Hall Render – Marijuana in the Workplace: Legal Issues for Texas Employers


The DFW Hospital Council posts guest blogs by our Associate Members. The following was provided by Hall Render.

By Robin Sheridan, JD, MILR at Hall Render, with assistance from Law Clerk Victoire Iradukunda

At least 30 U.S. states and D.C. have legalized marijuana in some manner and 9, including D.C., have legalized it for recreational use. At the federal level, however, marijuana remains classified as a Schedule I drug alongside heroine and LSD. Caught amidst the ever-evolving state and federal laws, employers are finding themselves left to untangle a mixed bag of seemingly contradictory directives. This article will provide an overview of the laws, analyze their impact on the workplace, and offer practical takeaways for Texas employers to apply as they try to balance legal authority with their duty to provide safe workplaces, manage employee rights, and optimize workplace productivity.

Federal Law:
The Controlled Substances Act, Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (CSA) is the federal law that criminalized marijuana. While multiple challenges have been brought, the Supreme Court has continuously held that the federal government has a right to regulate and criminalize cannabis, even for medicinal purposes. See United States v. Oakland Cannabis Buyers’ Cooperative (2001) (no medicinal necessity exception to the CSA’s prohibitions on manufacturing and distributing marijuana); Gonzalez v. Raich (2005) (Congress may regulate the use and production of home-grown marijuana given potential substantial economic effect on interstate commerce).

The CSA granted the federal government, through the Drug Enforcement Agency and the Food and Drug Administration, authority to regulate the manufacturing, importation and exportation, distribution, and dispensing of controlled substances. To achieve this goal, the CSA provides that drugs shall be placed in five categories – Schedule I through V – based upon the government’s determination of the drug’s potential for abuse, medicinal value, potential risk to the public health, and psychic or physiological dependence liability. Marijuana is listed as a Schedule I substance because the federal government determined it has a “high potential for abuse; has no currently accepted use in treatment in the United States,” and “there is a lack of accepted safety for use of marijuana under medicinal supervision.”

Employers must comply with the American with Disabilities Act (ADA). Certain government funded employers must also comply with the Drug Free Workplace Act (DFWA) and the Federal Omnibus Transportation Employee Testing Act (FOTETA). The ADA prohibits discrimination against individuals with disabilities. The DFWA requires that federal contractors adopt a zero-tolerance policy at their workplaces and comply with strict drug-free workplace requirements, including establishing a drug-dree awareness program; publishing and giving employees statements about the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance; and notifying employees that they must abide by the drug-free workplace statement as a condition of employment. FOTETA requires Department of Transportation (DOT) agencies to implement drug and alcohol testing of employees who hold a “safety-sensitive” position such as truck driving.

Regardless of the federal laws, the government has historically taken a relatively relaxed approach to prosecuting at the federal level and has left the policing of marijuana in the hands of the states. In August 2013, the then-U.S. Attorney General James Cole issued a policy stating that the DOJ would defer to the states to address marijuana activity and would not put any additional resources toward prosecuting such activities at the federal level. Many legitimate marijuana businesses felt comfortable operating within state-law-protected jurisdictions following the Cole Memo.

However, the waters were muddied in early 2018 when current Attorney General Jeff Sessions issued a memo that shifted the overall federal attitude away from the Obama-era “hands-off” policy approach and gave federal prosecutors across the nation free reign to decide individually how to prioritize resources to crack down on marijuana possession, distribution, and cultivation, even where state laws allow for such activities. Three months after his initial memo, Sessions released another memo, urging federal prosecutors to “consider every lawful tool at their disposal,” including the death penalty, when prosecuting drug-related crimes. Regardless of the Sessions Memo, however, the state-legalized marijuana industry has not slowed. Instead, the leading markets continue to forecast exponential growths in sales, with Washington projecting to reach $2.3 billion sales in 2020, and the overall market projected to reach $24.5 billion sales nationwide by 2021.

Texas Law:
The Texas Compassionate Use Act of 2015
While marijuana remains illegal at the federal level, several states have legalized it within their jurisdictions, including Texas. The Compassionate Use Act (Tex. Health & Safety Code Ann. § 487.001, et seq.) (CUA) legalized the limited use and distribution of marijuana in Texas. Under this law, qualified patients can use a “low-THC cannabis” to treat physician-diagnosed “intractable epilepsy,” which is defined as “a seizure disorder in which the patient’s seizures have been treated by two or more [FDA approved] drugs that have failed to control the seizures.”

The low-THC cannabis cannot contain any more than 10% cannabidiol and not more than 0.5% tetrahydrocannabinol (THC). No other conditions can be lawfully treated at this time. Consider also: Texas Occupations Code §169.001 specifically excludes smoking from the definition of “medicinal use,” meaning that a physician may not prescribe smoking as the means of ingesting the medicinal marijuana.

As of today, only three businesses are licensed to dispense and process low-THC cannabis, and less than 50 physicians are registered as qualified prescribers in the Compassionate Use Registry of Texas (CURT). While the first patient to receive medicinal marijuana legally in Texas received it in February 2018 – over two years after Texas legalized the medicinal use of marijuana – the country is growing more accepting of legalized marijuana. A 2017 poll by Gallup revealed that 64 percent of Americans support the legalization of marijuana, and efforts are being made at the state legislative level to expand medicinal marijuana in Texas. In 2017, House Bill 81, which would have decriminalized possession of one ounce or less, made it into the Texas House voting schedule.

Also in 2017, House Bill 2107 was introduced and would have expanded the CUA to allow Texans suffering from terminal cancer and post-traumatic stress to access medicinal marijuana. Although neither bill advanced to a vote, it is clear that legalized marijuana in Texas is here to stay, and, therefore, it is important for Texas employers to familiarize themselves with common issues that can arise at the workplace. Below are answers to common questions that employers can use to become more familiar with the legal landscape surrounding marijuana in the workplace.

Can an employer terminate an employee for failing a drug test due to the employee’s use of recreational marijuana while off duty and off premises?
Historically, courts generally held that an employee could be terminated for failing a drug test due to activities conducted off-the-clock. However, Texas Administrative Law Judge (ALJ) William G. Newchurch veered from this view in a 2017 ruling. In Texas Education Agency, Educatory Leadership and Quality Division v. Maryam Roland, the ALJ ruled that a public school teacher shouldn’t be sanctioned after testing positive for marijuana. Roland failed a drug test after she had consumed an edible product containing marijuana while on vacation in Colorado.

The Texas Education Agency requested guidance from the ALJ as they considered whether to ask the Board for Educator Certification to suspend Roland’s license and whether her actions violated “the policies of the school district that employed her, state and federal law, and the Educators’ Code of Ethics.” The ALJ held that Roland had not violated either law, finding that Roland consumed the drug in Colorado, where the use of marijuana was legal. The ALJ held that “[p]ossession of a usable quantity of marijuana is a criminal offense in Texas—but so is gambling…” In rendering his decision, the ALJ reasoned that the Board should not “find a teacher unworthy to instruct in Texas because she legally gambled in Nevada.” Similarly, the ALJ recommended that the Board should not “find Respondent unworthy to instruct because she legally consumed marijuana in Colorado.” Though the ALJ’s ruling was not legally binding, it serves as a warning to Texas employers to carefully consider termination decisions in this situation.

Are employers required to make any accommodations for employees using medicinal marijuana?
The ADA prohibits employers from discriminating against people with disabilities and requires employers to provide reasonable accommodations for such individuals. However, the ADA does not consider individuals who currently use illegal drugs to be qualified as disabled individuals entitled to reasonable accommodation, and marijuana is listed as an illegal drug under the CSA. 42 U.S.C. § 12114(a). Similarly, the Texas Labor and Human Resource Codes mirror the ADA Amendments with respect to the meaning of “disability.” Therefore, no accommodation would be required for a marijuana user under the state fair employment law at this time.

How does this impact drug test results?
Because the DOT’s Medical Marijuana Notice states that marijuana, in all forms, remains illegal under the CSA, the DOT expects that all medical review officers will treat marijuana, whether used recreationally or medicinally, as a Schedule I illegal drug and issue positive results to these tests. However, the employer’s medical review officer should not apply DOT standards to his/her review of a medicinal marijuana user and, instead, should use standard procedures to address the employee’s claim of legal medicinal use.

November Midterm Elections
During the November 6, 2018 midterm elections, four states included marijuana initiatives on their ballots and 3 of those initiatives passed. North Dakota voters rejected a ballot measure which would have allowed the recreational use and sale of marijuana for people 21 and older. Utah and Missouri voted to legalize medicinal marijuana in both states. In Michigan, 55 percent of voters endorsed a ballot measure that legalized the sale, cultivation, and use of recreational marijuana for people 21 and older, making Michigan the 10th state and the first Midwest state to legalize marijuana for recreational purposes. The passage of marijuana initiatives like those seen during the midterm elections is a sign that bipartisan lawmakers are becoming increasingly more supportive of the legalization of marijuana.

Additionally, the resignation of former Attorney General Jeff Sessions who was a longtime opponent of marijuana signals that the federal government might shift its focus away from marijuana, at least for the moment. Proponents of the marijuana industry certainly seem to think so. On the same day Sessions’ resignation was announced, stocks shot up for several marijuana companies. Canopy Growth and Aurora Cannabis rose 8.1 percent and 9 percent, respectively, that day and Tilray, a marijuana production company based in Canada, closed up 30 percent.

Employers should not only keep a close eye on legislative activities in their own states but also activities in other jurisdictions as lawmakers all over the country will look to states such as Michigan, Utah, and Missouri as they develop marijuana legislation in their own states.

Editor’s note: The recommendations provided in this article are for educational purposes only and are not to be construed as actual legal advice. Always consult with a local attorney.

For additional information about this topic, contact Mac Stewart (214) 615-2000 or Robin Sheridan at (414) 721-0469.

Robin Sheridan is an attorney with Hall, Render, Killian, Heath & Lyman, PC., the largest health care-focused law firm in the country. Visit the Hall Render Blog at http://blogs.hallrender.com for more information on topics related to health care law.