In the rapidly evolving interplay between federal and state employment laws, state medical marijuana laws, and employer policies seeking to maintain drug-free workplaces, an appellate court in Michigan has just concluded that while having a medical marijuana card cannot save your job with a private employer after a positive drug test (as concluded by a federal appellate court several years ago), it will not disqualify the employee for unemployment benefits. According to the Michigan Court of Appeals then, employees discharged after testing positive for marijuana based on their use pursuant to the Michigan Medical Marihuana Act (“MMMA”) can still receive unemployment compensation.

In the recent case, the state appellate court reviewed three cases in which the former employees sought unemployment benefits after being fired for a positive drug test. All three former employees were using medical marijuana pursuant to the MMMA and there was no evidence that any of them possessed, used, or were under the influence of marijuana at work.

In concluding that the former employees were entitled to unemployment benefits, the court emphasized that the MMMA contains broad immunity and provides that an individual using marijuana pursuant to the MMMA shall not be subject to “penalty in any manner.” As the loss of unemployment benefits would constitute a penalty issued by the state, a positive drug test based on use pursuant to the MMMA does not disqualify the former employees from unemployment benefits. Unlike the issue in the previous federal appellate court decision involving the action of a private employer (a discharge), the action at issue in the recent Michigan Court of Appeals decision was by the state (a denial of state-issued benefits) and thus, covered by the MMMA. That court also concluded that the MMMA preempts the Michigan Employment Security Act (“MESA”) which provides for unemployment benefits.

As it stands now, while private employers in Michigan can still discharge employees who test positive for marijuana, even if they are using pursuant to the MMMA, employees are still entitled to receive unemployment benefit (unless potentially they are using marijuana at work or are under the influence of it while working – a question the recent Michigan appellate court left unaddressed). Private employers in Michigan will now need to weigh the costs of unemployment benefits in their discharge decisions related to a positive test for medical marijuana.