Reflecting on the employer’s perspective on two decisions with national ramifications emanating from California last week, you have an unexpected victory from the Ninth Circuit on medical marijuana and an expected loss from the California Court of Appeal on the application of California law to a California-based officer of a Delaware corporation.
James v. City of Costa Mesa, 10-55769 (9th Cir. May 21, 2012) — The ADA Does Not Protect Medpot Users
The first of these decisions from the Ninth Circuit means that California employers are now free under state and federal law to prohibit marijuana use or possession in the workplace and working while under the influence. See also Ross v. Ragingwire Telecomms., Inc., 174 P.3d 200 (Cal. 2008) (no right to use or be under the influence of medical marijuana in the workplace under California disability discrimination laws).
In hearing a challenge to two California cities’ decisions to bar med-pot dispensaries within their borders, the Ninth Circuit in James held in a 2-1 vote that plaintiffs using medical marijuana under California law were not “individuals with disabilities” under the ADA and thus not entitled to its protections. Although the lawsuit was not an employment case, it nonetheless addressed the same definition of “individuals with disabilities” used in Title I of the ADA, the act’s employment provisions. Given a strong and reasoned dissenting opinion, one can expect a request for the Ninth Circuit to decide the matter en banc (through an 11-judge panel).
To read the full opinion of the court click this link: James v. City of Costa Mesa
Lidow v. Superior Court (International Rectifier Corp.), B239042 (Cal. Ct. of App. May 23, 1012) — California Law Applies to Wrongful Discharge Claim of Corporate Officer
The second decision was far less surprising. There, a California court held that California law applied to the discharge of a Delaware corporation’s California-based CEO, despite the so-called “internal affairs” doctrine. Under that doctrine, matters involving a corporation’s ”internal affairs” are governed by the law of the state of incorporation. In an acknowledged case of first impression, the Court of Appeal held that an employer’s discharge of its CEO for complaining about the company’s harmful or unethical policies was not an “internal” corporate matter and should be governed by California law. While it left open the possibility that another basis for discharge may invoke application of the doctrine, it is hard to imagine a circumstance where a California-based CEO or other corporate officer/employee would not be able to claim protection under California’s highly-protective, employee-friendly laws. The Court also rejected, on summary adjudication, the claim that the CEO was not an “employee” and merely an “officer.”
Corporations with California-based officers who may also be seen as employees should consider taking steps to prevent their identification of these officers as employees.©2013 Drinker Biddle & Reath LLP. All Rights Reserved