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It's High Time for Employers to Consider Policies and Strategies in Light of Michigan's Marijuana Statutes

April 08, 2019

Michigan has two statutes regulating the use of marijuana: 

  1. The Michigan Medical Marihuana Act, which was enacted in 2008.
  2. The Michigan Regulation and Taxation of Marihuana Act (also known as the Recreational Marihuana Act) was passed by the voters in November 2018 and became effective in December 2018.

Now that the smoke has cleared from the passage of the Recreational Marihuana Act, it is a good time to consider the impact of both statutes upon employer policies. While the statutes are similar, in that they deal with the use of marijuana in Michigan, their provisions regarding employer workplace policies are substantially different. 


RECREATIONAL MARIHUANA ACT (RMA)

Regarding employer drug policies, the RMA does not prohibit an employer from disciplining an employee either for violation of a workplace drug policy, or for working under the influence of marijuana. In addition, the RMA does not restrict a private employer from maintaining and implementing a zero-tolerance drug policy. Importantly, the RMA allows an employer to impose sanctions for an employee’s use of marijuana, where the employer can establish either

  1. use of the marijuana violated a workplace drug policy, or
  2. the employee was working while under the influence of marijuana.

Unfortunately, regarding the “under the influence” circumstance, the statute does not provide any criteria for an acceptable showing that the employee was actually “under the influence” of marijuana. The statute also contains no presumption that, if an employee tests positive for marijuana, the employee may be considered to have worked “under the influence.” 

In terms of practical application, under the RMA, if an employee fails a post-injury drug test required under an employer’s workplace drug policy, the employee may be disciplined. The discipline may be applied under the RMA, even if the employer could not factually demonstrate that the employee was actually working “under the influence” of marijuana. 

Given the very recent enactment of the RMA, there has not yet been any case law interpreting its provisions. 


MEDICAL MARIHUANA ACT (MMA)

Like the RMA, the MMA also has provisions governing the employment of workers who use marijuana. In particular, the MMA contains protections for an employee who is a “qualifying patient,” and who possesses a valid medical marijuana card. A “qualifying patient” is “a person who has been diagnosed by a physician as having a debilitating medical condition,” as defined by the MMA. Under the MMA, a cardholder is not subject to “arrest, prosecution, or penalty in any manner, or denied any right or privilege including, but not limited to, a civil penalty or disciplinary action by a business or occupational or professional licensing board or bureau for the medical use of marihuana” in accordance with the MMA. The RMA has no similar provision.   

Regarding the employment of medical marijuana cardholders, the MMA does not require an employer to “accommodate the ingestion of marihuana in any workplace or any employee working under the influence of marihuana.” Like the RMA, the MMA unfortunately does not define the term “under the influence.” Unlike the RMA, however, there is no option for the employer to discipline the employee, in a situation in which the employer can show that the employee violated a workplace drug policy by testing positive for marijuana, but there is no sufficient showing that the employee was actually working “under the influence” of marijuana. 


MMA vs MESA

The Michigan Court of Appeals considered the workplace provisions of the MMA in Braska v Challenge Manufacturing Company.  In Braska, the Court of Appeals (Court) reviewed situations in which employees, each of whom had a valid medical marijuana card, were terminated from their employment after testing positive for marijuana. After their termination, the employees applied for unemployment benefits. Their employers disputed the employees’ entitlement to unemployment benefits, on the basis that the employees were disqualified from receiving benefits under the Michigan Employment Security Act (MESA). Specifically, the employers asserted that, under the MESA, an employee is disqualified from receiving unemployment benefits if the employee tests positive on a drug test. Hearings were held in regard to the employees’ claims for unemployment benefits, and it was found that each of the employees was discharged from their employment for testing positive on a drug test. As part of the process of determining the employees’ entitlement to benefits, their claims were considered by the Michigan Compensation Appellate Commission (MCAC). The MCAC denied their claims on the basis that the MESA provided that an employee who tested positive for a controlled substance is disqualified from receiving unemployment benefits. 

The employees then appealed the denial of their unemployment claims to the Michigan Court of Appeals. The Court agreed that, under the MESA, the employees would be disqualified from receiving unemployment benefits. The Court also noted, however, that the MMA disallowed the imposition of any penalty, or the denial or right or any privilege for a person who held a valid medical marijuana card. The Court went on to conclude that the disqualification from employment benefits, based upon a positive drug test, constituted a “penalty” under the MMA. The Court then had to resolve the conflict between the MESA disqualification provisions, and the MMA prohibition against the imposition of a penalty against a medical marijuana card holder. The Court reviewed the MMA and noted that the MMA contained a provision which stated that the MMA preempted all other acts or parts of acts inconsistent with the MMA. In other words, the MMA protection provisions would supersede the MESA disqualification provisions. The Court ultimately held that, in light of the fact that the MMA superseded the MESA, the employees were entitled to unemployment benefits. 


WORKERS’ COMPENSATION TOO?

In Braska, the Court held that a MCAC decision denying unemployment benefits violated the protection provisions of the MMA. The MCAC is the same appellate body which decides appeals in workers’ compensation cases. At least one commentator has suggested that the rationale and result in Braska should also be applied in the context of workers’ compensation claims. This would occur in a situation, for example, in which an employee suffers an on-the-job injury and fails a post-injury drug test. The employee then submits a claim for workers’ compensation benefits, which is disputed on the basis that the employee’s failure to pass the drug test precludes entitlement to workers’ compensation benefits. Under the rationale of Braska, if the employee subsequently initiated workers’ compensation litigation, and the claim was denied by the MCAC, then the denial of the workers’ compensation benefits for failure to pass the post-injury drug test would constitute a “penalty” under the MMA. Based upon the reasoning in Braska, the employee would assert that the denial of workers’ compensation benefits by a magistrate or the MCAC would constitute a “penalty” under the MMA, and the employee should not be denied workers’ compensation benefits. 


ACTION PLAN

Both the RMA and MMA have created new issues for employers in implementing workplace drug policies. Employers will need to consider whether their current drug policy should be revised, in light of these relatively recent acts. Employers will also need to determine whether new strategies should be pursued in workers’ compensation claims, where the dispute of entitlement to workers’ compensation benefits is premised upon a violation of the employer’s drug policy. 

Smith Haughey attorneys can help you navigate these issues and avoid any potential potholes. Should you have questions regarding your workplace drug policies, please contact attorneys Jane Hofmeyer or Kim Mitchell.


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