On May 11, 2020, a Pennsylvania court upheld the state Unemployment Compensation Board of Review’s order granting a CBD (cannabidiol) user unemployment benefits after being terminated for testing positive for marijuana (Washington Health System v. Unemployment Compensation Board of Review). The decision highlights that employers must tread carefully before taking action against applicants or employees using medical marijuana or CBD products to treat various ailments.

The claimant, a licensed occupational therapist, tested positive for marijuana after submitting to a random drug test under the employer’s drug and alcohol testing policy. That policy prohibited employees from “being under the influence of drugs or having drugs in one’s system while at work,” and defined “drug” to mean “any substance producing effects on the central nervous system, or any controlled substance.” The policy did not prohibit the use of legal drugs, but did require employees to advise the employer if such use would “pose[] a significant risk of substantial harm to the health or safety of the individual or to others” or “render[] the Employee unable to perform the essential functions of the job.” Before the test, the claimant advised her employer that she used over-the-counter CBD for symptoms related to cancer. Regardless, the employer terminated her for testing positive for marijuana.

The Board found, and the court agreed, that the claimant was entitled to benefits because the employer did not prove the claimant violated any company policy. Both pointed to the failure of the employer to present admissible evidence at the hearing that the claimant had tested positive for marijuana. That the claimant testified that she had been advised of the positive test result was not sufficient, and the Board and the court rejected the employer’s efforts at proving the fact of the positive test through hearsay evidence. The claimant maintained all along that she never used marijuana. Instead, she testified to using what she believed to be a legal, over-the-counter product to treat cancer symptoms, although she acknowledged that she had been advised that CBD use could result in a “false positive” test result for marijuana. Thus, because the employer did not present the test result or evidence that the claimant used an illegal drug, the Board concluded the employer failed to prove the claimant violated the drug and alcohol testing policy and awarded the claimant benefits. In upholding the Board’s decision, the court added that the employer also had failed to prove the claimant’s use of CBD would have affected her ability to perform the job.

As previously reported here, CBD is projected to be a $22 billion industry by 2022. However, employers remain hazy about this extremely popular product and the implications it has on their employees and businesses. CBD is now being marketed and sold in a variety of forms, including oil (the most popular), health and beauty products, vapors, beverages, and infused edibles, such as chocolates and gummies.

CBD derived from hemp usually will not report a positive test result for marijuana assuming the THC concentration in the product does not exceed .3%. However, if the CBD product contains a sufficient amount of THC, it is entirely possible the product could cause a positive drug test result for marijuana. In our prior blog, we reported studies showing that some over-the-counter CBD products did in fact have THC in them, which might explain the claimant’s positive test result in the Pennsylvania unemployment case. Regardless, before taking any action against medical marijuana or CBD users, employers should review the laws of the states in which they operate and work with employment counsel to help navigate this complex and rapidly evolving area of the law.

Seyfarth Shaw will continue to monitor legal developments at the federal and state level.