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The FLSA Protects Colorado’s Recreational Cannabis Workers

The U.S. Court of Appeals for the Tenth Circuit recently held that cannabis workers employed in Colorado’s recreational marijuana industry are protected employees under the Fair Labor Standards Act (FLSA), notwithstanding the prohibition of marijuana in the federal Controlled Substance Act (CSA).

In Kenney v. Helix TCS, Inc., the Tenth Circuit upheld the district court’s denial of the defendant employer’s motion to dismiss. The defendant employer provides security and other services to the marijuana industry in Colorado. The plaintiff, a former security guard, brought a collective action under Section 216(b) of the FLSA, alleging that the employer misclassified him and other security guards as exempt from overtime.

The employer moved to dismiss the complaint under Rule 12(b)(6), arguing that because marijuana remains illegal under federal law and thus recreational marijuana runs afoul of the CSA, the FLSA does not apply to workers employed in Colorado’s recreational marijuana industry. The district court denied the motion to dismiss, and on interlocutory appeal, the Tenth Circuit affirmed.

As a provider of services to the Colorado marijuana industry, the employer’s argument that the Colorado marijuana industry’s arguable illegality under the CSA put its employees beyond the purview of the FLSA is somewhat ironic. The court noted an employer may not excuse compliance with federal law by virtue of other federal violations.

The Tenth Circuit also pointed out that the defendant employer did not argue that the employees at issue fell within one of the FLSA’s enumerated exclusions. Since the CSA’s enactment, Congress has amended the FLSA to specifically exclude other categories of employees, but not cannabis workers. Rather, the court explained, the employer advanced a reading of “the CSA as implicitly repealing the FLSA’s overtime mandate for employers in the marijuana industry.” The Tenth Circuit disagreed, rejecting the argument that “[e]xtending overtime benefits in this case would require the Court to find that Congress intended to both forbid (under the CSA) and reward (under the FLSA) the same conduct: drug trafficking.”

Ultimately, the Tenth Circuit explained that there is no conflict between a “plain reading and the overall purposes of” the FLSA and the CSA proscriptions, and held that “accepting the plain language interpretation that [cannabis] employees are covered by the FLSA promotes the legislature’s intent in enacting the statute.”

The Tenth Circuit’s decision underscores the “striking breadth” of the definition of employee under the FLSA, and serves as a reminder to employers in the cannabis industry that federal employment laws apply equally to their employees. In addition, while the court’s opinion is ostensibly focused on Colorado’s recreation marijuana employers, it marks yet another development in the panoply of workplace issues surrounding the legalization of marijuana.

© 2019 BARNES & THORNBURG LLP

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Peter J. Wozniak Barnes Thornburg Chicago  Labor Employment
Partner

Pete Wozniak is a vigorous advocate who strives to help his clients navigate issues that can be fraught with challenges as painlessly and efficiently as possible. He is a candid and personable counselor, offering his clients direct advice by leveraging his deep experience performing a broad range of outcome critical functions for complex labor and employment matters.

Pete represents clients across a number of industries, including transportation and logistics, restaurants, retail, manufacturing, and temporary staffing. Handling a number of high profile matters, he identifies the...

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Mark Wallin, Attorney, BT, Chicago, Labor Employment
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In order to provide the best counsel, Mark Wallin believes it is his role to understand his clients’ business needs so he can help them determine what resolution will provide the most benefit. His keen ability to understand his clients’ practical concerns allows him to advise on the best path to successfully resolve issues – whether through traditional litigation or negotiated resolution.

In the course of his practice, Mark has focused on providing the highest-level of service to his clients and building long-term relationships. Specifically, he defends employers in a wide range of employment matters including wage and hour class and collective actions, as well as complex, multi-plaintiff and single plaintiff employment discrimination claims brought not only by private plaintiffs but also initiated by the Equal Employment Opportunity Commission (EEOC).

Mark has successfully represented companies of virtually all sizes, litigating matters across multiple areas of the law, from the pleading stage through appeal. He has also represented clients in arbitrations and before administrative bodies.

Mark vigilantly stays abreast of cases, laws, and trends that may impact his clients coming out of the courts, Congress and the state legislature, as well as the U.S. Department of Labor, the EEOC, and state regulatory agencies. He strives to keep a watchful eye on how labor and employment related laws are evolving so as to proactively advise clients.

In addition to his regular legal practice, Mark has undertaken several pro bono cases including trying criminal jury trials in state and federal court, and representing indigent plaintiffs in civil rights matters as part of the federal Trial Bar.

Mark began honing his litigation skill during law school when he interned at the U.S. Attorney’s office for the Northern District of Illinois, where he handled both civil and criminal issues. He also interned for a judge on the U.S. Court of Appeals for the Seventh Circuit, which gave him a unique vantage of seeing the issues from the court’s perspective.

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