On October 23, 2014, the Michigan Court of Appeals ruled that employees discharged for having failed a drug test because of their medical marijuana use are not disqualified from receiving unemployment benefits.

The consolidated appeal involved three workers—a forklift operator, a CT technician and a furniture repairman—all of whom had medical marijuana cards, allowing them to use the drug to treat specific medical conditions. The workers were discharged for violating their employers’ drug-free workplace policies after testing positive for marijuana.

Typically, claimants who test positive on drug tests administered in a nondiscriminatory manner are disqualified from unemployment benefits under the Michigan Employment Security Act (MESA). However, the Michigan Medical Marihuana Act (MMMA) provides that a qualifying patient shall not be subjected to a “penalty in any manner” for the medical use of marijuana in accordance with the Act. By its terms, the MMMA also broadly preempts all inconsistent statutes.

The three-judge panel held that the denial of unemployment benefits constituted a prohibited “penalty” for the medical use of marijuana because the claimants were otherwise eligible for the benefits and there was no evidence to suggest that the positive drug tests, which formed the sole basis for their disqualification, were the result of anything other than the claimants’ use of medical marijuana in accordance with the terms of the MMMA.

Notably, the employers did not allege that the employees had failed to abide by the MMMA’s provisions in their medical marijuana use. They also did not allege that the employees were under the influence of marijuana while working or that they had ingested, inhaled, or possessed the drug on their employers’ premises. Accordingly, absent their use of medical marijuana, the claimants would not have been disqualified from receiving unemployment benefits. Thus, according to the panel, the denial of benefits resulted in an impermissible “penalty” for the medical use of marijuana in contravention of the MMMA.

The panel’s decision might have been different if there had been evidence the employees were under the influence of marijuana while working or that they had used the drug on their employers’ premises. The MESA expressly disqualifies a claimant from receiving benefits if he or she was discharged for “intoxication while at work” or “illegally ingesting, injecting, inhaling, or possessing a controlled substance on the premises of the employee.” And the MMMA provides that nothing in the Act shall be construed to require “[a]n employer to accommodate the ingestion of marijuana in any workplace or any employee working while under the influence of marijuana.” In reaching its decision, the panel narrowly read this provision, finding that while the MMMA does not require employers to accommodate employees’ use of marijuana in the workplace or working while under the influence, the Act does not say that an employer is not required to accommodate the “medical use” of marijuana, which includes “internal possession.”

The panel specifically distinguished its ruling from the Sixth Circuit Court of Appeals’ decision in Casias v. Wal-Mart Stores, Inc., 695 F.3d 428 (6th Cir. 2012), which held that the MMMA’s immunity clause did not apply to a private employer’s decision to fire an employee for using medical marijuana. The panel noted the issue in the present cases was not whether the employers had violated the MMMA by firing the claimants; rather, it was whether, in denying unemployment benefits, the Commission—a state actor—had imposed a penalty on the claimants for their medical use of marijuana in contravention of the MMMA’s broad immunity clause.

Thus, for now, Michigan employers may still discharge a medical marijuana card-possessing employee who tests positive for marijuana in violation of a drug-free workplace policy without running afoul of the MMMA, but they may ultimately be responsible for paying unemployment benefits for the discharged medical marijuana user.