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Does Medical Marijuana Affect Employers’ Drug Policies?

February 13, 2017   |   By Nic O'Brien

In 1996, Brandon Coats was a normal sixteen-year-old. His life, however, forever changed when he was a passenger in a vehicle that struck a tree. In the accident, Coats’ spine was irreparably damaged. The injury resulted in Coats being paralyzed in over 80 percent of his body. It also left Coats with a condition where he suffered from severe involuntary muscle spasms and seizures for the past twenty years. Fortunately for Coats, he lives in Colorado, which has liberal laws regarding the possession and use of marijuana.  As a resident of Colorado, Coats obtained a medical prescription for marijuana to combat his spasms and seizures.

How does Coats’ story affect you as a business owner?

The answer lies at the cross-roads of Coats’ medical use of marijuana and his employment. While Coats’ injuries are tragic, and a doctor believed marijuana could help him with his condition, does Colorado law overrule company drug policies?

Coats v. Dish Network

When he obtained his medical license to use marijuana, Coats worked for Dish Network. Eventually, Dish Network fired Coats for failing a random drug test administered as part of Dish’s zero-tolerance drug testing policy. Coats then sued Dish Network, alleging that Dish Network was discriminating against him for a lawful activity outside of the office, which Colorado law protects.

The trial court, however, rejected this position and held that Coats’ use of marijuana, although legal under Colorado law, did not constitute a “lawful activity” under Colorado’s statute and that Dish was within its rights to test Coats and fire him for his medical marijuana usage.

The Colorado Supreme Court upheld the decision concluding that “lawful” under the statute included state and federal laws and upheld the lower court’s ruling because marijuana use is still prohibited by federal law.

Because this area of marijuana use is a new issue before the courts, many states were awaiting the outcome of the Coats decision, and it may have already affected legislation in California.

California’s Control, Regulate and Tax Adult Use of Marijuana Act (Prop. 64)

The California legislature passed prop. 64 in November 2016, which legalizes the recreational use of marijuana by adults 21 years of age and older. Notably, however, prop. 64 did not alter employers’ right to maintain drug-free workplaces or drug testing policies.

In fact, the law’s purpose is to “allow public and private employers to enact and enforce workplace policies pertaining to marijuana.” The law also states that it will not be construed or interpreted to amend, repeal, affect, restrict, or preempt “(t)he rights and obligations of public and private employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of marijuana in the workplace, or affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees, or prevent employers from complying with state or federal law.”

Thus, the California law made clear that the state’s law regarding marijuana would not interfere with an employer’s ability to decide its own marijuana use policy.

Employer Workplace Drug Policies

If you are an employer who wants to maintain a zero-tolerance policy, the Coats decision and the California legislation may have been just what the doctor ordered (pun intended). These precedents appear to indicate that the trend is to leave drug use and drug testing policies to employers, not the states.

“These precedents appear to indicate that the trend is to leave drug use and drug testing policies to employers, not the states.”

Therefore, whether you’re an employer in a state that continues to outlaw marijuana use, or are in a state that allows limited medical use, or in a state that now allows for recreational use, it is important to clearly communicate with your employees regarding your drug use and drug testing policies. Make clear whether your policy applies to all marijuana use, or excludes medical or recreational use, and in what cases those uses are excluded.

If you wish to prohibit all uses regardless of the legality under state law, say that. Be clear in your drug policies that you have zero tolerance. And, of course, in all cases make clear that regardless of the legal status of marijuana in your state that you do not allow employees to be under the influence of any illegal or controlled substance, including marijuana and alcohol while performing company related work and that the sale, possession, or use of drugs and alcohol, including marijuana, while performing company business will result in termination.

By being clear upfront with your drug policies, you will reduce the chances of dealing with a situation like Coats. and you can be upfront with marijuana users at your office about what is expected of them.


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Nic O'Brien
Nic is an associate at Vela Wood. He focuses his practice in the areas of entity formation, capital raises, mergers and acquisitions, and general business transactions. You can see Nic's attorney profile HERE.