Navigating the workplace impact of evolving State marijuana legislation

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WEDA Legal Notes by Lance Formwalt

Since the first medical marijuana laws were passed in the latter half of the 1990s, few industries have sparked as much conversation and change as the cannabis industry. These changes are impacting dealers and creating many questions relating to employee policies and concerns about how the laws and related policies affect hiring and termination decisions and negatively impact the size of your pool of eligible candidates.

The patchwork quilt of evolving state legislation is also making a one-size-fits-all approach very difficult. Below is a quick summary of the current status of state laws as of April 2019:

  • 10 states (including Washington and Oregon) have legalized marijuana for recreational and medicinal use
  • 23 states (including Missouri, Oklahoma and New Mexico) have passed some level of comprehensive marijuana reform that allows for medical use and, in some cases, reduces criminalization for marijuana use that is still deemed illegal
  • 3 states have decriminalized certain marijuana uses despite maintaining that marijuana use is fully illegal
  • 14 states (including Kansas, Idaho and Texas) continue to provide that marijuana use remains fully illegal without changes to the criminal penalties

With all of the discussion on state marijuana legislation, it is important to remember that marijuana use is still illegal under the federal Controlled Substances Act. The conflict between federal and state law and language in several of the state laws give most employers continued flexibility to adopt or maintain a wide range of marijuana use policies, including zero tolerance policies, and to take marijuana use into account (or not) when making hiring or termination decisions.

However, if you operate a dealership in a state that allows some form of marijuana use, you will need to continue to monitor the legal landscape as states continue to adopt laws that may be designed to address ways to avoid conflict with the federal law when it comes to employment decisions. It is also important to note that the nature of your employees’ use (medical vs. recreational) can also impact a dealer’s policies and/or decision-making process on employment matters.

Employees and Applicants who use Marijuana for Medicinal Purposes

Employers generally should consider a more cautious approach in addressing medical marijuana use by applicants and employees due to potential conflicts with laws relating to workplace accommodations for disabilities. Courts have generally sided with employers on issues involving the enforcement of drug-free policies in connection with medical marijuana use, often using a conflict with federal law as the basis, but 13 states have enacted legislation to prohibit workplace discrimination against employees who consume marijuana for medicinal purposes. Additionally, while the Americans with Disability Act (ADA) does not offer protections to marijuana users because of its illegal status under federal law, some state courts have used similar state non-discrimination laws to protect employees.

A handful of courts in the states supported by the Western Equipment Dealers Association have addressed this particular issue. In 2010, the Oregon Supreme Court considered whether an employer had engaged in disability discrimination when it terminated an employee due to medical marijuana use permitted by the Oregon Medical Marijuana Act. After the Oregon Bureau of Labor and Industries found that the employer had engaged in disability discrimination, the court, in Emerald Steel Fabricators, Inc. v. Bureau of Labor & Industries, reversed this decision and found in favor for the employer by concluding that the federal Controlled Substances Act preempted state law.

In 2011, the Washington Supreme Court, in Roe v. TeleTech Customer Care Mgmt., determined that Washington’s medical marijuana use law did not prohibit an employer from firing an employee for use of medical marijuana. The court found in favor of the employer because the Washington law did not expressly require employers to accommodate medicinal use.

A U.S. District Court in New Mexico, in Garcia v. Tractor Supply Co., reached the same conclusion in 2016 as the Washington Supreme Court while interpreting New Mexico’s medical marijuana law.

Employees and Applicants who use Marijuana Recreationally

Dealers will generally have more flexibility in enforcing zero-tolerance policies in states where recreational use of marijuana has been legalized. Though some laws are silent on the issue, many of the 10 states that have legalized recreational marijuana use also grant employers the ability to maintain zero-tolerance policies based on existing federal law. However, we are starting to see some states explore legislation using an employee’s right to privacy as the basis for limiting employer discretion in testing as a way to protect employees’ off-duty conduct.

Maine recently became the first state to protect employees’ use of marijuana – medicinal or recreational – outside of the workplace and prohibits employers from testing applicants for marijuana. Under this law, employers are still able to prohibit use at work and may discipline employees for working while under the influence but have no protections otherwise.

Dealer Best Practices

Even though this is an area of evolving law, dealers should consider the following best practices when evaluating their workplace policies and decision-making as applied to marijuana use:

  • Use Your Business Judgment to Develop Policy. Since most jurisdictions currently support employer flexibility relating to marijuana policies, you should first consider your business objectives, staffing needs, and safety concerns in developing or deciding to maintain a policy and then consider whether modifications are needed based on the law.
  • Keep Up to Date on Law Changes. Staying up to date on employment laws (and adjusting practices as appropriate) is always important, but dealers need to be especially vigilant with marijuana use laws since we are in a period of legal and social change that is leading to a rapid-fire change in laws around the country. If you have questions about law changes and the related impact on your policies, don’t hesitate to contact the WEDA hotline for more information. The number is 1-800-762-5616.
  • Understanding Medical Marijuana Use. If you operate in a state that allows medicinal marijuana use, it is important to understand exactly what your rights and obligations are under applicable state law with respect to drug testing, the appropriate pretest inquiries and documentation concerning medical marijuana use, and making employment, disciplinary or discharge decisions based on positive test results.
  • Testing CDL Drivers. It is also very important to remember that legalization of marijuana use by states, whether for medicinal use or recreational use, has not modified the drug use and drug testing requirements applicable to truck drivers with commercial driver’s licenses who are subject to the authority of the U.S. Department of Transportation. Accordingly, marijuana use by these truck drivers is not permissible, even in states that have legalized marijuana use.

This article is intended to provide general recommendations and is not intended to be legal advice. You should always consult your attorney for advice unique to you and your business. Please note that any estimates of tax consequences are based on the current tax code and could change based on future changes in the law or regulations.


Article Written By Lance Formwalt

LANCE FORMWALT is the leader of the Equipment Dealer Group at Seigfreid Bingham, P.C. The firm also serves as legal counsel to the Western Equipment Dealers Association (WEDA). Lance may be contacted at lancef@sb-kc.com or 816-265-4106. Also see www.sb-kc.com.

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