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Employee’s Cost of Medical Marijuana to Treat Work Place Injury Reimbursable by Employer

In a case of first impression, the New Jersey Appellate Division held in January 2020 that an employee’s costs to use medical marijuana to treat chronic pain resulting from a work place injury is reimbursable by his employer.

This case arose out of a construction accident in 2001. Vincent Hager was working on a construction site when a truck delivering concrete dumped its load on him. Following the accident, Hager immediately experienced lower back pain that radiated down both legs, which he described as a “shooting and stabbing pain.” Initially, Hager’s employer, M&K, denied Hager’s workers’ compensation claim. While the claim was pending, Hager began to treat his injuries/pain with marijuana, as made available by New Jersey’s Compassionate Use Medical Marijuana Act (MMA), and sued M&K for reimbursement.

Considering whether M&K should have to reimburse Hager for the cost associated with using medical marijuana as part of his pain management regimen, the trial court determined those costs were related to reasonable and necessary treatment of Hager’s on-the-job injuries and were therefore reimbursable under New Jersey’s workers’ compensation law. M&K appealed and the Appellate Division affirmed.

The Appellate Division considered four main issues:

  • whether the federal Controlled Substances Act (CSA) preempts the MMA;

  • whether reimbursement of Hager’s purchase of medical marijuana would expose M&K to federal prosecution;

  • whether employer/workers’ compensation insurer should be treated the same under the MMA as a private health insurer; and

  • whether medical marijuana can be a “reasonable and necessary” treatment of a form of treatment because it is illegal under the CSA.

First, in affirming the trial court’s decision, the Appellate Division found that the CSA does not preempt the MMA because there was no “positive conflict” between the CSA and the MMA such “that the two cannot consistently stand together.” The Appellate Division noted the CSA, “only preempts a state law that requires the performance of an action specifically forbidden by the federal statute.” In this regard, the CSA prohibits possession, manufacture, and distribution of marijuana. Thus, an employer’s reimbursement of an employee’s purchase of medical marijuana is not an action prohibited under the CSA, and therefore it is not preempted.

Second, M&K argued the MMA should be preempted because reimbursement would amount to aiding and abetting the employee in the commission of a crime. Here, the Appellate Division disagreed, finding that reimbursing a person for the legal use of medical marijuana under the New Jersey law would not make M&K a participant in the commission of a crime.

Third, the Appellate Division noted that in New Jersey there are two categories of entities that may not be required to reimburse the costs of medical marijuana: government medical assistance programs and private health insurers. N.J.S.A. 24:6I-14. Under the plain language of N.J.S.A. 24:6I-14, if the Legislature wished to relieve workers’ compensation insurers from any obligation to pay the costs of medical marijuana, it would have done so explicitly, and therefore rejected M&K’s arguments.

Fourth, the Appellate Division addressed M&K’s argument that other, legal means of treatment were available. Here, the Appellate Division relied on the testimony and evidence presented at trial as to the efficacy of medical marijuana in Hager’s case, which included “competent medical testimony” on the benefits and dangers of medical marijuana as compared to the proposed opoid alternatives. Interestingly, the Appellate Division noted Hager’s history of opioid addiction in concluding that “medical marijuana was reasonable and necessary for the treatment of [Hager’s] chronic pain.”

While Hager v. M & K Constr. is only one of a few reported cases dealing with medical marijuana related issues, it is in line with a national trend towards tolerance and acceptance of marijuana as a legitimate medicine to be treated no different than doctor-prescribed drugs and treatments.

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About this Author

Gene Markin Attorney Stark & Stark Law Firm
Shareholder

Gene Markin is a Shareholder in Stark & Stark’s Complex Commercial, Intellectual Property, and Cannabis Litigation Groups where he concentrates his practice on complex litigation matters involving copyright protection and infringement, trademark and trade dress infringement and enforcement, trade secret litigation, false advertising, domain name disputes, unfair competition, class actions, fraud and consumer fraud, shareholder and partner disputes, breach of contract, cannabis business disputes, cannabis intellectual property matters, cannabis insurance coverage...

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Akshar Patel Retail Attorney Stark & Stark
Associate

Akshar Patel is a member of the Shopping Center & Retail Development practice at the firm. He concentrates his practice in the areas of leasing and commercial litigation, focusing on commercial landlord disputes and secured transactions before state and federal courts. Mr. Patel is also an active member of the International Council of Shopping Centers (“ICSC”).

Prior to joining Stark & Stark, Mr. Patel was an intern at the United States Attorney’s Office for the District of New Jersey where he drafted trial motions, performed legal research, and contributed to trial preparation. Mr. Patel also interned in the Office of Public Engagement at the White House where he assisted in drafting and preparing research and public policy memorandums.

Mr. Patel speaks Gujarati intermediately, as well as some Arabic and Spanish. While attending Seton Hall University School of Law, he was an Associate Editor on the Seton Hall Legislative Journal during his second year. As a third year law student, Mr. Patel served as the Executive Editor of the Seton Hall Legislative Journal. While on the Editorial Board, Mr. Patel was responsible for overseeing the selection and editing of articles written by legal scholars and practitioners for publication.

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