Labor & Employment Issues

E-Book Cover: Employment Compliance in the Age of Legalized MarijuanaThough cannabis is illegal under federal law, at least 30 states and the District of Columbia have legalized cannabis for medical use and nine states, as well as D.C., have legalized it for recreational use—a dichotomy that presents a unique and complex challenge for employers. In a new e-book, Fox attorneys Joseph A. McNelis III, Lee Szor, William Bogot and Joshua Horn provide an overview of federal and state marijuana laws, discuss specific aspects of the employment relationship affected by the legalization of marijuana in certain states, and offer practical guidance for employers on how to navigate this new and developing area of the law.

We invite you to download a PDF of the e-book.

Richard L. Holzworth writes:

Medical cannabis research
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Despite Pennsylvania’s medical marijuana industry being in its infancy, more than 17,000 patients have registered for the program, and more than 4,000 already have received their medical marijuana card from the Department of Health. Now that cannabis products have burst onto the scene, hospitals and other residential healthcare facilities are struggling with what to do when patients present medical marijuana cards and attempt to use marijuana in the facilities. Indeed, it is high time for the healthcare providers to update their policies and procedures to address these growing concerns.

Policy Considerations

In developing a medical marijuana policy, it is important for healthcare administrators to remember that medical marijuana, although legal in most states, is still classified by the federal government as a Schedule I Controlled Substance. With medical marijuana laws varying from state to state, hospitals, healthcare associations, and other stakeholders have developed and implemented a wide range of policies addressing the use and possession of medical marijuana products. These policies range from strict, categorical prohibitions to sanctioned self-therapy during hospital admission. Regardless of a healthcare facility’s philosophy (either from a political or medicinal perspective) on medical marijuana, it is important for each institution to develop and implement a comprehensive set of policies and procedures to address the inevitable circumstance of a patient presenting with a medical marijuana ID card or cannabis products in hand.

Each healthcare facility should consider a number of factors to ensure that policies and procedures align with the facility’s individualized needs:

  • Does the facility treat a population or particular demographic with a higher rate of medical marijuana use?
  • Does the facility specialize in treating one or more of the 17 “serious medical conditions” that qualify a patient for medical marijuana use?
  • Does the institution receive federal funding that could be impacted by permitting the use of medical marijuana?
  • What is the facility’s existing human resources policy on a drug free workplace, and does this policy address use of medical marijuana by employees?
  • What is the facility’s controlled substance diversion prevention protocol?
  • What is the facility’s current policy for medications brought into the facility by the patient?
  • What is the facility’s intake procedure, and how does it address medical marijuana use?

In Pennsylvania, neither the Medical Marijuana Act nor the applicable regulations specifically address these issues. However, guidance can be found in the regulations regarding employer-employee relations, the Department of Health suggestions for schools, and the policies in place at facilities in states with more mature medical marijuana programs.

Employer Regulations

Under the Pennsylvania Medical Marijuana Act, it is unlawful for an employer to “discharge, threaten, refuse to hire, or otherwise discriminate or retaliate against an employee […] solely on the basis of such employee’s status as an individual who is certified to use medical marijuana.” § 10231.2103(b)(1). However, nothing the law prevents an employer from disciplining an employee who is under the influence of marijuana (regardless of the source of the marijuana) or for working while under the influence of marijuana when the employee’s conduct falls below the standard normally accepted for that position. § 10231.2103(b)(2). In other words, employers cannot take an “adverse employment action” simply because an employee has been certified by a physician to use marijuana products, but employers are not obligated to tolerate use of marijuana or substandard performance because of marijuana. Moreover, employers are not required to accommodate the use of marijuana products in the workplace.

For hospitals and other residential healthcare facilities, these employer-employee provisions in the Medical Marijuana Act suggest that the Pennsylvania lawmakers did not intend to require healthcare providers to tolerate or accommodate the use of medical marijuana by patients (or anyone else) on the premises. Importantly, Pennsylvania’s Medical Marijuana Act does not “require an employer to commit any act that would put the employer or any person acting on its behalf in violation of federal law.” § 10231.2103(b)(3). Accordingly, it is unlikely that healthcare facilities or their employees will be required to take any action that is prohibited under federal law, e.g. possession of marijuana products or facilitation of marijuana use.

School Guidelines

The Pennsylvania Medical Marijuana Act directs the Department of Education to promulgate regulations for the use of medical marijuana on school district property. Although those regulations have not been issued, the Department of Health has provided temporary guidelines for schools. According to Department of Health, students should be prohibited from bringing medical marijuana products on school property or storing products at the school. Neither the students nor school personnel should be permitted to administer medical marijuana.

In order for a student to use medical marijuana during the school day, the Department of Health recommends that a parent, legal guardian, or registered caregiver bring the medical marijuana product to school, administer the product, and then remove the unused product from the premises. These arrangements should be made with school administration in advance and in accordance with all visitor protocols.

Even though these temporary guidelines are not mandatory and are not specifically designed for hospitals and other residential healthcare facilities, the concept could be implemented in a healthcare setting. The Medical Marijuana Act enables qualified patients to designate a “caregiver” who is registered with the Department of Health and permitted to purchase, transport, and administer medical marijuana products. With this in mind, hospitals and other residential facilities could permit a caregiver to possess and administer medical marijuana products to a patient, and then remove the unused product from the premises.

Examples from Other States

The Washington Health Care Association has published a sample medical marijuana policy for use by long-term care facilities. This policy outlines a protocol that is very similar to the Pennsylvania Department of Health’s guidance for school districts. The Washington policy requires each patient to designate a “provider” who will bring medical marijuana product into the facility, administer the medication, and then remove the unused product. The policy also states that staff will not assist patients in obtaining or using medical marijuana, store medical marijuana, or ensure that medical marijuana is being used appropriately. Staff involvement is to be limited to confirming a patient’s status as a qualified medical marijuana user and ensuring that the use of medical marijuana does not impact any other patients. Should a designated provider or patient fail to follow the policy, the facility reserves the right to enforce appropriate consequences, including discharge from the facility.

The Minnesota Hospital Association has published three different policy templates for medical marijuana use, which offer healthcare providers a range of options for handling medical marijuana issues. The first template completely bans medical marijuana from hospital property. If a patient is found to be using or in possession of marijuana products, this policy directs hospital personnel to first determine whether the patient is a qualified and certified to use medical marijuana under state law. Qualified patients will be asked to remove medical marijuana products from the facility, or the products will be secured with the patient’s other personal belongings. For patients who are not qualified users, the hospital will dispose of the marijuana in accordance with hospital policy for handling other illicit drugs.

Generally, the second and third policy templates offered by the Minnesota Hospital Association suggest that qualified patients should be permitted to continue use of medical marijuana in accordance with state regulations. These policy options include suggested protocols for incorporating medical marijuana as either a “self-directed therapy” or as part of the hospital’s medication process. Importantly, these policy templates include provisions that require patients to verify that they are enrolled in the state’s medical marijuana program, and state that the hospitals are not required to certify a patient as eligible for medical marijuana or to permit the continued use of medical marijuana during an in-patient stay.

Takeaways

Drafting comprehensive medical marijuana policies and procedures is an imperative for Pennsylvania healthcare facilities, including hospitals, long-term care facilities, nursing homes, and others. However, the specifics of these policies and procedures must be tailored to each facility’s individualized interests and needs. These policies also must balance patient rights and interests, compliance with divergent state and federal law, and the facilities’ own financial, operational, and political circumstances. This can be accomplished with the careful evaluation of existing facility policies, practices, and operations, and with the assistance of experienced counsel.


Richard L. Holzworth is an associate in the firm’s Litigation Department, based in its Pittsburgh office.

Venture capital is playing a growing role in the country’s emerging legal cannabis industry. Attorneys Emily J. Yukich and Matthew R. Kittay of Fox Rothschild’s Emerging Companies & Venture Capital Practice will conduct a panel discussion with industry insiders during the American Bar Association Business Law Section’s annual meeting in Chicago.

Cannabis leafThe Angel Venture Capital Subcommittee, which Yukich and Kittay co-chair, will present an in-depth 360-degree examination of venture capital investing in cannabis companies, featuring:

Panelists:

  • Jeremy Unruh, general counsel and director of external communications at PharmaCann, a medical cannabis provider based in Oak Park, Illinois.
  • Charlie Bachtell, founder and CEO of Cresco Labs, LLC, a Chicago-based medical cannabis cultivating and manufacturing company.
  • William Bogot, co-chair of the Cannabis Practice Group at Fox Rothschild LLP.

Date: Thursday, Sept. 14

Time: 10 a.m. to 11 a.m.

Venue: Chicago Ballroom VIII, Ballroom Level, Sheraton Grand, Chicago, Illinois.

As noted in my prior post, when the Florida Legislature finally passed laws to implement Amendment 2 (medical marijuana) it did not include smoking as a permissible use for medical marijuana.

And, as expected, litigation has been filed to allow medical marijuana to be smoked. The Florida law does permit vaping of medical marijuana.  Florida legislators have defended their position by noting that Amendment 2 did not specifically identify smoking of medical marijuana and instead made clear that smoking medical marijuana was not permitted in public spaces.

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Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

In November 2016, Arkansas passed a constitutional amendment (Amendment 98) establishing a medical marijuana program. The legislature recently added provisions to the law, resulting in significant protections for Arkansas employers.

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123RF Copyright : W.Scott McGill 

The amendment includes sections that clarify when an employer can take an adverse employment action against an employee who is a medical marijuana user, and some that place limits on an employee’s right of action under the law, such as:

  • Limiting coverage to employers with 9+ employees
  • Barring suit if an employer takes an action pursuant to a “substance abuse or drug-free workplace policy”
  • Barring suit if the employer has a “good faith belief” the employee possessed, used, or was under the influence of marijuana “while on the premises of the employer or during the hours of employment”
  • Capping damages in the same way as other employment discrimination claims under Arkansas law

The amendment also makes clear that a written certification (a document from a physician stating that the patient has a medical condition covered by the Act) “is not a medical prescription.” This provision could potentially limit an employer’s obligations under both the ADA and the FMLA when considering an employment decision.

Arkansas is one of the few states that has adopted such strong employer protections in their medical marijuana statute, and each state’s approach is different. It is essential that every business understand the laws of each state where they operate, especially as more and more states implement medical marijuana programs (29 in total, as of this blog).

You can read the full text of the Arkansas amendment here.

 

 

In March and April, I posted about two Florida House and one Florida Senate proposals to implement Amendment 2 (which legalized medical marijuana in November 2016).

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The Florida House of Representatives has now passed HB 1397, which was one of the more restrictive proposals.  However, HB 1397 has been amended to add some uses, and has been expanded to add more licenses.  The highlights are:

  • Prohibits smoking, but permits vaping and edibles.
  • No caps on the number of retail locations permitted.
  • The current seven licensed growers continue to be licensed for medical marijuana and Florida will add 10 more licenses as soon as practicable and no later than July 2018.
  • People with chronic pain can access medical marijuana, but only if that pain is directly linked to a debilitating condition that would have qualified them regardless.

The limited number of licenses provided in HB 1397, has been harshly criticized by many in the cannabis business.

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Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Michigan
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An Outback Steakhouse employee who was fired for distributing drugs to a co-worker despite her status as a licensed medical marijuana caregiver has lost her suit alleging the termination was the result of age discrimination.

Plaintiff Bobbie Henry worked at an Outback in Flint, Michigan, where one of her marijuana patients was also an Outback co-worker. Henry and several other workers were terminated for selling drugs on the restaurant premises. When interviewed, Henry admitted she had sold medical marijuana to a co-worker.

The court found that even though Henry had a Michigan medical marijuana card, “state medical-marijuana laws do not, and cannot, supersede federal laws that criminalize the possession of marijuana,” and that marijuana remains illegal under the federal Controlled Substances Act.

The court rejected Henry’s claim that her sales to a patient cannot be a basis for termination. Instead, the court found that the Michigan Medical Marijuana Act does not impose restrictions on private employers and does not provide protection against disciplinary actions by an employer.

Henry’s age discrimination claim failed as a matter of law, the court said, because she was unable to show that Outback’s stated reason for her termination – selling drugs – was a pretext for age discrimination.

The case is entitled Henry v. Outback Steakhouse of Florida, LLC (E.D. Mich., decided 4/18/2017).

Last month, I posted about one Florida House proposal to implement Amendment 2 (which legalized medical marijuana).

Thereafter, several other bills have been put forward and one in the House, HB 1397, has now passed the House Health Quality Subcommittee.  HB 1397, written by House Majority Leader Ray Rodrigues, is quite restrictive.  Specifically it provides the following:

  • A requirement that non-terminal patients must have a doctor at least 90 days before they can get a cannabis recommendation.
  • Bans the smoking of medical marijuana.
  • Also bans edibles like brownies and “vaping.”
  • Slow expansion of the number of licensed growers and dispensaries. HB 1397 grants licenses to the seven existing growers.  Plus five applicants denied last year by the Department of Health would obtain licenses after 150,000 patients have registered.  New licenses would be allowed once there are 200,000 patients.

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Heading back to the Florida Senate, Rob Bradley, has proposed SB 406 which has also made it past a key committee (the Senate Health Policy Commitee).  SB 406 is a more “in the middle” bill and proposes the following:

  • The proposal does not include any language that would restrict doctors’ ability to decide for themselves if patients qualify for marijuana treatment.
  • Nonresidents would be allowed to apply to receive medical marijuana in Florida as long as they are able to get medical marijuana in their home state and qualify in Florida.
  •  The Department of Health would be required to have computer software system to track marijuana from “seed to sale”.
  • Patients would also be allowed to increase their supply from 45 to 90 days or even more than 90 days with a doctor’s approval.
  • The Bill would increase the number of marijuana dispensaries, expanding the number of businesses by five more when the state has 250,000 patients, 350,000 patients, 400,000 patients and then every 100,000 thereafter.
  • At least one of the five dispensaries would have to be a black-owned company.
  • The Bill also proposes a new medical marijuana research group at the Moffitt Cancer Center in Tampa.

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Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

New Jersey’s medical marijuana statute, the New Jersey Compassionate Use Medical Marijuana Act (NJCUMMA), was enacted in 2010. To date, the statute does not include specific provisions requiring employers to accommodate an employee’s use of medical marijuana. But that may change if the legislature adopts amendments to the NJCUMMA which have been proposed in both the State Assembly and the State Senate, NJ A2482 [2016] and NJ S2161 [2016].

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Copyright – ronniechua / 123RF Stock Photo

These identical proposals would enact two major changes. First, before an employer could take an “adverse employment action” against an employee who is a lawful medical marijuana user on the basis of either (1) the employee’s status as a medical marijuana user or (2) a positive drug test, the employer would be required to show–by a preponderance of the evidence–that the employee’s use of medical marijuana, “has impaired the employee’s ability to perform the employee’s job responsibilities.” The legislation defines “adverse employment section” to include decisions regarding hiring, firing, and employee compensation.

Second, and relatedly, any employee or job applicant who is a medical marijuana user and tests positive under an employer-required drug test must be provided with an opportunity to show a “legitimate medical explanation for the positive test result,” and would be given three days to do so. Such an explanation would include a doctor’s note recommending the use of medical marijuana or an identification card showing the employee is a registered medical marijuana user.

These companion legislative proposals were introduced in February and May 2016, and both remain in the respective Health, Human Services, and Senior Services Committees of the NJ Assembly and Senate. However, if enacted, these amendments will (1) add an additional hurdle for employers when making employment decisions regarding employees who are lawful medical marijuana users, and (2) require New Jersey employers to reexamine their employee and/or pre-employment drug-testing policies.

In November 2016, Florida voters overwhelmingly approved, with more than 70% voting yes, expanded medical marijuana by passing Amendment 2.

Now comes the tough work of implementing Amendment 2.  One bill, Florida Senate Bill 614, proposes to throw out the current medical marijuana system (created in 2015 to grow, process and distribute low-THC cannabis oil) which strictly capped the number of businesses allowed to participate in the medical marijuana business in Florida.

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St. Petersburg Republican Jeff Brandes, the proponent of SB 614, calls the current system “state sanctioned cartel” that limits competition and results in higher prices.  At present, the Florida medical marijuana system is limited to only seven vertical license holders.  A “vertical license” means that the license holder must do it all and grow, process and distribute the product.  And, by maintaining the current system it will obviously severely restrict businesses who want to be involved in what will be big business under Amendment 2.

Senator Brandes’ plan would get rid of the vertical license system and instead create four types of licenses:  one to grow marijuana, one to process marijuana, one to transport marijuana, and one for retail centers.  Each county, and Florida is a large state with 67 counties, could have one retail center per 25,000 residents, or nearly 800 statewide.  But, the bill still permits local governments to outright ban retail dispensaries.

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Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.