March 19, 2019

March 19, 2019

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March 18, 2019

Subscribe to Latest Legal News and Analysis

Three New State Laws Legalize Marijuana Use, Sparking More Confusion and Igniting Further Conflict With Federal Law

The mid-term elections are still on people’s minds, as recounts and run-offs for federal congressional and state gubernatorial candidates are finally wrapping up.  Meanwhile, and largely taking a media-coverage backseat to these high-profile races, many new state initiatives became law as a result of the mid-terms, three which involved legalizing marijuana for recreational or medical use.  These new laws add to the growing body of law rife with conflict between state and federal law regarding the use of marijuana in the United States, particularly in the employment context.

Before the recent election, 31 states had medical marijuana laws on their books.  Missouri and Utah, both which passed new medical marijuana laws this month, raised this total to 33.  A smaller but still growing number of states have gone further by legalizing marijuana for adult, recreational use (most laws also include regulatory schemes addressing limits on the amount and location of use, among other things).  November’s election saw Michigan become the tenth state in the union, plus Washington D.C., to enact a statute legalizing non-medical use of marijuana.  North Dakota had a legalization initiative on its mid-term election ballot, but the law did not pass.  (North Dakota, does, however, have a medical marijuana law in place.  For a comprehensive identification of those states with various levels of marijuana legalization, click here.)

While states continue to push the issue through voter initiatives, the Federal Controlled Substances Act (“CSA”) still lists marijuana as an illegal, Schedule 1 substance – one that the federal government has formally declared as having no “currently accepted medical use” and a high potential for abuse.  In January 2018, the current administration’s (now former) Attorney General publicly announced the Department of Justice’s rescission of the Obama-era policy that the federal government would not interfere with states’ laws and enforcement schemes regarding marijuana use.  Federal bills that would allow veterans access to medical marijuana through Veteran’s Affairs, or allow banks to work with cannabis businesses, have also recently failed in Congress.  On the flip side, however, President Trump recently announced that he supported states’ rights to decide for themselves about marijuana legalization.  Thus, one thing is clear, the landscape is still hazy in this budding field of law.

And in the midst of it all, federal and state courts alike are attempting to navigate the situation, but in effect, may be adding to confusion by reaching different conclusions on questions about the federal preemption of state marijuana laws and viability of the laws’ application in the employment context.  One major factor in this debate appears to be whether the state marijuana laws specifically include anti-discrimination provisions that prohibit employers from taking adverse employment actions against employees because of their medical marijuana use that complies with applicable state law.  Currently, nine states have anti-discrimination or accommodation provisions.  Some others have complementary state laws construed to protect individuals from discrimination based on other applicable factors, such as a disability or “lawful” out-of-work conduct.  The latter was the issue addressed in the well-known case from 2015, Coats v. Dish Network, LLC.

In that case, the Supreme Court of Colorado (Colorado’s highest state court – no pun intended) ruled that an employee’s use of medical marijuana, even when in compliance with Colorado’s medical marijuana law, was not “lawful” because marijuana use is illegal under federal law.  The case arose from Dish Network’s termination of former employee Brandon Coats’ employment due to his positive drug test for marijuana, which Mr. Coats explained to Dish Network was a result of his out-of-work use in compliance with Colorado’s medical marijuana law.  Colorado’s medical marijuana law does not have an anti-discrimination provision, but Mr. Coats asserted that Dish Network violated another Colorado law that prohibits employers from taking adverse employment actions for an employee’s “lawful” activities that occur outside the employer’s premises during nonworking hours, arguing that his use of marijuana was “lawful” under Colorado state law.  However, the Colorado Supreme Court ruled against Mr. Coats and dismissed his claim because it found that the definition of the term “lawful” was not confined to Colorado state law, and therefore, an act that is illegal under federal law – such as using marijuana is under the CSA – was not “lawful.”  Although this case does not squarely address the preemption issue, it supports the idea that federal law ultimately prevails, notwithstanding state legalization of marijuana.

However, more recently, and in an atmosphere where significantly more states have passed marijuana laws, the United States District Court for the District of Connecticut issued a decision on September 18, 2018 in Noffsinger v. SSC Niantic Operating Company, LLC, ruling in favor of an employee who asserted a claim for illegal employment discrimination under the anti-discrimination provision in Connecticut’s medical marijuana law.  There, the plaintiff had been offered a job with SSC that was contingent on her passing a pre-employment drug test.  Before the drug test, plaintiff reported to SSC that she used marijuana outside of work in compliance with Connecticut’s medical marijuana law, called the Palliative Use of Marijuana Act (“PUMA”).  SSC nonetheless rescinded her offer and terminated her employment when her drug test showed positive results for marijuana.  SSC argued that it was entitled to terminate her employment under an exception to PUMA’s anti-discrimination provision when an employer is required to take an adverse employment action pursuant to federal law.  SSC argued that, as a federal contractor, the federal Drug Free Workplace Act (“DFWA”) required it to rescind Ms. Noffsinger’s offer.   The District Court disagreed with SSC, holding that although the DFWA requires federal contractors to make “good faith” efforts to maintain a drug-free workforce, it does not specifically require drug testing nor does it require that employers terminate employees for marijuana use that occurs outside of work, particularly if the use is in compliance with state medical marijuana law.

SSC also re-asserted an argument it made earlier in the case that PUMA was preempted by the federal CSA, the federal Americans with Disabilities Act, and the federal Food, Drug, and Cosmetic Act (“FDCA”).  The judge however ruled (by reference to his earlier decision on SSC’s motion to dismiss, where the Court fully addressed the preemption argument) that PUMA was not preempted by these laws.  Although SSC argued that PUMA, by legalizing marijuana, conflicted directly with the CSA, which makes marijuana illegal, the Court refused to analyze the larger conflict between those laws, narrowing the analysis only to PUMA’s anti-discrimination provision because it was the only aspect of PUMA at issue in the case.  The Court held that because the CSA (like the FDCA) does not regulate employment practices or otherwise make it illegal for an employer to employ someone who uses marijuana, there was no conflict between either the CSA or the FDCA and PUMA’s anti-discrimination provision.  With regard to the ADA, the Court found PUMA was not preempted because, while the ADA does not protect individuals involved in the current use of illegal drugs, the statute also does not prohibit states from defining their own laws protecting individuals who use certain drugs.  Both Rhode Island and Massachusetts state courts have held that employers have violated their state’s laws by failing to hire and failing to accommodate employee’s due to their medical marijuana use.  (Note however that the Ninth Circuit Court of Appeals on November 19 rejected an employee’s argument that Montana’s Medical Marijuana Act prohibits employment-related discrimination based on medical marijuana use or prevents employers from terminating employees for marijuana use.)

These cases demonstrate why, in this changing environment, employers often may feel paralyzed from making decisions involving employees and marijuana use.  As a first step, employers always should be aware of all applicable state laws on the issue, but also should take care to familiarize themselves with any relevant case law in their jurisdiction as well.  One other thing to note, however, is that none of the current marijuana laws permit employees to possess or use marijuana at work, or work while under the influence of marijuana.  Therefore, regulating workplace marijuana use is within the rights of employers in every state.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Daniel B. Pasternak, Squire Patton Boggs, Phoenix, Labor Litigation Layer
Partner

Dan Pasternak focuses his practice on litigating labor and employment claims, representing management in traditional labor relations matters, and working with employers to develop and enforce business-sensible policies and practices to effectively manage their human resources.

Dan represents employers before federal and state courts and administrative agencies, and in arbitration and mediation proceedings, in employment matters arising under the array of federal and state employment laws, including discrimination, harassment, retaliation,...

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