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Employers Delve Into the Weeds of Cannabis Law

As the laws involving cannabis use — for both medicinal and recreational purposes — evolve, businesses must figure out how to operate in a changing environment.

Q1 2019
Attitudes have certainly come a long way when it comes to marijuana. A little over a quarter century ago, a U.S. presidential candidate admitted, “I experimented with marijuana,” but then famously qualified that statement with, “I didn’t inhale.” This year, a presidential candidate matter-of-factly stated, “I did inhale…I think it gives people joy, and we need a lot more joy in the world.”

Indeed, statutes and case law have evolved dramatically in the years between those two very different political admissions about cannabis use. In two-thirds of the states, residents can get a doctor’s note opening the door for them to use marijuana to alleviate certain medical conditions. And in a fifth of the states, residents are allowed to partake for their own recreational reasons.

One group of people who may be a bit less than overjoyed are those in corporate human resources and legal departments who have to figure out how to operate a business in the changing landscape. It’s challenging enough to navigate the waters in a single state, but countless companies operate in multiple jurisdictions, some in which marijuana use has been decriminalized, some where it’s just as outlawed as it always has been. “There’s not one state that does the same thing in the same way as another,” observes Christine S. Clearwater, president of the consulting firm Drug-Free Solutions Group based in Florida. “It’s a very confusing time.”

There are lots of complicating factors at play, and complex corporate policy issues. Just about everyone agrees that employees who are on the clock should not be under the influence of any substances, legal or not. But if they’re legally treating some medical issue under doctor’s orders, how should that be handled? If they legally smoke pot in their off hours, will it affect a random drug test a few days later? Even more important, are there residual effects that might impact their job performance the day after getting high? What about interstate drivers covered by weed-unfriendly federal Department of Transportation regulations?

A Diverse Legal Landscape
A good place to start is to sort out the different potential situations. Clearwater points out that 17 states have not changed their laws at all. Employers there, she says, “can go on complying with federal law.” And federal law is pretty clear in stating that marijuana is a Schedule I controlled substance and, as such, is illegal to possess or use.

Simply put, in most jurisdictions there is no bright-line test for determining whether the use of medical marijuana can result in the lawful termination of employment under state law. Domenique Camacho Moran, Partner, Farrell Fritz That leaves 33 states and the District of Columbia that have taken more localized action on decriminalizing marijuana. “Of those states, they fall into three basic areas,” says Dr. Todd Simo, chief medical officer at the employee background screening company HireRight. “About a third say that for employer purposes, you don’t have to perform any accommodations.” Employers can still have a zero-tolerance policy for drugs and can still fire people who violate that policy, even if their drug use is after-hours.

“For the next group, also about a third, medical marijuana use is protected,” Simo continues. “You cannot automatically have a derogatory employment decision based on the fact. You have to have a business reason.”

It’s similar in some ways to complying with the Americans With Disabilities Act, he says. Companies need to consider the person and the job role to see if they can accommodate an employee who is an after-hours medical marijuana user. For some roles, such as truck drivers governed by federal law, there really is no way to accommodate a marijuana user. “But for a call center, I don’t know what business reason there would be,” says Simo.

Clearwater says making accommodations for users of medical marijuana is not unlike dealing with employees who have been prescribed other pharmaceuticals that could impact work performance or safety. Many companies have a protocol for that, and that protocol can be applied to medical marijuana. “Don’t put them in a safety-sensitive position,” she says.

The remaining third of the states don’t provide much guidance, Simo says. There’s no statutory law nor case law dictating whether employers need to make any accommodations or not. In those areas, he says, “It’s up to employers to decide.”

That’s the high-level view. It gets even fuzzier when you get down in the weeds (no pun intended). There truly are few generalizations that can be made about this incredibly diverse legal landscape.

No Longer a Black-and-White Situation
Consider, for example, the case of an employee with a doctor’s note, in a state where medical marijuana is permitted. If that state is Ohio, for example, “employers are not prohibited from refusing to hire, discharging or disciplining a person because of the use or possession of medical marijuana, nor are employers prohibited from establishing and enforcing a zero-tolerance drug policy,” observes Whitt Steineker, partner at the Bradley firm in Birmingham, Alabama. On the other hand, “a federal trial court in Connecticut recently held that an employer could not enforce its zero-tolerance drug policy against a medical marijuana user.”

“There’s not one state that does the same thing in the same way as another. It’s a very confusing time. Christine S. Clearwater, President, Drug-Free Solutions Group based “Some state laws have included language that prohibits workplace discrimination against registered medical marijuana patients,” notes Dori Stibolt, partner at Fox Rothschild in Florida. “Alaska, Arizona, Delaware, and Minnesota all have medical marijuana laws that restrict employers from firing or disciplining employees for testing positive for marijuana. Under these types of laws, employers can still terminate employees for working under the influence or using marijuana at work.” That said, “recent court decisions in this arena are trending towards employees’ rights,” according to Stibolt. “The decision to hire or terminate an employee can be difficult and fraught with legal pitfalls.”

“This issue is very much in flux,” says Danielle Urban, partner in the Denver office of Fisher & Phillips. The concept of zero-tolerance is no longer as black-and-white as it used to be — depending on the jurisdiction, it’s anywhere from fine to complicated to impermissible.

“Simply put, in most jurisdictions there is no bright-line test for determining whether the use of medical marijuana can result in the lawful termination of employment under state law,” adds Domenique Camacho Moran, partner in the labor and employment practice of the real-estate development law firm Farrell Fritz in New York.

Difficulty in Tracking Use
Making the issue all the more complex is the difficulty of tracking marijuana use through drug testing. “Research raises questions about whether a positive drug test for marijuana is reasonably related to impairment in the workplace,” notes Moran.

As Simo points out, a marijuana user asked to take a urine or hair drug screen may test positive long after any impairment has worn off. An oral fluid test, on the other hand, can have just the opposite issue. The test may come back negative even if the person is still impaired (though it’s a fairly safe bet that a positive result will reveal a presently impaired employee).

“Some employers have begun relying on other screenings to determine whether an employee’s marijuana use actually impairs job performance,” Moran says. “While these screenings have not yet been widely adopted, we expect to see increased use of alternative methods for evaluating compliance with drug-free workplace policies.”

Then there is the question of how to define impairment. Clearwater says an employee may smoke pot on a Sunday afternoon and not feel high on Monday morning, and yet still suffer some level of impairment that could be a problem at work. “Depth perception is the biggest one for most employers,” she says. Some research suggests depth perception issues can linger for 24 or even 48 hours. “You can imagine how that might impact someone who is operating machinery or driving a forklift.”

Need for Clear, Consistent Employment Policies
The changing legal environment makes it challenging to keep company policies up-to-date, particularly for companies that operate in multiple jurisdictions with widely varying laws. “As frustrating and inefficient as it is for companies operating in multiple jurisdictions, unfortunately there is not a good way to have a single policy for all U.S. jurisdictions,” says Steineker.

How can employers deal with the legal messiness? “By taking and clearly stating their position on federal law precedence and having clear employment policies that are communicated often and through multiple employee communication channels,” says Cheryl Larson, president and CEO of the Midwest Business Group on Health.

Employers who wish to create a consistent policy that applies across multiple states with varying state laws on the use of marijuana should consider a continuing ban on marijuana in the workplace. Sarah Reiner, Shareholder, GrayRobinson “Most employers adopt a policy of federal law precedence,” she points out. That precedence goes beyond the Controlled Substances Act. “The Drug-Free Workplace Act of 1988 prohibits companies that receive federal contracts from allowing any type of marijuana use in the workplace. The U.S. Department of Transportation has issued guidelines that prohibit employees in safety-sensitive transportation jobs from using recreational or medical marijuana. The Occupational Safety and Health Act of 1970 requires all employers to provide a safe and healthful work environment.”

Andrew Bernstein, vice president of corporate sales for Crown Worldwide Moving and Storage, says his company must give federal law precedence where it applies, even though California law is much more permissive. “We have a lot of government contracts and work with companies doing government work, subject to federal mandates. In those cases, the nature of federal laws supersede what California is doing.” For employees whose work is not governed by restrictive federal laws, it’s more a matter of common sense, he says. “We don’t want people coming to work high, and we never have. But it has not really been a problem.”

Still, many employers would like to stick as close to the zero-tolerance restrictive approach as possible. “Employers who wish to create a consistent policy that applies across multiple states with varying state laws on the use of marijuana should consider a continuing ban on marijuana in the workplace,” says Sarah Reiner, shareholder at GrayRobinson, a Florida law firm. “They should also add language to their drug and alcohol policies that places their employees and applicants on notice that, regardless of applicable state law, marijuana is still prohibited under federal law, and being under its influence or using it in the workplace continues to be prohibited and is grounds for discipline, including termination of employment.”

Clearwater advises clients with multiple locations to start with general policymaking and get specific as the location focus narrows. “Set up a policy that is the corporate policy, and an amendment for states” that have difference cannabis laws. “A policy needs to be compliant with federal law, the Health Insurance Portability and Accountability Act, the Americans With Disabilities Act, the Family and Medical Leave Act, statutory law, and case law,” she says.

Policies need to be clear on the subject of drug testing — when and under what circumstances it might happen. There’s no reason to abandon a testing policy aimed at ensuring a drug-free, safe workplace, Stibolt says. But it’s vital that the written policy “sets clear expectations for employees and states the legitimate purpose of such testing. That policy should be provided to all job applicants and published for all employees.” It should spell out just what a failed test means, and it must be applied consistently.

Limiting the Labor Pool?
Beyond the legal considerations, should employers operating in marijuana-friendly locations with low unemployment rates be worried about overly restrictive policies that could turn away qualified applicants? Simo says that may not be all that big an issue just yet. For example, just because the laws in two thirds of the states allow medical marijuana, it doesn’t mean everyone’s jumping on that bandwagon.

His company coordinates lots and lots of drug tests for client companies. In 2017, of all the tests that came back positive for marijuana, just 1.4 percent involved people who had declared themselves to be medical marijuana users. And a fifth of those people were in states where medical marijuana wasn’t even legal.

Overall, in states where marijuana use has been decriminalized, the vast majority of tests still come back negative, he says. “It’s not like there aren’t a lot of good candidates out there.”

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