Marijuana Legalization: Employers Don’t Gamble. Get Involved Now!

(Spring 2015) Employers can go through interesting passages as they begin hearing and comprehending the corporate requirements of a new law.  Think back to healthcare reform.  Denial, apathy, defensiveness and anger all swirled as employers began to identify specifically how their company would be impacted.  Most employers felt too far away from the federal source-point to have a meaningful impact as that law was taking shape.

With regards to state derived laws, employers have more immediate and powerful influence through their legislators, chambers, unions, industry associations and employee pools to support the direction of a law as it takes form, e.g., tax issues.

Unfortunately, when it comes to marijuana legalization, the majority of employers are experiencing the denial, apathy, defensiveness, anger AND costs only after these laws have taken effect in their states.  As of January 2015, 23 states have legalized medical marijuana, four states and Washington D.C. have legalized recreational use of marijuana, and countless states have decriminalized possession and use of marijuana.   Prior to legalization of marijuana, employers have been having minimal involvement because they do not recognize it as having a critical impact on their ability to conduct business.

A pivotal reason state legalization of marijuana poses legal headaches for employers is because these laws conflict with federal law.  At this time, marijuana is federally classified as a Schedule I controlled substance, meaning it has no currently accepted medical use in the United States there is a lack of accepted safety for use of the drug/substance under medical supervision and it has a high potential for abuse.  The process to change marijuana to a lesser schedule is required to be done by two federal agencies, the Drug Enforcement Administration and the Food and Drug Administration.

A state puts its employers and citizens in conflict with federal law when, through marijuana legalization movements, it allows its citizens to access, cultivate, distribute and sell this controlled substance.  Trying to navigate legal ground, satisfying both the federal and state laws, will leave the employer in an operational no-man’s land.

When there is a conflict or no clear legal direction, the answers are determined in a court of law.  If it involves an employment situation, this obviously becomes an employer’s burden.  It should be noted that these battles are a no-win for employers because even if the employer prevails in a court ruling, there will be dollars and costly hours spent in the pursuit.

Take, for example, the Coates v. Dish Network case in Colorado which began in 2010.  The employee, Brandon Coates, was a registered medical marijuana user and used in his off-duty time.  When tested on the job under his employer’s drug-free workplace program, he tested positive and was terminated.  Coates claims that his termination violates Colorado’s off-duty conduct law, which allows employees to “engage in any lawful activity off the premises of the employer during nonworking hours.”

Although Colorado has legalized marijuana for both medicinal and recreational purposes, the drug remains illegal under federal law. It is for this reason that Colorado’s district and appeals courts held that the plaintiff’s use of marijuana was not a “lawful activity” covered by Colorado’s off-duty conduct law and have disagreed with the employee thus far.

In five years of court battles, the employer has prevailed – winning each time.  However, this case is now being decided upon by Colorado’s Supreme Court. This case and its journey will refine laws for employers and employees within Colorado and all other states.  Keep in mind, the bill for that refinement is being paid by the employer – in this case, Dish Network.

The Coates v. Dish Network case clearly demonstrates a conflict between the state and federal law regarding the use of marijuana.  But it also demonstrates how other states’ laws can be tangled in a situation.  Consider that a state governs workers’ compensation, liability and auto insurance.  State laws also control taxes and employment law.  A state even interprets discrimination and corporate exposure limits.   All these areas are up for challenges to be determined in court if there is a conflict between federal and state laws around marijuana.

The Dish Network case illustrates another complication of marijuana legalization as Coates argues that he was following state law since he did not use at work and was not impaired at work. While he may not have used marijuana at work, proving impairment or lack- there-of is harder.  This becomes another critical issue for employers.

To this point in history, there is no scientific methodology to determine the relationship between marijuana and impairment.  Instead, for the last 50 years employers have been legally upheld to rely upon standardized, defensible measurements for what is considered unacceptable and unsafe levels of marijuana in an employee’s system.  Coates exceeded those levels when he was tested on the job.

Legalizing efforts are dominantly promoted on the mission of compassion for the sick and revenue that can be gained through taxing the sale of it.  However, we now have experience on the books to demonstrate that an employer’s profitability, productivity, safety and flexibility can all be at risk in states where marijuana has been legalized.  These increase the operational costs for employers and hit their bottom line.

Whether marijuana should be legalized or not isn’t the question.  Writing laws that make sense to the business backbone of our states is the issue.  This cannot be done without employer involvement and input.  In the long run, employers will pay a burden to get legislation that works either by contributing to the development or the refinement after they become laws.

Employers need to be informed and active in the discussion early in the process of marijuana legalization.  They must become educated voters and contribute to the form these laws take.  It is essential to their bottom line and to the business backbone of the nation.

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