Reefer Madness: The Thorniest Labor Issue Of The Decade

Last May, food services and facilities management company Sodexo fired a Massachusetts food supervisor after she tested positive for marijuana. It was standard policy—the employee, Bernadette Coughlin, had fallen at work, breaking her arm, and protocol required a mandatory drug test following an injury. Although Coughlin’s job was not “safety sensitive,” Sodexo’s policy was clear: One strike and you’re out.

There was just one problem: The policy was written well before the state voted to legalize recreational marijuana use in 2016. Coughlin maintains she never imbibed on the job, but rather had vaped the night before. It was a reasonable assertion given that tetrahydrocannabinol, or THC, the main active ingredient in cannabis, is detectable days or even weeks after use. Sodexo now faces a wrongful termination suit, though it was technically complying with U.S. federal law.

Sodexo is far from alone right now as thousands of American companies—across nearly every geography and industry—struggle to navigate what is fast becoming the most treacherous minefield in labor law: workplace drug policy. As of the last midterm elections, 10 states and Washington, D.C., had legalized marijuana for recreational use for adults over 21 and 31 states had legalized medical marijuana; of those 31, 12 ordered companies to make accommodations for medical marijuana users. That means companies with a zero-tolerance policy related to marijuana can easily run afoul of state law—even as that state’s law conflicts with federal law, under which marijuana is still a Schedule 1 controlled substance and illegal in all forms. The result is a new headache for CEOs who must somehow balance issues of unsettled law, privacy, insurance requirements—and, in many cases, workplace safety.

“Confused and concerned,” is how Bob Kill, CEO of manufacturing consultancy Enterprise Minnesota, sums up how his clients are feeling with regard to marijuana legalization and workplace drug policy: Medical marijuana has been legal in Minnesota since 2014, but it’s the looming prospect of legal recreational use that has employers reeling. Recreational legalization bills were introduced in both chambers of state government in January, and most expect some version to pass within the next year. Once that happens, Kill expects employers to begin random drug testing, if they haven’t already, to ensure workplace safety—but what they’ll do about the results remains unclear. “Even if someone tests positive, would it be legally within your right as an employer to take action?” Kill asks. “That still hasn’t been worked out.”

Given the rapidly shifting ground, it’s not surprising that so many workplace drug policies are out of date. According to HireRight’s 2018 Employee Screening Benchmark Report, 38 percent of HR departments lack a policy to accommodate either medical or recreational marijuana use. “That is the big void,” says Kill, who recently consulted an attorney to get some perspective on the topic for his own company’s policy. “She said that’s what everyone is asking now: ‘What do I put in my employee handbook?’”

Complicating matters further, the Trump Administration has been virtually silent on the subject, other than former attorney general and longtime marijuana foe Jeff Sessions reversing an Obama-era policy that said federal authorities would defer to state laws with regard to marijuana prosecution. “[Sessions] basically said, ‘We don’t recognize the statutes passed by the states and if we choose, we will federally prosecute companies and individuals because the states are trying to thwart the federal acts that have been passed,’” said Stephen Cates, a faculty member for graduate programs in Purdue University’s Global School of Business.

“But then he did nothing, and now he’s out, so who knows?” says Kathryn Russo, a principal with law firm Jackson Lewis. “At the moment, nothing is happening at the federal level. Supposedly, Trump supports letting the states deal with it—supposedly, but you never know.”

State courts seem to be reading that laissez faire attitude as permission to side with employees. Before 2017, Russo says employers never lost medical marijuana cases. The case law went overwhelmingly in favor of employers largely because marijuana is illegal under federal law. But last year, three cases found for the plaintiffs. “Some state courts are saying, the federal government isn’t enforcing it, so we’re going to enforce state law that says you need to accommodate,” she says.

Courts are likely to see many more cases. Quest Diagnostics, the medical testing company, has reported that five out of 16 industries—transportation and warehousing, retail trade, public administration, finance and insurance and wholesale trade—saw double-digit growth in positive drug tests between 2015 and 2017, with marijuana being the most commonly detected substance.

The Impact on Hiring

That’s causing CEOs headaches not only on the legal side, but on the talent front, particularly where marijuana use is legal. “Some people are stopping drug testing because the unemployment rate is so low,” says John Kramer, CEO of Cambridge Engineering, a manufacturer of heating systems based in Chesterfield, Missouri (where medical marijuana is legal). The numbers appear to back him up: According to a survey by the Employers Council, 10 percent of Denver employers that screen for drugs had dropped marijuana as of 2016, the most recent date for which data are available.