Seyfarth Synopsis: Last month, a New Jersey Administrative Law Judge (“ALJ”) held that an employer’s worker’s compensation insurance carrier must reimburse an employee who was injured on-the-job for his medical marijuana.

On January 18, 2010, New Jersey became the 14th state to enact legislation permitting the sale of medical marijuana. (To read more about the New Jersey medical marijuana law, please see our blog post here.) Compared to other state medical marijuana laws, the New Jersey medical marijuana program is considered restrictive, and only permits a small set of patients with “qualifying conditions” to be prescribed marijuana.[1] Further, medical marijuana in New Jersey is amongst the most expensive in the nation with the price of an ounce of marijuana ranging from $425 to $520, not counting the 7% state sales tax. As with other states, when medical marijuana was introduced in New Jersey, New Jersey employers became fearful of the law’s effect on the workforce. However, an ALJ decision from last month gives new reason for employers, and their worker’s compensation carriers, to be fearful.

Decision

Andrew Watson, the claimant, injured his hand while on-the-job at a lumber company in 2014. As a result of his injury, Mr. Watson purchased 2 1/4 ounces of state-sanctioned medical marijuana in the Spring of 2014, however, he stopped using medical marijuana when his employer refused to pay for it. Rather, per the employer’s policy, Mr. Watson relied instead upon prescription opiates, such as Percocet, to cope with his chronic pain. He then brought his case before the ALJ to reimburse him for the amount he had already spent on marijuana, and to secure a ruling that future purchases of medical marijuana would be covered by his employer’s worker’s compensation carrier.

The ALJ ruled that the effects of marijuana are not as “debilitating as the effects of Percocet,” and “[a]s a result of his improved pain management, [Mr. Watson] has achieved a greater level of functionality.” Further, the ALJ was persuaded that Mr. Watson’s “trial use of medical marijuana has been successful” and “[w]hile the court is sensitive to the controversy surrounding the medicinal use of marijuana, whether or not it should be prescribed for a patient in a state where it is legal to prescribe is a medical decision that is within the boundaries of the laws in the state.” Accordingly, reimbursement for medical marijuana was appropriate and that Mr. Watson’s future medical marijuana expenditures should be covered as well.

Outlook

If employers have a pessimistic gut reaction to this ALJ opinion, it is totally understandable. With very little case law covering this issue, it is likely that the ALJ opinion will be given at least some persuasive effect. Further, employers might find it discomforting to know that their employees who are injured on-the-job can use marijuana that is paid for by the employer’s insurance carrier – thereby increasing the risk of employees coming to work under the influence of marijuana.

However, John Sarno, president and general counsel for the Employers Association of New Jersey seems less concerned. Mr. Sarno predicts that the ALJ ruling will have a “minimal impact” on employers, considering the small number of employees who can qualify for both worker’s compensation and New Jersey’s restrictive medical marijuana program. Nonetheless, employers should closely monitor workplace injuries, and remain aware of the possibility that their worker’s compensation carrier might have to cover the costs of any medical marijuana potentially used to treat such injuries.

If you have any questions please contact your local Seyfarth Shaw attorney. Christopher H. Lowe (clowe@seyfarth.com) is a partner in the New York office, and head of the New Jersey practice group. Samuel Sverdlov (ssverdlov@seyfarth.com) is an associate in the New York office, and a thought-leader on workplace issues related to medical or recreational marijuana.