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Posted: December 07, 2012

Rocky Mountain high: What does it mean for bosses?

Employers need to clarify their policies

Natalia S. Ballinger and Jeannette M. Brook

On Nov. 6, Colorado voters passed Amendment 64, the controversial initiative legalizing the non-medical use of marijuana by adults, making Colorado one of the first states in the nation to decriminalize the possession, cultivation and sale of marijuana.

As cautioned by Colorado Gov. John Hickenlooper, however, recreational users should not “break out the Cheetos or gold fish too quickly,” given that the use and possession of marijuana remain illegal under federal law. In fact, Colorado Attorney Gen. John Suthers has called on the federal government to “make known its intentions regarding prosecution of activities sanctioned by Amendment 64 (particularly large wholesale grow operations) as soon as possible in order to assist state regulators and the citizens of Colorado in making decisions about the implementation of Amendment 64.”

For good reason, the incongruous state and federal mandates have created uncertainty among Coloradans, most notably among employers. The continuing illegality of the drug under federal law, however, means that employers need not undertake drastic measures in response to the amendment but should ensure that their existing policies clearly address the use of marijuana in the workplace.

The Substance of the Amendment

Amendment 64 permits anyone 21 or older to legally possess, use, display, purchase and transport marijuana accessories or up to one ounce of marijuana. The Amendment also allows those citizens to possess, grow and process up to six marijuana plants, provided that the growing takes place in an enclosed, private and locked space, and that the plants are not made available for sale. Finally, the new law allows the transfer of up to one ounce of marijuana, and the private consumption of the drug in a manner that does not endanger others.

The amendment contemplates the taxation and regulation of marijuana similar to the taxation and regulation of alcohol. With respect to taxation, the first $40 million in revenue raised annually has been allotted to the construction of public schools in Colorado.

Private citizens may not legally sell marijuana under Amendment 64. Driving under the influence of marijuana will remain illegal. And, the amendment does not change Colorado’s existing medical marijuana system.

Labor & Employment

The general effective date of the amendment will take place upon the governor’s declaration of the vote by proclamation, which must occur within 30 days after the votes have been canvassed. Other select activities under the amendment, such as business licensing, have their own self-executing effective dates. The deadline for the adoption of regulations necessary for the implementation of the amendment is July 1, 2013.

Impact on Colorado Employers

The impact of this unprecedented decriminalization is of particular concern for employers. Two of the amendment’s provisions, however, speak directly to employers’ right to forbid the use of marijuana in the workplace. In this regard, Amendment 64 disclaims any intent to “require an employer to permit or to accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees.”

The Amendment further provides that “[n]othing in this Section shall prohibit [an] employer […] or any other entity who occupies, owns or controls a property from prohibiting or otherwise regulating the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana on or in that property.”

A more challenging aspect of the law for employers is how to address workers who test positive for marijuana pursuant to lawful drug testing policies, but have not consumed marijuana during working hours or otherwise appeared compromised in their work performance. In particular, it remains unclear how the passage of Amendment 64 will be reconciled with Colorado’s Lawful Off-Duty Activities statute.

As set forth above, Amendment 64 makes clear that employers need not accommodate the use of marijuana in the workplace. Conversely, the Lawful Off-Duty Activities statute, originally enacted as an anti-discrimination measure to protect cigarette smokers, prohibits employers from terminating employees based on their legal, off-duty activities.

Also problematic is the amendment’s language permitting employers to enact policies “restricting the use of marijuana by employees,” which may leave employers vulnerable to an attack on policies outright prohibiting, rather than merely “restricting,” employee marijuana use. Such an attack, however, would likely fail in light of the amendment’s language granting employers free reign with respect to their workplace drug policies.

It is anticipated that Colorado employees terminated for testing positive for marijuana might challenge their terminations as contrary to Colorado law. Yet, because marijuana remains illegal under Federal law, employers have a continued legal basis upon which to apply a zero tolerance policy. How these conflicting provisions will ultimately be reconciled through case law is yet to be determined.

Recommendations

To mitigate the potential of employee litigation, Colorado employers should revise their employment and drug-testing policies to unequivocally articulate their position with respect to the use of marijuana in the workplace, including those employees who test positive for marijuana use. Because marijuana remains illegal under Federal law, those companies wishing to maintain a zero-tolerance policy may do so by clearly communicating to employees that state-authorized marijuana use is prohibited under the employers’ policies.

To this end, employers are advised to ensure that the policies they have in place expressly prohibit the use of drugs classified as illegal under local, state, or Federal law. As always, employers should proactively confirm that their policies are in step with the newly passed Amendment now rather than in response to a future lawsuit.

As a further preemptive measure, it may be advisable for employers to disseminate a newsletter to employees explaining that the passage of Amendment 64 has no impact on existing policies in the workplace, and that the use of marijuana by employees will not be tolerated.

Natalia S. Ballinger defends corporations in state and federal class actions throughout the country. Natalia’s practice encompasses a broad range of litigation matters, including employment issues, complex commercial business disputes and trade secret cases. In the employment arena, Natalia represents companies in misclassification, discrimination, harassment, wrongful discharge, and breach of employment contract lawsuits and administrative claims. Natalia also assists employers with the enforcement of restrictive covenants and non-compete agreements.

Jeannette M. Brook focuses her practice on litigation of a wide range of employment matters, including discrimination claims based on sex, race, age and disability. Jenny has represented clients in state and federal courts in various employment disputes as well as acting as lead counsel in both bench and jury trials. Her focus includes defense of numerous nationwide class actions. Representations include National City Bank, Bridgestone/Firestone, The State of Indiana, Eastman Kodak Co., El Paso Corporation, Johnson & Wales University and the Rolls Royce Company. She is a frequent speaker on current trends in employment law.

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Readers Respond

I agree. Terrific contribution. Thx By Publisher on 2012 12 07
Thank you for a very timely and informative article with recommendations. Tahnk you, again. By John Republican on 2012 12 07
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