How Does the Legalization of Marijuana Affect Your Workplace Drug Policy?

Since the legalization of marijuana in Colorado for medical and recreational use, businesses and employees in the state who questioned how the new laws might impact their workplace drug policies have faced heightened uncertainty. In large part, this uncertainty stemmed from questions of whether, and if so, how the new laws might affect employer and employee rights with respect to Colorado’s lawful activities statute. Broadly, the Colorado lawful activities statute prohibits businesses from firing employees for engaging in lawful activities off the business premises during nonworking hours, with several exceptions. Thus, the question became: “If marijuana is legal in Colorado, can a business with a drug policy that prohibits marijuana use terminate an employee for using marijuana away from the business premises during non-working hours, even if such use did not impact the employee’s job performance, without violating the Colorado lawful activities statute?”

In the summer of 2015, the Colorado Supreme Court answered that question unanimously with a “Yes” in Coats v. Dish Network. Brandon Coats is a 34 year old quadriplegic who worked for Dish Network as a telephone customer service representative from 2007 to 2010. In 2009, Mr. Coats “registered for and obtained a state-issued license to use medical marijuana to treat painful muscle spasms caused by his quadriplegia,” and thereafter used medical marijuana “at home, after work, and in accordance with his license and Colorado state law.” In May 2010, Mr. Coats tested positive for THC, a component of medical marijuana, during a random drug test at his work, and was subsequently fired by Dish Network for violating the company’s “zero-tolerance” drug policy. Mr. Coats then filed an employment discrimination action, alleging that Dish Network’s termination of his employment violated the state’s lawful activities statute. The Colorado Supreme Court, however, agreed with Dish Network’s position, holding that employees who engage in an activity such as medical marijuana use that is permitted by state law but unlawful under federal law are not protected by the Colorado lawful activities statute.

The reason – although marijuana use is now legal under Colorado law, it remains illegal under Federal law; thus, the lawful activities statute does not protect employees who legally use marijuana in Colorado because such use is not “lawful” under Federal law. While this may seem confusing, the consequences are, for the most part, quite simple – businesses with drug policies that prohibit marijuana use may continue to enforce those polices without fear of violating the lawful activities statute.

Still, the issue is not without its complications. For instance, employers must be cautious to ensure that their drug testing policies and practices do not conflict with federal and state anti-discrimination laws, and to ensure that adverse employment consequences are applied in a non-discriminatory manner when employees violate such policies.

Additionally, in light of a recent survey published by the Colorado Department of Public Health & Environment in which nearly 20% of adults living in Denver and Boulder reported using marijuana at least once in the past 30 days, some employers may need to consider the affect that a “zero-tolerance” drug policy might have on their workforce, and the costs associated therewith, before implementing such a policy.

For more information and to learn how our experienced attorneys can advise your business, please contact Miller & Steiert, PC to schedule a consultation.

i. See § 24-34-402.5, C.R.S. “(1) It shall be a discriminatory or unfair employment practice for an employer to terminate the employment of any employee due to that employee’s engaging in any lawful activity off the premises of the employer during nonworking hours unless such a restriction: (a) Relates to a bona fide occupational requirement or is reasonably and rationally related to the employment activities and responsibilities of a particular employee or a particular group of employees, rather than to all employees of the employer; or (b) Is necessary to avoid a conflict of interest with any responsibilities to the employer or the appearance of such a conflict of interest….”

ii. Coats v. Dish Network, LLC, 350 P.3d 849 (Colo. 2015).

iii. Coats v. Dish Network, LLC, 350 P.3d 849, 850 (Colo. 2015).


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