Hunton Employment & Labor Perspectives

As we previously discussed, employers continue to grapple with the workplace effect of medical marijuana laws (enacted in twenty-three states and the District of Columbia), as well as the recreational marijuana laws of Colorado, Washington, Oregon and Alaska. Notwithstanding these laws, marijuana remains illegal under the federal Controlled Substances Act, and all courts to have addressed the issue thus far have held that employers may continue to insist on a drug-free workplace, conduct drug tests, and take adverse employment action based on positive drug tests. 

Unresolved until this month, however, was the effect of Colorado’s Lawful Off-Duty Activities Statute,” C.R.S. §24-34-402.5, which prohibits discrimination against employees based on their lawful conduct outside the workplace. On June 15, 2015, the Colorado Supreme Court came down firmly on the side of employers in a long-awaited decision in Coats v. Dish Network, L.L.C., 2015 CO 44, No. 13SC394, in which it held that the statute’s protections do not extend to any type of marijuana use, because all such activity is prohibited under federal law.

The Coats case lingered at the state supreme court level for two years prior to this ruling. Brandon Coats, a quadriplegic, has been confined to a wheelchair since he was a teenager.  In 2009, he obtained a state-issued license to use medical marijuana to treat painful muscle spasms caused by his quadriplegia. This condition is known to be controlled by THC, a component of marijuana, and in fact several medical marijuana statutes identify the condition as one that the law is designed to ameliorate. Mr. Coats consumed marijuana only at home, and alleged he never was under the influence of marijuana at work. For three years, he satisfactorily performed his job at Dish Network as a telephone customer service representative.  He was discharged only because he tested positive for THC in a random drug test.

The Colorado “lawful activities” statute provides, “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.”  C.R.S. § 24-34-402.5(1). The word “lawful” is not defined.  Both the Colorado Court of Appeals and the state Supreme Court refused to extend the protections of the statute to activity prohibited by federal law, albeit permitted by state law. The former held, “while we agree that the general purpose of section 24-34-402.5 is to keep an employer’s proverbial nose out of an employee’s off-site off-hours business … we can find no legislative intent to extend employment protection to those engaged in activities that violate federal law.”  Coats v. Dish Network, L.L.C., 303 P.3d 147, 151 (2013).  The Colorado Supreme Court likewise declined to “engraft a state law limitation” onto the statutory language.

The legal analysis in Coats might also have been different had the same case arisen in Delaware, Arizona or Minnesota, where the medical marijuana statutes provide that a positive cannabis result cannot automatically be grounds for an adverse employment action. In the ensuing individualized inquiry, Dish Network would have been required to articulate a job-related reason why Mr. Coats could not remain in his position.

In addition, although not raised in Coats, employers should be aware of and consider potential allegations of disability discrimination in a situation like this.  Mr. Coats could have alleged that, by discharging him, Dish Network failed both to engage in an interactive process and to accommodate his disability.  The legal issue before the court would have been whether or not Coats’ state-licensed, off-duty medical marijuana use created an undue burden to Dish Network, or a direct threat to other employees. The court would have been required to balance the ADA’s broad remedial purposes with federal anti-drug policies. 

Absent such considerations, however, the Coats decision brings additional clarity and support to employers who wish to strictly enforce drug-free workplace policies.