House Bill 2541, which was recently passed by the legislature and signed into law by Governor Jan Brewer on April 29, 2011, amends Arizona’s drug testing statute by defining terms and adding much-needed protections for employers in light of the Arizona Medical Marijuana Act. The Act, passed by Arizona voters last November, includes a specific employment-based anti-discrimination section that protects medical marijuana “cardholders.” Employers are prohibited from taking adverse actions, such as termination, based on an employee’s or applicant’s status as a cardholder, or a qualifying patient’s positive drug test, unless the qualifying patient (i.e., a cardholder authorized to use medical marijuana) used, possessed or was “impaired” by marijuana while at work or during work hours. The Act’s failure to define “impaired” left employers questioning how to determine whether an employee is impaired without running afoul of the anti-discrimination language, and when employers could lawfully take any action against a cardholder.

Arizona’s nearly twenty-year-old drug testing statute (A.R.S. § 23-493, et seq.) details specific requirements for what must be included in an employer’s written policy distributed to all employees, as well as how drug testing must be carried out. Although no penalty exists for not complying with the drug testing statute, if an employer chooses to comply with it, the statute provides a “safe harbor” by shielding the employer from certain civil liability arising out of the testing procedure, including adverse employment actions. As explained in greater detail below, H.B. 2541 expands this safe harbor protection to include employment situations that may arise as a result of the Arizona Medical Marijuana Act. Phoenix shareholder, Joe Clees, noted that while the amendments are not perfect, “the legislature fixed most of the problems and it’s high time that Arizona employers take advantage of the protections offered by these amendments.”

H.B. 2541 also amends the Arizona Medical Marijuana Act with the addition of two brief, but significant, amendments. The first amendment provides that employers may use the verification system containing the registry identification information of cardholders. This use must be limited to the verification of a registry card provided to the employer by either a current employee or an applicant who has received a conditional offer of employment. So employers now have a lawful means to confirm an employee’s or applicant’s card status through the system established by Arizona Department of Health Services. The other amendment provides a retroactive effective date of April 12, 2011. This remedies the time lag that would have otherwise been created by the procedural process of amending the legislation.

Employment Actions Taken In “Good Faith”

H.B. 2541 provides important protections for employers that take employment actions based on the “good faith” belief of drug use or possession. Specifically, the new law provides that no cause of action may be established against an employer for actions based on the employer’s “good faith” belief that an employee used or possessed any drug, or had an “impairment” while working, while on the employer’s premises, or during the hours of employment. Importantly, these new protections are not limited just to marijuana use, but to all illegal drugs (including, in the case of safety-sensitive positions, legal drugs that may cause “impairment”) as well as alcohol.

The new law also describes the scope of protected employment actions to include “implementing, monitoring or measures to assess, supervise or control the job performance of the employee, reassignment of an employee to a different position or job duties or suspension or termination of employment.” This means that employers have a broad range of protected actions available to them to address situations involving drug possession or use at the workplace, up to and including termination of employment.

Definition of “Good Faith” Belief

The new law defines several key terms that will assist employers with both interpreting and complying with the Arizona Medical Marijuana Act, and the drug testing statute. First, the new law expands the definition of “good faith” to permit an employer to consider any of the following when deciding the existence of substance abuse or possession: (1) observed conduct, behavior or appearance; (2) information reported by a person believed to be reliable, including a report by a person who witnessed the use or possession of drugs or drug paraphernalia at work; (3) written, electronic or verbal statements; (4) lawful video surveillance; (5) records of government agencies, law enforcement agencies or courts; (6) results of a test for the use of alcohol or drugs; and (7) other information reasonably believed to be reliable or accurate.

Definition of “Impairment”

The new law specifically defines “impairment” by listing numerous symptoms indicating “that a prospective employee or employee while working may be under the influence of drugs or alcohol that may decrease or lessen the employee’s performance of the duties or tasks of the employee’s job position.” The symptoms, which range from speech and appearance, to “disregard for the safety of the employee or others,” provide employers with considerable latitude in determining impairment at their workplace.

The “Safety-Sensitive Position” Exclusion

The new law also provides that an employer is protected from litigation based on actions to exclude an employee from performing a “safety-sensitive position.” This may include “reassigning the employee to another position or placing an employee on paid or unpaid leave.” An employer may base this exclusion on the employer’s “good faith belief that the employee is engaged in the current use of any drug, whether legal, prescribed by a physician or otherwise, if the drug could cause an impairment or otherwise decrease or lessen the employee’s job performance or ability to perform the employee’s job duties.” Employers may look to a number of factors in evaluating the “effects” a drug may have, including drug or alcohol test results, warning labels, statements by the employee, information from a physician or pharmacist, information from reputable reference sources or any other information the employer in good faith believes to be reliable.

Definition of “Safety-Sensitive Position”

Employers are given some latitude in designating positions as “safety-sensitive.” The definition provides that a safety-sensitive position is “any job designated by an employer” as such, or “any job that includes tasks or duties that the employer in good faith believes could affect the safety or health of the employee performing the task or others.” The examples given include the operation of a motor vehicle, other vehicle, equipment, machinery or power tools, repairing, maintaining or monitoring certain equipment, performing duties in the residential or commercial premises of a customer, supplier or vendor, preparing or handling food or medicine, and working in any occupation regulated by Title 32 of the Arizona Revised Statutes, which includes Arizona’s regulated industries, such as the medical profession.

Definition of “Current Use of Any Drugs”

The new law also defines “current use of any drugs” to include use that “has occurred recently enough to justify an employer’s reasonable belief that involvement with drugs is ongoing.” The definition does not limit the use to any specific timeframe, recognizing that individual facts and circumstances may vary.

How Can Employers Maximize Their Protection From Litigation?

H.B. 2541 can place employers in a much better position when dealing with medical marijuana in the workplace, provided that employers comply with Arizona’s drug testing statute. According to Tibor Nagy, a shareholder in Ogletree Deakins’ Tucson office: “Before now, there was little incentive for Arizona employers to craft their substance abuse policies to comply with the drug testing statute, as the legal risks for non-compliance were low. With the medical marijuana law on the scene, having a ‘safe harbor’ from claims by cardholders fired for ‘impairment’ gives the drug testing statute a whole new reason to exist.” Therefore, it is essential that employers review their drug and alcohol policies and testing procedures to ensure compliance with the requirements of the statute. Employees should be reminded that drug policies apply to all types of prohibited drugs, including unlawful use of prescription drugs, and employees may not perform work while impaired by any drug or alcohol.

Employers should look to the specific definitions provided in H.B. 2541 when enforcing their policies. The new law explicitly describes numerous symptoms employers may use to form a good faith belief of impairment. Employers should train supervisors and managers on how to recognize those symptoms, as well as develop a process for documenting them, when possible.

Depending on the type of business conducted, some employers may consider classifying certain positions as “safety-sensitive positions.” Pursuant to H.B. 2541, employers may exclude individuals from these positions on the basis of a belief of current drug use. Prior to the amendment, this type of preemptive action by employers may have been considered discriminatory against cardholders under the Arizona Medical Marijuana Act. Now, employers should take advantage of this protection, where applicable.

Employers should keep in mind that under the terms of the Arizona Medical Marijuana Act, discrimination in employment remains specifically prohibited. Therefore, as with any employment policy, employers should ensure that all policies related to drugs, alcohol and testing are applied uniformly and in a non-discriminatory manner. While questions and issues involving medical marijuana are sure to continue, H.B. 2541 is an important first step in addressing medical marijuana in the workplace while maintaining a safe and productive work environment.

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