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Arizona Legislature Passes Law Protecting Employers From Medical Marijuana Claims; Governor Expected to Sign Bill Into Law

It is only right and fitting that we write again about medical marijuana on April 20.[1] But we write, not because of the date itself, but because yesterday the Arizona Senate passed House Bill 2541, which is designed to protect Arizona employers from some of the unintended side effects of Arizona’s new medical marijuana law. We have every expectation that Governor Brewer will sign H.B. 2541 into law, so it is important for Arizona employers to fully understand its provisions.

Arizona enacted its medical marijuana law through the narrow passage of Proposition 203 in last year’s election.  Arizona is the 15th state to enact a medical marijuana law. It is the only state, however, that regulates employers with respect to medical marijuana in the workplace. Prop. 203 specifically prohibits employers from discriminating against medical marijuana “card holders” with respect to hiring, termination, terms and conditions of employment, discipline, or penalties. Prop. 203 also provides that an employer does not violate the statute by taking any action against a candidate or employee when, to act otherwise would cost the employer a monetary or licensing benefit under federal law, or when a drug test demonstrates that the employee used, possessed, or was impaired by marijuana at the work site during work hours. Prop. 203 also allows an employer to take adverse action against a candidate or employee if he or she ingests marijuana in the workplace or is under the influence while working.

Prop. 203 provided virtually no guidance to Arizona employers with respect to compliance. It was with great anticipation, then, that Arizona employers awaited promulgation and publication of interpretive rules that would guide employers through the medical marijuana smokescreen. Unfortunately, when the Arizona Department of Health Services published its rules governing medical marijuana on March 28, 2011, it failed to so much as mention employer responsibilities in the new rules.  Arizona employers remained very much in the dark with respect to Prop. 203’s employer mandates.

The Arizona Legislature has come to the rescue of Arizona employers at least in some respects, with the Senate’s passage of H.B. 2541.  That Bill seeks to clarify some of the ambiguities of Prop. 203 in a roundabout fashion, by amending Arizona’s long-standing workplace drug and alcohol testing statute in several respects:

  • While Prop. 203 allows an employer to take adverse action for “current use” of any drug, the meaning of this provision was unclear.  H.B. 2541 explains that “current use” means drug use that has occurred at least recently enough to give the employer a “reasonable belief” that an employee is still involved in drug use.  H.B. 2541 still leaves some ambiguity, as it specifies that “current use” is a fact-specific determination to be made on a case by case basis.
  • Prop. 203 allows an employer to take adverse action against an employee who is impaired in the workplace, but does not define impairment or how an employer may go about determining if an employee is impaired.  H.B. 2541 clarifies this ambiguity by broadly defining the term impairment to include symptoms that may decrease or lessen the employee’s performance, including symptoms related to speech, walking, standing, dexterity, agility, coordination, actions, movement, demeanor, appearance, clothing, odor, irrational or unusual behavior, negligence, carelessness in operating equipment, disregard for safety, involvement in an accident resulting in serious damage, any injury to the employee, or other symptoms causing a “reasonable suspicion” of drug use. 
  • While Prop. 203 left unclear the scope of an employer’s liability for mistaken determinations that an employee is impaired, H.B. 2541 makes clear that an employer is immunized from Arizona law claims whenever the employer acts on a good faith belief that an employee is impaired.  The Bill also clarifies the meaning of “good faith” to include an employer’s reliance on: observed conduct, behavior or appearance; information reported by a reliable person; written, electronic, or verbal statements; lawful surveillance video; reports and records of government agencies, law enforcement agencies, or courts; results of a drug or alcohol test; and other information believed to be reasonably accurate.
  • H.B. 2541 also specifies that an employer is not required to keep an employee in a safety-sensitive position if the employee is a current drug user or shows signs of impairment.  The Bill defines safety sensitive-positions to include: operating a motor vehicle, equipment, machinery, or power tools; repairing, maintaining, or monitoring the performance or operation of equipment, machinery, or manufacturing processes where a malfunction could result in injury or property damage; performance of duties on the premises of a customer, vendor, or supplier; food or drug handling; or any safety-sensitive position otherwise defined by Arizona law.

In short, H.B. 2541 more clearly defines the exposure of Arizona employers who take action against an applicant or employee for suspected drug or alcohol use, particularly in light of the questions created by the medical marijuana law.  H.B. 2541 is not a panacea however.  Employers must still keep in mind several important factors to consider when dealing with drugs and alcohol in the workplace:

  • Prop. 203 prohibits an employer from discriminating against a medical marijuana “card holder” on account of the individual’s card holder status.  An employer cannot take adverse action solely because an individual possesses a medical marijuana card, something that must be stressed repeatedly to supervisors and managers.
  • Conversely, nothing in Prop. 203 requires an employer to allow possession of marijuana in the workplace, even if the individual is a card holder.
  • Prop. 203 prohibits adverse action taken solely because of a positive drug test confirming marijuana use.  An employer must not take adverse action solely on account of a positive test for cannabis, but must instead identify other bases for its “reasonable suspicion” of on-the-job impairment in addition to the positive test before taking an adverse action.
  • If you are federally regulated, do not assume that you will be able to demonstrate a loss of a federal license or revenue under federal law merely because you employ a card holder. Not all federal programs/contracts mandate termination of current drug users, and each program/contract must be viewed individually to determine your federal obligations. For example, merely certifying that an employer has a drug-free workplace pursuant to the Federal Drug-Free Workplace Act does not necessarily allow an employer to exclude or terminate a card holder.
  • If your current drug and alcohol testing policy tracks the language of Arizona’s drug and alcohol testing statute, or if your policy is not consistent with Prop. 203 and H.B. 2541, it is time to rewrite your policy.  For example, if your drug testing policy provides for immediate termination due to a positive test result, that policy should be clarified to provide that a positive test for marijuana coupled with reasonable suspicion of impairment will result in termination; zero-tolerance policies must be modified with respect to marijuana testing.
  • Neither Prop. 203 nor H.B. 2541  replace federal drug enforcement laws.  Do not assume that a card holder is immune from federal criminal drug laws just because the individual possesses an Arizona marijuana card.
  • Neither Prop. 203 nor H.B. 2541 address an employer’s ability to search an employee’s workplace.  Private sector employers should amend their policies and practices to fully define the scope of an employee’s privacy, if any, in the workplace, and clearly dash any expectation of privacy in work areas, lockers, etc.
  • Arizona law does not trump the Americans With Disabilities Act or the Federal Family and Medical Leave Act.  Drug and alcohol issues in the workplace often intersect with the ADA and the FMLA.  An employer must not consider drug and alcohol issues in the vacuum of Prop. 203 and H.B. 2541, but must consider the thorny issues posed by the ADA and the FMLA any time drug or alcohol issues present themselves in the workplace.

While Prop. 203 left Arizona employers collectively scratching their heads, H.B. 2541 answers many of the questions left unanswered after last year’s election. H.B. 2541 provides an added measure of protection to Arizona employers facing medical marijuana issues, but many questions still abound.


 [1]  April 20 is a date of significance within the marijuana drug culture.  See http://en.wikipedia.org/wiki/420_(cannabis_culture).

©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume I, Number 121
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