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.

“I don’t feel loosening hiring standards is the answer,” says Marc Braun, president of Cambridge Engineering. He’s also navigating the opioid epidemic, which has ravaged the labor market across the country. “[That] is a larger problem and a bigger challenge than legalization of marijuana, but the legalization of marijuana surfaces that and creates even more urgency around it.”

It also creates agita for CEOs who are trying to keep their workplaces safe. In a factory with potentially lethal machinery, drug testing keeps a lid on accidents—and lawsuits. “I am a chemical engineer by training and for the first 20 years of my career I had random drug testing,” he says. “I believe it allowed for me to have someone else holding me accountable, and I viewed it as a helpful element to me. So we’re looking at all the policies and how to be supportive, rather than punitive.”

In cases where a position is not safety sensitive, some employers are choosing to, as quietly as possible, make exceptions to their own rules in order to hold on to their most valuable people. Stanley Jutkowitz, senior counsel for employment law firm Seyfarth Shaw, recounts a recent call from a client describing just such a dilemma. “They said, ‘We’ve got a problem. One of our star employees just tested positive, he or she was not under the influence and we don’t want to lose that person. Do we have to fire them?’” The position was not safety sensitive. Ultimately, the CEO chose to keep the employee.

But cherry-picking when to follow policy can put a company on shaky ground. “You can change how you administer your policy, but you really have to be mindful of being consistent in that approach, so you don’t attract discrimination claims,” says Don Lawless, labor and employment partner in Barnes & Thornburg’s Grand Rapids office.

One of the key challenges for CEOs and their CHROs trying to decide whether to continue testing is that detection for marijuana-related impairment is an imperfect science. “When employers start looking at whether someone is under the influence, there are no hard and fast standards as to what the heck that means,” says Jutkowitz.

“That to me is the critical issue,” adds Russo. Say, for example, a forklift operator you’ve hired tells you he has a medical marijuana card. He says he will never use it at work, only at home. “And he tells you, ‘I can still come in and drive the forklift.’ A lot of employers struggle with that because how do you really know?”

The Trouble with Testing

While conventional wisdom has been that despite the presence of THC in hair and urine samples, impairment is short-lived, other, newer studies indicate that marijuana use impairs beyond the intoxication window, says Todd Simo, M.D., chief medical officer for HireRight. “People say, ‘I’m no longer intoxicated, no longer acting funny,’ but when they try to do psychomotor skills or some complex functions like running machinery or driving, they are still impaired.” In fact, there are conflicting reports as to whether high levels of THC in the bloodstream even correlate with high levels of impairment—or if it’s just the opposite.

This uncertainty is not just a problem for employers. Law enforcement agencies struggle to assess impairment levels in drivers. In advance of the much-anticipated legalization of marijuana across Canada, a report co-produced by the European Monitoring Centre for Drugs and Drug Addiction and the Canadian Centre on Substance Use and Addiction found the percentage of Canadian drivers fatally injured in vehicle crashes who tested positive for drugs (40 percent), now exceeds that of drivers testing positive for alcohol (33 percent). And, unlike breath alcohol detection tests, which are cheap, reliable and easily administered roadside, a breathalyzer for cannabis does not yet exist.

Simo says oral tests can narrow the usage window to within a day or so, but still can’t assess level of impairment. “Everyone is struggling with [defining] the level of acute intoxication,” says Simo. “That’s all been figured out for alcohol, but with marijuana, it’s still virgin territory.”

The issue puts employers in an almost impossible position. “I can’t stress enough how much we need technologies that are able to tell whether or not someone is impaired. It’s the missing piece,” says Braun.

But a breathalyzer-equivalent commercial product will take time, leaving companies to grapple with this on their own. “And there are risks in all of it,” says Michelle Lee Flores, a national labor lawyer with the law firm Akerman who works with California companies responding to legalization. “[Legalization] is putting employers in the position of, ‘I have to do something and I feel like I’m going to be damned if I do and damned if I don’t.’ Every road that’s an option feels like there is a risk involved.”

Read more: If You Were Elon Musk, You’d Drink Whiskey And Smoke Pot Too

C.J. Prince: C.J. Prince is a regular contributor to Chief Executive and other business publications.