Health care providers and custodial agencies operating in Illinois are now subject to new obligations under the Health Care Violence Prevention Act (210 ILCS 160/1 et seq.)(“HCVPA”), which went into effect on January 1, 2019. The HCVPA, which was enacted in response to two 2017 incidents involving inmates who assaulted hospital nurses, seeks to reduce the growing rates of violence against health care workers.

The HCVPA establishes both preventive and curative measures to protect health care workers. Health care providers are required to create an OSHA-compliant workplace violence prevention program. Each program must include:

(1) descriptions of the four classifications of workplace violence under the HCVPA;

(2) commitment by management and health care worker participation;

(3) worksite analysis and identification of potential hazards;

(4) hazard prevention and control;

(5) safety and health training (with required hours determined by rule); and

(6) recordkeeping and evaluation of the violence prevention program.

Hospitals and retail health care facilities are also required to provide resources to workers harmed by patients or their associates. Under the HCVPA’s guidelines, workers directly involved in an incident of workplace violence caused by a patients or their visitors have a right to employer-provided services, including acute treatment and access to psychological evaluation. Additionally, employers of health care workers must post notices in their facilities that detail zero tolerance for verbal aggression or physical assault. Notices must also inform violators that any physical assault will be reported to law enforcement. Rules detailing the requirements of the Notice (including size, format, etc.) have not yet been promulgated and no template Notice is currently available. The HCVPA prohibits management from preventing workers from reporting workplace violence to law enforcement, and any worker that contacts law enforcement or files a report with law enforcement must notify management of the underlying incident within three days. (Pursuant to 45 C.F.R. 164.512 (f)(5) and (j)(1), employees likely would not violate their obligations under HIPAA in directly reporting such an incident to law enforcement). A whistleblower provision further protects employees seeking to ensure the Act is enforced.

Hospitals and health care facilities are encouraged to collaborate with custodial agencies like the Department of Corrections to establish a protocol for committed patients that require treatment outside of custody. Custodial agencies must also comply with new guidelines under the law. Among these rules, custodial agencies must notify hospitals or medical treatment facilities of any significant medical, mental health, or violent safety concerns regarding a committed patient. Additionally, the HCVPA tasks custodial agencies with ensuring that guards or escorts accompany high-risk committed patients and that committed patients have the most comprehensive medical records practicable. The HCVPA also requires the Illinois Law Enforcement Training Standards Board to establish curriculum for custodial agency training.

Health care providers are encouraged to post the required notices and update/create policies that comply with the HCVPA while awaiting additional rules and regulations from Illinois lawmakers.

In the November 2018 mid-term elections, state ballot measures for the legalization of marijuana were approved in three states – Michigan, Missouri, and Utah – and rejected in one state – North Dakota.

Michigan

Michigan is now the 10th state in the country to legalize the recreational use of marijuana under certain conditions. Michigan residents approved Proposal 1, allowing for recreational marijuana to be consumed, purchased, or cultivated by those 21 and over. The new law went into effect December 6, 2018, but the commercial system will not be running for another year. The law imposes a 10% tax on marijuana sales and will create a licensure system for dispensaries. The law does not require an employer to permit or accommodate recreational use of marijuana, nor does it prohibit an employer from refusing to hire, discharging, disciplining, or taking any other adverse action because of the violation of a workplace drug policy or working under the influence.

Missouri

In Missouri, voters rejected two of three proposals regarding marijuana, but approved a ballot measure (Amendment 2) to allow for medical marijuana to be sold at a 4% tax. Notably, all three measures would have allowed for medical marijuana, but each measure varied in terms of tax, from 2% to 15%. The 4% tax will be used to sponsor veteran’s health issues.

The Missouri Department of Health and Senior Services will implement the law’s provisions, which will take all of 2019. Medical marijuana is not expected to be available for purchase until January 2020. While the law provides certain protections for patients, medical providers, and caregivers, the law does not permit a private right of action against an employer for wrongful discharge, discrimination, or any similar cause of action based on the employer’s prohibition of the employee being under the influence of marijuana while at work or for disciplining or discharging an employee for working or attempting to work while under the influence.

Utah

Utah voters approved Proposition 2, a medicinal marijuana proposal. Proposition 2, which was opposed by the Church of Jesus Christ of Latter-day Saints) was altered by legislation – the Utah Medical Cannabis Act (HB 3001) – after the election. On December 3, HB 3001 passed the legislature and was signed by Governor Gary Hebert. The bill stripped certain provisions of Proposition 2: patients who live more than 100 miles from a dispensary may not grow their own marijuana; patients must purchase medical marijuana through a state- or privately-run dispensary (the number of which has been reduced); and dispensaries must employee pharmacists to recommend dosages. In addition, HB 3001 added nurse practitioners, physician assistants, and high-ranking social workers to the list of health care workers that can recommend medical marijuana. HB 3001 is already the subject to two lawsuits, but currently it is scheduled to take effect on July 1, 2019.

Under the new Utah law, a patient cannot be discriminated against in the provision of medical care due to lawful use of medical marijuana, and the state may not discriminate against such users in employment. The new law, however, does not address medical marijuana use in the context of private employment. But employers may need to treat medical marijuana users the same as they treat employees with disabilities under state law, because the underlying conditions qualifying for medical marijuana use also qualify as disabilities under state law.

North Dakota

Voters in North Dakota rejected Measure 3, an initiative to legalize marijuana for recreational purposes.

*          *          *

Employers and health care professionals should be ready to handle issues that arise with the potential conflict between state and federal law in devising compliance, both in terms of reporting and human resources issues. States continue to consider – and pass – legislation to legalize marijuana (both medicinal and recreational), and we are marching toward 50-state legalization. Almost all organizations – and particularly those with multi-state operations – must review and evaluate their current policies with respect to marijuana use by employees and patients.

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.

Cannabis has been legalized in Canada as of October 17, 2018. What does this mean for employers with employees traveling to and from Canada? Can travelers from Canada to the United States with legally purchased cannabis simply drive to a state where recreational or medical use of cannabis is legal? The bottom line: Employers should remind employees that they cannot cross into the United States with Canadian cannabis under any circumstances.

The framework created in Canada did not change laws regarding borders. A traveler who purchases legal cannabis in Canada may not enter the United States with it, regardless of whether the person is traveling to a state that has legalized marijuana. Cannabis remains illegal under federal law and crossing any U.S. – Canada border will result in legal prosecution by the federal government. This applies to any amount and any form of cannabis, including medical marijuana.

The same is true if one were returning to Canada with legally purchased cannabis from Canada. This act is illegal. There is no situation where a receipt can be shown to “prove” the origin. The origin does not matter. The act of taking cannabis across the border is illegal.

Further, for the same reasons, cannabis cannot be brought on international flights even if the flight originated from Canada. It is expected that declaration forms on flights originating from Canada traveling to the U.S. may include questions on cannabis. Given how relatively new the legalization and regulation of cannabis is in Canada, travelers should expect to see and/or hear increased questions about cannabis possession and use, generally, at the borders.

Forget bringing cannabis purchased in Canada into the U.S. Even a single past use of cannabis may lead travelers to unforeseen legal troubles. The Canadian government warns that previous use of cannabis could result in the traveler being denied entry to the destination country, including the U.S. This could be a lifetime ban that may take years to sort for these noncitizens.

Certain other travelers may be inadmissible to the U.S. due to their ties to cannabis. Canadian citizens working in the marijuana industry, for example, may be denied entry to the U.S. if they are traveling to the U.S. for reasons related to that industry. In addition, while Canada intends to pardon citizens with simple marijuana possession convictions, the U.S. does not recognize foreign pardons, and so these individuals also could be deemed inadmissible to enter the U.S.

Employers and health plans should be aware that two recent federal decisions have recognized that the non-discrimination provision in the Affordable Care Act prohibits discrimination on the basis of gender identity. Plans cannot categorically exclude coverage for procedures to treat gender dysphoria.

In Boyden v. Conlin, the U.S. District Court for the Western District of Wisconsin found that the state’s exclusion of gender reassignment-related procedures from the state employees’ health insurance coverage constitutes sex discrimination in violation of Section 1557 of the Affordable Care Act (the “ACA”) and Title VII of the Civil Rights Act. Section 1557 of the ACA prohibits discrimination and the denial of benefits under a health program or activity, any part of which is in receipt of federal financial assistance, on the basis of race, color, national origin, sex, age or disability. The plaintiffs, two transgender women employed by the State of Wisconsin, also alleged that the exclusion violated the Equal Protection Clause of the Fourteenth Amendment.

This case involved the exclusion of “procedures, services, and supplies related to surgery and sex hormones associated with gender reassignment” from the health insurance coverage. Pursuant to the exclusion, the health plan did not cover hormone therapy involving gender reassignment surgery, or the surgery itself. Defendants argued that the exclusion did not discriminate on the basis of sex because the plan excludes coverage for all cosmetic treatments for psychological conditions, and because the exclusion simply prohibits coverage for gender reassignment procedures, not because plaintiffs are transgender. The court disagreed, finding that the case constituted a “straightforward case of sex discrimination” because the exclusion treated people differently based on their natal sex. The court also found that the exclusion implicated “sex stereotyping by limiting the availability of medical transition … thus requiring transgender individuals to maintain the physical characteristics of their natal sex.”

The court also found liability against the state on plaintiffs’ Equal Protection Clause claim. In applying heightened scrutiny review, the court concluded that the state failed to show that the exclusion was the product of cost concerns or concerns about the safety and efficacy of gender reassignment surgery and hormone therapy. Because the state could not put forth evidence of a genuine reason for the exclusion, the court found in favor of plaintiffs on the Equal Protection Claim.

Two days after the decision in Boyden, in Tovar v. Essentia Health, the District Court for the District of Minnesota held that Section 1557 prohibits discrimination on the basis of gender identity. In that case, plaintiffs alleged that Essentia Health and HealthPartners Inc. violated Section 1557 by sponsoring or administering a plan that categorically excluded coverage for all health services and surgery related to gender reassignment. Section 1557 incorporates four federal civil rights statutes that prohibit discrimination on the basis of: race, color and national origin (Title VI); sex (Title IX); age (ADEA); and disability (Rehabilitation Act). Concluding that Title IX’s prohibition against sex discrimination should be read as coextensive with Title VII, and noting that courts have recognized a cause of action under Title VII for sex discrimination based on gender identity and gender-transition status, the court determined that “sex discrimination encompasses gender-identity discrimination.” The court thus concluded that Section 1557 prohibits gender identity discrimination and denied defendants’ motion to dismiss.

The court also declined to stay the action pending resolution of Franciscan Alliance, Inc. v. Burwell, in which the Northern District of Texas issued a nationwide injunction enjoining enforcement of the Department of Health and Human Services (HHS) regulations providing that Section 1557’s prohibition of sex discrimination encompasses gender identity discrimination. The Minnesota court concluded that a stay was not warranted because its conclusion that Section 1557 prevents discrimination based on gender identity is based on the plain reading of the statute and does not rely on the Franciscan Alliance decision.

Employer Takeaways

These two cases are the latest in a series in which plaintiffs allege that their employer sponsored health plans are designed in a manner that discriminates based on gender identify in violation of Section 1557 of the ACA and Title VII of the Civil Rights Act. While an earlier decision (Baker v. Aetna Life Insurance Co., 228 F. Supp. 3d 764 (N.D. Tex. 2017)) by the Northern District of Texas declined to find a cause of action for gender identity discrimination under Section 1557, these decisions are in line with the current trend to allow gender identity discrimination claims to be pursued under Section 1557. Therefore, while HHS continues its current policy of non-enforcement of allegations of gender identity discrimination under Section 1557, employers should be aware of provisions in their group health plans that exclude coverage for transgender benefits and litigation risks that these provisions may pose.

Notably, the plans in both Boyden and Tovar included categorical exclusions for services and/or surgeries related to gender reassignment or transition. These categorical exclusions often are a red flag. By contrast, in Baker, the plan did not categorically exclude gender reassignment procedures; there, the insurance company denied the plaintiff’s request for breast augmentation surgery as not medically necessary. The Baker court found in favor of defendants on both the Section 1557 and Title VII claims. Thus, employers are advised to review their plans to ensure that services to treat gender dysphoria and related conditions are made available to their covered employees.

So far, the year 2018 has brought an increasing number of labor and employment rules and regulations. To help you stay up to date, we are pleased to invite you to join our Employment, Labor & Workforce Management Webinar Series. Each month, we will focus on a specific industry, topic, or practice area.

Our July webinar will be hosted by Epstein Becker Green’s Health Employment and Labor (HEAL) strategic service team and Trade Secrets and Employee Mobility service team. This webinar will provide an overview of the legal landscape of non-compete agreements in the health care industry, including state law requirements and restrictions, public policy considerations, recent developments, and expected trends. The webinar will also address key considerations when drafting and enforcing non-competes, engaging in the due diligence process, and integrating providers following a health care transaction.

Tuesday, July 24, 2018
12:00 p.m. – 1:00 p.m. ET

Register for this complimentary webinar today!

Health care registry companies provide families and their loved ones with peace of mind by providing matchmaking and referral services for qualified, pre-screened and vetted home caregivers. They often also provide administrative services. As part of the “gig economy,” health care registries often tread a fine line in classifying caregivers as independent contractors rather than employees. A new Field Assistance Bulletin (“Bulletin”), “Determining Whether Nurse or Caregiver Registries are Employers of the Caregiver,” issued on July 13, 2018, by the Wage and Hour Division (“WHD”) of the U.S. Department of Labor (“DOL”) to its field enforcement staff, provides a road map on how homecare, nurse, and caregiver registries relying on an independent contractor business model can ensure the caregivers remain independent contractors not covered by the Fair Labor Standards Act (“FLSA”).

Relevant Factors to Maintain an Independent Contractor Business Model

The Bulletin restates the traditional “economic reality” test for determining independent contract staff, under which the WHD considers the totality of the circumstances when evaluating whether an employment relationship exists between a registry and a caregiver. No one factor is necessarily dispositive. It also notes that it historically has maintained that a registry that performs only referral and payroll services is not an employer of the caregivers whom it refers, but a registry that also directs and controls the work and sets the rate of pay may become an employer of the caregiver. The Bulletin then discusses specific business practices that could affect the determination of whether an employment relationship exists. The relevant factors flagged by the WHD and best practices are listed below:

  • Background Checks: Registries can collect objective information such as a caregiver’s criminal history, credit report, licenses, credentials, or background checks pursuant to state or local laws without being designated as employers. However, screening that evaluates subjective criteria, such as interviewing a caregiver or obtaining a caregiver reference to determine likeability or suitability for a particular client, may imply that the registry is an employer.
  • Hiring and Firing: Making the client the ultimate decision maker in hiring and firing the caregiver will help ensure no employment relationship exists between the registry and the caregiver. Thus, a registry that informs its client that a potential caregiver meets the client’s threshold parameters and preferences but leaves the client to decide whether to accept or decline services is not an employer of the caregiver. Conversely, exercising control over hiring and firing decisions, even by terminating the caregiver’s services at the request of a client, may have the opposite effect.
  • Scheduling and Assigning Work: Leaving it to the client and caregiver to independently determine work schedules and assignments avoids triggering an employment relationship. In addition, communicating contact information to selected caregivers (screened by objective criteria such as whether the caregiver can work in a home with pets or smokers) about potential clients also does not indicate an employer-employee relationship. On the other hand, exercising control over the work schedules and assignments, or offering work assignments based on the registry’s own discretion and judgment based on subjective factors such as likeability, may suggest an employment relationship.
  • Controlling the Caregiver’s Work: Controlling, monitoring, supervising or providing instruction on how to provide services, supervising or evaluating work performance, or even just monitoring the caregiver’s methods or work habits may cause a registry to be considered an employer of the caregiver. In addition, exercising control over the caregiver by such actions as limiting the number of clients or hours of work referred to a caregiver or prohibiting the caregiver from seeking work outside the registry may also have the same effect.
  • Setting the Pay Rate: Requiring the client and caregiver to negotiate or determine rates of pay (or if Medicaid sets the rate) avoids creating an employment relationship between the registry and caregiver. A registry may, however, provide advice on typical pay rates in the area to serve as a benchmark for negotiations, or relay offers and counteroffers. On the other hand, the registry acts more like an employer by effectively setting the rate of pay, or dictating what a caregiver should charge for specific services.
  • Continuous Payments for Caregiver Services: Registries seeking to maintain an independent contractor business model should consider charging one-time upfront fees for matching caregivers and clients, or charging fees solely for administrative and ministerial functions such as payroll processing or tax documentation. Conversely, a fee system based on the number of hours a caregiver works indicates the registry’s fees are based on an ongoing relationship and may create employer status.
  • Paying Wages: A registry that provides payroll-related functions for its clients can avoid designation as an employer by transmitting only client-funded payments to the caregiver in the form of pay or benefits (by, for example, issuing checks or electronic deposits) chosen by the caregiver. The registry should avoid issuing direct payments by use of its own funds, even if it expects to be reimbursed by the client. Failing to heed this advice may trigger an employee-employer relationship.
  • Tracking Caregiver Hours: A registry’s reliance on the caregiver and/or client for confirmation of hours by independent submissions of time records will not indicate the registry is the caregiver’s employer. The same is true if the registry requires the client or caregiver to submit correct time records through time sheets or an electronic time verification system provided by the registry. Conversely, verifying, creating, or confirming records of the caregiver’s hours worked may indicate supervision and control, and consequently an employer-employee relationship.
  • Purchasing Equipment and Supplies: Investing in office space, payroll software timekeeping systems and other products to operate the business will not be regarded as forming an employment relationship between caregivers and a registry. Registries can also provide caregivers with an option to purchase discounted equipment or supplies from either the registry or a third party. However, registries should avoid investing in a caregiver’s training or pay for a caregiver’s licenses, insurance or medical supplies, as such actions indicate the registry is acting as an employer, instead of simply a referral service.
  • Receiving Employer Identification Number (EIN) or 1099: Whether registries require an EIN (or a caregiver acquires one), or state law requires insurance or a bond, is irrelevant to a determination of employee status. Calling a caregiver an “independent contractor” or issuing an IRS 1099 form does not preclude the caregiver from being an employee for FLSA purposes.

The Bulletin makes it clear that other factors also may be considered and that all factors will be evaluated in any given case. Nonetheless, a registry that avoids all or most of the factors discussed above that can cause the loss of independent contractor status should have a significant degree of confidence that the WHD will not claim otherwise. At the same time, in addition to complying with the FLSA requirements, employers should also ensure they are complying with other tests, such as those imposed by state agencies that require unemployment insurance contributions, as well as the Federal Internal Revenue Service requirements for independent contractor status.

* Eduardo J. Quiroga, a Summer Associate (not admitted to the practice of law) in Epstein Becker Green’s New York office, contributed to the preparation of this Advisory.

___________

See also the related article posted on our Wage and Hour Blog.

Effective July 26, 2018, Oklahomans will be able to legally use medicinal marijuana under state law. The change follows a June 26, 2018 ballot measure, State Question 788, approved by 56% of voters. Oklahoma’s new law, cheekily coded 63 Okla. Stat. § 420 et seq., expands the prior permissible use of cannabidiol (CBD) oil for limited purposes, now allowing licensed medicinal marijuana consumption. The ballot measure initially appeared in 2016, but was delayed for several years by a series of legal challenges concerning changes to its title, ultimately resolved by the Oklahoma Supreme Court in March 2017.

Consistent with the secondary wave of state laws legalizing medicinal marijuana, Oklahoma’s law contains an anti-discrimination provision providing that employers “may not discriminate against a person in hiring, termination, or imposing any term or condition of employment or otherwise penalize a person based on their status as a medical marijuana license holder,” unless failing to do so would cause the employer to “imminently lose a monetary or licensing related benefit under federal law or regulation.” 63 Okla. Stat. § 425(B)(1)-(2). Further, employers may not take action against a license-holder solely based upon the results of a positive drug test for marijuana or its components. 63 Okla. Stat. § 425(B)(2). Employers should note that these protections do not extend to use or possession of marijuana in the license-holder’s place of employment, or during the hours of employment. Id.

Oklahoma’s law differs from other states’, however, in that it does not predicate approved marijuana use on specific qualifying medical conditions. Instead, medical license applicants need only obtain the signature of an Oklahoma Board certified physician, who recommends the license “according to the accepted standards a reasonable and prudent physician would follow when recommending or approving any medication.” 63 Okla. Stat. § 420(M). Moreover, the law incorporates protections for the recommending physician, who “may [not] be unduly stigmatized or harassed for signing [the] medical marijuana license application.” Id.

Looking forward, interested parties should expect to see regulations introduced to further refine terms of use. Governor Mary Fallin previously criticized the law as too “loose[ly written],” such that it “opens the door for basically recreational marijuana[,]” and threatened to call a special session of the legislature to develop regulations if the ballot measure succeeded. Rather than call a special session, however, Governor Fallin signed emergency legislation on July 11 adopting rules created by the State Board of Health, including a ban on the sale of smokable marijuana. In response, activists are pushing to legalize recreational marijuana use as an “insurance policy” against these and other potential restrictive regulations. At least two parties have filed lawsuits challenging the validity of the recent Department of Health rules. Additionally, Oklahoma voters will weigh in on Questions 796 and 797 this November—provided those questions receive the requisite 124,000 signatures by August 8, 2018—deciding whether to classify marijuana as an “herbal drug” and whether to permit adults 21 years or older to recreationally use marijuana, respectively.

Beginning July 1, 2018, recreational marijuana can be legally sold, taxed, and consumed in Massachusetts—one of nine states, in addition to Washington, D.C., that now permits recreational marijuana use. Massachusetts already is one of 29 states that allow marijuana use for medicinal purposes (and 17 others permit certain low-THC cannabis products for medical reasons).

Background

Legalization of recreational marijuana started in 2016 with a ballot initiative by Massachusetts voters. The Regulation and Taxation of Marijuana Act (“Marijuana Act”), which took effect on December 15, 2016, provides that “[t]his chapter shall not require an employer to permit or accommodate conduct otherwise allowed by this chapter in the workplace and shall not affect the authority of employers to enact and enforce workplace policies restricting the consumption of marijuana by employees.” Thus, while the Marijuana Act expressly permits employers to prohibit employees from using or being under the influence of marijuana in the workplace, it does not address whether an employer can regulate employees’ lawful use of marijuana off duty.

How Might a Court Rule if an Employer Banned Off-Duty Recreational Marijuana Use?

Employers may terminate an employee for off-duty and/or off-site recreational marijuana use because Massachusetts, unlike a number of other states, has no statutory protection for employees’ lawful off-duty conduct, such as smoking.

There are, however, other claims an aggrieved applicant or employee might bring absent the off-duty conduct statute protections. In one case, an employee who was terminated by his employer for violation of the company’s non-smoking policy when he tested positive for nicotine brought a case claiming a right to privacy. See Rodrigues v. EG Sys., 639 F. Supp. 2d 131, 133 (D. Mass. 2009).   A federal court dismissed the plaintiff’s claims that the employer violated his right to privacy because the plaintiff made no attempt to keep his smoking private: he testified to smoking outdoors and purchasing cigarettes with coworkers. Id.

In Barbuto v. Advantage Sales and Marketing, LLC, a 2017 decision by the Massachusetts Supreme Judicial Court, a new hire disclosed a prescription for medical marijuana she used for Crohn’s Disease. 78 N.E. 3d 37, 42 (Mass. 2017). HR personnel informed her that her prescribed, off-duty use would be acceptable; however, when she tested positive after working for one day, the company terminated her employment.

The Barbuto court permitted the employee’s reasonable accommodations claim. Specifically, the court held that although marijuana use is still illegal at the federal level, the public policy of Massachusetts prioritizes accommodating workers with disabilities.

Although the use of medical marijuana could be considered a public policy concern under certain circumstances, given that an employee may be discharged for the off-duty conduct of smoking cigarettes, it is unlikely that Massachusetts courts would protect employees who test positive for recreational marijuana use. Unlike medical marijuana use, recreational marijuana use likely does not implicate public policy considerations because the use of medical marijuana has health benefits related to treating illness and disease, whereas the use of recreational marijuana does not.

With respect to privacy arguments akin to those asserted in Rodrigues, courts might distinguish marijuana from cigarettes for a variety of reasons. In Massachusetts, marijuana consumption in public and in vehicles is prohibited, whereas cigarette smokers have greater freedom to smoke outdoors and in vehicles. Additionally, marijuana, unlike cigarettes, is still illegal under federal law.

How Can Massachusetts Employers Manage Employees While Avoiding Legal Risks of Employees Using Recreational Marijuana?

Although neither the law nor the applicable regulations address employee-employer rights in the context of recreational marijuana, and it is too soon for the courts to have weighed in, employers likely have the right to terminate an employee for recreational marijuana consumption, even where that consumption occurs off duty and/or off-site. To minimize any risk that an employee may bring a viable legal claim resulting from the termination of employment or rescission of a conditional offer of employment due to a positive drug test, employers should consider the following:

  1. Employers that continue to enforce zero tolerance policies and either decline to hire or terminate individuals for marijuana use should articulate to employees that the test will screen for marijuana, and clearly define “illegal” drugs as those banned under federal, state, or local law to avoid conflicts regarding its legal status in Massachusetts.
  2. As recreational use becomes more prevalent in Massachusetts, in light of the Marijuana Act, talent pool considerations may favor loosening drug-testing policies, at least for certain positions.
  3. Though Massachusetts law currently permits pre-employment drug screening for any reason (as long as it is non-discriminatory), employers may choose to eliminate standardized testing policies and instead opt to test only upon “reasonable suspicion” that the employee is under the influence at work.
  4. Multistate employers should update employee handbooks with particular emphasis on any changes made to their drug-testing policies and decide whether they plan to standardize testing across the company or enact carve-outs for recreational marijuana states.
  5. Notwithstanding the above, because health care employers in particular face safety issues and high risks associated with patient care, those considerations may weigh in favor of enforcement of zero tolerance and standardized testing policies – particularly with respect to recreational marijuana – in patient-care and other safety-sensitive positions.
  6. Employers in highly regulated industries, such as health care and transportation, should be aware of additional regulations that govern drug testing in their industries.
  7. Drug-testing policies should make clear that on-the-job marijuana consumption or being under the influence of marijuana remains against company policy. Further, employers wishing to prohibit off-duty or off-site recreational consumption should expressly state that such conduct may result in discipline or termination of employment.

This post was written with assistance from John W. Milani, a 2018 Summer Associate at Epstein Becker Green.

State attorneys general from Louisiana, Missouri, Oklahoma, Texas, Michigan, Nebraska, and South Dakota have joined Arkansas (collectively the “States”) in an amicus brief to the Eighth Circuit, urging the court not to join the Seventh Circuit and Second Circuit in interpreting Title VII of the Civil Rights Act of 1964 (“Title VII”) to prohibit sexual orientation discrimination.

The States submitted this brief in a case brought by Mark Horton against Midwest Geriatric Management LLC (“Midwest Geriatric”) in which the plaintiff alleges sexual orientation and religious discrimination in violation of Title VII. More specifically, Horton alleges that Midwest Geriatric revoked his job offer after the company learned he was gay. In their brief, the States assert that Horton wrongly petitioned the court to ignore precedent and reverse its prior position that sexual orientation discrimination is not covered by Title VII.

The States argue that until last year, when the Seventh and Second Circuits expanded the scope of Title VII to encompass sexual orientation discrimination, federal courts had unanimously found that sexual orientation was not a protected category under Title VII, and the Eighth Circuit should follow this long-standing view. The States add that, despite numerous opportunities to revise Title VII to include sexual orientation, Congress has chosen not to do so. Finally, the States contend that Horton’s arguments simply are not persuasive.

In addition to the States’ brief, the Eighth Circuit has also received amicus briefs supporting Horton’s argument from 18 other states and Washington D.C., in addition to the U.S. Equal Employment Opportunity Commission and various businesses.

The Eighth Circuit’s decision remains pending, and we will be watching for it. In the meantime, employers operating within the Eighth Circuit—comprising Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota—are encouraged to evaluate their non-discrimination policies with this potential change to the federal law in mind, to the extent they have not already done so to comply with state or local laws.