Careless Conflicts: Medical Marijuana Implications for Employer Liability in the Wake of Vialpando v. Ben's Automotive Services

• Author: George Fitting
• Position: J.D. Candidate, The University of Iowa College of Law, 2017; B.A. English, Dickinson College, 2010
• Pages: 259-288

Careless Conflicts: Medical Marijuana Implications for Employer Liability in the Wake of Vialpando v. Ben’s Automotive Services George Fitting * ABSTRACT: There are 25 states and the District of Columbia that have legalized medical marijuana, but the federal government still lists the drug as a Schedule I controlled substance under the Controlled Substances Act. This conflict between state and federal law raises significant liability issues for employers whose employees obtain a medical marijuana prescription. Although state and federal courts have traditionally permitted employers to terminate employees for medical marijuana use, and did not require employers to pay for medical marijuana through workers’ compensation or private health insurance plans, some recent cases suggest a trend in the opposite direction. This Note explores employer medical marijuana liability concerns, and argues for an amendment to the Controlled Substances Act that either: (1) reclassifies marijuana as Schedule II or lower; or (2) exempts medical marijuana states, combined with state-level legislation providing explicit accommodation exemptions for employers, or a federal liability shield modeled after the Protection of Lawful Commerce in Arms Act, to give employers protection while respecting the medical needs of their employees. I. INTRODUCTION ............................................................................. 261 II. CANNABIS REGULATION IN THE UNITED STATES AND ITS RELATIONSHIP TO EMPLOYER LIABILITY ....................................... 262 A. T HE R EGULATORY F RAMEWORK OF C ANNABIS IN THE U NITED S TATES ................................................................................... 262 1. The Transition from Hemp Cultivation to Marijuana Cultivation ..................................................................... 263 * J.D. Candidate, The University of Iowa College of Law, 2017; B.A. English, Dickinson College, 2010. I would like to thank Evelyn Charles and my parents, Jane and Peter Fitting, for their love and support throughout the writing process, and the Iowa Law Review Editorial Board for its hard work bringing this Note to publication. 260 IOWA LAW REVIEW [Vol. 102:259 2. The Shift from Regulation to Criminalization ............ 263 3. Shifting Views and the Conflict Between State and Federal Law .................................................................... 266 i. Continued Federal Prohibition .................................... 266 ii. Legalization at the State Level .................................... 267 B . T HE R EGULATORY F RAMEWORK G OVERNING E MPLOYERS . ......... 268 1. Financial Risk from Loss of Federal Contracts ........... 269 2. Federal Occupational Safety and Health Act Workplace Liability .......................................................................... 270 3. Federal Criminal Accomplice Liability ........................ 270 4. Civil Liability for Employees’ Actions .......................... 271 III. THE EXIGENT NEED FOR REFORM ................................................. 273 A. N EW D EVELOPMENTS M ANDATING C OMPLIANCE WITH S TATE M ARIJUANA L AWS ................................................................... 273 1. Accommodations Required Under State Disability Acts ................................................................................. 274 2. Reliance on Judicial Prioritization of Federal Law ..... 274 3. A Trend Away from Federal Prioritization .................. 275 B. T HE H ARMFUL E FFECTS OF P ROTECTIONIST E MPLOYER A CTION ............................................................................ 277 C. J UDICIAL R ELIANCE ON E XECUTIVE D ISPOSITION AND D ISCRETION ............................................................................ 279 1. Ambiguous and Unreliable Declarations of Policy ..... 280 2. The Fickle Nature of Administrative Posturing. ......... 282 IV. THE CASE FOR REMEDIES AT THE STATE AND FEDERAL LEVELS. ... 282 A. M ARIJUANA S HOULD B E R ECLASSIFIED U NDER THE CSA FROM S CHEDULE I TO S CHEDULE II OR L OWER ................................... 283 1. Political Will for Reclassification. ................................. 283 2. Employers Would Retain Discretion to Terminate Where Reasonable......................................................... 284 B. A CSA E XEMPTION FOR S TATES W OULD E LIMINATE L EGAL C ONFLICT ............................................................................... 285 C. S TATE L EGAL E XEMPTIONS W OULD S HIELD E MPLOYERS ........... 286 1. Arizona and Delaware’s Exemption from Reasonable Accommodation ............................................................ 286 2. Minnesota’s Exemption for Impairment on the Job .. 287 3. Nevada’s Threat of Harm Exemption ......................... 288 4. Federal Passage of an Independent Liability Shield .. 131 V. CONCLUSION ................................................................................ 288 2016] CARELESS CONFLICTS 261 I. INTRODUCTION Cannabis was once a staple of the American economy, when hemp was prized for its myriad commercial applications. 1 After the Industrial Revolution introduced new technologies that reduced hemp’s usefulness, people began to value the medicinal properties of marijuana instead. Until the 20th century, cannabis was legal at both the state and federal levels. 2 However, rampant narcotics addiction to other drugs like cocaine and heroin (then marketed as medicines), coupled with a rising prohibitionist movement, caused the public to lump cannabis in with these other substances and criminalize cannabis possession and distribution. 3 State and federal marijuana laws were complementary until 1996, when California became the first state to legalize medical marijuana, prompting 22 other states and the District of Columbia to do the same over the next several years. 4 Since the federal government did not change its position, this created a conflict between state and federal law. 5 Under the Supremacy Clause of the Constitution, federal law controls where state law and federal law conflict. 6 States cannot forbid federal prosecutions of their citizens with medical marijuana prescriptions under federal law, but they can eliminate state prosecutions of those citizens under state law. Employers face significant liability issues if they retain employees who have obtained a medical marijuana prescription in states where it is legal to do so. 7 Examples of this liability include loss of federal contracts, vicarious and negligent retention and hiring liability, violation of federal law or public policy, and workplace safety violations. 8 Until recently, state courts have uniformly permitted employers to refuse to pay for medical marijuana under workman’s compensation or employee insurance plans, and to terminate employees who fail a drug test for marijuana regardless of whether they have a prescription. 9 Recent cases in Michigan and New Mexico broke away from traditional judicial deference to employer discretion on the issue, and have highlighted employers’ dilemma. 10 This Note argues that shielding employers from this liability without ignoring the needs of medical marijuana patients will require significant state and federal legislative reforms. Part II briefly introduces marijuana regulation, tracing its development from legal use in the 19th century to the 1. See infra Part II.A. 2. See infra Part II.A. 3. See infra Part II.A.2. 4. See infra Part II.A.3.ii. 5. See infra Part II.A.3. 6. See U.S. CONST. art. VI, cl. 2. 7. See infra Part II.B. 8. See infra Part II.B. 9. See infra Part III.A.2. 10. See infra Part III.A.3. 262 IOWA LAW REVIEW [Vol. 102:259 present conflict between state and federal law, and explores the theories of liability under which employers could be charged. Part III explains how recent case law has elevated the need for a solution to this problem, and Part IV analyzes four potential solutions. Part V advocates for either changing marijuana’s classification under the CSA or a combination of state and federal legislation to shield employers from liability if they retain employees who use medical marijuana. II. CANNABIS REGULATION IN THE UNITED STATES AND ITS RELATIONSHIP TO EMPLOYER LIABILITY This Part examines the legal status of cannabis in the United States from pre-criminalization to 2015. It discusses uncertainty about employer liability issues that arose when some states legalized medical marijuana, but Congress did not change marijuana’s classification as a Schedule I controlled substance. An understanding of the historical context from which current legislation has emerged is essential to an informed analysis of the larger problem that this Note considers. A. T HE R EGULATORY F RAMEWORK OF C ANNABIS IN THE U NITED S TATES State and federal cannabis laws currently conflict on the issue of cannabis regulation, but cannabis was not a criminalized substance at either level in the United States until the 20th century. 11 In fact, hemp 12 was once widely used as a commercial fiber, and played an integral role in American history. 13 As a result of rising prohibitionist sentiments, and a vigorous campaign that culminated in the Controlled Substances Act of 1970, Congress criminalized cannabis nationwide and state legislatures followed suit. 14 However, California became the first state to legalize medical marijuana in 1996, marking the start 11. See Mark Eddy, Overview: U.S. Federal Policy on Marijuana , in DRUG LEGALIZATION 138 (Noël Merino ed., 2011). 12. Hemp is a variety of the cannabis plant that generally has a tetrahydrocannabinol (“THC”) concentration of 0.3% or less, while marijuana is a variety that generally has a concentration of 5%–20%. Doug Fine, Opinion, A Tip for American Farmers: Grow Hemp, Make Money , L.A. TIMES (June 25, 2014, 7:17 PM), http://www.latimes.com/opinion/op-ed/la-oe-fine-hemp-marijuana-legalize-20140626-story.html. THC is the main psychoactive component of...