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Wilson & Oxyer: With CBD legal, is THC in the workplace A-OK?

April 17, 2019
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By Amy Wilson and Alexandra Oxyer

As the legality of hemp, CBD oil, marijuana and other substances containing THC continues to change, questions arise relating to an employer’s options when THC is detected on a drug screen and whether an employer must accommodate the use of legal THC-containing substances. Attorneys advising employers should carefully consider an employer’s rights and responsibilities prior to employment decisions related to an employee’s use of THC-containing substances.

The ADA and state disability discrimination laws

Several states have now made marijuana or other THC products legal in some fashion, despite many still being considered Schedule 1 substances and illegal under federal law. Because these products are often used for medical purposes, whether the Americans with Disabilities Act (ADA) requires accommodation of these products is a common issue for employers. Several courts have now addressed the tension between federal and state law regarding the legality of marijuana or similar substances and the impact of that tension on the ADA or similar state discrimination laws.

In several states, both state and federal courts have held that employers do not need to accommodate medical marijuana use and that employers may terminate employees who are under the influence of marijuana in the workplace. See, e.g., Cotto v. Ardagh Glass Packing, Inc., 1:2018-1037 (D.N.J. Aug. 10, 2018); Roe v. Teletech Customer Care Mgmt., 257 P.3d 586 (Wash. 2011); Emerald Steel Fabricators, Inc. v. Bureau of Labor & Indus., 230 P.3d 518 (Ore. 2010); Johnson v. Columbia Falls Aluminum Co., 213 P.3d 789 (Mont. 2009); Ross v. RagingWire Telecommunications, Inc., 174 P.3d 200 (Cal. 2008); Washburn v. Columbia Forest Products, Inc., 134 P.3d 161 (Ore. 2006). Some state courts have relied on their state’s lack of a specific discrimination law regarding marijuana to find that employers did not need to accommodate employees’ use of it. Regardless, a volume of case law supports the contention that the employer need not accommodate marijuana or other products containing THC.

However, it is worth noting that other courts, commonly in states with specific marijuana anti-discrimination statutes, have found that employees may have a private right of action for discrimination based on medical marijuana use. See Whitmire v. Wal-Mart Stores Inc., 3:17-cv-08108, (D. Ariz. Feb. 7, 2019). Additionally, the Massachusetts Supreme Court has held that employers should accommodate medical marijuana use by their employees. In Barbuto v. Advantage Sales and Marketing, LLC, 78 N.E.3d 37 (2017), the Supreme Court of Massachusetts addressed an employer that terminated a newly hired employee after her drug screen flagged marijuana in her system, despite the employee’s explanation that she used marijuana pursuant to a physician’s orders. The court found that creating an exception to the employer’s zero-tolerance drug policy to allow marijuana use outside of work could be a reasonable accommodation.

In Indiana, the most pressing question is whether an employer must accommodate CBD oil use by employees. Though Indiana Senate Enrolled Act 52 has now made CBD oil legal in Indiana and the 2018 Farm Bill legalized all hemp-based products, CBD oil made from hemp that contains more than 0.3 percent THC is still considered a Schedule 1 substance by the DEA, and consumption of CBD oil with such amount of THC is prohibited under federal law. It is also worth noting the DEA has been skeptical that CBD oil can contain this little amount of THC in the past. See Drug Enforcement Administration, “Final Rule: Establishment of a New Drug Code for Marihuana Extract,” (2016) (stating the DEA’s position that “[a]lthough it might be theoretically possible to produce a CBD extract that contains absolutely no amounts of other cannabinoids, the DEA is not aware of any industrially-utilized methods that have achieved this result.”). Because consumption of products with more than 0.3 percent THC is still illegal under federal law, and because Indiana does not have a statute prohibiting discrimination based on CBD oil use, employers in Indiana are not required under state law, nor under the Americans with Disabilities Act, to accommodate employees who are flagged for THC in their systems because of CBD oil use. This essentially means it is up to the employer whether it wants to accommodate CBD oil containing THC or not (unless the organization is a federal contractor or receives federal grant money, in which case the employer would be subject to the Drug-Free Workplace Act and required to prohibit the use of controlled substances).

There are, however, some issues an employer may want to consider before deciding on accommodation. First, a drug screen may flag the trace amounts of THC in CBD oil if an employee or applicant uses it in large quantities. If an employer chooses to accommodate CBD oil use, its drug testing policies and practices should allow employees a certain amount of time to explain the THC in their system following a positive result. Second, regardless of the decision to accommodate or not, policies should be enforced consistently with all employees. Users of CBD oil tend to use it to treat medical issues and are more likely to be considered disabled under the ADA. If some employees can use CBD oil but persons in a protected class cannot, this practice may draw a discrimination claim.

Drug testing concerns

Because the legality of accommodating marijuana or other products containing THC is not settled, and because use of such products is becoming more prevalent, some employers have considered moving away from flagging THC on drug screens or eliminating drug screens altogether. Though this approach may assist an employer in retaining employees who would otherwise be terminated due to a drug screen, loosening drug screen requirements or eliminating screens comes with risk.

Particularly in workplaces with exposure to many safety hazards, a failure of an employer to exercise reasonable care in testing for drugs or alcohol use may lead to liability for an accident due to negligence. Should an employer fail to test or remove an employee it knows to be under the influence of marijuana or other substances, and the employee then injures someone else in the performance of his job duties, the employer may be found to have negligently retained or supervised the employee. Negligent retention and supervision may impose liability on an employer when an employee “steps beyond the recognized scope of his [or her] employment to commit a tortious injury upon a third party.” Clark v. Aris, Inc., 890 N.E.2d 760, 765 (Ind. Ct. App. 2008).

These principles are upheld in other states, as well. For example, in a case out of Ohio, an employee committed a violent crime against a customer during employment and while under the influence of drugs. The employer failed to conduct a drug test, and the court found the employer could be held responsible for the attack: “The facts in this case are pristine. Taylor abused drugs, which is criminal conduct in Ohio. … With a reasonable amount of care, A-Able Rents could have known of Taylor’s criminal propensity. … A-Able Rents should have known of Taylor’s drug abuse. … Consequently, a reasonable jury could have found the failure to inquire into Taylor’s employment history before hiring is causally connected to and may have proximately caused the attack on Marie Stephens.” Stephens v. A-Able Rents Co., 654 N.E.2d 1315 (Oh. Ct. App. 1995).

Should an employer have an environment where several safety risks are present, eliminating drug screening altogether or not testing for THC could lead to liability. However, if an employer has an environment that does not contain much safety risk, loosening drug testing requirements may pose fewer liability concerns. Carefully evaluating the workplace environment is critical to determining the drug testing policy that should be implemented by an employer, despite the changing legal treatment of certain substances.•

Amy Wilson and Alexandra Oxyer are attorneys in Frost Brown Todd LLC’s Indianapolis labor and employment practice group. Opinions expressed are those of the authors.

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