As more states legalize medical marijuana and consider legalization of “recreational” marijuana, many employers have wrestled with the question of whether they can still maintain a drug free workplace or must allow employees to use marijuana at work.  The Colorado Supreme Court just provided the common sense answer we’ve been waiting for:  YES,  employers can prohibit use of marijuana at work (even medical marijuana) and can fire employees who break that rule.  This was clearly the right result – – just because conduct is “legal” it does not mean that employees can engage in that conduct at work.  Thus, employers can now “breathe easy,” as they may enforce rules which prohibit marijuana use at work, even by those who have a medical marijuana prescription.

First, even as many states enact new laws regulating marijuana, marijuana remains an illegal controlled substance under Schedule I of the federal Controlled Substance Act (“CSA”).  However, there was still a dilemma for employers in the states which have legalized medical marijuana as to what action they could take if one of their employees tests positive for the drug. Which scheme of law wins out in such a situation – state, or federal?

The Colorado Supreme Court just clarified the answer for Colorado employers, and provided valuable guidance for employers in other states in Coats v. Dish Network, 2015 CO 44. The plaintiff, Brandon Coats, was employed by Dish Network (“Dish”) as a telephone customer service representative. Mr. Coats was registered and licensed by Colorado to use medical marijuana. Dish, like many companies, had a drug free workplace policy and, in May 2010, Coats tested positive for marijuana use and was terminated.  He then sued Dish.

Coats’ theory was that Colorado, like many states, has a statute which prohibits employers from terminating  an employee based on any “lawful activities” outside of work. Section 24-34-402.5, C.R.S. (2014) (“Lawful Activities Statute”).  Mr. Coats claimed that his use of medical marijuana was a “lawful activity,” and that his termination violated the Lawful Activities Statute.

The Colorado Supreme Court disagreed, and held that the use of medical marijuana at work was not covered by the Lawful Activities Statute. First, the court rejected Mr. Coats’s argument that the term “lawful” was restricted to what is lawful under state law. To the contrary, the Court interpreted the term “lawful” as having its “commonly accepted meaning” of “that which complies with applicable law, including state and federal law.” The Court noted that  marijuana is a Schedule I substance under the CSA and that its use, possession, or manufacture is a federal criminal offense. The Court also relied, in part, on the United States Supreme Court’s application of the Supremacy Clause to the marijuana issue, noting that the U.S. Supreme Court had stated that the clause “unambiguously provides that if there is any conflict between federal and state law, federal law shall prevail” even in the area of marijuana regulation. Gonzalez v. Raich, 545 U.S. 1, 29 (2005). The Colorado Supreme Court therefore held that, because Coats’s use of medical marijuana was unlawful under federal law, it was not protected by the Lawful Activities Statute.

The Court’s ruling should come as  welcome relief for employers in Colorado, as well as in other states where marijuana use has been made lawful under state law. Prior to the ruling, it was unclear whether an employer could incur liability for terminating an employee for lawfully using marijuana under state law, when it remained unlawful under the federal CSA. Now, the Coats decision shows that, it is fairly likely (although not guaranteed) that courts will come down on the side of employers who rely on the drug’s illegality under federal law to uphold a termination decision.

Employers should continue to be mindful that the fight over marijuana legalization is likely not over, as twenty-three states and the District of Columbia have legalized the use of medical marijuana and several other states have legislation pending that would legalize it as well.  Further, in the past three years, Alaska, Colorado, Oregon, and Washington legalized the use of marijuana for recreational purposes. Litigation in response to this movement is ongoing as well, as Colorado’s neighboring states of Nebraska and Oklahoma have filed suit against Colorado in the United States Supreme Court, claiming that the state is violating federal law and causing a burden on them as bordering states. Indeed, there is no sign that the legalization movement, or the pushback thereto, is slowing down, and employers should continue monitoring for additional developments in the near future.