What Risks Will Employers Face Under the New Medical Marijuana Laws?

With the recent push to legalize medical marijuana across the country, there have been a significant amount of regulatory changes in specific states.

Legislation for non-criminal marijuana use began in 1996. Just over 20 U.S. states and the District of Columbia have enacted some form of legislation so far.

Eight states have recently passed medical marijuana laws, and Illinois just became the 21st state to legalize medical marijuana on August 1st.

Statutes Differ Per State
These statutes are different across the states, but they do have one thing in common – they don’t specifically address the impact of legal medical marijuana on employers.

Companies who hire individuals in states with medical marijuana laws may not be aware of the circumstances they’ll face when an employee fails a drug test or admits to being a medical marijuana patient.

Employment Protections
Most states with any kind of medical marijuana law, haven’t incorporated statutory language to address civil protections for medical marijuana patients. Of the 21 jurisdictions that have medical marijuana legislation, 15 of them do not provide for any form of employment protections.

The courts in California, Oregon, Washington and Montana have all upheld employer decisions to terminate employees that were revealed medical marijuana patients.

The plaintiffs argued that medical marijuana users are protected under these recent statutes. They allege that the employer’s decision to discharge the user violates the state’s public policy, or that discrimination took place against them on the basis of a disability.

The courts have upheld that the medical marijuana statutes in their state only protect patients from criminal sanctions and that the statutes don’t create a clear public policy that supports wrongful termination claims.

With respect to legal claims based on disabilities, federal law preempts an argument that an individual is protected from disability discrimination if they are a medical marijuana patient.

How Are Employers in Medical Marijuana Jurisdictions Adjusting Policies?
The trend has been that employers with federal contracts or ones subject to federal regulations concerning drug-free workplaces do not have to change their policies.

Employers that are not subject to federal drug testing regulations or do not provide for employment protections should review their substance abuse policies to ensure compliance with local and state law.

To compliment a positive work environment with zero tolerance for this type of discrimination, an EPLI (Employment Practices Liability Insurance) policy should also be put into action.

Contact us today to learn how you can mitigate these risks. Call 201-847-9175 or email info@axisins.com.


Axis Insurance Services, LLC is a nationwide professional liability insurance brokerage located in Franklin Lakes, NJ. We offer custom insurance solutions in the areas of Errors and Omissions insurance (E&O), Directors and Officers liability (D&O), Employment Practices (EPLI), Commercial Crime, Privacy/Network Security and Fiduciary products for today’s professional services firms, including commercial real estate professionals, property managers, insurance agents, medical groups, third party administrators, accountants and other professionals.
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