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Small and middle-size employers are generally feeling optimistic about 2015 and many are looking toward hiring. But the hiring process brings up the issue of employer drug testing, which has only become more complicated in the last year with widespread state-by-state legalization of medical marijuana.

All eyes have turned to the Colorado Supreme Court’s decision in Coats v. Dish Network, which is expected in the very near future. Medical use of marijuana is protected by the Colorado Constitution. Colorado has also adopted a Lawful Off-Duty Activities Statute, which prohibits employers from discriminating against or terminating employees for engaging in legal off-duty conduct. The case turns on whether actions that are illegal under federal law can be lawful within the meaning of the state statute.

California and New York have similar off duty activities laws. They are actually fairly common throughout the states, having been originally enacted to protect the rights of tobacco smokers. These laws may become the center of controversy in those states, as well.

What does this mean for employer drug testing programs. Is random drug testing no longer a useful tool for employers who legitimately want to guard against the risks posed by intoxicated employees? Are employers in danger of running afoul of discrimination laws? Are employees being asked to choose between effective medication and employment?

Coats v. Dish Network

Brandon Coates is a quadriplegic with a medical marijuana card. He takes marijuana at home at night to control spasms in his limbs. Until 2010, he worked full-time at Colorado-based DISH Network as a telephone customer service representative, where he pushed a button to answer customer telephone calls. He lost his job because he failed a random drug screen, even though he had had satisfactory performance reviews and there were no allegations that he was high or that he used marijuana at work.  The sole reason for his termination was the violation of DISH’s zero tolerance policy, as evidenced by the drugs in his system.

He sued DISH. The trial court dismissed the complaint ruling the Colorado Constitution did not protect his right to use medical marijuana but only protected him from criminal prosecution. It effectively interpreted the law as merely decriminalizing rather than legalizing medical use. In 2013, the Colorado Court of Appeals upheld the trial court’s decision. The Colorado Supreme Court heard oral arguments in September 2014 and is expected to hand down a decision very shortly.

From a legal perspective, it is an intriguing federalism issue. This is the kind of puzzle lawyers love, but clients hate. The conflict between state and federal laws will have to be resolved at some point, even if not in this case. Employees would be happy to  have employment discrimination and privacy protections strengthened. Employers just need to know under what circumstances they can drug test employees and how they can act on the results of those tests.

California’s Compassionate Use Act

California first established a medical marijuana program 1996. The Compassionate Use Act permits qualified patients and caregivers to possess up to 8 ounces of marijuana, as long as they possess a state-issued identification card. It exempts patients and caregivers from criminal prosecution and protects physicians who recommend the drug. It expressly does not supersede prohibitions of conduct endangering others, drugged driving, for instance, or permit diversion of the drug.

California’s Lawful Off-Duty Conduct Statute

California Labor Code section 96(k) authorizes the Labor Commissioner to act on an employee’s claims for loss of wages because of demotion, suspension or discharge for lawful conduct occurring during non-working hours away from the employer’s premises. It has been used in fraternization and moonlighting cases but not yet in situations involving drug testing.  An employer may be faced with a Labor Commissioner claim if it appears that the employer acted solely on the basis of the employee’s legal off-duty behavior. Before taking any adverse action, an employer should therefore consider factors such as:

  • Whether the conduct occurred on company property or involved company equipment,
  • Whether the activity created a conflict of interest,
  • Whether it impacted company morale, productivity or reputation, and
  • Whether it was a first offense.

These factors suggest, at the very least, that the employer must establish a strong connection between the off-duty conduct and the employee’s job.  In California, this may limit drug screening and employment termination to situations where the employer has reason to suspect that the employee is impaired on the job.

Employment Discrimination and Privacy Grounds in California

The seminal case in this area, Ross v. RagingWire Telecommunications, inc., was brought by a probationary employee, on the basis of the disability accommodation requirements of California’s Fair Housing and Employment Act and the California Constitution’s guarantee of a right of privacy. Gary Ross’s offer of employment was withdrawn after he failed a drug screen on the basis of authorized medical marijuana use.

In 2008, the California Supreme Court held that California law does not prohibit an employer from refusing to employ a medical marijuana user even if his marijuana use is permitted under California law. The reasoning used by the court makes the distinction between legalization and protection from criminal prosecution, much as the Coates court has.

The limits on employee drug testing in California seem to arise from the lawful off-duty conduct statute, rather than from the prohibitions against employment discrimination and invasion of privacy.

New York’s Compassionate Care Act

New York’s medical marijuana law was enacted in June 2014, and has not yet been fully implemented. A patient with a medical marijuana card may be treated for specified conditions on the recommendation of a certified physician. Because the law is so new, cases dealing with drug testing of workers and job applicants who use medical marijuana have not yet had time to appear.

New York’s Lawful Activities Statute

When they do, however, New York's Legal Activities law is certain to be at the center of things. Labor Code Section 201-4 makes it unlawful for an employer to make hiring or firing decisions because of an individual’s legal use of consumable products or legal "recreational activities" outside of work hours, off of the employer’s premises, and without use of the employer’s equipment or other property.

The law protects employers who act on reasonable interpretations of the law if the employees’ actions are deemed to constitute habitually poor performance, incompetency or misconduct.  It does not permit the employer to act on the basis of the employee’s romantic relationships, extramarital affairs or political activities.

The mention of “consumable products” would seem to strengthen the case for employees and job applicants, but when challenges arise, as they are nearly certain to do, the construction of the term “legal use” is likely to be key as it is under Colorado law.

New York Disability Discrimination Law

The New York State Human Rights Law and various local human rights laws prohibit discrimination against job applicants and employees. The protections are somewhat broader than those of federal law. It is clear, however, that illegal drug users are not protected under its provisions. However, no authority exists with respect to use that is legal under state law but not federal law.

New York Drug Testing

New York is somewhat unusual in that it has no law regulating or limiting the drug testing of employees in private employment, so claims relating to employment drug testing would probably have to be framed in terms of disability discrimination or privacy invasion. Employers must, however, have a written policy that communicated to employees and describes the testing program.

New York employers can apparently continue with drug testing of job applicants and employees, and employees may be asked to submit to random testing as well as testing based on cause, as long as proper written notification is provided.

The Coates case is being closely watched by employers who need guidance about the limits of employee drug testing and employees who need to know whether decisions about medication may cost them their livelihood. Resolving this dilemma through the state court systems may simply take too long.

The better solution may be legislative. Arizona and Delaware, for example, have enacted laws that make it clear that an employer may not discriminate against a registered and qualifying patient who has failed a drug test for marijuana metabolites or components. Both states make an exception if the patient  “used, possessed or was impaired by marijuana on the premises of the place of employment or during the hours of employment” or if failing to do so would jeopardize an employer’s license under federal law.

In most of these situations, it is the issue of impairment that is dispositive. Impairment is also very difficult to measure, subjective, and not necessarily related to any socially disapproved of cause. Coworkers who fall suddenly, madly in love can be pretty useless.

Employers certainly have a legitimate interest in productive workers who are not likely to endanger or offend customers, fellow employees or anyone else. Nonetheless, employees should have the right to expect that medical decisions that do not affect work performance will not cause them to lose their jobs. Now that hiring is beginning to pick up, it is important to resolve these issues as soon as possible.

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