Employers and medical pot: A landmark decision

On June 15, the Colorado Supreme Court ruled in Coats v. Dish Network, LLC, that employers with a drug-free workplace policy have the right to take adverse action against employees who test positive for marijuana, even if the employees fully comply with the state’s medical marijuana laws, do not use marijuana at the workplace, and are not impaired on the job. This landmark decision affirms the right of employers to require that their employees comply with all federal drug laws, regardless of their states’ marijuana laws. 
The plaintiff, Brandon Coats, a quadriplegic as a result of an automobile accident, failed a random drug test required by his employer, Dish Network.  Mr. Coats argued that his use of medical marijuana was the only means by which he could control his leg spasms.  Dish Network did not contest that Mr. Coats had no work-related problems other than the failed drug test.  There was no dispute that Mr. Coats used marijuana only at home and had a valid Colorado medical marijuana card.
The Court rejected the plaintiff's argument that the Colorado lawful off-duty activities statute, Colo Rev. Stat. § 24-34-402.5, protected his use of medical marijuana at home.  That statute bars employers from taking adverse employment action against employers for “lawful” activities conducted away from work.
The Supreme Court narrowly focused on the definition of “lawful” in the statute and declined to reach any other issue.  Mr. Coats’s attorney argued that the definition encompasses activities legal under state law, regardless of their status under federal law.  Dish Network disagreed, arguing that the word “lawful” referred to activities legal under both state and federal law.
A unanimous Court, with Justice Márquez not participating, agreed with Dish Network.  The court held that the word "lawful” should be interpreted according to its generally accepted meaning, and that the Colorado legislature included no language indicating that the word should refer to state law alone.  Colorado’s lawful activities statute thus only protects employees engaged in activities that are legal under both state and federal law.
Because the federal Controlled Substances Act lists marijuana as a Schedule I controlled substance and prohibits its possession, manufacture, sale, or use, medical marijuana remains illegal under federal law.  Accordingly, Colorado’s lawful activities statute does not protect an employee using medical marijuana because such use is prohibited by federal law.
The trial court dismissed Mr. Coats’s claim against Dish Network.  A split panel of the Colorado Court of Appeals affirmed the trial court’s decision, holding that Colorado’s lawful activities statute incorporated both state and federal law, and therefore, does not protect activity illegal under federal law.  Judge Webb dissented, arguing that the reach of “lawful activities” should be determined exclusively by state law, under which marijuana use is considered lawful.  The Supreme Court affirmed the Court of Appeals’ ruling.
The Coats decision reaffirms the right of employers to manage and to enforce drug-free workplaces.  Employers will not have to make individualized decisions about whether a particular employee’s marijuana use is “lawful” under state law for bona fide medicinal purposes; instead, employers can institute and enforce broad drug-free workplace policies.
Further, the Coats decision avoids potential problems with the conflict between state and federal law.  Colorado employers who contract with the federal government generally must comply with the federal Drug-Free Workplaces Act, which requires drug-free workplaces.  Similarly, employers engaged in the transportation industry may be required to comply with the Omnibus Transportation Employee Testing Act of 1991, which mandates drug testing of certain transportation workers.  
Had the Court ruled in favor of Mr. Coats, employers subject to federal drug-free workplace regulations would have faced conflicting obligations.  Colorado law would have demanded that employers tolerate certain employee drug use, while federal law would have demanded that employers take action against those same employees.  The Court avoided that problem by clarifying that Colorado law only protects employees engaged in activities that are lawful under state and federal law.
Employers also need to recognize the limits of this decision.  Importantly, the Court did not hold that employers have unfettered rights to fire or to discipline employees for the use of marijuana.  Employers must still follow the law.  Dish Network likely prevailed because it had adopted a clear and broad drug-free workplace policy, engaged in random drug testing, and applied its policies neutrally.  An employer that selectively applies a policy could be vulnerable to discrimination claims.   
Additionally, the Coats decision does not resolve the preemption issues surrounding Colorado’s medical and recreational marijuana amendments.  A number of other pending cases, including Nebraska’s and Oklahoma’s challenge to Colorado’s marijuana laws filed in the U.S. Supreme Court, raise the preemption issue head-on.

Categories: Economy/Politics, Management & Leadership