On Monday, June 15, 2015, the Colorado Supreme Court, in a long-awaited decision in the Coats v. Dish Network, LLC, case, confirmed what actions employers may take against employees in Colorado who use medical marijuana during off-duty time. The Colorado Supreme Court held that because medical marijuana use is unlawful under federal law, a Colorado employee who uses medical marijuana cannot seek protection under Colorado’s Lawful Off-Duty Activities statute, and his/her employment can be terminated if the employee violates the employer’s drug policies.

The Coats Case and Decision

Brandon Coats, the plaintiff in the lawsuit, is a quadriplegic. Per his complaint, in 2009, he registered for and obtained a state-issued license in Colorado to use medical marijuana to treat painful muscle spasms caused by his quadriplegia. Mr. Coats consumed medical marijuana at home, after work, and in accordance with his license and Colorado state law. Between 2007 and 2010, Mr. Coats worked for Dish Network as a telephone customer service representative. Dish Network maintained a zero-tolerance drug policy and, under the policy, its employees were subject to random drug tests. In May 2010, Mr. Coats tested positive for tetrahydrocannabinol (“THC”), a component of medical marijuana, during a random drug test. Mr. Coats informed his employer that he was a registered medical marijuana patient. On June 7, 2010, Dish Network terminated Mr. Coats’s employment for violating the company’s drug policy.

Subsequently, Mr. Coats filed a wrongful termination claim against Dish Network under Colorado’s Lawful Off-Duty Activities statute (Colo. Rev. Stat. Section 24-34-402.5), which generally prohibits employers from discharging an employee based on his/her engagement in “lawful activities” off the premises of the employer during nonworking hours. Mr. Coats contended that Dish Network violated the statute by terminating him based on his outside-of-work medical marijuana use, which he argued was “lawful” under Colorado’s Medical Marijuana Amendment.

Dish Network moved to dismiss Mr. Coats’s lawsuit for failure to state a claim. The state District Court granted the dismissal, which was affirmed by the Court of Appeals. The Colorado Supreme Court, after much anticipation, upheld Mr. Coats’s firing. In upholding his employment termination, the Court concluded that Colorado’s Lawful Off-Duty Activities statute was not just state specific in its purview. Stated another way, because medical marijuana use is still unlawful under federal law, using medical marijuana, even if done lawfully under Colorado law, is not protected conduct under the Lawful Off-Duty Activities statute. As a result, an employer may lawfully terminate a Colorado employee’s employment pursuant to a policy, such as a zero-tolerance drug policy, if the employee tests positive for marijuana and even if the employee is lawfully using marijuana, in this case medically, under Colorado law.

What the Coats Decision Means for Employers

This decision confirms that an employer’s zero-tolerance drug policy remains lawful in Colorado.

Even still, employers operating in Colorado should review their drug-testing policies to ensure that they include marijuana, including medical marijuana, as a prohibited substance. Employers operating in Colorado should also ensure that their managers and employees are aware of and trained on the employer’s drug-testing policies. Effective communication concerning the status of the law and the employer’s policies will often ward off employee uncertainty or disputes, as many employees misperceive what is permitted in the workplace with regard to using marijuana outside of work given that both medical and recreational marijuana are technically lawful under Colorado state law.

Employers should also keep in mind that numerous states have different medical and recreational marijuana laws and regulations, which should be carefully reviewed and considered when creating and implementing a drug-testing policy and imposing discipline or employment termination on an employee. Ultimately, in Colorado, at least for now, employers have more concrete guidance on how to implement their drug-testing policies. Employers should keep an eye, however, on developing federal law and how that may impact this decision.