IN THE WEEDS OF MARIJUANA LAW

Jeffery Kelsey Managing Director Employment Law Group FEDERAL EXPRESS CORP. 3620 Hacks Cross Rd., Building B Memphis, Tennessee 38125 (901) 434-8563 [email protected]

William M. Toles FEE, SMITH, SHARP & VITULLO, LLP Three Galleria Tower 13155 Noel Road, Suite 1000 Dallas, Texas 75240 (972) 934-9100 [email protected]

L. Johnson Sarber III CARR ALLISON The Greenleaf and Crosby Building 208 North Laura Street, Suite 1100 Jacksonville, Florida 32202 (904) 328-6457 [email protected]

Shea Oliver Senior Attorney Employment Law Group FEDERAL EXPRESS CORP. 3620 Hacks Cross Rd., Building B Memphis, Tennessee 38125 (901) 434-8539 [email protected]

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TABLE OF CONTENTS

I. Introduction ………..…………………………………………………. 3

II. Current (But Rapidly Changing) State Laws Regarding Marijuana Use ……………..………………………. 3

III. Federal Law -- Still Zero Tolerance, Especially For Safety Sensitive Transportation Employees ..……………………. 6

IV. Emerging Case Law -- Legalization .………………………………… 7

V. Emerging Case Law -- Disability Accommodation ………………….. 11

VI. Conclusion ………..………………………………………………….. 13

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I. INTRODUCTION The landscape of marijuana law and regulation is changing rapidly. Marijuana is or will soon be legal for recreational use by more than a quarter of the United States population, and for medical use on an even larger basis. New laws allowing different levels of marijuana use have been implemented on a state-by-state basis, and some states have also enacted employee protection laws or regulations addressing marijuana use. The federal government, on the other hand, continues to maintain a prohibition. The United States Department of Transportation (DOT) in particular maintains a zero tolerance policy in connection with safety sensitive jobs regulated by the DOT. These various laws and regulations have created a complicated legal environment, a patchwork of laws, and a number of important and often contradictory judicial decisions that are difficult to navigate for multi-state employers, especially those involved in the transportation industry. This paper is intended to provide a general overview of the law as it exists today. All participants should understand that this is a rapidly-changing environment, and that the following is not intended as legal advice. An employer should monitor changes in this area and consult with qualified attorneys on a regular basis. II. CURRENT (BUT RAPIDLY CHANGING) STATE LAWS REGARDING MARIJUANA USE Marijuana was legal in the United States until the passage of the Marijuana Taxation Act of 1938, although many states had banned the substance earlier. Thereafter, the Controlled Substances Act of 1970 significantly strengthened the prohibition of marijuana, which was classified as a Schedule I drug with a high potential for abuse and little known medical benefit. Public attitudes about marijuana consumption began to shift, however, particularly towards support for medical uses. In 1973, Oregon became the first state to decriminalize marijuana possession, though cultivation and distribution of the drug remained felony offenses. A number of ballot initiatives and legislative efforts across states culminated with California voting to legalize marijuana for medical use (medical marijuana) in 1996. The other west coast states, Oregon and Washington, followed suit in 1998. Today, 33 states and the District of Columbia 3 | Page

permit broad forms of medical marijuana, despite the continued nominal prohibition at the federal level. Those states and regions, as of late 2018, are as follows:

Alaska Illinois New Mexico Arizona Maine New York Arkansas Maryland North Dakota California Massachusetts Ohio Colorado Michigan Oklahoma Connecticut Minnesota Oregon Delaware Missouri Pennsylvania District of Columbia Montana Rhode Island Florida Nevada Utah Georgia New Hampshire Vermont Hawaii New Jersey Washington West Virginia

The liberalization of marijuana policy reached another milestone in 2012, when voters in Washington and Colorado approved ballot initiatives which explicitly legalized the production and consumption of marijuana for recreational use (recreational marijuana). Alaska, the District of Columbia, and Oregon followed suit with similar ballot measures in 2014, and California, Nevada, Maine, and Massachusetts legalized marijuana with ballot measures in 2016. In 2018, Vermont became the first state to legalize the recreational use of marijuana via legislative action, and Michigan approved a ballot initiative. The following states now allow the recreational use of marijuana without penalty:

Alaska Maine Oregon California Massachusetts Vermont Colorado Michigan Washington District of Columbia Nevada

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Most states’ marijuana laws do not affect a company’s enforcement of its drug-free workplace policies. In such states, employers may terminate or refuse to hire an employee/applicant because of a positive marijuana test. In addition, an employer is not required to reasonably accommodate medical marijuana use by employees. However, at least 14 states have now expanded protections to medical marijuana users in the employment context. These statutory protections commonly include anti-discrimination provisions, which generally prohibit employers from discriminating against or terminating a “qualified patient” for a positive drug test or for participation in a medical marijuana program. States with these added protections include:

Arizona Illinois New York Arkansas Maine Oklahoma Connecticut Massachusetts Pennsylvania Delaware Minnesota Rhode Island Nevada West Virginia

Note that this list should not be considered determinative given the changing environment, and these protections vary by state. By way of example, the first state on this list, Arizona, prohibits employers from discriminating against or terminating a qualified patient for a “positive drug test for marijuana components or metabolites” unless the employee used, possessed, or was impaired by marijuana on the job or if it would cause the employer to lose a benefit under federal law. Ariz. Rev. Stat. § 36-2813(B). Employers may designate “safety sensitive” positions and refuse to hire medical marijuana card- holding applicants for those positions. A position is safety sensitive if the employer has a good faith belief it could affect the safety or health of the card-holding employee or others. Such positions include handling food, operating machinery, driving, repairing or monitoring performance of equipment, handling or dispensing medicine, and/or other similarly dangerous or risky tasks. Ariz. Rev. Stat. Ann. § 23-493.

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III. FEDERAL LAW -- STILL ZERO TOLERANCE, ESPECIALLY FOR SAFETY SENSITIVE TRANSPORTATION EMPLOYEES Under federal law, the use of marijuana remains illegal in all respects. Marijuana, including a mixture or preparation containing marijuana, continues to be classified as a Schedule I controlled substance by the Drug Enforcement Administration (DEA) in 21 CFR § 1308.11. Under the Federal Motor Carrier Safety Regulations (FMCSRs), a person is not physically qualified to drive a commercial motor vehicle if he or she uses any Schedule I controlled substance such as marijuana. See 49 CFR §§ 391.11(b)(4) and 391.41(b)(12). In addition to the physical qualification requirements, the FMCSRs also prohibit a driver from being in possession of or under the influence of any Schedule I controlled substance, including marijuana, while on duty, and prohibit motor carriers from permitting a driver to be on duty if he or she possesses, is under the influence of, or uses a Schedule I controlled substance. See 49 CFR §§ 392.2 and 392.4. Legalization of marijuana use by states or other jurisdictions also has not modified the application of DOT drug testing regulations in 49 CFR parts 40 and 382. DOT regulations generally preempt and take precedence over state laws when it comes to marijuana use. Thus, all “safety sensitive” employees who are subject to federally-mandated drug testing are still prohibited from using the drug. This group of employees includes anyone who operates commercial vehicles, including train engineers, pilots, and school bus drivers. DOT has made its stance on the issue known multiple times, beginning when Washington and Colorado legalized recreational marijuana in 2012. “We want to make it perfectly clear that the state initiatives will have no bearing on the Department of Transportation’s regulated drug testing program. The Department of Transportation’s Drug and Alcohol Testing Regulation – 49 CFR Part 40 – does not authorize the use of Schedule I drugs, including marijuana, for any reason,” the DOT said in a statement. Thus employers in the transportation industry, no matter otherwise-applicable state laws, cannot permit safety sensitive employees to have marijuana in their systems at any time. Even if an employee is not impaired when they take a drug test, the THC from the drug will be detectable in their system for up to 30 days after use. If

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an employee whose job subjects them to DOT regulations tests positive for marijuana, they should be removed from their job immediately. State laws as described above, however, including those requiring the accommodation of an employee’s marijuana use, will continue to apply to employees in non-DOT regulated positions, and thus all employers, including employers involved in interstate transportation, must be aware of and implement procedures for complying with the applicable state laws. IV. EMERGING CASE LAW -- LEGALIZATION Despite statutory protections for medical marijuana users in some states, broad exceptions still remain. States and courts almost uniformly allow an employer to take an adverse action against an employee if the use occurred at work, or if an employee is impaired at work. Further, as stated, different rules often apply to “safety sensitive” positions allowing for more stringent drug-related employment qualifications. Most state statutes make exceptions for employers with employees subject to DOT or FAA drug-testing regulations and federal contractors subject to the federal Drug Free Workplace Act (FDFWA). The legal environment is quickly-evolving, however, and several courts have recently ruled against employers and explicitly upheld statutory employment protections for medical marijuana users, even over exceptions commonly thought to protect employers from liability. Generally speaking, challenges to terminations or other employment actions based on medical marijuana began with plaintiffs relying upon the state medical marijuana legalization laws. Such challenges did not initially fare well; however, recent decisions from a federal district court in Connecticut and a state court in Rhode Island may be a harbinger of the future. In Noffsinger v. SSC Niantic Operating Co., LLC, 2018 WL 4224075 (D. Conn. Sept. 5, 2018) (Noffsinger II) , a Connecticut federal district court ruled that refusing to hire a medical marijuana user who tested positive on a pre-employment drug test violated the anti-discrimination provision of the state’s medical marijuana law. The court granted summary judgment to the applicant, holding that Connecticut’s law expressly protects a qualifying medical marijuana patient’s off- duty legal use of medical marijuana, even if he/she tests positive on a drug test.

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In denying the employer’s earlier motion to dismiss, the Noffsinger court agreed with the employee that the federal Controlled Substances Act does not regulate employment. 273 F. Supp.3d 326 (D. Conn. 2017). While Congress made it a federal crime to use marijuana, Congress did not make it illegal to employ a marijuana user. The court likewise dispensed with the employer’s argument regarding preemption by provisions of the Americans with Disabilities Act (ADA) explicitly excepting illegal drug use from ADA protections. The court held that the fact that the ADA allows employers to prohibit the illegal use of drugs at the workplace did not give employers the power to regulate non-workplace activity. “[T]he ADA is not an employer’s Magna Carta to engage in drug testing for all employees.” The court held that the state employment protections created a private right of action, and rejected as “border[ing] on the absurd” the employer’s argument that its duty to comply with federal law put the employer outside the statute. “[T]he act of hiring a medical marijuana user does not itself constitute a violation of … any federal, state, or local law.” Noffsinger is also significant because it is the first decision to address—and reject—a claim that an employer’s federal Drug Free Workplace Act (DFWA) obligations excuse adverse action when a worker is using marijuana in accordance with state law. The employer argued that as a government contractor, it was required to comply with the federal DFWA which, the employer posited, makes it unlawful for an employer to allow employees to use illegal drugs, including marijuana. The court disagreed, holding that the DFWA neither requires drug testing nor regulates an employee’s off-duty cannabis use, “much less an employee who uses medical marijuana outside the workplace in accordance with a program approved by state law.” Similarly, in Callaghan v. Darlington Fabrics Corp., 2017 R.I. Super. LEXIS 88 (R.I Super. May 23, 2017), in an opinion that starts with the quotation “I get high with a little help from my friends,” a Rhode Island state trial court granted the plaintiff’s motion for summary judgment in a case alleging a violation of Rhode Island’s medical marijuana statute. The plaintiff, a college student, sought an internship with a textiles manufacturer. She disclosed she had a marijuana card. The company asked her if she was currently using medical marijuana. The plaintiff said she was, and the employer said it was unable to hire her. The court first held the state law provided a private right of action, and then held that refusing to hire someone because she could not pass a drug test due to medical

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marijuana use outside the workplace violated state law. The court rejected the employer’s federal preemption argument. Prior to these two significant recent cases, the primary issue had been whether legalization impliedly creates employment protections. Every state but Montana has employment at will. Absent a relevant contract stating otherwise, an employer generally can terminate an employee for any reason that is not an illegal reason, or for no reason at all. The question arose whether statutes legalizing medical marijuana implicitly prohibited employers from terminating employees for engaging in conduct that complies with the state law. Most courts held that it did not, in the absence of explicit provisions to the contrary. Certain medical marijuana statutes contain language stating that qualified patients are not to be subject to any penalty or sanction, or denied any right or privilege due to their use of medical marijuana. Some statutes also state that there is no duty upon employers to accommodate the onsite use of medical marijuana, suggesting that there might be a duty to accommodate the off-site use of medical marijuana. So far, however, courts have generally determined that such provisions are not sufficient to prohibit termination because of the at-home use of medical marijuana in accordance with state law, even where it is conceded the employee’s use of marijuana had no job impact. A few representative cases dealing with these issues: Ross v. RagingWire Telecommunications, Inc., 42 Cal. 4th 920, 174 P.3d 200, 7 Cal. Rptr. 3d 382 (2008) -- The California Supreme Court held that the purpose of California’s medical marijuana law was to protect patients from criminal prosecution, and that the law did not address the employment relationship. The employee argued that California’s medical marijuana law had implicitly amended the state’s disability discrimination act to preclude his termination, but the argument was rejected by a vote of five to two. Johnson v. Columbia Falls Aluminum Co., LLC, 2009 Mont. LEXIS 120 (Mont. 2009) -- Plaintiff used marijuana at the recommendation of a physician in accordance with Montana’s Medical Marijuana Act (MMA), and was terminated after testing positive for marijuana in violation of company policy and the union’s collective bargaining agreement. Plaintiff alleged that the employer’s action violated the MMA. The Montana Supreme Court held that the MMA does not provide a private right of action. The court relied on the provision of the statute

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which explicitly does not require employers “to accommodate the medical use of marijuana in any workplace.” Roe v. TeleTech Customer Care Mgmt. LLC, 257 P.3d 586 (Wash. 2011) -- In Roe, the plaintiff was hired as a customer service consultant. When informed that she would have to take a drug test, she informed the employer that she used medical marijuana at home and that she had a medical authorization to do so. She tested positive for THC and was terminated. Roe then sued for wrongful termination in violation of (1) the state’s Medical Use of Marijuana Act (MUMA) and (2) Washington public policy. Washington’s MUMA expressly protects qualifying patients from being “penalized in any manner, or denied any right or privilege” as a result of using medical marijuana in accordance with the Act, but also provides that “[n]othing in this chapter requires any accommodation of any on-site use of marijuana in any place of employment....” RCW 69.51A.040. The Washington Supreme Court held that: (1) MUMA “does not provide a private cause of action for discharge of an employee who uses medical marijuana, either expressly or impliedly, nor does MUMA create a clear public policy that would support a claim for wrongful discharge in violation of such a policy”; (2) that the statute did not require employers to accommodate the off-site use of medical marijuana; and (3) that the statutory language prohibiting a qualified patient from being “penalized” did not apply to private employers. Casias v. Wal-Mart Stores, Inc., 695 F.3d 428 (6th Cir. 2012) -- Plaintiff used marijuana in accordance with Michigan’s Medical Marijuana Act (MMMA) to treat a brain tumor. Wal-Mart terminated his employment after he tested positive for marijuana in violation of the company’s drug policy. The MMMA states that a lawful user of medical marijuana cannot be “denied any right or privilege, including but not limited to civil penalty or disciplinary action by a business or occupational or professional licensing board or bureau. . . .” Mich. Comp. Laws § 333.26424(a). Relying on this provision, the plaintiff sued Wal-Mart for wrongful termination. The Sixth Circuit held, questionably, that MMMA does not regulate private employment because the word “business” in the statute modifies “licensing board.” Savage v. Maine Pretrial Services, Inc., 58 A.3d 1138 (Me. 2013) -- Plaintiff was terminated after she applied to open a registered medical marijuana dispensary. She

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sued her employer and alleged her termination violated the Maine Medical Use of Marijuana Act (MMUMA). The Supreme Judicial Court of Maine held that the MMUMA did not provide a private right of action against employers. Despite the inclusion of the word “business” in the MMUMA, the statute provides only protections from government sanction to those who engage in authorized conduct under the act, including using, prescribing, dispensing, and administering marijuana. Coats v. Dish Network, LLC, 350 P.3d 849 (Colo. 2015) -- A number of states have off-duty conduct laws that prohibit employers from discharging employees for off- duty, off-premises lawful conduct. Unless the statute makes clear the “lawfulness” of the employee’s conduct depends only on state law, the statute may provide no protection for medical or recreational marijuana use in accordance with state law. In Coats, the employee argued that using medical marijuana in compliance with state law but in violation of federal law was a “lawful activity” under the Colorado off-duty conduct statute, but the Colorado Supreme Court unanimously held that statute’s prohibition on termination “due to the employee’s engaging in any lawful activity off the premises of the employer during nonworking hours” did not embrace activity unlawful under federal law. V. EMERGING CASE LAW -- DISABILITY ACCOMMODATION In addition to challenges to employment actions based on state legalization laws themselves, plaintiffs have also formulated challenges to terminations under state reasonable accommodation law applicable to disabilities. At first, this effort was also not successful: Johnson v. Columbia Falls Aluminum Co., LLC, 2009 Mont. LEXIS 120 (Mont. 2009) -- Relying on the provision of the state medical marijuana statute not requiring employers “to accommodate the medical use of marijuana in any workplace,” the court held that the Montana Human Rights Act does not require an employer to excuse a positive drug test caused by medical marijuana used in accordance with state law. Ross v. RagingWire Telecommunications, Inc., 42 Cal. 4th 920, 174 P.3d 200, 7 Cal. Rptr. 3d 382 (2008) -- The majority held that an employee could not state a claim under California’s disability discrimination statute because the act does not require employers to accommodate the use of illegal drugs. The majority found this 11 | Page

principle in the statute’s allowance of employers to condition an offer of employment on the results of a medical examination. Emerald Steel Fabricators, Inc. v. Bureau of Labor & Indus., 348 Or. 159, 230 P.3d 518 (2010) -- Emerald Steel involved a disability discrimination claim brought under Oregon’s state anti-discrimination law. The state Bureau of Labor and Industries (BOLI) brought the action on behalf of an employee who was terminated after disclosing that he used medical marijuana in compliance with the Oregon Medical Marijuana Act. The Oregon Supreme Court rejected BOLI’s disability discrimination argument by a vote of five to two, on the basis that Oregon’s employment discrimination law provides that the statute’s protections from disability discrimination “do not apply to any ... employee who is currently engaging in the illegal use of drugs if the employer takes action based on that conduct” and the definition of “illegal use of drugs” is defined to include use of drugs prohibited under the federal Controlled Substances Act. The Court left open the possibility that the Oregon legislature could fix this issue by amending the statute. Curry v. MillerCoors, Inc., 2013 WL 4494307 (D. Colo. Aug. 21, 2013) -- Plaintiff had an authorization to use medical marijuana in Colorado but was fired after testing positive for marijuana in violation of the company’s written drug policy. Plaintiff claimed disability discrimination under Colorado law. The district court granted the company’s motion to dismiss. More recently, however, in 2017 both the Rhode Island court in Callaghan and the Massachusetts Supreme Judicial Court in a separate case have explicitly ruled in favor of employees based on reasonable accommodation claims. Again, these cases may be the first sign of things to come, in terms of judicial receptivity to accommodation arguments: Barbuto v. Advantage Sales & Marketing, LLC, 477 Mass. 456, 2017 Mass. LEXIS 504 (2017) -- The plaintiff used medical marijuana at home to treat her Crohn’s disease. She was offered an entry-level sales and marketing position. The company required her to take a drug test. She worked one day and then was fired. The company told her that “we follow federal law, not state law.” The employee claimed handicap discrimination in violation of state law, violation of the state marijuana law, and wrongful termination in violation of public policy. A trial judge granted the employer’s motion to dismiss, but the Supreme Judicial Court

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unanimously reversed. The court held the plaintiff was a “handicapped person” due to her Crohn’s disease. The court rejected the employer’s claim her use of a drug illegal under federal law rendered an accommodation facially unreasonable under state law. The court relied on language in the state medical marijuana law prohibiting the denial of “any right or privilege” on the basis of medical marijuana use. The court further held that by providing that there was no duty to accommodate the on-site medical use of marijuana, the legislature intended accommodation of off-site use. The Barbuto court held that “where a handicapped employee needs medication to alleviate or manage the medical condition that renders her handicapped, and the employer fires her because company policy prohibits the use of this medication, the law does not ignore the fact that the policy resulted in a person being denied employment because of her handicap.” The employer could prove undue hardship, however, by showing the use of marijuana by an employee would violate an employer’s contractual or statutory obligation and thereby jeopardize its ability to conduct its business. The court gave transportation companies and federal government contractors as examples of employers who could take advantage of this defense. Callaghan v. Darlington Fabrics Corp., 2017 R.I. Super. LEXIS 88 (R.I Super. May 23, 2017) -- After first holding that Rhode Island’s medical marijuana statute prohibited employers from rejecting an applicant based non-workplace use, the court went on to hold that the state statute prohibiting disability discrimination also protected her actions. The state statute against disability discrimination did not require the employee prove she was a “qualified individual with a disability.” Therefore, the court did not have to decide whether the reference to “illegal use of drugs” as a permissible qualification standard applied to a drug lawful under state law but illegal under federal law. The court rejected the employer’s federal preemption argument.

VI. CONCLUSION Although the legal landscape has generally been favorable to employers who have sought to implement and maintain a “zero tolerance” policy with respect to marijuana use, even in states where marijuana use is legal, in our view that is not

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likely to be the case much longer in a good part of the country. The takeaway from the 2017 and 2018 cases on the East Coast (Noffsinger in Connecticut, Callaghan in Rhode Island, and Barbuto in Massachusetts) is that employers purporting to follow federal law will no longer have a “free pass” to justify or defend the application of a “zero tolerance” policy in jurisdictions that have adopted protections for medical marijuana users in one form or another. Note also that while these protections are currently limited to medical marijuana users, as the legalization of recreational use continues, we fully expect greater protections for recreational users to follow. In short, while employers can still maintain a zero-tolerance policy to a large extent, in large parts of the country, there are an increasing number of instances where employers will have to adjust those policies in light of state marijuana laws. This entire area, moreover, is likely to be a net drain in terms of ongoing legal expenses, in terms of both obtaining sound advice and being required to defend the inevitable employment lawsuits.

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