What Employers Should Know About the Regulation of Marijuana

co-authored by Roger G. Trim, a shareholder in the Denver office of Ogletree Deakins

As of January 2013, 18 states and the District of Columbia have laws on the books legalizing the use of medical marijuana. A number of additional states have gone even further by passing laws decriminalizing or eliminating jail time for possession of small amounts of marijuana, regardless of whether the marijuana was for medical use. Finally, two states — Colorado and Washington — passed laws on November 6, 2012, affirmatively legalizing the recreational use of marijuana. Many employers are concerned about what these marijuana laws mean for them and whether they need to make any changes to their drug policies in light of recent developments.

Regardless of state law, marijuana possession and use remain illegal under the federal Controlled Substances Act. In an official statement after the November election, the U.S. Attorney’s Office stated that the U.S. Department of Justice’s enforcement of marijuana laws remains unchanged. Therefore, even with the passage of the new laws in Colorado and Washington, both recreational and medical marijuana use remains illegal under federal law.

Furthermore, the explicit language of Colorado and Washington’s new laws should minimize their impact in the workplace. Neither law affords affirmative employee work rights with respect to marijuana. To the contrary, Colorado’s law specifically states: “Nothing in this section is intended to require an employer to permit or accommodate the use … of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees.”

Additionally, at least two Colorado court decisions have held the use of medical marijuana does not constitute lawful off-duty conduct. This is important because under Colorado law, it is unlawful for an employer to terminate an employee for engaging inlawful activity off the premises of the employer during nonworking hours.

In Beinor v. Industrial Claim Appeals Office, the Colorado Court of Appeals affirmed the Industrial Claim Appeals Office’s denial of unemployment benefits to the claimant and concluded that, although the Colorado Constitution precluded a claimant from being criminally prosecuted for using marijuana for medical purposes, “it does not preclude him from being denied unemployment benefits based on a separation from employment for testing positive for marijuana in violation of an employer’s express zero-tolerance drug policy.” Similarly, in June 2011, a Colorado court found using medical marijuana does not qualify as “lawful” off-duty conduct because medical marijuana was not per se legal in Colorado.

Washington’s new law does not directly address employers’ drug policies. However, a Washington Supreme Court case addressing the issue of medical marijuana determined the state’s medical marijuana law did not prevent an employer from firing an employee for medical marijuana use.

A number of other states also have determined their medical marijuana laws do not prohibit employers from terminating employees for violation of drug policies. For example, in Ross v. Ragingwire Telecommunications, Inc., the Supreme Court of California determined an employee was not wrongfully terminated when he failed a drug test and his employer had no duty to accommodate his medical marijuana use.

Although there are not yet any cases dealing with employers’ right to terminate employees for violation of drug policies after the passage of Colorado and Washington’s recreational marijuana laws, the medical marijuana use cases in those states are indicative of what the result would be if an employee attempted to argue wrongful termination for recreational marijuana use. The argument for continued prohibition of recreational marijuana use under drug policies is even stronger than the argument for continued prohibition of medical marijuana. If an employer can refuse to hire or terminate the employment of someone who uses marijuana for medical purposes, then that employer should be able to refuse to hire or terminate someone who uses marijuana recreationally.

Therefore, drug testing of applicants and employees for marijuana is still generally permissible, and employers still can take action against applicants and employees found to be in violation of carefully crafted drug policies. Employers should review their drug testing policies, or have them reviewed, to ensure compliance with the latest nuances in this emerging area of the law, particularly with respect to variations in state law.