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Colorado Supreme Court: Terminating an Employee for Marijuana Use Does Not Violate the Colorado Lawful Activities Statute

By Gillian McKean Bidgood and Sean R. Gallagher

On June 15, 2015, the Colorado Supreme Court held that the Colorado Lawful Activity Statute does not prohibit an employer from terminating the employment of an employee for off-the-job use of medical marijuana.  However, this may not be the last challenge to Colorado employers’ drug policies.

In Coats v. Dish Network, L.L.C., case no. 13SC394, Brandon Coats challenged his termination by Dish Network, L.L.C. after he tested positive for marijuana.  Coats, a quadriplegic, held a license from the State of Colorado to use medical marijuana pursuant to the state’s Medical Marijuana Amendment to the Colorado Constitution.  Coats alleged that he used medical marijuana within the limits of the license, and never on his employer’s premises.  He further alleged that he was never under the influence of marijuana at work.

Coats challenged his termination as a violation of the Lawful Activities Statute, C.R.S. section 24-34-402.5, which prohibits an employer from discharging an employee for “engaging in any lawful activity off the premises of the employer during nonworking hours,” subject to certain exceptions.  Dish filed a motion to dismiss the lawsuit, arguing that the use of medical marijuana was not “lawful activity” because it was prohibited under both state law and federal law.  The trial court granted the motion and dismissed the case because Colorado’s Medical Marijuana Amendment created an affirmative defense to criminal charges arising from medical marijuana use rather than making medical marijuana use legal.  Coats appealed to the Colorado Court of Appeals.

On April 25, 2013, a majority of the Colorado Court of Appeals held that Coats had not stated a claim for relief under the Colorado Lawful Activities Statute because medical marijuana use was prohibited by federal law and thus was not a “lawful activity” for purposes of C.R.S. section 24-34-402.5.  One Judge dissented from the majority’s opinion, stating that he would have held that the term “lawful” in section 24-34-402.5 refers only to Colorado state law and that medical marijuana use is protected by the Colorado Lawful Activities Statute because such use is lawful under Colorado law.

Coats appealed this decision to the Colorado Supreme Court, which issued its opinion on June 15, 2015.  The Colorado Supreme Court began its analysis by determining the generally understood meaning of “lawful.”  The Colorado Supreme Court agreed with the Court of Appeals that the commonly accepted meaning of lawful is “not contrary to or forbidden by law.”  Next, the court concluded that the term “lawful” in the Colorado Lawful Activities Statute is not limited to activities that are permitted by Colorado law.  Instead, the Lawful Activities Statute protects activities that comply with the applicable state and federal laws.  While the court noted that the United States Department of Justice announced that it will not prosecute patients who are using medical marijuana in accordance with state law and that Congress passed an act prohibiting the Department of Justice from using public funds to prevent states from implementing their own medical marijuana laws, marijuana use is still prohibited under the federal Controlled Substances Act.  Because the Court concluded that Coats’s medical marijuana use was not protected by the Lawful Activities Statute, the Court did not address whether Colorado’s Medical Marijuana Amendment makes medical marijuana use “lawful” by conferring a right to such use. 

Previous statements by counsel who represent employees in Colorado suggest that, despite the ruling in Coats, they may pursue two avenues to attack terminations based on marijuana use.  First, counsel for employees may challenge terminations of employees who engage in recreational marijuana use under the Colorado Lawful Activities Statute.  Although recreational marijuana use is illegal under federal law just like medical marijuana use, employees may raise challenges under the Lawful Activities Statute based on the language in the Colorado recreational marijuana amendment stating that it is not “unlawful” nor an “offense under Colorado law” for people twenty-one years of age or older to use marijuana for non-medical purposes.  Second, counsel for employees may challenge medical and recreational marijuana terminations as tortious wrongful terminations in violation of public policy.  In other words, employees would argue that they were terminated in retaliation for exercising alleged constitutional rights to use marijuana.

Colorado employers should continue to monitor this area of the law.