Legal cannabis is having a moment in the United States and only continues to gain momentum. While cannabis remains a “Schedule I” drug under the federal Controlled Substances Act, 21 U.S.C. Section 801, et seq., nearly 30 states and the District of Columbia have now legalized cannabis in some form, whether for recreational or medical use. During the 2016 election cycle, the voters of several states—including Arkansas, California, Colorado, Florida, Massachusetts, Montana, Nevada, and North Dakota—voted in favor of ballot measures that either legalized the use of cannabis or expanded currently existing programs. Neighboring West Virginia is the most recent state to enact medical cannabis legislation, with the Governor signing West Virginia Senate Bill 386, the WV Medical Cannabis Act, in April 2017.

Gov. Tom Wolf signed the Pennsylvania Medical Marijuana Act in April 2016, see Senate Bill 3 of 2016, 35 P.S. Section 10231.101. The act establishes Pennsylvania's Medical Marijuana Program, which will allow patients with a “serious medical condition” (defined in 35 P.S. Section 10231.103 to include 17 specific conditions, including cancer, epilepsy, PTSD, and Autism) to receive a certification to treat with medical marijuana obtained from a licensed dispensary in the commonwealth. Since the act's passage, the Department of Health has moved at a swift and efficient pace to draft and approve regulations, administer and review permit applications, issue the first round of permits to grower/processors and dispensaries, and register doctors to certify prospective medical marijuana patients.

One of the next major steps for the Program will be the issuance of certifications to patients, allowing individuals to obtain and use medical marijuana. Most industry watchers expect that this will occur in the spring or summer of 2018. That will mark a critical moment for Pennsylvania businesses, as it will be the first time many will have to wrestle with the unique challenge posed by medical marijuana, i.e., the drug is authorized for medical use in the Commonwealth but remains illegal under federal law. Now that it appears the legal use of cannabis will be a mainstay in Pennsylvania and across the United States, Pennsylvania employers must be mindful of the Act's provisions, both on their own and in connection with several federal statutes.

What Does the Medical Marijuana Act Say About Employment?

35 P.S. Section 10231.2103 of the act, titled “protections for patients and caregivers,” contains a specific provision applicable to employers. Section 2103(b) contains an anti-discrimination provision, but makes clear that an employer need not accommodate an employee using or being under the influence of marijuana on the employer's premises.

Section 2103(b)(1) states, in pertinent part: “No employer may discharge, threaten, refuse to hire or otherwise discriminate or retaliate against an employee … solely on the basis of such employee's status as an individual who is certified to use medical marijuana.” Section 2 goes on to state, however, that, “nothing in this act shall require an employer to make any accommodation of the use of medical marijuana on the property or premises of any place of employment.” Lastly, the act states that it shall not require an employer to, “commit any act that would put the employer or any person acting on its behalf in violation of federal law.”

What Do Section 2103 and Applicable Federal Laws Mean for Employers?

• Hiring and Firing

Because the decision to hire or fire an employee may implicate the employee's right to use medical or recreational cannabis, employers must be aware of the applicable law. State court decisions from the early part of this decade emphasized marijuana's illegal status under federal law and found in favor of employers on these issues. However, more recent cases highlight the applicability of state medical marijuana laws and the need for compliance by employers.

In Emerald Steel Fabricators v. Bureau of Labor & Industry, 230 P.3d 518 (Ore. 2010), the employer discharged an individual after he disclosed that he was a registered user of medical cannabis, and the employee filed suit under the state's disability discrimination statute. The Oregon Supreme Court held that the employer did not act unlawfully in terminating the employee, holding that because federal law prohibited the use of cannabis, and the employer discharged the employee for engaging in illegal activity, the Oregon disability statute did not apply. Similarly, the Colorado Supreme Court held that, although the use of medical cannabis was lawful under state law, an employer could terminate an employee who uses medical cannabis program because it was still unlawful to do so under federal law, see Coats v. Dish Network, 350 P.3d 849 (Colo. 2015).

Recent decisions from courts in the Northeast have signaled a potential swing of the pendulum. In March, the Supreme Judicial Court of Massachusetts held that a plaintiff who was discharged after testing positive on a pre-employment drug test stated a prima facie case of discrimination because she was a “handicapped person” under the state's disability statute, and her use of medical marijuana recommended by her doctor was a “reasonable accommodation,” as in Barbuto v. Advantage Sales and Marketing, No. SJC-12226 (Mass. March 9). Similarly, a Rhode Island trial court ruled that federal law did not pre-empt Rhode Island's medical marijuana statute and that the employer's discharge of an employee for her medical marijuana use was a violation of both the state's medical marijuana and civil rights statutes in Callaghan v. Darlington Fabrics, No. PC-2014-5680 (R.I. Super. Ct. May 23, 2017). Notably, the Rhode Island statute contains employment-related provisions which mirror 35 P.S. Section 10231.103.

There is some uncertainty in how Pennsylvania courts would determine whether an employment decision was made “solely on the basis” of an employee's status as a medical marijuana user. Thus, employer should examine and document hiring and adverse action decisions to ensure there is a basis other than an employee's status as a lawful user of cannabis, such as safety or an inability to effectively complete the employee's essential job duties.

• Employee Working Conditions and Reasonable Accommodations

Employers must also be mindful of the Americans with Disabilities Act (ADA), 42 U.S.C. Sections 12101. The ADA generally prohibits employers from discriminating against employees with disabilities and requires employers to make accommodations for employees with a disability, so long as the accommodation does not impose an “undue hardship.” Because individuals certified under the act will do so in order to treat a “serious medical condition, see 35 P.S. Section 10231.103, they will usually qualify as being “disabled” under the ADA.

After determining an employee has a qualified disability, employers would be wise to engage in an initial interactive process to determine whether it is feasible to make accommodations for the employee to lawfully use cannabis away from the workplace and still perform their job. Before taking any action, the employer should ensure that it ties its decision to the hardship in accommodating the employee, the employee's inability to complete the job, or a decline in the employee's performance.

• Zero Tolerance and Drug Testing Policies

Another important consideration for employers is the desire to maintain a safe and drug-free workplace. The act neither requires an employer to allow the use of cannabis on their premises nor prohibits employers from implementing a legitimate drug testing policy. Indeed, the act provides that, “nothing in this act shall require an employer to make any accommodation of the use of medical marijuana on the property or premises of any place of employment.” Furthermore, the federal government requires contractors in certain industries, such as transportation, to submit to drug testing, a requirement which likely would not be superseded by state law.

There is a recognized need for employers to maintain a safe and drug-free workplace, and employers should not abandon a legitimate drug testing policy that has those goals in mind. However, because the act states that employers cannot take an adverse employment action “solely” due to an employee's status as a medical marijuana user, employers should examine their existing drug testing policies, and particularly any “zero tolerance” policy. In doing so, employers should set clear expectations for employees and state the legitimate purpose of such testing. As noted above, any decisions made based on a positive drug test for marijuana must be preceded by an examination of the employee's status under the act, whether a reasonable accommodation is available, and whether the employee can perform the essential functions of their job.

While medical marijuana presents new and unique challenges for employers, general best practices will help to fend off legal claims and place the employer in the best position should litigation arise. In all cases, employers should engage in a deliberative and documented process which connects employment decisions to the important interests of employee conduct, job performance, and workplace safety.

Joseph A. McNelis III is a member of Fox Rothschild's cannabis law practice group. An associate with the firm, he focuses his practice on the litigation of labor and employment matters and commercial disputes.