Two recent federal cases illustrate why employers – even federal contractors – must be cognizant of relevant state-law pronouncements regarding the use of marijuana (i.e., cannabis) by employees. While one case found in favor of the employer, and the other in favor of the employee, these decisions have emphasized that state law protections for users of medical marijuana are not preempted by federal laws such as the Drug-Free Workplace Act (DFWA). Employers must craft a thoughtful and considered approach to marijuana in the workplace, and in most cases should not take a zero-tolerance approach to marijuana.

Ninth Circuit Finds in Favor of Employer Who Discharged Employee for Positive Drug Test

In Carlson v. Charter Communication, LLC, the Ninth Circuit affirmed the dismissal of a lawsuit brought by an employee who alleged discrimination under the Montana Medical Marijuana Act (MMA) because he was discharged for testing positive for marijuana use. The plaintiff, a medical marijuana cardholder under Montana state law, tested positive for THC (a cannabinoid) after an accident in a company-owned vehicle. His employer, a federal contractor required to comply with the DFWA, terminated his employment because the positive test result violated its employment policy.

The District Court of Montana held that the employer was within its rights to discharge the plaintiff because (1) the DFWA preempts the MMA on the issue of whether a federal contractor can employ a medical marijuana user; and (2) the MMA does not provide employment protections to medical marijuana cardholders. Indeed, the MMA specifically states that employers are not required to accommodate the use of medical marijuana, and the Act does not permit a cause of action against an employer for wrongful discharge or discrimination. The Ninth Circuit rejected this rationale. Because the MMA does not prevent employers from prohibiting employees from using marijuana and does not permit employees for suing for discrimination or wrongful termination, the Ninth Circuit held that the MMA does not preclude federal contractors from complying with the DFWA and thus found no conflict.

The plaintiff asserted that the provisions of the MMA exempting employers from accommodating registered users and prohibiting such users from bringing wrongful discharge or discrimination lawsuits against employers are unconstitutional and sought certification of the question to the Montana Supreme Court. The Ninth Circuit rejected this request because, it determined, the Montana Supreme Court already decided the issue. The MMA and the specific sections challenged by the plaintiff appropriately balance Montana’s legitimate state interest in regulating access to a controlled substance while avoiding entanglement with federal law, which classifies the substance as illegal.

Plaintiff Wins Summary Judgment Against Employer That Rescinded Job Offer Due to Positive Test

If federal law does not preempt state law on the issue of marijuana, then in certain states – like Connecticut – employers will be more susceptible to discrimination claims from marijuana users. In Noffsinger v. SSC Niantic Operating Company, the District of Connecticut granted summary judgment to a plaintiff-employee of Bride Brook Nursing & Rehabilitation Center who used medical marijuana to treat post-traumatic stress disorder (“PTSD”) and whose offer was rescinded for testing positive for THC during a post-offer drug screen. Plaintiff filed a discrimination claim under the Connecticut Palliative Use of Marijuana Act (“PUMA”), which makes it illegal for an employer to refuse to hire a person or discharge, penalize, or threaten an employee “solely on the basis of such person’s or employee’s status as a qualifying patient or primary caregiver.”

We covered a previous decision in this case, in which the court held that PUMA is not preempted by the federal Controlled Substance Act (“CSA”), the Americans with Disabilities Act, or the Food, Drug & Cosmetic Act (“FDCA”). The decision was notable then for being the first federal decision to hold that the CSA does not preempt a state medical marijuana law’s anti-discrimination provision, a departure from a previous federal decision in New Mexico.

In this recent decision, the District Court again considered whether PUMA was preempted by federal law. In ruling for the Plaintiff, the court rejected Bride Brook’s argument that its practices fall within an exception to PUMA’s anti-discrimination provision because they are “required by federal law or required to obtain federal funding.” Bride Brook argued that in order to comply with DFWA, which requires federal contractors to make a good faith effort to maintain a drug-free workplace, it could not hire plaintiff because of her failed pre-employment drug-test. The court was not persuaded, concluding that the DFWA does not require drug testing, nor does it prohibit federal contractors from employing people who use illegal drugs outside the workplace. The court noted that simply because Bride Brook’s zero-tolerance policy went beyond the requirements of the DFWA does not mean that hiring the plaintiff would violate the Act.

The court also rejected Bride Brook’s argument that the federal False Claims Act (“FCA”) prohibits employers from hiring marijuana users because doing so would amount to defrauding the federal government. Because no federal law prohibits employers from hiring individuals who use medicinal marijuana outside of work, employers do not defraud the government by hiring those individuals.

Lastly, the court rejected the theory that PUMA only prohibits discrimination on the basis of one’s registered status and not the actual use of marijuana, as such a holding would undermine the very purpose for which the employee obtained the status.

What These Decisions Mean for Employers

These decisions are notable for the fact that the federal courts refused to find the state laws were preempted by federal law. Importantly, neither found that the DFWA preempts state law, which means that even federal contractors must be aware of and follow state law with respect to marijuana use by employees. Thus, in states in which employers may not discriminate against medical marijuana users – such as Connecticut – all employers must take care not to make adverse employment decisions based solely on off-duty marijuana use and, in certain states, must accommodate medical marijuana use. A majority of states and the District of Columbia now permit the use of medical marijuana; employers, including federal contractors, should be mindful of these statutes and consult with counsel to ensure their employment policies are compliant.

Our colleagues , at Epstein Becker Green, have a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the health care industry: “New Jersey’s Appellate Division Finds Part C of the “ABC” Independent Contractor Test Does Not Require an Independent Business

Following is an excerpt:

In a potentially significant decision following the New Jersey Supreme Court’s ruling in Hargrove v. Sleepy’s, LLC, 220 N.J. 289 (2015), a New Jersey appellate panel held, in Garden State Fireworks, Inc. v. New Jersey Department of Labor and Workforce Development (“Sleepy’s”), Docket No. A-1581-15T2, 2017 N.J. Super. Unpub. LEXIS 2468 (App. Div. Sept. 29, 2017), that part C of the “ABC” test does not require an individual to operate an independent business engaged in the same services as that provided to the putative employer to be considered an independent contractor. Rather, the key inquiry for part C of the “ABC” test is whether the worker will “join the ranks of the unemployed” when the business relationship ends. …

Read the full post here.

Connecticut employees using medical marijuana for certain debilitating medical conditions as allowed under Connecticut law for “qualified users” are protected under state law from being fired or refused employment based solely on their marijuana use. Employers who violate those protections risk being sued for discrimination, according to a recent federal district court decision.

Background

In Noffsinger v. SSC Niantic Operation Company (3:16-cv-01938; D. Conn. Aug. 8, 2017), the federal district court ruled that “qualified users” are protected from criminal prosecution and are not subject to penalty, sanction or being denied any right or privilege under federal laws, such as the Controlled Substances Act (CSA), the Americans with Disabilities Act (ADA) and the Food, Drug and Cosmetic Act (FDCA), because the federal laws do not preempt Connecticut’s Palliative Use of Marijuana Act (PUMA).

PUMA prohibits employers from refusing to hire, fire, penalize, or threaten applicants or employees solely on the basis of being “qualified users” of medical marijuana. PUMA exempts patients, their caregivers and prescribing doctors from state penalties against those who use or distribute marijuana, and it explicitly prohibits discrimination by employers, schools and landlords.

In Noffsinger, Plaintiff was employed as a recreational therapist at Touchpoints, a long term care and rehabilitation provider, and she was recruited for a position as a director of recreational therapy at Bride Brook, a nursing facility. After a phone interview, she was offered the position at Bride Brook and accepted the offer, and she was told to give notice to Touchpoints, which she did to begin working at Bride Brook within a week. Plaintiff scheduled a meeting to complete paperwork and routine pre-employment drug screening for Bride Brook, and at the meeting, she disclosed her being qualified to use marijuana for PTSD under PUMA. The job offer was later rescinded because she tested positive for cannabis; in the meantime, Plaintiff’s position at Touchpoints was filled, so she could not remain employed there.

Litigation

Plaintiff sued for violation of PUMA’s anti-discrimination provisions, common law wrongful rescission of a job offer in violation of public policy and negligent infliction of emotional distress. Defendant filed a Rule 12(b)(6) pre-answer motion to dismiss based on preemption under CSA, ADA, and FDCA. The federal court denied the motion and ruled that PUMA did not conflict with the CSA, ADA or FDCA, because those federal laws are not intended to preempt or supersede state employment discrimination laws. The court concluded that CSA does not make it illegal to employ a marijuana user, and it does not regulate employment practices; the ADA does not regulate non-workplace activity or illegal use of drugs outside the workplace or drug use that does not affect job performance; and the FDCA does not regulate employment and does not apply to PUMA’s prohibitions.

The court’s decision is notable in that it is the first federal decision to determine that the CSA does not preempt a state medical marijuana law’s anti-discrimination provision, and reaches a different result than the District of New Mexico, which concluded that requiring accommodation of medical marijuana use conflicts with the CSA because it would mandate the very conduct the CSA proscribes. The Noffsinger decision supplements a growing number of state court decisions that have upheld employment protections for medical marijuana users contained in other state statutes. These decisions stand in stark contrast to prior state court decisions California, Colorado, Montana, Oregon, and Washington that held that decriminalization laws – i.e., statutes that do not contain express employment protections – do not confer a legal right to smoke marijuana and do not protect medical marijuana users from adverse employment actions based on positive drug tests.

Key Takeaways

Employers may continue to prohibit use of marijuana at the workplace; and qualified users who come to work under the influence, impaired and unable to perform essential job functions are subject to adverse employment decisions. Employers in Connecticut, however, may risk being sued for discrimination for enforcing a drug testing policy against lawful medical marijuana users.  In those cases, employers may have to accommodate off-duty marijuana use, and may take disciplinary action only if the employee is impaired by marijuana at work or while on duty.

It remains unclear how employers can determine whether an employee is under the influence of marijuana at work. Unlike with alcohol, current drug tests do not indicate whether and to what extent an employee is impaired by marijuana. Reliance on observations from employees may be problematic, as witnesses may have differing views as to the level of impairment, and, in any event, observation alone does not indicate the source of impairment. Employers following this “impairment standard” are advised to obtain as many data points as possible before making an adverse employment decision.

All employers – and particularly federal contractors required to comply with the Drug-Free Workplace Act and those who employ a zero-tolerance policy – should review their drug-testing policy to ensure that it: (a) sets clear expectations of employees; (b) provides justifications for the need for drug-testing; and (c) expressly allows for adverse action (including termination or refusal to hire) as a consequence of a positive drug test.

Additionally, employers enforcing zero-tolerance policies should be prepared for future challenges in those states prohibiting discrimination against and/or requiring accommodation of medical marijuana users. Eight other states besides Connecticut have passed similar medical marijuana laws that have express anti-discrimination protections for adverse employment actions: Arizona, Delaware, Illinois, Maine, Nevada, New York, Minnesota and Rhode Island. Those states may require the adjustment or relaxation of a hiring policy to accommodate a medical marijuana user. Additionally, courts in Massachusetts and Rhode Island have permitted employment discrimination lawsuits filed by medical marijuana users to proceed.

Finally, employers should be mindful of their drug policies’ applicability not only to current employees, but also to applicants.