Clearing the Air: Exploring Employee Rights Regarding Medical Marijuana

Clearing the Air: Exploring Employee Rights Regarding Medical Marijuana image
By Robert Pizarro, AVP, AmTrust Financial Services

Support for legalizing marijuana is at an all-time high. According to Pew Research Center, about 62 percent of Americans are pro pot.

Thanks to growing support from the medical community, cannabis is getting closer to shaking stigmas that date back to the 1930s. While the drug has its doubters, medical marijuana use is on the rise. In 2018, estimated retail sales of medical marijuana were between 3.7 and 4.5 billion dollars, with annual sales projected to climb as high as 6.1 billion dollars by 2020.

As consumer demand for cannabis continues to grow, employers will need to stay current on the country’s changing laws regarding the use of medical marijuana.


Planting the Seed

In 1996, California became the first state to legalize medical cannabis, igniting a movement that continues to gain momentum.

Across the U.S., employee rights regarding the use of medical marijuana remains a hotly debated topic, with some state legislations protecting the drug’s use for both medicinal and recreational use. In February 2018, Maine became the first jurisdiction in the nation to protect workers against adverse action for using marijuana away from the workplace.

Currently, medical marijuana is legal in 33 states and Washington, D.C. Along with the nation’s capital, 10 states – Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington – allow its use recreationally.


A Compelling Case

For employers, July 2017 marked a major shift in the medical marijuana debate. In the landmark case Barbuto v. Advantage Sales & Marketing, the Massachusetts Supreme Judicial Court unanimously held that an employee may pursue a disability discrimination claim under state law against an employer for failing to accommodate the employee’s use of marijuana for medical purposes.

Matthew Fogelman of Fogelman & Fogelman, co-counselor for the plaintiff, presented a convincing scenario. He argued that “if someone is taking medication and can perform the essential job functions; is not impaired on the job; and is ready, able and willing to work, the employer must engage in an interactive process and provide a reasonable accommodation unless that accommodation would cause an undue hardship for the employer.”


Weeding Out the Misconceptions

Labeled a gateway drug by its critics, marijuana has been a flashpoint for controversy and linked to everything from lung cancer to laziness. Despite these claims, many medical professionals are using the drug to treat many medical conditions including chronic pain, cancer-related side effects, Alzheimer’s disease and nausea, among others.

Because of marijuana’s status under federal law, physicians are not permitted to write a prescription for medical marijuana. Instead, physicians write recommendations or orders for a medical marijuana card, allowing the patient to have the order filled at a state-approved marijuana dispensary.

Because state marijuana laws continue to evolve, employers across the country are scrambling to stay ahead of the changes. Here are four things employers need to know about medical marijuana and how it affects their employees:

1. All marijuana use is still illegal under federal law. Despite new legislation, marijuana remains a Schedule 1 controlled substance and a dangerous narcotic in the eyes of the federal government. However, change is in the air thanks to federal bill H.R. 420, which seeks to regulate marijuana like alcohol. Introduced in January, the proposed bill would remove cannabis from the controlled substances list and shift the drug’s regulation to other federal agencies including the Bureau of Alcohol, Tobacco, Marijuana, Firearms and Explosives, according to Forbes magazine.

2. The shift is on. The perception of marijuana’s medicinal value in many state courtrooms has changed. As a result, many judges are placing medical marijuana in the same category as other lawful prescription medications.

3. Testing is lacking. Even today, a widely accepted method of testing for marijuana impairment does not exist. Leading arbitrators reviewing wrongful termination cases usually look for other kinds of evidence, from on-the-job accidents to poor performance.

4. Marijuana use on the clock is still off limits. Regardless of its purpose, using marijuana – in any form – during work hours is illegal and cause for termination.


Raising Awareness, Lowering Risk

The Barbuto decision reset the bar for evaluating and accommodating an employee’s use of medical marijuana. If your business resides in a state that has legalized medical marijuana, consider these tips for accommodating your employees:

Be proactive. Work closely with your HR or legal team to create a comprehensive workplace drug policy, including the use of medical and recreational marijuana, and have HR distribute a copy to every employee.

Be prepared. Make sure your company’s drug policy is clear, up to date and accounts for different state laws if your business operates in more than one state. According to Senior Legal Editor Lisa Nagele-Piazza of the Society for Human Resource Management (SHRM), your policy, at a minimum, should:
  • Prohibit the use, possession, sale, distribution or manufacture of drugs and drug paraphernalia at work.
  • Forbid employees from reporting to work while under the influence.
  • Reserve the right to conduct searches of workspaces upon reasonable suspicion.
  • Ensure compliance with all applicable state and federal laws.
  • Leave no room for misinterpretations.

Be interactive. If an employee discloses or tests positive for marijuana use, consider consulting the experts. Your employee’s healthcare provider can confirm the first two statements below, while an occupational health specialist can perform an assessment to confirm the third one.

1. Marijuana is the most effective medication for your employee’s ailment.

2. Any alternative medication permitted by your company’s drug policy would be less effective.

3. Using medical marijuana will not inhibit the employee’s ability to perform the job or pose a significant safety risk.

Be safe. Consult your insurance provider about employment practices liability insurance or EPLI. Having the right coverage in place will help protect your business against a costly wrongful termination lawsuit.


An Industry on a Roll

While 46 states have instituted laws “permitting or decriminalizing cannabis or cannabis-related products in some way,” according to The National Law Review, the future of marijuana legislation in the U.S. is still somewhat hazy. Here are few predictions for marijuana in 2019 and beyond:
  • The U.S. will continue to be the epicenter of the legal cannabis market. According to a report by New Frontier Data, the U.S. cannabis industry will create 250,000 jobs by 2020. Additionally, the industry is projected to generate over $13 billion – in the states where cannabis is legal – in 2020. By 2025, California alone could account for one-quarter of the industry’s projected $25 billion in national sales.
  • Nationwide legalization of marijuana will take a big step closer to becoming a reality. Introduced in 2018, the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act will continue to gain momentum. The act’s intent is to uphold each state’s right to determine how it regulates marijuana use within its borders. Besides opening the door to nationwide legalization, the bill – if signed into law – would protect banks and other institutions interested in investing in the cannabis industry.
  • Sales of medical marijuana will continue to climb. Based on last year’s estimated sales, it wouldn’t be surprising if retail sales of medical marijuana topped 5 billion dollars in 2019.
  • The number of states legalizing the use of marijuana will hit a new high. While just 10 states currently allow the recreational use of marijuana, more states are likely to follow suit in 2019. Additionally, more states are likely to adopt legislation legalizing the use of medical marijuana.
  • More insurance carriers will begin offering policies for businesses in the cannabis industry. Moreover, there will be more insurance startups devoted to the industry. For example, Ohio-based Cannasure offers marijuana business insurance for growers, physicians, dispensaries, collectives and more.
  • Employee rights regarding medical marijuana will remain a hot-button issue. Recently, the U.S. District Court for the District of New Jersey held that an employer was not required to accommodate a forklift driver’s medical cannabis use, despite the fact the driver’s doctor gave him a note stating he could operate machinery while using his prescription.
  • Insurers everywhere will be fine-tuning their policies. Following Oregon’s lead, more states are likely to push insurers to add explicit marijuana usage language to their policies. Those who do not risk being subject to bad faith claims, according to Jason M. Horst, an attorney based in San Francisco.


On High Alert

Despite the many unknowns, cannabis is a burgeoning industry. Used by nearly 55 million American adults, marijuana has officially gone mainstream. As a result, marijuana in now on the radars of employers and insurance companies everywhere. Complying with state and federal laws while serving the needs of their business is a balancing act employers must perform well or risk violating their employees’ rights.

That and a potentially costly lawsuit.

Robert Pizarro is an Assistant Vice President of Professional Lines Underwriting specializing in Management Liability and Professional Liability at AmTrust Financial Services, a multinational property and casualty insurer headquartered in New York City.
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