Colorado Court of Appeals Issues Employer-Friendly Decision in Medical Marijuana Case

The Colorado Court of Appeals recently issued an important decision that sheds some light on the murky intersection between medical marijuana use and employment law. Colorado first passed amendments to the state Constitution in 2000, protecting medical marijuana users from criminal prosecution. In 2009, U.S. Attorney General Eric Holder said the Drug Enforcement Agency (DEA) would end raids on state-approved marijuana dispensaries. Since then, the number of dispensaries and individuals seeking medical marijuana in Colorado exploded. Employers have been left in the dark regarding what to do with employees holding medical marijuana cards and how to handle employees’ use of medical marijuana. Although Beinor deals with the denial of unemployment compensation benefits, it is the first case reviewed by an appellate court in Colorado regarding medical marijuana in the employment context, and provides a favorable result for employers. Beinor v. Industrial Claim Appeals Office, No. 10CA1685, Colorado Court of Appeals (August 18, 2011).

Factual Background

Jason Beinor was employed by Service Group, Inc. (SGI) as an operator assigned to sweep the 16th Street Mall in Denver with a broom and dustpan. SGI fired Beinor in February 2010 for violating the company’s zero-tolerance drug policy after he tested positive for marijuana in a random drug test. The company’s policy states:

If an employee is substance tested for any reason . . . and the results of the screening are positive for . . . illegal drugs, the employee will be terminated.

Beinor claimed that he obtained and used the marijuana for severe headaches, as recommended by his physician. After Beinor was terminated, he applied for unemployment benefits. SGI contested his claim for benefits and they went to a hearing. The hearing officer granted Beinor unemployment compensation benefits and SGI appealed.

On appeal, the Industrial Claim Appeals Office (ICAO) disqualified Beinor for having “not medically prescribed controlled substances” present in his system during working hours. Beinor appealed the ICAO decision and argued that he was entitled to benefits because he obtained and used marijuana legally under the Colorado Constitution for a medically-documented purpose, thereby entitling him to use of the drug.

The Colorado Court of Appeals affirmed the ICAO’s denial of benefits and concluded that, although the Colorado Constitution may preclude a claimant from being criminally prosecuted for using marijuana for medical purposes, “it does not preclude him from being denied unemployment benefits based on a separation from employment for testing positive for marijuana in violation of an employer’s express zero-tolerance drug policy.”

Colorado Constitution

Article XVIII § 14(2)(b) of the Colorado Constitution states, in pertinent part:

[I]t shall be an exception from the state’s criminal laws for any patient or primary care-giver in lawful possession of a registry identification card to engage or assist in the medical use of marijuana, except as otherwise provided in subsections (5) and (8) of this section.

Colo. Const. art. XVIII § 14(2)(b).

The amendment also specifies:

A patient may engage in the medical use of marijuana, with no more marijuana than is medically necessary to address a debilitating medical condition. A patient’s use of marijuana, within the following limits, is lawful:

(I)     No more than two ounces of a usable form of marijuana; and

(II)     No more than six marijuana plants, with three or fewer being mature, flowering plants that are producing a usable form of marijuana.

Colo. Const. art. XVIII § 14(4)(a).

Legal Analysis

Beinor argued that the ICAO erred in disqualifying him from receiving unemployment benefits because the Colorado Constitution protects his medical marijuana use. He also asserted that the ICAO should have recognized that his employer’s categorization of marijuana with other more harmful illegal drugs is inappropriate and “prejudicial” because marijuana can remain in an individual’s system for several days after its use and long after it has lost its influence.

Colorado’s unemployment compensation laws provide that an employer shall not be charged for unemployment benefits when it has a previously established written drug policy and terminates an employee as a result of a drug test showing the presence of a “not medically prescribed controlled substance” in that employee’s system. “Controlled substance” is defined in relevant part as “a drug, substance, or immediate precursor . . . including cocaine, marijuana, [and] marijuana concentrate.” The court found that the Colorado Constitution does not allow for a physician to “prescribe” medical marijuana.  Instead, a physician only certifies that an individual would benefit from medical use of the drug. The court determined that the medical use of marijuana by an employee possessing a registry card is not pursuant to a prescription, and therefore does not constitute the use of a “medically prescribed controlled substance” within the meaning of C.R.S. § 8-73-108(5)(e)(IX.5). Accordingly, the court determined that “the presence of medical marijuana in an individual’s system during working hours is a ground for a disqualification from unemployment benefits.”

According to the majority, the constitutional amendment “was not intended to create an unfettered right to medical use of marijuana” or “to violate employers’ policies and practices regarding use of controlled substances.” Instead, it specifically provides that “[n]othing in this section shall require any employer to accommodate the medical use of marijuana in any work place.”

What’s Next

Issues involving medical marijuana in the workplace continue to raise questions for employers and human resources professionals in Colorado. It should be noted that the Beinor court split its decision, 2-1, with Judge Richard Gabriel finding that Beinor’s use of marijuana to treat his medical condition protected him from discharge for violating his employer’s established zero-tolerance drug policy.

The fact that this case was a split decision shows that there is a lack of consensus as to how to deal with employees who use marijuana for medical purposes when they are off-duty. At some point, we expect that the Colorado Supreme Court will weigh in on this issue. But, this is probably not the case that will find its way to that court. Beinor himself has been quoted in several periodicals as saying that he thought his own case was weak, so he will likely not spend the time or money to appeal to Colorado’s highest court.

Regardless, Beinor is an important first decision in Colorado supporting the proposition that employers may create and enforce zero tolerance drug policies, and take adverse action against employees in violation of such policies, even in instances of marijuana-card-carrying employees.