Court: Employers can fire workers for using marijuana

In past columns, I have chronicled banking-related difficulties faced by individuals and businesses trying to navigate the murky waters between Colorado’s legalization of marijuana use and the federal laws that continue to prohibit such use. On June 15, the Colorado Supreme Court added another area to the list of subjects where the federal prohibition on marijuana use has limited the effectiveness of Colorado’s legalization. Rather than effects on banking, the court’s decision in Coats v. Dish Network instead has substantial implications for employer-employee relationships in Colorado.

Among Colorado’s employment-related laws is Section 24-34-402.5 of the Colorado Revised Statutes, titled “Unlawful prohibition of legal activities as a condition of employment.” That section reads, in pertinent part, as follows: “(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.” That statute is intended to prohibit employers from firing employees who participate in lawful activities outside of work hours when those lawful activities have no rational relation to the employee’s job.

In cases that arise under this statute, courts must answer two questions: (1) Was the terminated employee engaging in lawful activity off the premises of the employer during nonworking hours?; and (2) If the answer to question (1) is “yes,” then (a) does the employer nonetheless have a bona fide reason why a prohibition on any such lawful activity is a rational occupational requirement or (b) is such a prohibition necessary to avoid a conflict of interest? If the answer to the first question is “no” then no further analysis under this statute is needed.

In the Coats case, the Colorado Supreme Court was faced with the issue of whether Dish Network, an employer with a zero-tolerance drug testing policy, could lawfully terminate Coats for his use of marijuana at home outside of work hours where Coats held a state license for the use of medical marijuana. In 2009, Coats, a quadriplegic, obtained a Colorado medical-marijuana license for treatment of pain related to muscle spasms associated with his quadriplegia. He had been employed by Dish, a company with a strict drug policy, since 2007. In May 2010, Coats took a random drug test in which he tested positive for THC, the active ingredient in marijuana, and was fired from his position at Dish as a phone customer-service representative.

In his claim against Dish, Coats argued that he had been fired for participating in lawful activity (smoking marijuana pursuant to his state-issued medical-marijuana license) outside of work hours. Dish argued that, notwithstanding the fact that the use of medical marijuana was lawful under Colorado state law, such marijuana use was still unlawful according to federal law as set forth in the federal Controlled Substances Act, and thus Coats was not protected by the Colorado statute. In its opinion, the court acknowledged that the CSA “lists marijuana as a Schedule I substance, meaning federal law designates it as having no medical accepted use, a high risk of abuse, and a lack of accepted safety for use under medical supervision.”

While the Justice Department under President Obama’s administration is not pursuing Colorado residents for their use of medical marijuana because such use is permitted by state law, any such marijuana use continues to constitute a violation of federal law under the CSA. The Colorado Supreme Court, in its decision in favor of Dish and against Coats, ruled that the phrase “engaging in lawful activity” must take into account both state law and federal law. Accordingly, Dish’s firing of Coats under its no-tolerance drug policy was not prohibited by Colorado’s “lawful activities” statute.

The court’s decision in the Coats case is of considerable importance both to the many employers who have no-tolerance drug use policies and to the many employees in Colorado who take advantage of the state’s legalization of marijuana use both for medical and recreational purposes. Employers may retain such policies, and employees must be aware that their use of marijuana outside of work, while lawful under state law, may still have severe work-related consequences depending on the policies of their employer.

Daniel W. Jones, an attorney for Coan, Payton & Payne LLC at the Greeley office, can be reached at djones@cp2law.com or 970-339-3500.

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