If your company employs an individual who moonlights on the weekend as a volunteer at the new medical marijuana dispensary, can that individual be terminated for that reason? No, at least not in Arizona.

With the counting of provisional and mail-in ballots continuing weeks after election day, the proponents of the Arizona Medical Marijuana Act (Proposition 203) eked out with margin of approximately 5,000 votes in favor of legalizing marijuana for medicinal purposes. What will the new law mean for Arizona employers?

Buried in the new legislation is a new protected status — Cardholders under the Medical Marijuana Act against whom employers may not discriminate. Under the citizen-backed initiative, Arizona employers cannot discriminate against Cardholders in hiring, termination, or imposing any term or condition of employment.

The law defines Cardholders in three ways:

  •  Qualifying Patients ― A person who has been diagnosed by a Physician with a Debilitating Medical Condition and whose diagnosis authorizes the use of an Allowable Amount of Marijuana;
  •  Designated Caregivers ― An adult person who has agreed to assist a Qualifying Patient with the medical use of marijuana; or
  •  Nonprofit Medical Marijuana Dispensary Agent ― An adult officer, board member, employee or volunteer of a Nonprofit Medical Marijuana Dispensary.

In short, the law gives employment protection not only to authorized users of medical marijuana, but to those who agree to help users and those who work in the dispensary selling marijuana. Additionally, the law prohibits discrimination against a Qualifying Patient who tests positive on a drug test for marijuana components or metabolites.

The law does have some limitations, though. For example, if a Qualifying Patient fails his or her employer’s drug test and the Qualifying Patient used, possessed or was impaired by marijuana on the employer’s premises or during work hours, then the employer can still take adverse action against the employee. Not surprisingly, an employer may also lawfully take adverse action against employees who use marijuana in the workplace or who work under the influence of marijuana even if no drug test has been administered. Similarly, an employer may take adverse action against a Cardholder employee if the employer would lose a monetary or licensing related benefit under federal law or regulations. Regulated employers ― such as airlines and trucking companies ― and other employers where safety is of paramount importance ― construction, mining, hospital, and manufacturing employers ― will want to review how this new law relates to its existing drug testing policies and practices.

Despite the limitations, the clear intent is to establish statutory protection for employees who lawfully use, or aid those who use, medical marijuana. Capitalized terms in this article are defined terms under the new law, and, in interpreting what the statute means, it is important to review each statutorily defined term. For example, a Physician can be not only a state-licensed M.D. or D.O., but also state-licensed naturopathic and homeopathic physicians. Despite developing a comprehensive approach to the use of medical marijuana, several issues are unresolved.

  • The statute does not define employer. A number of federal and state antidiscrimination laws apply to employers that have 15 or more employees. This law appears to only require an employment relationship, meaning it could extend protection to employees of all employers regardless of the size of the workforce. The term employer appears to include all governmental entities and school districts as well as private sector employers.
  •  Can employees enforce the nondiscrimination protection through a private civil action? The statute does not provide for a charge filing administrative process that an employee has when he or she wants to pursue a race or sex discrimination claim. Could an employee bring a claim under the Arizona Employment Protection Act if he or she has suffered an adverse action in the place of employment because of their status as a Cardholder?
  •  Marijuana possession and use remain illegal under federal law. Although the Department of Justice appears to be backing off enforcement efforts when it comes to registered users, the relationship between federal law and state law in the employment area is unresolved. Generally, federal law should trump state law, but the cases dealing with this issue have tended to arise in the criminal context and not the employment arena. In California, the courts have been deferential to employers who discipline registered users, but unlike Arizona's new law, that state's law does not have express protection for employees.

Litigation will address and ultimately resolve those issues. The Arizona Department of Health has 120 days from November 29, 2010, to put rules in place governing the use of medical marijuana. The rules are expected to be released in April 2011. At that time, the state will begin issuing cards.

Employers are not alone in having to figure out how the new law will impact them. The law provides similar protection to Cardholders who are students enrolled in schools and tenants who seek to rent from landlords. The law prohibits discrimination against student and tenant Cardholders unless failing to do so would cause the school or landlord to lose monetary or licensing benefits under federal law.

Last, family courts and domestic relations lawyers will have a new issue with which to wrestle: custody and visitation may not be denied to a person unless the person's behavior creates an unreasonable danger to the safety of the minor as established by clear and convincing evidence.

Affected employers should review the statute, compare it with their existing workplace safety and drug testing policies, and determine what changes, if any, the legislation will require.