how will the legalization of marijuana affect your employment policies?

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How will the Legalizationof Marijuana Affect Your

Employment Policies?

RIMS 2014 Annual Conference, Denver, Colorado


Panelists• Ashley Kilroy, Executive Director of Marijuana

Policy, Mayor’s Office, City and County of Denver• Vance O. Knapp, partner, Labor and Employment

Law Department, Sherman & Howard L.L.C.• Bryan Molen, Vice President, Aon Risk Solutions• Jennifer Owens, CPC Liaison


Panelists (cont’d.)

• Kelly Rosenberg, Assistant Attorney General, Revenue & Utilities Section, Colorado Department of Law, Office of the Attorney General

• Ronald Thackery, Risk Manager, Senior Vice President, Professional Services, American Medical Response


What to Expect

• Background--how medical and recreational marijuana became legal in Colorado and the subsequent conflict with federal law

• Government’s Perspective--the City and County of Denver’s and the State of Colorado’s regulation and enforcement concerning medical and recreational marijuana


What to Expect (cont’d.)

• Risk Manager’s View--American Medical Response to the legalization of marijuana

• Insurers’ Perspective—Are insurers underwriting insurance for businesses engaged in marijuana activities or for employers that have lenient substance abuse policies?


• Legal Recommendations—How employers can deal with the legalization of marijuana and a discussion of recent and pending court cases

What to Expect (cont’d.)


Background

• In Colorado, Amendment 64 Legalized Recreational Marijuana.

— Marijuana can be obtained as easily as alcohol.— Allows individuals 21 or over to cultivate, possess, and

use limited amounts of marijuana without having to be certified as having a serious illness or debilitating health condition.


Marijuana is Still Illegal UnderFederal Law—or Is It?

• On August 29, 2013, The U.S. Department of Justice issued a memorandum to all U.S. attorneys updating its guidance on marijuana enforcement.

— The DOJ is deferring its right to challenge legalization efforts at this time.


Marijuana is Still Illegal Under Federal Law—or Is It? (cont’d.)

• “We’ve got bigger fish to fry,” responded President Obama to a question concerning prosecution of marijuana users posed by Barbara Walters on ABC’s “Good Morning America” on December 14, 2012.


Drug Free Workplace Act

• Applies to any organization that receives a Federal contract of at least $100,000 to establish a drug-free workplace

— It also requires that all organizations receiving Federal grants of any size establish and maintain such a policy

— Does not require employers to drug test employees


Federal Status

• Bottom Line—marijuana remains classified as a Schedule I narcotic under the Federal CSA

— Marijuana cultivation, distribution, possession, and use are still criminal acts under federal law.

— Marijuana is in the same category as Cocaine, Heroin, LSD, and Ecstasy.


City and County of Denver’s Responseto Legalization of Marijuana

• Regulation of Public Consumption of Marijuana• Regulation of medical and recreational marijuana

businesses


City and County of Denver’s Responseto Legalization of Marijuana (cont’d.)

• Tax revenue from medical and recreational marijuana sales

• Community outreach and education efforts• Tourism


Colorado Department of Revenue’s Marijuana Enforcement Division

• Revenue’s role – the Marijuana Enforcement Division is within the Enforcement line of business. It’s a blend of criminal and regulatory oversight:

— Criminal in that all investigators, background and field, are POST-certified peace officers.

— Regulatory in that they administer all aspects of the medical and retail marijuana codes and rules promulgated pursuant to both.


Colorado Department of Revenue’sMarijuana Enforcement Division (cont’d.)

• The Marijuana Enforcement Division regulates all marijuana businesses, owners, and employees. There are expansive licensing requirements for all licensees.

• Revenue has a broad set of rules that all marijuana businesses must follow, including mandatory tracking of all aspects of marijuana (“seed-to-sale”).


• Regulation of marijuana is similar to regulating any other goods—except for the fact that it is still illegal under federal law.

— For example, most federally insured financial institutions will not do business with marijuana-related businesses (which is primarily a cash only business).

— For the most part, marijuana is still illegal in Colorado, e.g., retail marijuana is completely illegal for those under 21, etc.

Colorado Department of Revenue’sMarijuana Enforcement Division (cont’d.)


Diversified geographic service Local, regional and national contracting Broad program offerings:

• Emergency 911 transport services• Non-emergent transport services• Managed transportation• Fixed-wing air ambulance• Disaster response

Nation’s largest paramedic training institute Strong research and extensive clinical database Contracting dynamics

• 168 "911" contracts and 3,375 non-emergency transport arrangements• Emergency 911 contracts are exclusive and awarded through RFP process with a rate

regulated by municipalities• Inter-facility contracts have limited price elasticity often aligned with Medicare allowable;

few exclusive contracts

• Exclusive national contract with FEMA

Leading national provider of medical transportation services

American Medical Response Overview


Substance Abuse Policy

•Employees are drug tested:

— Pre-hire

— Post-incident

— Reasonable suspicion

— Follow up

•Non – DOT regulated provider

•No policy change with legalization of medical or recreational marijuana

American Medical Response Overview (cont’d.)


Safety Sensitive Positions – AZ •Position designated by Employer as “Safety Sensitive”

— Good faith belief that position could affect safety or health of employees or others

•Operating vehicles, equipment, machinery, power tools•Maintenance, repair, monitoring equipment performance, malfunction, disruption•Duties performed in residential or commercial premises of a customer, supplier or vendor•Preparing or handling food or medicine•Any occupation regulated by Title 32

American Medical Response Overview (cont’d.)


How are Insurance Carriers Dealingwith the Legalization of Marijuana?

• Presently, there is no impact on coverage for General Liability, Workers Compensation, or Employer Liability insurance.

• Coverage is dependent upon the employer’s policy and procedure.

• An employer with a zero tolerance drug policy needs to ensure that it complies with the law in their respective jurisdictions.


How are Insurance Carriers Dealing with theLegalization of Marijuana? (cont’d.)

• If an employer’s substance abuse policy does not reference marijuana, it is up to the employer to enforce the policy.

• Insurance carriers will likely treat marijuana as a discretionary issue, similar to alcohol, as long as the employer is following its internal policies and procedures in accordance with applicable law in their respective jurisdictions.


• Employers should strongly consider having employer liability policies in place to address potential marijuana-related claims.

— If the policy does not exclude coverage for incidents/occurrences involving marijuana and the employer is following its policies and the law, the carrier will likely provide defense and coverage for damages.

How are Insurance Carriers Dealing with theLegalization of Marijuana? (cont’d.)


ADA Issues Involving Marijuana

• ADA does not require employers to accommodate the use of marijuana.— However, if an employee enters a substance abuse

program, employers have to accommodate the employee’s participation.

— ADA does not consider drug testing to be a medical examination.


Accommodation of Medical Marijuana

• Beware, some state anti-discrimination laws do not address marijuana use as an accommodation.— In states that have legalized marijuana, Plaintiff’s

counsel could argue that under state anti-discrimination laws, an employee’s use of marijuana to ameliorate the effects of a disability constitutes a reasonable accommodation.


Can I Regulate My Employees’Use of Marijuana?

• YES! — At a minimum, employers in all 50 states and

the District of Columbia can regulate an employee’s use of marijuana by:

– Prohibiting marijuana possession and use at work; and

– Prohibiting employees from reporting to work impaired or under the influence of marijuana.


• In Colorado, both Amendment 20 (medical marijuana) and Amendment 64 (recreational marijuana) provide that employers do not have to accommodate employees’ use of marijuana.

Can I Regulate My Employees’ Use of Marijuana? (cont’d.)



• Benoir v. Industrial Claims Appeals Office— Employee can be denied unemployment for testing

positive for marijuana in violation of employer’s zero tolerance drug policy

— Medical Marijuana Amendment only provides an affirmative defense to criminal prosecution


• Employers may restrict the use of marijuana by employees, but can employers prohibit the lawful off-duty and off-premises use?

— Does having a trace amount of THC in your body constitute use or possession at work?

— When is an employee “impaired” or “under the influence” of THC?

— Combating employees’ perceptions concerning their “constitutional right” to use marijuana versus reality



• Colorado’s Lawful Off-Duty Activities Statute, C.R.S. §24-34-402.5, makes it a discriminatory or unfair employment practice to terminate an employee who is engaged in lawful off-duty, off-premises activities.

— In Coats v. Dish Network, the Colorado Court of Appeals held that medical marijuana use is not lawful for purposes of Colorado’s Lawful Off-Duty Activities Statute. An appeal of this case is currently pending in the Colorado Supreme Court.



• The Colorado state legislature has passed a driving under the influence of marijuana bill.

— This bill sets the threshold for impairment at 5 nanograms of THC per milliliter of blood and allows defendants to argue at trial that they were not impaired.



Can I Still Have a Zero-Tolerance Drug Policy?

• Yes, but--“Damn lawyers! There is always a but!”— Marijuana is still illegal under federal law. You could

have a zero-tolerance policy for positive test results and the courts would probably uphold your right to terminate an employee for a positive test.

— However, the expense to defend a wrongful termination suit through the appeal process could easily cost $300,000 in legal fees and costs.


How Should I Address MarijuanaUse in My Employment Policies?

• Review your substance abuse policy to ensure its restrictions concerning marijuana use are consistent with the restrictions contained your respective jurisdiction.

— E.g., “Acme Company does not permit the possession, distribution, or use of illegal substances (including medical and recreational marijuana.)”

— Educate your employees, vendors, and customers about your substance abuse policy.


Policy OptionsZero Tolerance

v.Treating Marijuana Like Alcohol

v.No Testing

v.Reasonable Suspicion/Post Accident Testing

v. Random Testing


Questions, Final Comments and Contact Information


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