Seyfarth Synopsis: The Tenth Circuit is set to decide whether workers in Colorado’s legalized marijuana industry are entitled to wage and hour protections under the FLSA. 

The Fair Labor Standards Act (FLSA) is the federal statute that provides wage and hour benefits to certain employees.  On the other hand, the Controlled Substances Act (CSA) is a federal statutes that categorizes marijuana as a Schedule I drug, meaning it is illegal under federal law.  Simple possession (let alone participating in its manufacture and distribution) is illegal, irrespective of state law to the contrary.  In the wake of widespread legalization of recreational marijuana in states across the country, a questions has arisen as to whether the FLSA was meant to provide wage and hour protections to employees of businesses engaged in the manufacture or distribution of Schedule I drugs under the CSA.

Background

This question has been put to the test in Kenney v. Helix TCS, Inc..  In Kenney, an employee of Helix, which provides armed security and transport services for businesses that grow and distribute marijuana, filed a putative collective action against Helix under the FLSA.  Kenney claims that Helix misclassified him, and similarly situated employees, as exempt and owes them overtime wages.  In response, Helix moved to dismiss the action, arguing that Kenney is not entitled to the protections of the FLSA because he is employed in the marijuana industry, which is entirely forbidden under the CSA.

The District Court denied Helix’s motion to dismiss.  The Court observed that Helix did not cite any cases in support of its theory, while Kenney relied on Greenwood v. Green Leave Lab LLC, which held that a plaintiff employed in a marijuana-testing laboratory under Oregon’s recreational marijuana law was entitled to protections under the FLSA, notwithstanding the CSA’s prohibition on marijuana.  Further, the Court held that businesses are not precluded from complying with federal laws because their business practices may violate other federal laws.  Nonetheless, the Court certified the ruling for immediate appeal to the Tenth Circuit with respect to the issue of whether Kenney is a covered employee under the FLSA. 
Continue Reading DIRTY WAGES: TENTH CIRCUIT TO DECIDE WHETHER EMPLOYEES IN THE MARIJUANA INDUSTRY ARE COVERED UNDER THE FLSA

On July 17, 2017, the Massachusetts Supreme Judicial Court (“SJC”), the highest state court in Massachusetts, held that an employer could be liable for disability discrimination by declining employment based on an individual’s off-duty medical marijuana use. This is a landmark decision, which has major implications for employers with drug testing programs and drug-free workplace policies.
Continue Reading Is Medical Marijuana A Reasonable Accommodation? Mass. Court Says … Possibly

New York state’s Medical Marijuana Program historically has been one of the most restrictive in the United States with strict limitations on the number of licensed producers and various barriers preventing patients from accessing medical cannabis. However, recent expansions to New York’s qualifying conditions and changes to the licensing requirements for medical professionals will allow more patients to participate in the program.  
Continue Reading New York Medical Marijuana: Can the Fire Keep Burning?

Seyfarth Synopsis: Last month, a New Jersey Administrative Law Judge (“ALJ”) held that an employer’s worker’s compensation insurance carrier must reimburse an employee who was injured on-the-job for his medical marijuana.

On ­­January 18, 2010, New Jersey became the 14th state to enact legislation permitting the sale of medical marijuana.  (To read more about the New Jersey medical marijuana law, please see our blog post here.)  Compared to other state medical marijuana laws, the New Jersey medical marijuana program is considered restrictive, and only permits a small set of patients with “qualifying conditions” to be prescribed marijuana.[1]  Further, medical marijuana in New Jersey is amongst the most expensive in the nation with the price of an ounce of marijuana ranging from $425 to $520, not counting the 7% state sales tax.  As with other states, when medical marijuana was introduced in New Jersey, New Jersey employers became fearful of the law’s effect on the workforce. However, an ALJ decision from last month gives new reason for employers, and their worker’s compensation carriers, to be fearful.
Continue Reading ALJ Holds that Employer’s Worker’s Compensation Carrier Must Pay for Employee’s Medical Marijuana

As we enter a new year, and approach the one year anniversary of New York’s Medical Marijuana Program,  we are given an opportunity to look back and reflect on the performance of the program, and what lies ahead.

In some ways, the program has been vastly successful.  As of January 3, 2016, 807 practitioners have registered for the Medical Marijuana Program, and 12,067 patients have been certified by their practitioners.

However, the Medical Marijuana Program has also been criticized for its limited access, high prices, and the regulatory hurdles which have discouraged doctors and patients from participating, and have hurt medical marijuana companies trying to grow their business.  For instance, some patients have to travel upwards of three hours to receive the required medication.  Further, many companies have invested in large grow spaces, but due to the restrictive nature of the law, demand has remained low.  Consequently, these companies are using only a marginal fraction of their overall capacity for growth.

Continue Reading New York is Lighting A Fire Under its Budding Cannabis Industry

Not everybody has been high on life since Colorado passed Amendment 64 on November 6, 2012, which legalized the sale and distribution of marijuana in Colorado.  Since the passage of Amendment 64, several states have voiced their concerns regarding the inherent conflict between states legalizing medical and/or recreational marijuana, and the Controlled Substances Act (“CSA”), which lists marijuana as a Schedule I drug, and forbids its sale or use.  On March 21, 2016, the Supreme Court of the United States (“SCOTUS”) exercised its discretion to reject a challenge by Oklahoma and Nebraska to Amendment 64, and other marijuana legalization efforts, alleging that Amendment 64 is preempted by federal law.  In other words, Oklahoma and Nebraska, argued that the Colorado law violates the CSA, and that SCOTUS should adjudicate this case based on “original jurisdiction,” which empowers SCOTUS to hear disputes between the states without first being tried at the District Court and Court of Appeals.
Continue Reading SECOND-HAND SMOKE: How Colorado’s Neighbors Are Fighting Amendment 64

Ohio Governor Kasich’s presidential campaign went up in smoke.  So did his opposition to marijuana legalization in the medical context when he recently signed into law Ohio’s Medical Marijuana Act (“OMMA”).  He went from unartfully quibbling with Stephen Colbert about marijuana’s “problem” despite seemingly not being harmed by his own admitted usee to making Ohio the 26th state to enact medical-marijuana legislation.  (To read more about the medical marijuana laws in Pennsylvania, New York, Connecticut, and New Jersey, please see our articles here and here).  But there is no smoke or fire in OMMA, both literally in the sense that smoking remains a banned form of consumption, and metaphorically for employers who wish to continue to treat marijuana as a banned substance in the workplace.

OMMA goes into effect in early September.  Under the law, individuals diagnosed with a “qualifying medical condition,” who have registered with the State Board of Pharmacy are permitted to use certain forms of medical marijuana for medicinal purposes.  As mentioned above, do not expect Harold and Kumar to have smoke billowing from their car at a White Castle drive-thru any time soon though, as OMMA explicitly prohibits smoking or other combustion of pot.  Rather, patients are only permitted to use oils, tinctures, plant materials, edibles, patches, or any other form approved by the State Board of Pharmacy, including vaporization.
Continue Reading No Smoke or Fire in New Ohio Medical Marijuana Act

Can a bistro in Pottsville, Pa. fire employees for using medical cannabis?  Not anymore.  On Tuesday, May 17, 2016, the Pennsylvania Medical Marijuana Act (SB-3) (“MMA”) went into effect, following Governor Tom Wolf’s signature last month (as previously reported here).  Pennsylvania joins 24 other states, including New York, New Jersey and Connecticut, on the Pineapple Express.  Along the way, employers will learn their ability to discipline employees for consuming medical marijuana on the job, for showing up to work under the influence of medical marijuana, and other unintended consequences that will bud from the law.
Continue Reading The “Key-Stoned State”: Employer’s Guide to the Pennsylvania Medical Marijuana Law

In the stoner-classic, “Cheech and Chong’s Next Movie,” Cheech Marin laments: “I’m gonna be late for work again. That’s the fifth time this week, and it’s only Tuesday, man.” While Cheech’s calculations remain a mystery, the prospect of employees coming to work while under the influence of marijuana presents a concerning picture for employers.  In an era where medical marijuana is legal in certain circumstances under the state laws of New York, New Jersey, and Connecticut – and with Vermont on the verge of making marijuana entirely legal – it is critical for employers to educate themselves on their rights and obligations with regard to these laws. This article provides employers in the tristate area with practical guidance on the medical marijuana laws of New York, New Jersey, and Connecticut. 
Continue Reading Smoking Out the Tristate Area: Employer Concerns with Local Medical Marijuana Laws