Business Law Articles
Written By: Muliha A. Khan, Esq.
Zupkus & Angell, P.C.
Background: Legalizing Marijuana in Colorado
Was John Denver’s “Rocky Mountain High” an innocent tribute to the beauty of the Colorado mountains or a premonition regarding the state’s future legalization of marijuana? While some believe the tune was about nature and only nature[i], Colorado’s recent legalization of marijuana gives a whole new meaning to the 1973 song, now ironically one of the two official state songs.[ii]
Arguably, Colorado’s legalization of recreational marijuana was merely a continued progression of past laws of the state. In 1932 Colorado was the first state to repeal the nation’s prohibition on alcohol.[iii] Fast-forward to the millennium and medical marijuana was decriminalized in the state. Technically speaking, Colorado created insulation from criminal prosecution for those using marijuana for medical purposes.[iv] In 2012, twelve years later, Colorado voters approved an amendment to the state constitution extending the “use of marijuana . . . legal for persons twenty-one years of age or older.”[v] In other words, marijuana, even if not used for medical purposes, had become legal in Colorado.
Inevitably, the legalization of marijuana has in many ways led to more questions than answers. For example, how does this recent legalization impact employers? The constitutional amendment clearly states that employers are not required “to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace . . .”[vi] Easy enough: what this means is that employers can clearly prohibit employees from using marijuana in the workplace. But, what about off the job? The constitutional amendment does state that employers can still “have policies restricting the use of marijuana by employees.”[vii] So is it permissible for an employer to terminate an employee simply for testing positive for marijuana even if the employee was not under the influence of the drug at work? Applying Colorado case law regarding medical marijuana in the workplace, the short answer is most likely yes. However, employers should not assume automatic insulation from liability. As discussed later, the regulation of marijuana in the workplace is largely a policy question. Therefore, there could be future opportunity and basis to challenge a termination stemming from an employee’s off duty use of marijuana. In light of this, employers must continue to take precaution and adopt a best practices approach with respect to drug policies and procedures in the workplace.
Case Law: Medical Marijuana in the Workplace
In 2000 Colorado voters approved an amendment to the constitution which established affirmative defenses to the state’s criminal laws against marijuana for those who used the drug for medical purposes (“Medical Marijuana Amendment”).[viii] Inevitably, the Medical Marijuana Amendment has collided with the drug-free policies adopted by many businesses, as evidenced in the cases discussed below.
In Beinor v. Indus. Claim Appeals Office, Jason Beinor was discharged by his employer after testing positive for marijuana.[ix] Beinor obtained and used marijuana for severe headaches, as recommended by a physician.[x] However, the employer’s zero-tolerance drug policy was very clear: "[I]f a current employee is substance tested for any reason . . . and the results of the screening are positive for . . . illegal drugs, the employee will be terminated."[xi] Ultimately, Beinor was denied unemployment benefits following his discharge. The Colorado Court of Appeals upheld the denial relying on Colorado law which disqualifies employees “from receiving unemployment compensation benefits if a separation from employment occurs because of ‘[t]he presence in an individual's system, during working hours, of not medically prescribed controlled substances . . .”’[xii] The court ruled that medical marijuana, even though decriminalized pursuant to the Medical Marijuana Amendment, did not qualify as a medically- controlled substance.[xiii] Therefore, denial of Beinor’s unemployment benefits was upheld.
There is no doubt that Beinor is a pro-employer case. In addressing the interplay between Colorado’s drug laws and the workplace, the court emphasized that the Medical Marijuana Amendment does not “require any employer to accommodate the medical use of marijuana in any work place.”[xiv] Furthermore, the court pointed out that “the Colorado Constitution does not give medical marijuana users the unfettered right to violate employers' policies and practices regarding use of controlled substances.”[xv]
The court in Beinor made it very clear that its focus was denial of unemployment benefits and “not deciding whether the amendment limits an employer from discharging an employee for using medical marijuana.”[xvi] The court in Coats v. Dish Network, L.L.C., considered the larger issue of discharge.[xvii]
In Coats, ex-employee of Dish Network, Brandon Coats, was fired after he tested positive for marijuana. Coats, a quadriplegic, used marijuana for medical purposes in compliance with the Medical Marijuana Amendment which provides immunity from criminal prosecution of marijuana use.[xviii]. Coats challenged his termination arguing that his use of marijuana qualified as lawful off duty conduct.[xix]. The Court of Appeals disagreed reasoning that because marijuana was prohibited by federal law such activity could not be categorized as lawful off duty conduct.[xx] Thus, the court found that the employer was justified in discharging Coats after he failed a drug test.[xxi]. Coats’ claims that he “never used marijuana on defendant’s premises, and was never under the influence of marijuana at work” played no role in the court’s analysis.[xxii]
Off Duty Use of Marijuana
Extending Beinor and Coats to the 2012 amendment legalizing recreational marijuana (“Recreational Marijuana Amendment”), could an employee be legitimately fired for off duty use of recreational marijuana? The answer is most likely yes. The fact that the ex-employees in both cases used marijuana, even though only for medical purposes, was enough to render pro-employer outcomes. However, no consideration was given to whether the ex-employees were actually under the influence of marijuana at work.[xxiii] Recreational marijuana would probably be treated in the same manner, particularly as the Recreational Marijuana Amendment, like the Medical Marijuana Amendment, does not “require an employer to permit or 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.”[xxiv]
However, the dissents in both Beinor and Coats raise valid points, suggesting that employers may not always be justified in discharging an employee for off duty use of marijuana. The dissent in Beinor argues that “many patients who are eligible to use medical marijuana would likely abandon their right to do so because even lawful use at home would put their benefits, and perhaps even their jobs, at risk.”[xxv]. So, isn’t the question of whether an employee can be fired for off duty use of marijuana really a question of policy? Even though recreational marijuana is legal in Colorado, any person who uses it, even if in compliance with the law, risks the possibility of termination regardless of whether or not they use the drug on the job. Doesn’t such a policy defeat the very purpose of the Recreational Marijuana Amendment? And, doesn’t such a policy infringe on an employee’s off duty autonomy? The Coats’ dissent points out that the Colorado off duty conduct statute is “to protect employees’ autonomy in their off-the-job activities, such as smoking and eating patterns that lead to obesity.” [xxvi] Even the majority in Coats admits that the purpose of the off duty conduct statute is to “is to keep an employer’s proverbial nose out of an employee’s off-site off-hours business.”[xxvii]. However, when it comes to marijuana, Colorado courts will likely let employers keep their proverbial noses in the off duty conduct of their employees. Well, at least for now.
On August 29, 2013, the U.S. Department of Justice (DOJ) issued yet another Memorandum, the subject of which was: Guidance Regarding Marijuana Enforcement.[xxviii]. The purpose of the Memorandum was to provide “guidance in light of state ballot initiatives that legalize under state law the possession of small amounts of marijuana . . .”[xxix]. The Memorandum specifies the DOJ’s enforcement efforts with respect to marijuana.[xxx]. Clearly, the Memorandum was directed at Colorado and Washington. If this Memorandum was in existence at the time of the Beinor and Coats decisions, arguably the rulings in those cases could have been different. To illustrate, the court in Beinor cited to the DOJ memorandum which was in existence at that time to further support its denial of benefits.[xxxi] However, the 2013 Memorandum may have prompted the court to rule differently. Additionally, in Coats the court’s argument was premised on the unlawfulness of marijuana at the federal level.[xxxii] The 2013 Memorandum addresses this very issue and could have impacted or changed the court’s ultimate ruling in Coats that off the job use of marijuana was not lawful off duty conduct.
The main lesson in light of Beinor and Coats is that the interpretation of the Recreational Marijuana Amendment, like the Medical Marijuana Amendment, will largely be driven by policy. Undoubtedly, policy is shaped by many factors, including the 2013 Memorandum referenced above, and thus is subject to continuous change. Therefore, employers should not assume blanket protection when terminating employees for off duty use of marijuana. Instead, employers should adopt the best practices and policies such as the ones listed below.
Learning from Beinor and Coats: Implementing Best Practices
The following are best practices for employers to implement for purposes of establishing and/or maintaining a drug-free workplace:
1. The drug-free policy should be in written form either in the handbook or as a separate policy. Regardless of where it appears, the employee should be required to show receipt of the policy either through signature or electronic verification.
Reasoning: This provides the employee with less of a basis to argue that they were unaware of the drug-free policy.
2. The drug-free policy should be as broad in scope as possible i.e. "If a current employee is substance tested for any reason and the results of the screening are positive for illegal drugs and/or marijuana, the employee will be terminated."
Reasoning: If you limit the prohibited drugs to just “illegal drugs,” employees could now argue that marijuana is legal pursuant to the Recreational Marijuana Amendment. Therefore, if the policy only prohibited illegal drugs, use of marijuana would never be a violation. Also, as opposed to stating that drugs are not to be used in the workplace, the policy should state that those who test positive for drugs will be terminated because this encompasses any kind of drug use whether on or off the job. As we learned from Coats, an employee could be discharged for off duty drug use.
3. If the goal is to deny unemployment benefits, testing should be carried out during work hours.
Reasoning: Tests showing the presence of not medically controlled substances during work hours disqualify the employee from receiving unemployment benefits.
4. If the goal is to deny unemployment benefits, testing should be administered by a medical facility or laboratory licensed or certified to conduct such tests.
Reasoning: Tests showing the presence of not medically controlled substances to deny unemployment benefits must be administered by licensed facilities or labs.
5. If possible, document any and all evidence of on-the-job drug use or the effects of off duty drug use.
Reasoning: While Coats likely supports the discharge of an employee even for off duty use of recreational marijuana, any evidence showing on-the-job drug use or effects of off duty drug use will further justify the termination of the employee.
Conclusion: If You Choose to Use
Colorado voters approved the legalization of marijuana; it's what the people wanted. But, as Eleanor Roosevelt said, “With freedom comes responsibility.”[xxxv] Thus, those who choose to use must comply with the law: they must be of age; they must pay the necessary tax (still a pending issue); they may not distribute to minors; and they must not violate their employer's drug policy.[xxxvi] With respect to the last point, policy at this time favors employers. However, watch this space, as this unchartered, emerging area of law will inevitably change.
[i] Rick Moore, John Denver, “Rocky Mountain High,” American Songwriter (April 1, 2013, 6:07 AM), http://www.americansongwriter.com/2013/04/john-denver-rocky-mountain-high/,
[ii] Colorado Department of Personnel & Administration, http://www.colorado.gov/dpa/doit/archives/history/symbemb.htm (last visited Sept. 12, 2013).
[iii] Dick Kreek, High, Dry Times as Prohibition Era Sobered Denver, Denver Post (July 5, 2009).
[iv] Colo. Const. art. XVIII, § 14.
[v] Colo. Const. art. XVIII, § 16(1)(a).
[vi] Colo. Const. art. XVIII, § 16(6).
[viii] Colo. Const. art. XVIII, § 14.
[ix] Beinor v. Indus. Claim Appeals Office, 262 P.3d 970, 972 (Colo. App. 2011), cert denied, NO. 11SC676, 2012 WL 1940833 (Colo. May 29, 2012).
[xii] Id. at 973 (citing C.R.S. § 8-73-108(5)(e)(IX.5)).
[xiii] Beinor, 262 P.3d at 974-975.
[xiv] Id. at 976 (citing Colo. Const. art. XVIII, § 14(10)(b)).
[xv] Beinor, 262 P.3d at 976.
[xvii] Coats v. Dish Network, L.L.C., 303 P.3d 147 (Colo. App. 2013).
[xviii] Id. at 149.
[xx] Id. at 151-152.
[xxi] Id. at 152.
[xxii] Id. at 149.
[xxiii] Beinor, 262 P.3d at 978; Coats, 303 P.3d at 149.
[xxiv] Colo. Const. art. XVIII, § 16(6).
[xxv] Beinor, 262 P.3d at 980.
[xxvi] Coats, 303 P.3d at 156.
[xxvii] Id. at 151.
[xxviii] Memorandum from James M. Cole, Deputy Attorney General, for All United States Attorneys (August 29, 2013), available at http://www.justice.gov/iso/opa/resources/3052013829132756857467.pdf.
[xxix] Id. at p. 1.
[xxxi] Beinor, 262 P.3d at 974.
[xxxii] Coats, 303 P.3d at 152.
[xxxiii] C.R.S. § 8-73-108(5)(e)(IX.5) (2013).
[xxxv] Pearls of Wisdom, Quotations, http://www.sapphyr.net/women/women-quotes-eleanorroosevelt.htm (last visited Sept. 12, 2013).
[xxxvi] Colo. Const. art. XVIII, § 16(1) & (6).