Employers Unsure About Impact of State Medical Marijuana Laws

By Joanne Deschenaux May 17, 2011

CHICAGO – More than 50,000 medical marijuana patients are registered in California. Michigan has issued more than 60,000 registration permits and another 110,000 requests for permits are pending. In the city of San Jose, Calif., there are 110 medical marijuana dispensaries. These numbers are a “big deal” for employers, Douglas Farmer, an attorney in Ogletree Deakins’ San Francisco office told attendees at the firm’s 2011 Workplace Strategies seminar on May 12, noting that the proliferation of state laws legalizing marijuana for medical use may impact employers in several ways. Employees’ or applicants’ use of medical marijuana may raise safety concerns and may motivate employers to re-examine drug- and alcohol-testing policies, he said. Employers may also be wondering whether they have an obligation to accommodate an employee’s medical marijuana use under federal and state disability laws.

On May 13, Delaware became the 16th state to enact a medical marijuana law. (The others are Alaska, Arizona, California, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont and Washington.) The District of Columbia also has such a law.

Possession of medical marijuana is still a federal offense, but, in October 2009, the U.S. Department of Justice issued a policy statement saying that the agency will not focus federal resources “on individuals whose actions are in clear and unambiguous compliance with existing state laws for providing for the use of medical marijuana.” said Richard Hurford, an attorney in Ogletree’s Bloomfield Hills, Mich., office.

And although no employee has been successful to date in suing an employer under state laws legalizing marijuana for medical use, that may change in the future, added Lori Bowman, an attorney in Ogletree’s Los Angeles office. Furthermore, Arizona’s recent enactment is far more problematic than the other laws, Hurford said. “Arizona’s law is unique in that it does create rights in the workplace,” which the other laws do not, he explained.

Acts’ Basic Provisions

Except for the Arizona law, the state enactments are similar, according to Hurford. They use the same terminology, authorizing individuals who suffer from “a debilitating medical condition” to use medical marijuana upon receipt of a “registry identification card.” A “debilitating medical condition” can clearly meet the definition of a disability under the federal Americans with Disabilities Act (ADA) and most state laws barring bias based on disability, Hurford said.

And, again, except for the Arizona law, there is no requirement under state law to accommodate the use of medical marijuana and no court decision has mandated an employer accommodate the use of medical marijuana, Bowman noted. Also, except in Arizona, employers may still enforce drug-testing policies to exclude employees who test positive for marijuana.

The existing court cases, Bowman said, have ruled that the state statutes at issue (California, Michigan, Montana, Oregon and Washington) do not apply to employment. They merely create a defense to a drug charge for an individual with a medical marijuana permit.

“Employees have tried just about everything” in suing employers under the state medical marijuana laws, Bowman said, “and nothing has worked.” But, in several states, there is pressure on the legislatures to broaden these laws, and a change in administration might also make a difference. For example, the California legislature previously passed a bill that prohibited discrimination against marijuana users, which was vetoed by then-governor Arnold Schwarzenegger. Current governor Jerry Brown might not veto such a law, Bowman noted.

Arizona Law Is Different

“There are a number of reasons for concern in Arizona,” Hurford said, although there have not yet been any cases under the new law. The Arizona act, passed by voters last November, includes a specific employment-based anti-discrimination section that protects medical marijuana “cardholders.” Employers are prohibited from taking adverse actions, such as termination, based on an employee’s or applicant’s status as a cardholder, or a qualifying patient’s positive drug test, unless the qualifying patient (a cardholder authorized to use medical marijuana) used, possessed or was “impaired” by marijuana while at work or during work hours. The act’s failure to define “impaired” left employers questioning how to determine whether an employee is impaired without running afoul of the anti-discrimination language, and when employers could lawfully take any action against a cardholder.

House Bill 2541, which was signed into law by Gov. Jan Brewer on April 29, 2011, amends Arizona’s drug-testing statute by defining terms, including “impairment” and expanding the law’s “safe harbor” provision to include employment situations that may arise as a result of the Arizona Medical Marijuana Act. It also provides important protections for employers that take employment actions based on the “good faith” belief of drug use or possession and provides that an employer is protected from litigation based on actions to exclude an employee from performing a “safety-sensitive position.”

“It is critical for anyone with employees in Arizona” to understand both that the Arizona law goes further than the laws in other states and that the recent amendments to Arizona law scaled back the original scope of the law, Hurford concluded.

Joanne Deschenaux, J.D., is SHRM’s senior legal editor.


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