Marijuana Laws Spark Need to Review Employment Policies

“Don't break out the Cheetos or Gold Fish too quickly,” quipped Colorado Governor John Hickenlooper after election results confirmed that his state's voters had legalized the personal use of marijuana.

He cautioned of a “complicated process” local lawmakers had ahead of them in balancing the will of voters with the federal government's continued assertion that the drug remains a Schedule I controlled substance.

As of last month's election, 18 states have approved the use of medical marijuana. Outright legalization was on the ballot, and passed, in Washington and Colorado. Caught in the middle of legalization efforts and federal enforcement are companies who must square changing marijuana laws with their workplace policies and drug-testing practices.

“Business leaders are very concerned about how this is going to impact their ongoing business operations,” says Vance Knapp, a member of Denver-based law firm Sherman & Howard's labor and employment practice. “You can walk around downtown Denver and you'll get that smell of marijuana; people are smoking it like cigarettes. There is a lot of misinformation out there and it is incumbent upon employers to educate their workforce on what they can or cannot do.”

Deciding how far companies can hold the line on existing drug policies is no easy task amid the many uncertainties, he said. Despite pro-marijuana efforts like Colorado's Amendment 64, the Department of Justice and other federal agencies have held fast to a policy that, no matter what state legislatures may say, marijuana remains an illegal substance.

Emily Hobbs-Wright, an associate for the law firm Holland & Hart, also based in Denver, says her state has a “lawful off-duty activity statute” that prohibits companies from disciplining or terminating employees for using any legal substance after hours and off-premise. It was initially passed to protect cigarette smokers from losing their jobs after new public bans were enacted.

That has led many to assume that because personal use of marijuana will be lawful within the state, it falls under that protection. The counter argument, however, is that because federal law trumps local ones, employees should not count on that protection.

A pending lawsuit may soon offer some clarity on which view is right and how far employers in Colorado, and potentially other states, will be able to go with drug prohibitions in an age of legalization.

DISH's Dilemma

DISH Network has been sued by Brandon Coats of Colorado, a quadriplegic and medical marijuana patient who was fired from his job as an operator after testing positive for marijuana. DISH has countered that, even if the substance wasn't used on-site, it still has the right to maintain “its drug-free workplace policy and compliance with federal law, which does not permit the use of marijuana, even for medicinal purposes.”

Knapp predicts that the case will ultimately head to Colorado Supreme Court, which he expects will come down on the side of employers and agree that federal prohibition takes precedent over the local liberalization. For now, it illustrates a key challenge all companies could face when an employee exhibits trace amounts to the drug in their system.

“The cut-off levels for alcohol and intoxication is a lot easier to determine than it is with Marijuana, which can stay in your system as long as three weeks” he says. “An employer, however, can't take the risk you are going to be impaired. If you get injured or injure an innocent third party, they are going to be held liable if they knew you were using it.”

“You can walk around downtown Denver and you'll get that smell of marijuana; people are smoking it like cigarettes. There is a lot of misinformation out there and it is incumbent upon employers to educate their workforce on what they can or cannot do.”

— Vance Knapp,

Attorney,

Sherman & Howard

Even if the DISH Network case is decided in a pro-business fashion, new drug policy challenges are likely emerge.

Congresswoman Diana DeGette, a Colorado Democrat, has teamed with her Republican colleague Michael Coffman to co-sponsor a bill that would exempt Colorado and Washington from the Federal Controlled Substances Abuse Act. It asserts a states' rights argument and among its supporters are Texas libertarian Ron Paul.

In recent correspondence, Paul and House Democrat Barney Frank of Massachusetts, a longtime advocate of marijuana legalization, also pressured the Department of Justice “to respect the wishes of the voters of Colorado and Washington” and refrain from federal prosecution regarding the use of marijuana. The two have sponsored legislation to remove criminal penalties at the federal level, citing “individual freedom” and states' rights.

Knapp speculates that, at some point, a state legislature might also try to wrap marijuana use into Title VII and create a protected class of employees who are lawfully using marijuana and cannot be discriminated against.

“Hopefully in near future well have some legal authority on the issue, but in the meantime it is creating practical problems in the workplace,” Hobbs-Wright says. “Employees may start to push back and test the limits of these policies. It is time right now for employers to take control of the situation.”

LETTER TO OBAMA

The following is from a letter from congressmen Barney Frank and Ron Paul, urging President Obama and the Department of Justice to respect state marijuana laws and refrain from federal prosecution.

We urge you to respect the wishes of the voters of Colorado and Washington and refrain from federal prosecution of the inhabitants of those states who will be following their states' laws with regard to the use of marijuana.

We have sponsored legislation at the federal level to remove criminal penalties for the use of marijuana because of our belief in individual freedom. We recognize that this has not yet become national policy, but we believe there are many strong reasons for your administration to allow the states of Colorado and Washington to set the policies they believe appropriate in this regard, without the federal government overriding the choices made by the voters of these states.

Respect for the rights of states to set policies on those matters that primarily affect their own residents argues for federal noninterference in this case, as does respect for the wishes of the voters – again, on matters that primarily affect those in the relevant electorate. Additionally, we believe that scarce federal resources – law enforcement, prosecutorial, judicial, and penal – should not be expended in opposition to the wishes of the voters of Colorado and Washington, given the responsibility of all federal officials to find ways to withhold unwise or unnecessary expenditures.

We believe that respecting the wishes of the electorates of Colorado and Washington and allowing responsible state authorities to carry out those wishes will provide valuable information in an important national debate. Our request does not mean any permanent waiver of the ability of the federal government to enforce national laws should there be negative consequences of these state decisions – which we do not believe are at all likely – and thus we have as a result of these two states' decisions a chance to observe in two states the effect of the policy that we continue to believe would be wise for the country as a whole. Those who disagree with us should welcome the opportunity to put their theories to a test.

Respect for the principles of democracy; respect for the states to make decisions on matters that primarily affect the residents of those states; the chance to conserve scarce federal financial resources – these we believe are many strong reasons for you to defer to the state decisions, and we believe that even those who do not share our view that personal liberty should dictate this result should have no objection to your acting on these principles in this case.

Source: Barney Frank.

An initial step, she said, is for employers to make sure they have a clear, unified drug use policy and, through training programs, a workforce that knows these efforts will continue to be enforced. Companies should also carefully review all pertinent state laws as their language may contain important exemptions. Colorado's Amendment 64, for example, specifically states that employers can still have policies prohibiting illegal drug use, thereby allowing them to leverage federal guidelines to their advantage.

“Managers need to get ahead of the curve in terms of addressing this,” Knapp adds. “A lot of employers are taking a wait and see approach, but the problem then is what happens when you do have an employee who tests positive? What are you doing with that person. Do you want to be making an example of somebody and setting a precedent, or not?”

The hodgepodge of state marijuana laws means that companies with branch offices or subsidiaries in more than one location need to be particularly concerned. Unified standards will help avoid discrimination claims.

“The interstate issue is something that is going to come up,” Hobbs-Wright says. “We are probably going to see a federal preemption argument eventually play out. Courts will have to determine whether federal law does preempt local law and interstate operations is a prime way for that argument to play out.”

Michael Rush, an associate with Delaware law firm Potter and Anderson, said his state's experience with marijuana laws puts an interesting twist on the struggle between state and federal enforcement. In 2011, when that state passed a medical marijuana initiative, it went the extra step to add affirmative employment protections for registered users. With limited exceptions, it said that employers could not fire someone because of a drug test if they were recognized as a legal user of medical marijuana.

The federal government then stepped in, put pressure on the stare and announced that employees who were running marijuana dispensaries would be subject to federal prosecution for drug violations if they continued with the program. “As a result the state backed down,” Rush says. “Because the state has stopped the whole process, the employment protections are now essentially meaningless.”

What's unusual, he says, is that four other states with affirmative employment protections – Connecticut, Arizona, Rhode Island and Maine, Arizona, Rhode Island, and Maine – have not yet faced federal muscle flexing. “I'm not sure how those states have gone thorough with their medical marijuana programs without running afoul of the government,” he says.

Rush's advice for businesses is an individual review of the different types of drug testing they do. Among them: pre-applicant screening, reasonable suspicion testing for current employees, random drug testing  and post-accident testing.

Although drug testing policies will likely remain as is for anyone fulfilling a government contract of falling under government  safety regulations, employers should be aware that there can be differing rules on a state-by-state basis. For example, Maine requires companies to submit their drug testing policy to the state and get approval before they can institute it, he says.

As for the “green rush” of companies looking to make money off the newly loosened laws, they too will need to consider their internal policies and standards.

“[Dispensaries] will need to comply with all kinds of state and local regulations -- those that every other type of business deals with, like zoning, plus those which are special considerations for this industry,” says Shaleen Title, an associate at the law firm Vicente Sederberg who specializes in medical marijuana. “With the pace at which state laws and public perception regarding medical marijuana are changing, we are quickly moving toward a system in which medical marijuana facilities will be just like any other healthcare facility.”