Weed at Work: Is Cannabis Covered Under State Benefit Programs?

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This is the third in a three-part series of articles on cannabis laws and court opinions. Today's article focuses on how marijuana is treated under state workers' compensation and benefit programs. The first article reviews different rulings on federal pre-emption of state marijuana laws, and the second part discusses workplace accommodations for medical marijuana use.

Although federal and state marijuana laws may conflict, many state laws support medical use of the drug in connection with disability and medical leave management. Beyond that, states may take different views of marijuana use with regard to workers' compensation and unemployment benefit programs. The law is still developing in these areas.

Workers' Compensation

With regard to workers' compensation programs, the question is twofold. First, can a workers' compensation claim be denied if an employee tests positive for using state-approved medical cannabis? Second, can an injured employee seek reimbursement for medical marijuana to treat a workplace injury?

Case law is sparse on the first question. Workers' compensation carriers will no doubt point to state statutes disqualifying employees with workplace injuries caused by intoxication, while employees will explain that any positive tests resulted from lawful, off-duty use. Courts must consider different burdens of proof under state law and the less-than-reliable means of pinpointing levels of "intoxication" from cannabis using testing techniques.

The second question—whether an employee is entitled to be reimbursed for medical marijuana that is used to treat a workplace injury—is a new and evolving issue. In Bourgin v. Twin Rivers Paper Company, LLC, the Maine Supreme Court held that an employer was not required to pay for an employee's medical marijuana, as that would directly conflict with federal law.

A New Mexico appellate court, however, held the opposite in Vialpando v. Ben's Auto. Servs. & Redwood Fire & Cas., where an employer appealed a Workers' Compensation Administration order requiring it to reimburse an employee's medical marijuana costs. The court held that the state's workers' compensation law permits such reimbursement. Additional decisions in the state confirmed that marijuana is a medically necessary treatment and rejected federal pre-emption arguments against allowing reimbursement for cannabis.

[SHRM members-only how-to guide: How to Administer a Workers' Compensation Claim]

The Minnesota Department of Labor and Industry issued rules excluding medical marijuana from the definition of "illegal substances" that cannot be used as treatment. So cannabis is now a reimbursable form of medical treatment in the state.

In California, the question remains unsettled as parties continue to litigate the seminal case of Cockrell v. Farmers Insur. and Liberty Mut. Insur. Co.

Unemployment Benefits

Employers that want to fire workers for using marijuana may wish to consider whether the employee will be eligible for unemployment benefits. The answer, once again, will depend on where the employee works.

In Braska v. Challenge Mfg. Co., a Michigan appellate court found that claimants holding medical marijuana cards pursuant to the Michigan Medical Marijuana Act who were fired for testing positive for marijuana use were eligible for unemployment compensation benefits.

By comparison, in Beinor v. Indus. Claim Appeals Office of Colorado, a Colorado appeals court held that an employee using physician-recommended marijuana to treat severe headaches could not receive benefits. Under Colorado's unemployment compensation laws, employees can't receive benefits if they are fired for testing positive for a nonprescribed controlled substance during work hours. Because a physician recommends, but does not prescribe, medical marijuana under Colorado law, the court held that unemployment compensation benefits were not available to the employee.

Tips for Employers

The laws surrounding marijuana legalization are complex and changing quickly. Employers looking to control employee use of the substance inside or outside of the workplace through drug policies and screening programs must observe both federal law and applicable state laws.

Employers should consider the purpose of their policies and keep them up-to-date as the national and international trends toward legalization continue.

Dean Rocco is an attorney with Wilson Elser in Los Angeles. Noelle Sheehan is an attorney with Wilson Elser in Orlando, Fla.