Dealing with marijuana in the workplace

By James Waite and Brian McQuinn 

QUESTION: My state recently legalized marijuana. I understand that more and more states are legalizing marijuana as well. What rights do I have to prevent my employees from using or being under the influence of marijuana in the workplace? What steps can I take to prevent it?

Answer: As of the end of 2019, marijuana has been legalized for medicinal use and consumption in 34 states and the District of Columbia, and for recreational use and consumption in 10 states and the District of Columbia. Up to three additional states are expected to legalize the use of marijuana in some form in 2020. In addition, the 2018 Farm Bill, championed by Senate Majority Leader Mitch McConnell (R-Ky.), legalized hemp, which is federally defined as cannabis with less than 0.3 percent of tetrahydrocannabinol (THC), the psychoactive element of marijuana.

Marijuana remains illegal under federal law as a Schedule I controlled substance under the Controlled Substances Act. In 2013, then-Deputy Attorney General James Cole issued the “Cole Memorandum,” which generally directed federal prosecutors to not expend federal resources to pursue claims against individuals who were in compliance with state marijuana laws. In 2018, then-Attorney General Jeff Sessions issued the “Sessions Memorandum,” which rescinded the Cole Memorandum. Nevertheless, the federal government has generally continued to refrain from prosecuting those who possess and distribute marijuana in compliance with state laws.

As marijuana is legalized in more states, the dichotomy of state legality and federal illegality has left employers asking whether and to what extent they have the right to prevent use of marijuana in the workplace. As of now, such rights largely depend on the state regulatory scheme under which marijuana was legalized. For such employers, each new state that legalizes marijuana tends to adopt what can be a confusing mix of regulations based on the regulatory regimes of the other states that previously legalized marijuana. On the bright side, this evolutionary process has yielded a growing list of best practices and some exceptions.

Preventing possession, distribution or being under the influence of marijuana in the workplace to the extent permitted by law. Employers have a vested and recognized interest in preventing marijuana use by employees in the workplace. Though not yet conclusive, there is strong evidence that marijuana usage creates greater risk of workplace accidents and reduces productivity. This is particularly important where workplace duties involve dealing with potentially dangerous equipment, as is the case in most equipment rental businesses. In addition, employers may owe contractual and/or other obligations to maintain direct employee drug testing policies under leases, insurance policies, licenses, permits and local zoning codes.

Mechanisms employers can use to restrict possession, distribution or influence. Because marijuana remains federally illegal, businesses typically have the right to prohibit employees from possessing, distributing and/or being under the influence of marijuana and other intoxicants in the workplace. However, because the legality of marijuana currently occupies a decidedly gray area within the law, it has become particularly important for employers to clearly express their marijuana-related drug policies in writing and the repercussions for violating such policies to employees, for most, in their employee manuals. The best practice is to provide written notice of all drug policies as well as any changes to such policies, and to require each employee acknowledge each such notice in writing. If done properly, this can help eliminate confusion while enabling the employer to obtain the employee’s express written commitment to comply, largely eviscerating the inevitable “I didn’t know” or “You were serious about that?” post-disciplinary-action arguments.

Legal limitations on employer restriction on workplace marijuana. In preparing such policies, employers need to ensure compliance with applicable state laws, rules and regulations. In virtually all states, employers have broad rights to discipline, suspend, fire or take other adverse action against employees who use or possess marijuana while on duty, or show up for duty under the influence or marijuana or other intoxicants, regardless of whether the employee is a certified medical marijuana patient. With the exception of Maine, in addition to allowing disciplinary action for on-site/duty usage, possession or influence, all states that have legalized recreational marijuana grant employers broad rights to discipline employees who use or possess marijuana while off-duty and away from the worksite. Depending upon the state, this concept may be written directly into the law or it may be the result of case law interpreting the applicable statutes or constitutional amendments. Where the applicable statute or amendment does not expressly prohibit employers from discriminating against employees for the use of marijuana — whether medical or recreational — courts have tended to allow employers to discipline or fire employees for use of marijuana, whether in the workplace or off-site.

For example, in the 2015 Colorado Supreme Court case, Coats v. Dish Network, LLC, the court ruled that Dish Network did have the right to terminate an employee who failed a random drug test for marijuana, despite the fact that such employee had been approved as a medical marijuana patient under Colorado law. The plaintiff, who was prescribed medical marijuana for muscle spasms caused by his quadriplegia, used marijuana off-duty, at home and in compliance with Colorado law. Dish Network, however, maintained a zero-tolerance drug policy, of which it made all of its employees aware. When Coats failed a random drug test, Dish Network terminated his employment. Coats brought an employment discrimination action against Dish Network on the grounds that his termination violated Colorado’s “Lawful Activities Statute,” which states that it is a “discriminatory or unfair employment practice for an employer to terminate the employment of any employee due to that employee’s engaging in any lawful activity off the premises of the employer during nonworking hours.” Despite this, the court ruled that, because use of marijuana is unlawful under federal law, use of marijuana did not adequately satisfy the definition of “lawful activity,” legalization of marijuana at the state level notwithstanding.

While Maine and only Maine prevents employers from disciplining employees for use of recreational marijuana off-site, this issue becomes most complicated when considering an employer’s rights with respect to medical marijuana use while off-site, off-duty and at home by a certified medical marijuana patient. Fourteen of the jurisdictions that have legalized medical marijuana expressly prevent employers from discriminating against employees based upon their prescribed use of marijuana while off-duty and off-site. Some of these states even require the employer to make accommodations for medical marijuana patients, going so far as to require that they be allowed to start work late due to their use of marijuana the previous night. Note, however, that even in states requiring such accommodations, employers still have broad rights to prevent use or possession at work and/or while on duty.

Of the remaining 21 jurisdictions that have legalized medical marijuana, 10 allow employers to terminate or otherwise discipline employees for their prescribed use of medical marijuana off-site and off-duty, whether such right arises expressly under statute or under case law. In the remaining 11 jurisdictions, the statute or constitutional amendment legalizing medical marijuana is silent as to employer’s rights to discipline and, as of yet, there exists no interpretive case law. As discussed above, where the authorizing statute doesn’t expressly bar employers from such taking disciplinary action for off-duty, off-site use of medical marijuana, courts have typically granted employers broad rights to do so. Consequently, these jurisdictions are likely to permit employers to take disciplinary action, up to and including termination of employment, for off-duty, off-site use of medical marijuana.

Given that the broad variations in the permissibility of disciplinary activities for off-site/off-duty marijuana use among the states, employers are well-served to include language in their drug policies that automatically modifies and conforms their terms to applicable federal and state laws, acknowledging that each may well change in the near future. Employers also are encouraged to continuously monitor both federal and state employment and marijuana-related laws for the same reason.

Practical difficulties in testing. The practical limitations of testing for marijuana use further complicate the issue. Unlike alcohol, which is water soluble, THC attaches to fatty tissue in the human body. Consequently, most tests for marijuana — including urine, hair and saliva — serve to establish marijuana use, but not current impairment. At present, oral fluid and blood testing offer the most reliable means of assessing current impairment. However, such tests continue to be cost-prohibitive in some areas and blood levels of THC do not consistently or predictably measure impairment. This is of particular importance in states that require employers to allow prescribed medical marijuana patients to use marijuana off-site and off-duty, as testing results are unlikely to identify whether the employee was actually under the influence at the worksite or while on duty. In such situations, best practice typically consists of a combination of the following:

  • Require the employee to provide the same or similar documentation of the medical marijuana prescription as the employer would require for any other prescription drug and specifically, for use of prescription opioids.
  • Consult qualified legal counsel to ensure the policy complies with any accommodations required under the laws of that state.
  • Train managers and supervisors in the company’s drug policy and the means of determining the signs of marijuana influence on the job site.
  • Implement a drug testing policy focused on testing for influence at the worksite.
… use of marijuana did not adequately satisfy the definition of “lawful activity”

Occupational Health and Safety Administration (OSHA) post-incident response rule and clarification. In light of the rapidly changing state of marijuana related employment law in the U.S., OSHA issued a guidance document in 2016 regarding post-incident drug testing. In 2018, OSHA issued a clarification, the key provisions of which indicated that permissible employer drug testing includes:

  • Random drug testing.
  • Drug testing unrelated to the reporting of a work-related injury or illness.
  • Drug testing under a state workers’ compensation law.
  • Drug testing under other federal law, such as a U.S. Department of Transportation rule.
  • Drug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees. If the employer chooses to use drug testing to investigate the incident, the employer should test all employees whose conduct could have contributed to the incident, not just employees who reported injuries.

The generally accepted view of the last provision is that in order for post-incident drug testing to be legitimate in the eyes of OSHA, the incident must have been of a type where impairment could have been the root cause, the incident need not have actually harmed anyone, but must have had the potential for to harm someone, and all employees involved must be tested, regardless of potential causation, which helps limit claims of discrimination based on an employer’s subjective perception of an employee’s likely drug use.

These OSHA limitations on testing are perceived to be an outgrowth of various state rules pertaining to accommodations or allowing off-site, off-duty use of medically prescribed marijuana. Essentially, the concern is that discrimination on the basis of prescribed medical marijuana use may be construed as discrimination on the basis of a disability or medical condition, which are barred under the Americans with Disabilities Act and corresponding state laws.

Employer best practices. Given the evolving nature of the regulatory regimes surrounding legalized marijuana, employer best practices include the following:

  • Restrict marijuana use to the extent permitted by law. Marijuana impairment in the workplace can pose serious health and safety risks in addition to productivity concerns.
  • Verify the legal obligation of your business. Contracts, insurance policies, licenses, permits and local zoning codes may require you to maintain a direct drug testing policy.
  • Clearly communicate policies. Because the legality of marijuana occupies such a grey area in the law, employers should clearly indicate their drug policies and the repercussions for violating such policies to employees in writing. A best practice is to provide written notice of all drug policies, including changes thereto, and to require each employee sign off on each such notice.
  • Train managers and supervisors. A drug policy is far more effective where management is aware of their rights and obligations under the policy, including knowing which accidents should immediately trigger impairment testing requirements. Teaching such management of the signs of impairment is also imperative.
  • Ensure the policy is in compliance with state law. Verify with legal counsel whether your state requires accommodation for certified medical marijuana patients. At a minimum, your drug policy should include language to the effect of, “in the event of conflict with state or local law, state or local law will control.” Continually monitor federal and state laws as they evolve.
  • Collect appropriate documentation for accommodations. Employers who are required to provide accommodations to certified medical marijuana patients should collect the standard documentation such employer would collect for any other prescription drug.