to enforce the federal prohibition on marijuana.[13]

Employers’ Ability to Refuse to Hire an Applicant Testing Positive for Cannabis

In every state, employers remain free to create and enforce drug-free workplace policies, including potential discipline or termination when a legal or illegal drug impairs an employee’s job performance or creates a safety hazard. For example, when California legalized recreational marijuana use in 2018, the statute expressly provided that it was not intended to affect “[t]he rights and obligations of public and private employers to maintain a drug and alcohol free workplace” or to “require an employer to permit or accommodate” marijuana use in the workplace.”[14]Other state marijuana legalization statutes contain similar provisions.[15]

No statute or court decision has required an employer to accommodate an employee’s recreational marijuana use, and employers in all states remain free to terminate, discipline, or refuse to hire recreational marijuana users. In Coats v. Dish Network, LLC, the Supreme Court of Colorado analyzed whether a state statute prohibiting employers from discharging employees based on “lawful” out-of-work activities prevented employers from terminating employees for using marijuana.[16] Even though the employee’s marijuana use was lawful under Colorado state law, the court found that the federal prohibition on marijuana use rendered the employee’s conduct unlawful and outside the gambit of the statute at issue.[17] Thus, the court held that employers could lawfully terminate employees for marijuana use, even though such use was permitted under state law.

Whether Employers Are Required to Reasonably Accommodate Medical Marijuana Use

Notwithstanding the general rule that employers are free to not hire applicants (or to terminate employees) who test positive for cannabis, state law may require reasonable accommodation of employees who use medical marijuana outside of work hours due to a disability. For example, Arizona,[18] Connecticut,[19] Delaware,[20] Illinois,[21]Minnesota,[22] Nevada,[23]New York,[24] and Rhode Island[25] have statutes expressly prohibiting employers from discriminating against employees based on their status as medical marijuana patients. Recently, employers in Connecticut and Rhode Island challenged their respective state statutes, arguing that they were preempted by federal law making marijuana use illegal. Both the federal district court in Connecticut and the Rhode Island Superior Court upheld the state statutes, finding no preemption.[26]

Some states are considering adopting similar protections. For example, California’s legislature is considering a bill which would require employers to reasonably accommodate medical marijuana use for the treatment of a known physical disability, mental disability, or medical condition.[27] The law would provide an exception “if hiring or failing to discharge an employee would cause the employer to lose a monetary or licensing-related benefit under federal law,” and would allow employers to terminate the employment of, or take corrective action against, any employee who is impaired at work because of marijuana.[28]

Even in states lacking a statute requiring accommodation of medical marijuana cardholders, a court may determine that such an obligation exists. For example, in Barbuto v. Advantage Sales and Marketing, LLC, the Supreme Court of Massachusetts found that a medical marijuana user who was terminated for testing positive for marijuana could pursue a state-law employment discrimination claim against her employer.[29] The court rejected the employer’s argument that allowing medical marijuana use was a “facially unreasonable” accommodation because it is illegal under federal law, instead holding that even where an employer’s policies prohibit marijuana use, the employer would be obligated to engage in an interactive process to determine “whether there were equally effective medical alternatives … whose use would not be in violation of its policy.”[30] The court further held that an employer who wishes to deny employment based solely on an applicant or employee’s use of medical marijuana bears the burden of demonstrating that the medical marijuana use would impose an undue hardship.[31] The court based its analysis on Massachusetts’s medical marijuana statute, which stated that medical marijuana patients shall not be denied “any right or privilege” on the basis of their marijuana use; although the statute did not expressly address employment, the court found that the phrase “right or privilege” encompassed the right to a reasonable accommodation.[32]

Adding to the confusion, courts in other states have found that employers have no obligation to reasonably accommodate medical marijuana use. For example, in Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries, the Oregon Supreme Court held that because Oregon’s medical marijuana statute conflicted with the federal Controlled Substances Act, an employer need not accommodate the use of medical marijuana.[33] The court found that the state and federal statutes conflicted because the Oregon statute’s affirmative authorization of medical marijuana – which the federal law prohibits – “stands as an obstacle to the implementation and execution of the full purposes and objectives of the Controlled Substances Act.”[34] Based on the Supremacy Clause, the Oregon Supreme Court found that the federal law preempted the state law, and employers had no obligation to engage in an interactive process or to otherwise accommodate medical marijuana use.[35] Courts in other states have taken a similar approach in finding that employers need not reasonably accommodate medical marijuana use.[36]

Even in states where employers may be required to accommodate medical marijuana use, employers in industries subject to federal regulation can likely demonstrate that accommodating medical marijuana use would be an undue hardship. For example, transportation employers are subject to U.S. Department of Transportation (“DOT”) regulations which prohibit any safety-sensitive employee subject to drug testing under DOT regulations from using marijuana.[37] Moreover, federal government contractors and recipients of federal grants are obligated to comply with the federal Drug Free Workplace Act, which requires employers to make “a good faith effort … to maintain a drug-free workplace” and prohibits employees from using controlled substances in the workplace.”[38]

Finally, it is important to note that no legal authority has yet required an employer to accommodate medical marijuana use during work hours or while at work. Indeed, the Delaware statute requiring medical marijuana accommodation expressly excludes marijuana use during work hours.[39]Thus, employers in all states may continue to adopt and enforce policies prohibiting the use of marijuana while at work or during work hours.

Guidance for Employers in States Where Marijuana Use Is Legal

A number of states have already passed legislation requiring employers to accommodate medical marijuana use. Although judicial precedent in several other states suggests that employers in those states need not accommodate medical marijuana use, the change in attitudes towards marijuana and growing trend towards marijuana legalization may lead to those authorities becoming overruled, whether by statute or by further judicial decision. Thus, the following guidelines are intended for employers in any state where medical or recreational marijuana use is legal:

1. Continue to enforce workplace policies preventing the use of alcohol, marijuana, and illegal drugs at work or during work hours. Ensure that these policies expressly identify marijuana as a prohibited substance, instead of referring to “illegal drugs” since that phrase may no longer encompass marijuana.
2. Determine whether any federal statute or regulation requires your organization to maintain a drug-free workplace or decline to employ any applicant testing positive for marijuana.
3. Notify prospective employees that any pre-employment drug screen may test for cannabis, and that testing positive for cannabis may disqualify the applicant from employment.
4. If a prospective or current employee notifies you of medical marijuana use, consult with counsel to determine whether a reasonable accommodation is required or feasible.