September 23, 2019 - Legislation

As State Cannabis Approval Grows Higher, When Can You Fire?

For decades, many employers have categorically prohibited marijuana use given its illegal status under federal law. With a growing number of state and localities legalizing marijuana and creating protections for marijuana users, many employers have been left wondering whether they can continue to lawfully fire or refuse to hire employees and applicants who use marijuana. This Commentary discusses the seeming conflict between federal and state law regarding marijuana and the increasingly shaky grounds for federal preemption in the employment context.

Federal Stance on Marijuana

Under federal law, use and possession of marijuana is illegal, even for medical purposes. In 1970, the Federal Controlled Substances Act (CSA) established five schedules of controlled substances, ranging from schedule I (most potential for abuse) to schedule V (least potential for abuse).[1] The CSA has always categorized marijuana as a schedule I drug—i.e., as a drug with “no currently accepted medical use in the United States,” “no currently accepted medical use in treatment in the United States,” and “a high potential for abuse.”[2] Heroin, ecstasy, and peyote are three examples of other drugs listed on schedule I.[3]

In addition to the CSA, certain federal contractors and recipients of federal grants are subject to the Drug-Free Workplace Act of 1988 (DFWA). The DFWA requires covered companies to prohibit employees from engaging in the “unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance” in the workplace, including any location where the work is done “in connection” with a covered contract or grant.[4] The DFWA requires contractors to take direct action against employees who violate the DFWA, which can include terminating their employment or requiring satisfactory participation in a drug-abuse assistance or rehabilitation program. Contractors who fail to comply with the DFWA can face harsh penalties, such as cancellation of their federal contracts or grants.

Using or possessing marijuana may also jeopardize an individual’s ability to obtain a security clearance, which is necessary for some employees to access classified information.[5]

Workplace Drug Testing

Many employers have drug testing programs that screen for marijuana. Testing might include pre-employment testing, testing employees based upon reasonable suspicion of drug use, and, where permitted, random drug testing. Companies have good reason to test for drugs, including ensuring a safe and productive workplace, reducing possible claims of negligent hiring, and even obtaining discounts on workers’ compensation premiums in certain states.

If testing complies with applicable law, employers have typically been able to lawfully decline to hire applicants or terminate employees who test positive for marijuana. The Americans with Disabilities Act (ADA) does not add any protection for marijuana users. Although the ADA protects employees from being disciplined or terminated for taking legally prescribed drugs in accordance with their prescriptions, the ADA does not protect individuals who use schedule I drugs under the CSA, which means it does not protect medical marijuana users.

Unlike alcohol tests, current marijuana tests are not sophisticated enough to determine whether someone is under the influence at the time of test. Instead, marijuana tests typically show whether someone has used marijuana during the weeks leading up to the test. Given the difficulty of determining whether a positive test is the result of marijuana usage during work or during non-work hours, some employers have found it easier to ban marijuana use outright.

A Growing Chorus of States Legalize Marijuana for Medical and Recreational Use

Over the last decade, a growing number of states have legalized marijuana use. Thirty-three states and the District of Columbia have approved comprehensive medical marijuana legislation, and thirteen states have legalized the use of “low THC, high cannabidiol (CBD)” products for medical reasons in limited situations or as a legal defense.[6] Recreational use of marijuana has also been legalized by eleven states (Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington) and the District of Columbia.[7]

While the majority of these state laws do not address whether an employer can take adverse action against employees for marijuana use, fourteen states so far have gone a step further by limiting an employer’s ability to discipline or terminate employees for off-duty medical marijuana use.[8] For example, New Jersey law prohibits employers from taking adverse employment action against an employee or applicant “based solely on the employee’s status” as a registered medical marijuana patient.[9] The law also requires employers to give employees or applicants an opportunity to provide a “legitimate medical explanation” if they test positive for marijuana before taking any adverse action.[10] Other states, such as Illinois,[11] Maine,[12] and Nevada,[13] impose even stricter limitations by prohibiting employers from rescinding job offers or taking adverse action for off-duty marijuana use—even recreational use.

New York City and Nevada also recently passed legislation barring employers from testing applicants for jobs in those jurisdictions for marijuana. Both laws are subject to certain exceptions. For example, the New York City law, which will go into effect on May 10, 2020, exempts certain jobs that have the potential to impact the health or safety of employees or the public, such as commercial drivers and medical staff, or if such testing is required by federal contracts, grants, or other laws. Whether other jurisdictions will follow suit remains to be seen.

Reconciling Federal and State Laws on Marijuana

Although the CSA does not expressly preempt state law “unless there is a positive conflict” with the state law,[14] some courts have found that the CSA preempts state laws permitting medical marijuana use.[15] For example, in Emerald Steel Fabricators, Inc. v. Bureau of Labor & Indus.,[16] an employee who used medical marijuana to manage pain from his sinus cancer and inoperable brain tumor claimed that his employer violated the Oregon Medical Marijuana Act (OMMA) by terminating him for testing positive for marijuana. The employer argued that the OMMA was preempted by the CSA. The Supreme Court of Oregon agreed, finding that the employer did not discriminate against the employee because he was engaged in the illegal use of drugs under federal law.

A handful of more recent cases, however, have gone the other way. In Noffsinger v. SSC Niantic Operating Co., LLC,[17] the employer argued that the federal law preempted an employee’s claim that it violated Connecticut’s Palliative Use of Marijuana Act (PUMA) by terminating him for testing positive for marijuana, despite him allegedly using marijuana to treat post-traumatic stress disorder. Distinguishing Emerald Steel, the court held that PUMA, unlike OMMA, explicitly barred employment discrimination for marijuana use by providing that no “employer may refuse to hire a person or may discharge, penalize or threaten an employee solely on the basis of such person’s or employee’s status as a qualifying patient” under the law.[18] A federal court in Arizona reached a similar conclusion when it found that a plaintiff terminated for a positive marijuana test could claim discrimination because, like PUMA, Arizona’s medical marijuana law had an anti-discrimination provision.[19]

Even where state medical marijuana laws did not have those same protections, some courts have found that taking adverse action against employees or applicants for marijuana use could violate state disability discrimination laws. In Barbuto v. Advantage Sales & Marketing, LLC, [20] for instance, an employee who used medical marijuana to treat her Crohn’s disease filed suit after being terminated for failing a drug test. The Massachusetts Supreme Court found that she could pursue a claim for handicap discrimination under Massachusetts disability law. The court held that federal law did not preempt state law, stating:

[t]o declare an accommodation for medical marijuana to be per se unreasonable out of respect for Federal law would not be respectful of the recognition of Massachusetts voters, shared by the legislatures or voters in the vast majority of States, that marijuana has an accepted medical use for some patients suffering from debilitating medical conditions.[21]

Similarly, in Wild v. Carriage Funeral Holdings, Inc., [22] the New Jersey appellate court held that an employee who was fired after testing positive for medical marijuana he used to treat pain caused by his cancer could sue his former employer for disability discrimination under New Jersey law for failing to accommodate his medical marijuana use during “off-work hours.”

Companies covered by the DFWA should also proceed cautiously before relying on the DFWA to terminate employees testing positive for marijuana. For example, in Noffsinger, the court found that the DFWA did not require the employer to rescind a job offer to the plaintiff. The court reasoned that the “DFWA does not require drug testing. . . . Nor does the DFWA prohibit federal contractors from employing someone who uses illegal drugs outside the workplace, much less an employee who uses medical marijuana outside the workplace in accordance with a program approved by state law.”[23]

Practical Takeaways

Given the trend of states and courts limiting employers’ ability to take adverse action against employees for marijuana use, employers should continue to monitor developments in this area and reexamine their drug-free and drug testing policies. Employers may need to allow for flexibility. Testing for marijuana should be eliminated for applicants and employees in jurisdictions prohibiting such testing, unless there is a clear exception under the law. Even where there are no outright bans, employers should consider allowing exceptions to their policies for employees using marijuana for documented medical reasons.

Marijuana use is also on the rise, particularly in states allowing recreational use. Given the tight labor market, employers may want to consider whether testing for marijuana might hinder their ability to recruit talent.

Morrison & Foerster associate Alison Frost has contributed to the writing of this post.

 


[1] 21 U.S.C.S. § 812(a).

[2] https://www.deadiversion.usdoj.gov/schedules; 21 U.S.C.S. § 812(b)(1); 21 C.F.R. § 1308.11.

[3] 21 C.F.R. § 1308.11.

[4] Federal Acquisition Regulation (FAR) subpart 23.5 implements the prohibitions of the DFWA, and the subpart’s implementing clauses are incorporated into government contracts. FAR 23.505; 52.223-6.

[5] Bradley Wine and Steven Cave, “Don’t mean to harsh your mellow, but … contractors and the Drug-Free Workplace Act,” Thomson Reuters (Jan. 16, 2018), https://media2.mofo.com/documents/180116-contractors-drug-free-workplace.pdf.

[6] National Conference of State Legislatures, State Medical Marijuana Laws (2019), http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx.

[7] National Conference of State Legislatures, Marijuana Overview (2019), http://www.ncsl.org/research/civil-and-criminal-justice/marijuana-overview.aspx.

[8] States that prohibit adverse actions against employees for off-duty use of marijuana are Arizona, Arkansas, Connecticut, Delaware, Illinois, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New York, Oklahoma, and Rhode Island.

[9] The New Jersey Jake Honig Compassionate Use Medical Cannabis Act, 9(a).

[10] The New Jersey Jake Honig Compassionate Use Medical Cannabis Act, 9(b).

[11] H.B. 1438, 101st Gen. Assembl., Reg. Sess. (Ill. 2019).

[12] Me. Rev. Stat. Ann. tit. 7, § 2454 (repealed 2018).

[13] Assemb. B. 132, 80th Sess. § 2 (Nev. 2019).

[14] 21 U.S.C. § 903.

[15] See, e.g., Ross v. RagingWire Telecomms., Inc., 42 Cal. 4th 920, 926 (2008) (dismissing claim under California’s Fair Employment and Housing Act, Government Code, § 12900 et seq., for employer’s refusal to accommodate employee’s use of medical marijuana pursuant to the California Compassionate Use Act of 1996, Health & Safety Code, § 11362.5 and finding “[n]o state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law”); Brandon Coats v. Dish Network, LLC, 2015 CO 44 (Colo. 2015) (dismissing wrongful discharge claim because employee’s medical marijuana use did not fall within “lawful” activities under Colo. Rev. Stat. § 24-34-402.5 in light of its illegal status under federal law); Garcia v. Tractor Supply Co., 154 F. Supp. 3d 1225, 1230 (D.N.M. 2016) (“To affirmatively require [Defendant-Employer] to accommodate [Plaintiff-Employee’s] illegal drug use would mandate [Defendant-Employer] to permit the very conduct the CSA proscribes.”).

[16] 348 Ore. 159 (2010).

[17] 338 F. Supp. 3d 78 (D. Conn. 2018).

[18] Noffsinger v. SSC Niantic Operating Co. LLC, 273 F. Supp. 3d 326, 334-35 & n.2 (“The very different question presented in Emerald Steel was whether the CSA more generally preempted a provision of Oregon law that authorized the use of medical marijuana. Here, by contrast, the question is whether the CSA preempts a provision that prohibits an employer from taking adverse action against an employee on the basis of the employee’s otherwise state-authorized medicinal use of marijuana.”).

[19] Whitmire v. Wal-Mart Stores Inc., 359 F. Supp. 3d 761, 780-81 (D. Ariz. 2019).

[20] 477 Mass. 456 (2017).

[21] Id. at 465-66.

[22] 458 N.J. Super. 416, 433-34 (N.J. Super. Ct. App. Div. 2019), cert. granted, No. C-1043, 2019 N.J. LEXIS 926 (N.J. July 11, 2009).

[23] See Noffsinger, 338 F. Supp. 3d at 84.