Federal laws prohibiting use of marijuana continue to be in tension with the laws of some states legalizing use of marijuana for medical and/or recreational use. The Colorado Supreme Court recently weighed in on one of the employment-related issues stemming from that tension.

On June 15, the Colorado Supreme Court issued an important decision in Brandon Coats v. Dish Network, LLC, clarifying the scope of off-duty conduct that earns protection from termination under the state’s lawful activities statute. Like similar statutes in other states, this Colorado statute bars employers from discharging employees for “engaging in any lawful activity off the premises of the employer during non-working hours.” In the Coats case, the Court unanimously held that Dish Network was not in violation of the Colorado lawful activities statute when it terminated employee Brandon Coats for his off-duty and off-premises use of medical marijuana. Though Colorado legalized medical marijuana usage under its Medical Marijuana Amendment, the Court found medical marijuana usage is not a “lawful activity” for purposes of the Colorado lawful activities statute because it still is illegal under federal law.

Coats is a quadriplegic who has been confined to a wheelchair since he was a teenager.  He began working for the defendant employer, Dish Network, as a customer service representative back in 2007.  Due to painful muscle spasms caused by his quadriplegia, Coats registered with the state and obtained a license to use medical marijuana starting in 2009.  At the same time, however, Dish Network had a zero-tolerance drug policy.  After Coats tested positive for tetrahydrocannabinol (“THC”), a primary component of marijuana, during a random workplace drug test in May 2010, Dish Network fired him for violating its zero-tolerance drug policy.

Following his termination, Coats brought suit against Dish Network, alleging that he was wrongfully terminated in violation of the lawful activities statute. Because Coats had registered and obtained a license for medical marijuana under the Medical Marijuana Amendment, he argued that his out-of-work marijuana usage was a lawful activity and his discharge was in direct violation of the lawful activities statute.

The trial court dismissed his claim without addressing marijuana’s treatment under federal law. A divided appellate court affirmed the decision, holding that because marijuana use is prohibited under the federal Controlled Substances Act, it cannot be a lawful activity despite the state constitutional amendment permitting it as a matter of state law. In reviewing the decision, the Colorado Supreme Court agreed with the appellate court’s interpretation of the term “lawful,” noting that “in its general, unrestricted sense” it includes activities that comply with both state and federal law. While Coats argued that the state statute intended to protect activities that were “lawful under Colorado state law,” the Supreme Court rejected that argument, stating that it declined “to engraft a state law limitation onto the term.”

Though this decision is limited to Colorado’s lawful activities statute, similar employment-related issues can arise in a number of different contexts. Currently, twenty-three states and the District of Columbia have laws allowing for the use of medical marijuana, while four states and the District of Columbia passed initiatives allowing recreational use of marijuana.  At the same time, however, use of marijuana remains illegal under the federal Controlled Substances Act. The intersection of these state and federal laws can create a host of employment-related issues for employers. As theCoats case highlights, employers who are seeking to discipline employees for use of marijuana that is permitted by state law should be aware of the various laws that apply – and in particular, the scope of any applicable laws protecting lawful off-duty conduct in the state. And while the Coats decision did not address the issue, employers also should be cognizant of protections that may be afforded by statutes requiring accommodations for individuals with disabilities.

A court is likely to hold that use of medical marijuana cannot be a reasonable accommodation under the Americans with Disabilities Act (“ADA”), given the federal law prohibition on all marijuana use, but the result could potentially be different under state disability laws. For example, in 2008, a California Supreme Court case, Ross v. RagingWire Telecommunications, Inc, addressed the intersection of the state’s Compassionate Use Act and its Fair Employment and Housing Act (“FEHA”) with an employer’s pre-employment drug policy. Despite the plaintiff’s status as a qualified individual with a disability under FEHA, the court upheld his termination for marijuana use as non-discriminatory because “[t]he FEHA does not require employers to accommodate the use of illegal drugs.” Even though California’s Compassionate Use Act did not address marijuana use in the context of employment law and only addressed exceptions to criminal penalties, the court went further in its analysis, noting that “[n]o state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law.” Though California’s medical marijuana law does not provide for an exception to employer drug policies, other state laws may identify these types of carve-outs.

Given all of the various laws that can come into play with medical marijuana usage, employers confronting these sorts of issues should consider evaluating the laws of the states in which they operate, to ensure that their policies and practices are in compliance with the various legal requirements.