How Will the Colorado Supreme Court Decide Coats v. Dish Network?
In a case being closely watched nationwide, the Colorado Supreme Court will address for the first time an important issue for employers and employees in the state: whether an employer may terminate an employee for the off-duty use of medical marijuana. Oral argument in Coats v. Dish Network is scheduled for September 30, 2014.
Plaintiff Brandon Coats, a quadriplegic who worked for three years as a telephone customer service representative with Dish Network, is registered in Colorado as a medical marijuana user under the Medical Marijuana Amendment (MMA) to the Colorado Constitution, Art. XVIII, Sec. 14. He uses medical marijuana to help control the painful muscle spasms that accompany his condition. While employed by Dish Network, Coats only used medical marijuana at his home and never had or used the drug at work, nor was he ever suspected of having been intoxicated or impaired while at work. Nonetheless, Dish Network terminated Coats’ employment when a saliva test showed the presence of an unknown amount of THC in his system.
Lower Court Proceedings
Coats filed suit in state court against Dish Network under an employment discrimination provision of the Colorado Civil Rights Act that prohibits an employer from discharging an employee for “engaging in any lawful activity off the premises of the employer during nonworking hours” (the Lawful Activities Statute, or LAS), C.R.S. § 24-34-402.5. The LAS was enacted in the early 1990s in order to protect employees from being fired for legal off-duty activities that an employer might perceive as having a negative impact on their at-work productivity, such as smoking cigarettes or unhealthy eating that might cause obesity. However, the trial court dismissed Coats’ complaint for failing to state a claim after concluding that the use of medical marijuana was not a “lawful activity” under the Lawful Activities Statute because the MMA, rather than establishing a right to use medical marijuana, only provided an affirmative defense from prosecution for marijuana use under state criminal law.
The court of appeals agreed with the trial court that state-licensed medical marijuana use was not a “lawful activity” under the LAS, but took a different path to reach that conclusion. Noting that the plain and ordinary definition of “lawful” is “that which is ‘permitted by law,’” the court concluded that an activity is “lawful” in Colorado only if that conduct is permitted by, and not contrary to, both state and federal law. As marijuana use is prohibited under the federal Controlled Substances Act (21 U.S.C.S. §§ 801-904), the court of appeals held that this use was not a “lawful activity” for purposes of the LAS. Coats v. Dish Network, L.L.C., 303 P.3d 147, 150-151 (Colo. App. 2013).
One court of appeals judge dissented from the majority opinion, however, concluding that (1) a “lawful activity” under the LAS should be measured only by reference to state law, and (2) the use of medical marijuana is lawful under the MMA. In reaching the first conclusion, the dissenting judge noted that the LAS is designed to protect employees from discriminatory discharge for engaging in lawful conduct, rather than empower employers to discharge employees for engaging in unlawful conduct, and excluding conduct that is only unlawful under federal law from protection under the LAS would limit the remedial protection for employees that is at the heart of the LAS. In support of this conclusion, the dissent also noted that the protection of employees from discharge based on their off-duty conduct is primarily a matter of state concern and should be governed primarily by state law. Coats v. Dish Network, L.L.C., 303 P.3d 147, 156-157 (Colo. App. 2013)(dissenting opinion of Webb, J.). Addressing the scope of the MMA, the dissent concluded that the MMA establishes a right to possess and use medical marijuana, but that even if the MMA does not establish a constitutional right, the use of medical marijuana consistent with the MMA is at the very least “lawful,” especially given that the MMA and its enabling legislation repeatedly use the term “lawful” to describe that conduct. Coats v. Dish Network, L.L.C., 303 P.3d 147, 157-158 (Colo. App. 2013)(dissenting opinion of Webb, J.).
Issues Before Colorado Supreme Court
The Colorado Supreme Court granted review in this case to address two issues: (1) whether the LAS protects an employee from discretionary discharge for lawful use of medical marijuana outside the job when the use does not affect the employee’s work performance; and (2) whether the MMA makes the use of medical marijuana “lawful” and creates a right to use medical marijuana for lawfully registered persons.
Arguments Made in Support of Plaintiff
Coats’ arguments to the Colorado Supreme Court largely track those of the dissent in the court of appeals opinion:
> The MMA does more than just provide an affirmative defense from criminal prosecution, but rather establishes that the use of medical marijuana is “lawful” in Colorado for those who follow the procedures for registration;
> Conduct that is considered lawful under the State Constitution should be considered lawful under state statutes;
> The LAS is a remedial statute that should be interpreted broadly to accomplish its objective to protect the freedom of employees to engage in lawful off-duty activities without fear of losing their jobs; and
> Employment law is largely a state concern and should not implicitly include federal law when the state legislature has not explicitly directed such inclusion, which it has not done in the LAS.
To counter broad policy-based arguments offered by the defendant and amici in support of the defendant’s position, plaintiff Coats also points out that:
> The LAS is a specific exception to the at-will employment doctrine;
> The record contains no evidence that there are actually any issues in this case involving a “drug-free workplace” or “zero tolerance” policy;
> There are no safety concerns, hazardous activities, or work-place accommodation issues present in the case; and
> The medical marijuana use by Coats had no adverse effects on his employee performance.
Filing an amicus brief in support of Coats, the Patient and Caregiver Rights Litigation Project (PCRLP) also makes the unique argument that the federal Controlled Substances Act was not intended to cover the medical use of marijuana authorized under a state program. PCRLP argues that the 1970 listing of marijuana as a Schedule I controlled substance was a temporary assignment made under the assumption that there was no known accepted medical use for the drug, and in light of subsequent recognition that the drug has medical value, the Schedule I listing should not be interpreted to cover medical marijuana use under a state medical marijuana program. In support of this conclusion, PCRLP also notes that Congress has more recently taken affirmative steps to lift any ban on medical marijuana use in the District of Columbia, suggesting that even Congress does not intend the Controlled Substances Act to cover the use of medical marijuana.
Arguments Made in Support of Defendant
Defendant Dish Network makes several arguments in support of the court of appeals decision, including the argument relied on by the trial court that the MMA only creates an affirmative defense from criminal prosecution and does not otherwise make marijuana use “lawful.” Dish Network also argues that the LAS does not protect users of medical marijuana because:
> Such use is not “lawful” under either state or federal law;
> The LAS does not confine the term “lawful” to only a certain set of applicable laws; and
> The legislative history of the LAS demonstrates that it was not intended to cover off-duty drug use.
While arguing that any effect on job performance from off-duty conduct is irrelevant to application of the LAS, defendant nonetheless notes that studies have shown that routine marijuana use has lasting effects on functionality and job performance. Dish Network also argues that Coats effectively admitted that his medical marijuana use actually affected his job performance by decreasing his muscle spasms and that this effect constituted on-the-job marijuana “use.”
Impact on Drug-Free Workplace Policies
Addressing perhaps the broadest policy issue presented under their view of the case, Dish Network and several amici argue that prohibiting an employer from terminating the employment of a worker under the LAS for off-duty medical marijuana use would effectively make it illegal in Colorado for an employer to enforce a “drug-free workplace” policy as it pertains to marijuana use. For example, in his amicus brief, the Colorado Attorney General argues that applying the LAS to medical marijuana would effectively bar any employer “zero tolerance” marijuana policy and force employers to engage in a “complex, fact-finding determination” when an employee tests positive for marijuana use. Amicus Colorado Defense Lawyers Association (CDLA) argues that plaintiff’s interpretation of the LAS would place an enormous burden on employers, especially large employers, who would be required to determine which employees should be permitted to use medical marijuana in contravention of a zero tolerance policy, requiring an individualized determination of whether a bona fide occupational requirement exists in light of the duties and responsibilities of each job.
The Attorney General also notes that federal law mandates drug testing of employees in certain industries, such as transportation employees and other “safety-sensitive” employees, and while a positive test for marijuana use would not necessarily result in termination of employment, the AG argues that an employer should have the discretion to take such steps without running afoul of the LAS and without fear of being micromanaged by the courts. Similarly, amicus Colorado Mining Association (CMA) argues that employers in mining and other similar safety-sensitive industries and occupations cannot afford to “wait and see” whether off-the-job marijuana use will negatively impact an employee’s on-the-job performance.
CMA also notes that the MMA itself specifically provides that “Nothing . . . shall require any employer to accommodate the medical use of marijuana in any work place,” arguing from this and related ballot materials that the voters intended to keep the employer/employee relationship unaffected by the legalization of medical marijuana and that the MMA left employers free to prohibit the use of marijuana as a condition of employment.
In light of these potential negative impacts on the enforcement of workplace drug policies, amici raise other practical and pragmatic points to consider. For example, the Colorado Civil Justice League (CCJL) argues that, despite plaintiff’s predictions, few users of medical marijuana will actually lose their employment if the court of appeals decision is upheld. CCJL notes that not all medical marijuana users are employed, not all employers discharge employees for marijuana use, not all employers drug test their employees, and those that do normally do so only after an accident or with reasonable suspicion. In addition, CDLA notes that the LAS was drafted years before legal marijuana use in the state was seriously being considered, and argues that given the serious implications for employers, who face both a duty to create a safe workplace and potential tort liability to third parties if an employee causes an injury while impaired in the course of employment, any determination that would undermine the currently widespread use of zero tolerance drug policies should be made by the General Assembly rather than the courts.
The questions presented in the Coats case are not easily answered. How should a “lawful activity” be defined for purposes of applying the LAS? From an employee’s perspective, a state law such as the LAS should protect an employee from being terminated for engaging in conduct that has specifically been legalized by the voters in Colorado, such as using medical, and now even recreational, marijuana. Moreover, the legalization of medical marijuana use suggests that there is actual medicinal value in the drug, and as with other legal drugs, an employee should be able to make an informed decision about treatment options without fear of losing his or her job, so long as the employee is not impaired or intoxicated on the job.
Richard E. Falcone, a long-time injured worker advocate in Colorado Springs, CO, told us he wouldn’t expect a decision from the Colorado Supreme Court until 2015. Falcone agreed with the dissent in the Court of Appeals’ decision:
“While it is asserted that medicinal marijuana use is lawful by state statute, it is allegedly unlawful by federal law. Additionally recreational use is also permitted to a limited extent. Marijuana use may result in testing weeks later that shows positive. Thus, non use during work hours and a fully functioning worker can be terminated for permitted medicinal use after hours weeks earlier. It is conceivable a treating physician in a work injury claim may even prescribe marijuana use for the injury. It would seem that the impact of the Colorado law may result in a potential conflict with federal law. However, that remains to be seen. The Colorado law has not been brought into a federal court. Until that happens, it is lawful to use marijuana for the permitted state uses. It is asserted that if it is lawful, it will harm no tolerance policies but that is absurd. No tolerance policies can continue to be utilized so long as it is recognized that lawful activity cannot be sanctioned by the employer. To decide as the Court of Appeals did that the permitted medicinal use statute is unlawful activity flies in the face of the law and improperly speculates on what will happen if the Colorado law is asserted as being in violation of federal law. To my knowledge the federal authorities have chosen not to confront the Colorado law on medicinal and also on recreational use. As such the asserted conflict remains speculative and Colorado lawful activity should be assumed as that lawful activity protected by the statute in question. There should be a reversal of the lower court’s decision.”
Conversely, from an employer’s perspective, drug-free workplace policies are there for a reason, often mandated by law, and no one would seriously argue that marijuana use causes no impairment. Moreover, there are inherent difficulties in determining whether and when an employee’s marijuana use might be impairing the employee’s abilities and judgment. Given the serious consequences to an employer that could flow from failing to remove an impaired employee, limiting the ability of an employer to enforce workplace drug policies places the employer in a precarious situation.
We asked defense attorney Bradford J. Williams at Holland & Hart LLP in Denver, CO, why the stakes are high for employers and how the Court might rule. According to Williams:
“Any decision reversing Coats’ termination under Colorado’s Lawful Activities Statute would effectively invalidate zero-tolerance drug policies in Colorado; preclude employers from ensuring that employees remain safe and productive at work absent prohibitively expensive investigations into the precise timing and psychoactive effect of drug use; raise grave preemption concerns given the multiple federal statutes that mandate a drug-free working environment; and contravene an express provision in Colorado’s 2012 Recreational Marijuana Amendment that permits employers to retain policies that restrict employees’ marijuana use. The Colorado Supreme Court seems unlikely to sanction such results. Instead, the Court seems likely to agree that off-duty marijuana use is not ‘lawful’ under Colorado’s statute because it remains illegal under federal law. Alternatively, the Court might avoid some of this case’s stickier questions by holding that off-duty marijuana use is instead not ‘lawful’ under Colorado’s Medical Marijuana Amendment, which arguably only created an exemption from criminal prosecution. However, any such narrow ruling would almost certainly spawn additional litigation over the different wording in Colorado’s Recreational Marijuana Amendment, and whether that amendment made off-duty marijuana use ‘lawful.’ ”
© Copyright 2014 LexisNexis. All rights reserved.
Date: Wednesday, August 13, 2014
Time: 2:00-3:35 p.m. ET
Duration: 95 minutes
Earn: 1.5 CLE Credits
Register here for this complimentary CLE webinar
Dale L. Deitchler, Shareholder, Littler Mendelson P.C.
Angelo Cifaldi, Shareholder, Wilentz, Goldman and Spitzer, P.A.
Renee Maxwell, SPHR, Director, Human Resources, Hansgrohe North America
Also, please join us afterwards for a live discussion on LexTalk.