Employer Liability Issues

Changing Marijuana Laws and Effective Drug Testing PolicyAlthough marijuana is classified as an illegal drug under federal law, a majority of states have now legalized its use in one form or another. This rapidly evolving legal landscape presents new challenges for employers, particularly those with offices and employees in several states. Employers must balance complying with often divergent federal and state laws, maintaining a safe work environment, and protecting employees’ rights. Although difficult at times, there are steps employers can take to help successfully navigate this legal minefield.

Maintain a Safe Workplace

Workplace accidents can have significant effects on multiple areas of a business, including insurance costs, personal injury claims, third-party claims, and employee satisfaction and productivity. An employee’s impairment from drugs or alcohol can seriously increase the risk of injury to persons and damage to property. Accordingly, most employers have zero-tolerance policies that ban the use of alcohol and illegal substances. Although zero-tolerance policies typically permit an employee to avoid adverse employment actions by disclosing the use of prescription drugs prior to a positive drug test, these policies otherwise prohibit the off-site consumption of alcohol or drugs that will result in a positive test. The legalization of medical marijuana in a number of states has made maintaining a zero-tolerance policy more difficult.

In some states, employers must accommodate an employee’s use of medical marijuana. For example, in Noffsinger v. SSC Niantic Operating Co., LLC, a Connecticut federal court held that a federal contractor could not enforce its zero-tolerance drug policy against a medical marijuana user. Similarly, Oklahoma law prohibits employers from discriminating or punishing an employee based on the employee’s status as a medical marijuana card holder or a positive drug test for marijuana or its components unless the employer would lose a benefit under federal law or regulations. Although these statutes do not prohibit employers from disciplining employees who consume marijuana, or are under its influence, while on the job, it may be difficult to determine when an employee is actually impaired and a drug test is warranted. This difficulty can give rise to liability for discriminatory drug testing or wrongful employment actions in instances where a contractor is mistaken.

Other states that have legalized medical marijuana do not require accommodation of employees’ use. In California, for example, an employer can dismiss an employee who tests positive for marijuana and its components. Likewise, under Ohio law, employers are not prohibited from refusing to hire, discharging, or disciplining a person because of the use or possession of medical marijuana, nor are they prohibited from establishing and enforcing a zero-tolerance drug policy.

Between these two ends of the accommodation spectrum, a number of states’ laws provide for varying levels of accommodation for employees’ medical marijuana use. In Illinois, for example, employers are prohibited from discriminating against employees and job applicants who qualify as a medical marijuana patient unless the accommodation would result in the violation of a federal law or the loss of a federal benefit. Nonetheless, Illinois employers may still impose reasonable limitations on the consumption of medical marijuana and enforce zero-tolerance and drug-free workplace policies as long the policies are applied in a non-discriminatory manner. Other states, such as Delaware, Nevada, New York, and West Virginia, have similarly varied degrees of required accommodation.

To help navigate these nuanced laws, employers, especially those with a multi-state footprint, should develop a well-defined drug policy and administer a drug testing program in a non-discriminatory manner.

Develop a Well-Defined Drug Policy

Developing a well-defined company policy on marijuana use can minimize the risk of harm to persons and property, and decrease the likelihood that drug testing and disciplinary action arising from marijuana intoxication will open the door to liability for adverse employment decisions. At a minimum, employers should ensure that a company drug policy:

  • Defines the terms “marijuana,” “cannabis,” or any other derivation of the drug. Simply prohibiting the use of “illegal drugs” can create ambiguity because of marijuana’s legal status in various jurisdictions.
  • Indicates that the use of marijuana, whether recreationally or on the job, is strictly prohibited.
  • Articulates drug testing policies and procedures (including penalties for failing a drug test).
  • Educates employees on clinical issues relating to marijuana, such as its effects on the body, the length of time it can continue to impair cognitive and physiological functions, and the potential impacts on workplace safety and performance.
  • Is included in recruiting and new-hire onboarding materials to ensure notice to the individual.

Consistently Administer a Drug Testing Program

Once an employer adopts a drug policy, it is critical that drug tests are conducted uniformly for all employees. Failure to do so can subject an employer to liability for discrimination claims that arise from adverse employment actions.

If an employee tests positive for marijuana, the recourse available to an employer can vary greatly under federal and state laws. For example, the Americans with Disabilities Act (ADA) currently does not shield an employee from adverse employment actions for using marijuana to treat a disability, even if the employee refrains from using medical marijuana while on the job. The ADA exempts from its scope the “illegal use of drugs” and defines that term to include any substances that are unlawful under the Controlled Substances Act, which currently lists “marijuana” as a banned substance. As a result, at least under the ADA, employers can terminate an employee who tests positive for marijuana, even if that employee is disabled, prescribed medical marijuana, and only uses marijuana on his or her own time. Note, however, that under the ADA, if an employee discloses a disability and requests an accommodation, an employer is required to consider reasonable accommodations, which could include transfer to a non-safety sensitive job (where the marijuana use may not pose a safety concern) or temporary leave during treatment.

By contrast, as discussed above, some states require an employer to accommodate an employee’s use of medical marijuana and prohibit an employer from terminating an employee for a failed drug test for marijuana use. Employers should be mindful of the potential for conflict between their own drug testing policies and requirements mandated by federal or state laws. If there are questions as to what actions an employer can take against an employee for failing a drug test, the advice of legal counsel should be sought.

The Measure of Success

An effective drug policy decreases hazards and promotes an accident-free work environment. While state and federal laws meant to promote this goal may seem straight forward when read in isolation, problems arise when these laws overlap or conflict with one another. The growing number of states legalizing marijuana use, and the nuanced differences between laws, will only amplify this problem. Although all employers need to implement well-defined policies and procedures, it is particularly important that those employers operating in any of the 30 plus states in which marijuana is now legal in some form take time to review current policies and evaluate the need for changes to ensure employee safety and reduce company risk. If you have questions about this rapidly changing legal issue, you should contact an attorney with experience in this emerging area of the law.

Update: Soup, Salvation and Overtime – Sixth Circuit Reverses $400,000 FLSA VerdictApparently if you are doing the Lord’s work and seek only treasures in heaven, the Fair Labor Standards Act will not guarantee that you receive an earthly reward as well. In a significant ruling that impacts religious organizations, the Sixth Circuit reversed a nearly $400,000 FLSA verdict based on the fact that the volunteers did not expect payment.

We previously described how Cathedral Buffet and Rev. Ernest Angley cast a wing and prayer to the Sixth Circuit to undo the district court’s verdict. In that order, the district court ruled in favor of the Department of Labor finding that unpaid volunteers were employees entitled to wages.

The Sixth Circuit, however, threw the reverend manna from heaven when it found the district court’s logic wanting. The volunteers at Cathedral Buffet did not expect to receive compensation – a threshold requirement for any FLSA claim — according to the appellate court. Although the common “economic realities” inquiry is used to analyze whether the person was an actual employee entitled to compensation, the court emphasized that binding law “plainly requires us to first ask whether Cathedral Buffet’s volunteers worked in ‘expectation of compensation.’ They did not.” The court went on to chronicle that the volunteers did not expect or receive any wages or in-kind benefits, and were not even allowed to accept tips. The district court had reached a different conclusion on the volunteers’ expectations.

The appellate court also found — in stark contrast to the district court — that there was not a sufficient showing of economic coercion by Cathedral Buffet to warrant FLSA protection. While circumstances can establish that an organization coerced a volunteer to not expect compensation, the court found that was not the case here as the “type of coercion with which the FLSA is concerned is economic in nature, not societal or spiritual.”

Religious and volunteer-based organizations should take special note, and evaluate what their volunteers/employees expect regarding being financially compensated. “[A]lthough the FLSA might aim to curb the societal ills caused by low wages, it does so through a comprehensive system of economic regulations. The Act does not go so far as to regulate when, where, and how a person may volunteer her time to her church. After all, the giving of one’s time and money through religious obligation is a common tenet of many faiths.”

Unless you have been living in a cave for the last month, you have heard about the sexual misconduct allegations against Hollywood mogul Harvey Weinstein. The story has all of the makings of a Hollywood blockbuster, except this time it’s not a movie. Here’s why it should also raise the curtain for employers outside of Tinseltown.

Why the Harvey Weinstein Scandal Should Scare the Pants Off EmployersRising Tide of Allegations Will Result in Increased Scrutiny

The Weinstein allegations have triggered an avalanche of claims against Hollywood stars, celebrity chefs, executives and politicians unlike anything in recent memory. The EEOC has weighed in with renewed interest in harassment claims, seizing upon an opportunity to publicize the issue. Those who use their workplace positions to make unwelcome sexual advances deserve to be called out for their misconduct. To be clear, this post is not for them. However, the sheer number of allegations regarding misconduct that occurred years ago and were never reported poses a real problem for conscientious employers. What does this mean for employers who face fallout for this kind of misconduct?

First, employers will have to deal with increased administrative interest. Undoubtedly, the EEOC will more carefully scrutinize claims of harassment and increase litigation efforts against companies alleged to harbor harassers, especially in the C-suite. Second, litigation could get tougher. Juries and courts may be more inclined to believe that alleged harassment occurred and to disbelieve denials by an accused executive and by extension his or her employer. In short, we will likely see an increase in claims, so what can employers do?

An Ounce of Prevention

You have heard it before but it bears repeating. While employers can’t stop employees from acting badly, they can take steps to try to prevent bad conduct and to properly address it when brought to their attention.

  • Review your policies. Any employer reading this almost certainly has a policy against harassment or discrimination, but far too often we see employers with cut and paste policies gleaned from another company or pulled off the internet that don’t really align with their workplace. You need clear, well-thought-out policies that your employees understand. Be sure the policy explains what harassment is and encourages people to report it.
  • Identify the right person to receive complaints. A policy merely advising employees to report harassment to their immediate supervisor, who has little or no training in how to identify or address harassment, often proves of limited help. Think about who is best to receive allegations about harassment and to properly address them and draft your policy to match. Clear policies with carefully crafted reporting procedures (perhaps supplemented with a third-party hotline option) can help.
  • Distribute the policy. A policy buried in a handbook, with no stand-alone employee acknowledgment, can be portrayed as mere words on the page with no real meaning. Worse still, employees may claim (sometimes truthfully) that they never received or read it. A policy given to employees and acknowledged in writing is critical.
  • Training, training, and more training. The again obvious, but often overlooked or sporadically implemented, additional step is education and training. For those of you in states that require annual training, make sure you do it and document it. For the rest of the country, have annual training of management in EEOC matters and trends. Add training of HR staff in how to identify, investigate and address allegations. Make sure your supervisors can identify harassment and know what to do when they see it or get a complaint. Educate employees in the company’s reporting procedures and make sure they understand that the company will not tolerate retaliation for a complaint. Finally, implement the training in a manner that avoids the holes created by employee and supervisory turnover.

Again, all of this sounds obvious but it can mean the difference between preventing harassment in your workplace and being found liable for the bad acts of people who you thought knew better.