POT ON THE BALLOT COULD PUT EMPLOYER POLICIES OUT OF JOINT AND INTO THE COURTROOM

As this contentious presidential campaign season draws to a close on November 3, 2020, voters in five states also will be casting their ballots on legalization of marijuana. Arizona, Montana, New Jersey and South Dakota will decide whether to approve recreational marijuana, and Mississippi voters will choose whether to approve medical marijuana.

 

 However a recent federal court case in Pennsylvania, demonstrates the pitfalls and legal liabilities that employers can face in a state where marijuana is legal. In Hudnell v. Jefferson University Hospitals, Inc. (E.D. Pa. Sept. 25, 2020), a U.S. District Court allowed an employee fired for testing positive for marijuana to bring a lawsuit against her employer under Pennsylvania’s Medical Marijuana Act (“MMA”). 

 The plaintiff in the case, Donna Hudnell, was hired by Thomas Jefferson University Hospitals (“the Hospital”) as a security analyst in 2016. By 2018, she began experiencing severe back pain that limited her ability to work, walk and sleep. Recreational marijuana is illegal in Pennsylvania, but medical marijuana is legal under the state’s MMA. Patients prescribed medical marijuana are required to be certified by a physician and receive a medical marijuana card. Hudnell’s physician, who also worked at the Hospital, prescribed her medical marijuana to alleviate her back pain. However, her condition worsened and she was approved to work from home in May of 2019.

In October 2019, she asked to return to work and was required under the Hospital’s policies to take a drug test, because she had been out for more than 90 days. She gave the testing nurse copies of all her prescriptions, including her medical marijuana card. The nurse informed Hudnell that the card had expired in August. Hudnell responded she had renewed her card in August but her appointment with her physician for recertification was scheduled for five days later. Her physician at the Hospital re-certified her at that time.

However, the hospital subsequently terminated her under their drug testing policy, because at the time she was tested, and was positive for marijuana use, she did not have a valid and certified medical marijuana card. 

She subsequently sued the Hospital under Title VII of the Civil Rights of 1964, Pennsylvania’s Human Relations Act, and also alleged a claim under Pennsylvania’s MMA. Written into the MMA is a provision that “[n]o employer may discharge, threaten, refuse to hire or otherwise discriminate or retaliate against an employee regarding an employee’s compensation, terms, conditions, location or privileges solely on the basis of such employee’s status as an individual who is certified to use medical marijuana.” 

In regard to Hudnell’s MMA claim, the Hospital asked the court to dismiss the claim on the basis that the MMA did not explicitly provide a private cause of action allowing an employee to file a lawsuit. The Hospital also argued the statute did not apply to her because she did not have a valid medical marijuana card when tested.

 

In ruling against the Hospital and finding Hudnell had a right to sue under the MMA, the federal court determined that there was an implied right of action because, without one, the anti-discrimination provision would have no practical effect, and allowed Hudnell’s litigation against the Hospital to proceed.

The lesson for employers in states that legalize marijuana, is that the language of these statutes can vary widely as to the protections afforded to employees, and employers may have to adjust their policies to comply, including reasonable accommodation under the Americans with Disabilities Act.  Employers may also need to reexamine their drug testing policies and also address safety and discipline issues in regard to employees being under the influence in the workplace.

SUPREME COURT PASSES ON FINDING A "MARIJUANA EXCEPTION" TO THE FLSA

A Colorado employer’s hope of avoiding an employee’s collective action under the Fair Labor Standards Act (“FLSA”) has gone up in smoke at the United States Supreme Court.

The Justices declined to hear the employer’s argument that it should not have to comply with the federal wage and hour law because it was engaged in Colorado’s legal marijuana industry, which remains illegal under federal law.

The case involves Helix TSC, Inc. (“Helix”), which provides armed security guards, inventory control, and compliance services to the state-sanctioned marijuana industry in Colorado. The named Plaintiff, Robert Kenney, worked as a security guard for Helix, and filed suit claiming that the company misclassified him and other employees as exempt, and failed to pay overtime when they worked more than 40 hours in a work week.

In the trial court, Helix filed a Motion to Dismiss on the basis that the federal District Court lacked jurisdiction. Helix argued that because Kenney was employed in the marijuana industry, which is an industry "entirely forbidden" by the Federal Controlled Substances Act, Kenney was not entitled to the protections of the FLSA, and thus, the Court does not have subject matter jurisdiction over Plaintiff's claim. According to Helix, "[t]he protections of federal law ... are simply unavailable to an individual or business choosing to participate in an industry that is criminalized under federal law."

In the District Court’s Opinion denying Helix’s Motion, the Court held that the law was clear that “that employers are not excused from complying with federal laws, such as the FLSA, just because their business practices may violate federal law” and gave the example of finding FLSA violations where an employer employed illegal immigrants, which also was in violation of federal law. Helix then appealed the ruling to the U.S. Court of Appeals for the 10th Circuit.

 The 10th Circuit’s Opinion affirmed the District Court’s decision, and rejected Helix’s “illegality defense”, noting that “just because an Employer is violating one federal law, does not give it license to violate another.”

In its petition to the United States Supreme Court for a writ of certiorari, Helix argued that "the Tenth Circuit's decision confers the same rights on a mule trafficking methamphetamine for a cartel in Oklahoma as it does on a driver ferrying marijuana through the streets of Denver."

However, the Supreme Court was not convinced, and its October 5, 2020 denial of Helix's petition returns the case back to the District Court where Helix will have to defend against Kenney’s claims that he and other similarly situated employees were wrongly treated as exempt under the FLSA and not properly paid overtime.