Employers Maintain Right to Prohibit Recreational Marijuana Use

Many anticipate that the MRTMA will result in more Michigan residents using marijuana at a higher rate.

The MRTMA does not preclude employers from continuing to prohibit their employees from possessing or using recreational marijuana. Subsection 3 of section 4 of the MRTMA (MCL 333.27954(3)) expressly permits employers to restrict their employees' use of marijuana. MCL 333.27954(3) reads as follows:

This act does not require an employer to permit or accommodate conduct otherwise allowed by this act in any workplace or on the employer's property. This act does not prohibit an employer from disciplining an employee for violation of a workplace drug policy or for working while under the influence of marijuana. This act does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person's violation of a workplace drug policy or because that person was working while under the influence of marijuana.

In other words, employers may still lawfully terminate an employee, decline to hire, discipline, or take other similar adverse action against a prospective or actual employee for:

Employers seeking to restrict or prohibit their employees from using recreational marijuana should review their drug free workplace policies to ensure that, among other things, their policies expressly prohibit marijuana or drugs that are classified as a Schedule I drug under the federal Controlled Substances Act. To the extent that employers seek to prohibit or restrict marijuana use under a policy that refers only to substances illegal under Michigan law, such policies may no longer be enough to ensure that an employer's drug free workplace policies lawfully prohibit marijuana.

Recent Legal Developments and Their Potential Impact on Employers.

In addition, the MRTMA and MMMA are subject to further legislative amendment and interpretation by the courts. Employers may want to consider two legal developments since the passage of the MRTMA that may affect the way in which they address marijuana in their workplace.

First, on March 1, 2019, Governor Gretchen Whitmer signed an executive order that abolished the Medical Marihuana Licensing Board. The Board was responsible for granting licenses to businesses seeking to manufacture and distribute marijuana. Critics asserted that the alleged politicized nature of the Board resulted in inefficiencies that hindered the licensing of businesses. In its place, Governor Whitmer's order establishes the Marijuana Regulatory Agency (MRA), which will be a division of Michigan's Department of Licensing and Regulatory Affairs (LARA). The MRA will be responsible for administering laws related to the MTRMA and MMMA. The public, and employers among them, can expect new administrative rules that will further regulate marijuana, which may affect the way by which employers prohibit or restrict marijuana use.

Second, on February 19, 2019, the Michigan Court of Appeals issued an unpublished per curiam decision, Eplee v. City of Lansing, No. 342404. In Eplee, the Court held that an employer does not violate the MMMA by revoking a conditional offer of employment extended to a prospective at-will employee where the prospective employee tests positive for tetrahydrocannabinol ("THC"), the substance in marijuana that is chiefly responsible for the "high" associated with marijuana use. Thus, while Michigan law provides that "qualified patients" are not subject to arrest or prosecution for lawfully using marijuana for medical purposes, the Michigan Court of Appeals held that employers are free to terminate the employment of an at-will employee (or not hire a prospective employee) for using medical marijuana, even if the employee or prospective employee used marijuana in a manner that would not result in criminal penalties.

 
More to Come?

These developments may be the tip of the iceberg in a wave of new rules and court decisions addressing marijuana use in Michigan. Employers should be mindful that the MTRMA is a new statute that Michigan will almost assuredly continue to interpret through new laws and administrative rules. Employers should review their corporate policies and handbooks to ensure they address employee marijuana possession and use in the new age of legalized marijuana in Michigan.

 

4810-8104-1802, v. 1

The REAL ID ACT was passed by Congress in 2005 in response to the September 11th attacks and was based on a recommendation issued by the 9/11 commission.  The Act was established for the purposes of establishing standards toward the production and issuance of Driver Licenses and ID cards. It also prohibited Federal agencies from accepting for certain purposes driver's licenses and identification cards from states not meeting the Act's minimum standards. The overall purposes covered by the Act are the following: accessing Federal facilities, entering nuclear power plants, and, boarding federally regulated commercial aircraft.

 

On December 20, 2013, the U.S. Department of Homeland Security announced a phased enforcement plan for the Real ID Act, which is a plan to implement the various phases of the act pursuant to an enforcement schedule and regulatory time frames. Michigan is now embarking on the final stage of implementation of the Real ID act, at the end of which all residents will be required to be in compliance.

 

Beginning October 1, 2020, Michigan residents (18 years old and over) will need to present a REAL ID-compliant document to fly within the United States and in order to enter certain federal facilities, military bases, and nuclear power plants. In addition to REAL ID-compliant driver's licenses and ID cards issued by the State of Michigan Secretary of State office, the following documents are acceptable as Real ID compliant:

Michigan Secretary of State (SOS) offices now offer REAL ID-compliant driver's licenses and ID cards, which are marked with a gold circle with a star inside. Michigan SOS offices currently offer, and will continue to offer after October 1, 2020, standard driver's license and IDs that are not REAL ID compliant. A standard license or ID card will have "Not for Federal Identification" printed on it. After October 1, 2020, standard driver's licenses will remain valid for driving, and both standard driver's licenses and State Identification Cards will continue to be legal identification for cashing checks, renting vehicles, purchasing alcohol and tobacco, or entering casinos. 

In Michigan, only U.S. citizens and non-U.S. citizens who are lawfully present in the U.S. are eligible to apply for a REAL ID driver's license or ID card. Currently, only 13 states offer driving privileges to those without lawful presence in the U.S. [1]Non-U.S. citizens who are lawfully present in the U.S. will need to present evidence of their social security number or SSA-L676 letter of ineligibility, along with evidence the non-U.S. citizen holds valid legal presence in the US [2]. These documents will be verified through the government's document verification system, SAVE [3], which is used by the government to verify the applicant's immigration status, and usually takes several days for verification [4]. The non-U.S. citizen will also need to present identity verification, which, in many cases, can be established by providing two of the same documents presented to establish valid legal presence in the U.S. As with all applicants applying for a REAL ID, the non-U.S. citizen will also need to present proof of Michigan residency.  A comprehensive list of document requirements is published by the Michigan SOS on Form "SOS-428", which can be found on the Michigan SOS's website. Given the additional document verification step through SAVE, non-U.S. citizens should file renewals of any status or employment authorization documents ("EAD's") as early as possible, typically 4 to 6 months in advance of the document expiration date. Currently, government processing times are exponentially long, which may result in lapses in employment authorization and driving privileges.
 

 

Are you ready?

[ 1]California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, New Mexico, Nevada, Utah, Vermont, Washington, District of Columba.  See  http://www.ncsl.org/research/immigration/states-offering-driver-s-licenses-to-immigrants.aspx

[2]Documents include a valid, unexpired permanent resident card, or valid, unexpired foreign passport with valid U.S. visa and entry stamp, or valid I-94 form, or valid, unexpired foreign passport presented with valid, unexpired employment authorization document ("EAD").

[3]Systematic Alien Verification Entitlements System

[4]Additional information regarding the SAVE system, including how to request a status update on documents currently submitted for verification through the SAVE system can be found at the USCIS SAVE website: https://www.uscis.gov/save 

 

 Jonathan Edwards - Shanty

During the ACC's 2019 Spring Symposium in Grand Rapids, we led a discussion on what employers should know about concerning the MRTMA, which has been a hot topic for Michigan in the past year.  Following is a summary of our discussion at the 2019 Spring Symposium, along with some key takeaways for employers.

In November 2019, Michigan voters went to the ballot box and overwhelmingly passed the Michigan Regulation and Taxation of Marihuana Act ("MRTMA"). MRTMA allows adults to possess or use up to 2.5 ounces of marijuana, grow up to twelve plants in their residence, assist others with the above and give away, but not sell, up to 2.5 ounces of marijuana. Any of these acts are not grounds for "arrest, prosecution, or penalty in any manner, are not grounds for search or inspection, and are not grounds to deny any other right or privilege." So now that recreational marijuana is legal in Michigan, does that mean you have to tolerate marijuana in your workplace?

 

NO, you do not. That seems pretty broad, that "deny any other right or privilege" language, but, the MRTMA specifically states:

"Sec. 4.1 (h)(3): This act does not require an employer to permit or accommodate conduct otherwise allowed by this act in any workplace or on the employer's property. This act does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person's violation of a workplace drug policy or because that person was working while under the influence of marijuana."

OK, so we can all breathe a sigh of relief-that seems pretty clear. We can refuse to hire or fire someone who violates a "workplace drug policy" OR "was working while under the influence." We obviously don't have any case law on this yet, but we do have some under the medical marijuana act, which has been around a lot longer. Under the medical act, remember, in Casias, the court held that the language, "(c) Nothing in this act shall be construed to require: . . . (2) An employer to accommodate the ingestion of marihuana in any workplace or any employee working while under the influence of marihuana" (before you say anything I didn't spell it that way, the state did) did not prohibit Wal-Mart from firing Mr. Casias when he tested positive for marijuana even when he had a card. The language in the recreational statute seems even clearer to me. In Casias, it seems to me the ACLU (they represented Mr. Casias) could have argued that he did not use at work and there was no proof he was "under the influence." And that might have worked. Because the recreational statute allows an employer to fire for using at work and also for violation of a "workplace drug policy" OR "working under the influence" even that argument should not be available and the language actually seems to me to be more employer friendly.

Does that mean that all of you employers out there are free and clear? Well not necessarily, don't forget Braska. In Braska, the Michigan Court of Appeals questioned the decision in Casias and gave the plaintiff's, who were fired for failing a drug test, unemployment. Now they did that for two reasons: First, because the medical act has a broad preemption provision in it that says: " [a]ll other acts and parts of acts inconsistent with this act do not apply to the medical use of marijuana as provided for by this act." Well guess what, the MRTMA has similar language: "All other laws inconsistent with this act do not apply to conduct that is permitted by this act." And second, the Court of Appeals stated that unemployment was state action, so the employer's conduct was not in question the state's conduct was. Can an employee make that same argument here? Well you can make any argument you want, but what is different here is that the medical act as noted above does not require employers to "accommodate the ingestion of marihuana in any workplace or any employee working while under the influence of marihuana."(spelling again, right?) The recreational statute is broader and also allows employers to take "an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person's violation of a workplace drug policy . . ." So if an employee violated my drug policy have they committed "misconduct" under the unemployment act prohibiting them from getting benefits? I would argue they do, but we will have to see.

 

So one of the big questions we are getting now is: "What do I do? Do I test for marijuana or not?". Good question and because of the way the MRTMA is written that remains up to you as an employer. But there are some things you should consider when making that decision.

 

First, recognize the nature of your workplace. Is it safety sensitive? Do your employees operate dangerous machinery for example? If they do you might want to consider testing.

 

Second, because marijuana is still illegal under the federal Controlled Substances Act, be sure to check if your company hires employees to perform under federal contracts. These employees are subject to federal agency regulations, which require these employees to remain drug free. In these situations, you may have to continue to test.

 

Third, if you are not required to, do you still want to do pre-employment testing? With the legalization of marijuana, many employers have considered removing pre-employment testing policies. More applicants legally using marijuana outside of work will reduce your applicant pools and as you already know it is hard to find good employees these days.

 

Finally, think about on demand or reasonable suspicion testing of current employees. If you are going to continue to do that, make sure your supervisors are trained to recognize if an employee is under the influence. That will bolster any argument you have that the terminated employee should not get unemployment. You also want to think about what this means for retention. For example what if your best employee cuts her hand and fails the test. You are asking for a discrimination suit if you fire one employee and keep the next.

No matter what you decide, make sure you communicate your expectations with employees. Employers should remind all employees of drug policy details. Employees should understand that a drug test could still be positive even if the employee used marijuana off-hours, even weeks before the test. Make employees aware of all potential consequences of a positive drug test. And if you are going to continue to test for marijuana, make sure your employees know that you consider a positive marijuana test to be grounds for termination.

Steven Palazzolo 

is a Senior Counsel at Warner Norcross + Judd. Steve counsels clients on employee issues, policy development, NLRB, ADA, FMLA, FLSA and international labor relations. His services extend to acquisitions, immigration, employee benefits, campaign finance, employment litigation and civil rights. Steve represents numerous organizations in the automotive supply industry, agriculture, finance, food processing, hospitality, manufacturing, marketing and service industries, ranging from start-ups to large Fortune 500 clients. He advises clients in the Midwest, United States, Asia, Europe and South and Central America. Steve is a frequent speaker for industry organizations, including the Original Equipment Suppliers Association, the Society for Human Resource Management and the Association of Corporate Counsel. 

Steve brings valuable expertise to his practice through his unique work history. Prior to law school, he was a shop floor supervisor in both union and non-union food processing plants. He spent 11 years as in-house counsel in labor and employment law and oversaw the HR department for a multi-billion-dollar multinational corporation with extensive manufacturing operations.  Steve created the Warner Norcross & Judd employment blog and is active on Twitter. Visit zomichiganemploymentlaw.wnj.com and twitter @zoemploymentlaw to stay informed on the latest employment and labor law trends. He can be reached at spalazzolo@wnj.com.

 

Kaitlin Sheets is a litigation attorney at Warner Norcross & Judd who focuses her practice on commercial litigation. She is also a member of Warner's Cannabis Group and advises clients about the Michigan Medical Marihuana Act, and Medical Marihuana and Facilities Licensing act, hemp, cannabidiol (CBD) products, and the 2018 Farm Bill. She can be reached at ksheets@wnj.com.

During the ACC's Spring Symposium in Grand Rapids, we led a discussion on smart contracts and what their rise could mean for corporate counsel. While the technology is still new, the complex nature of smart contracts and blockchain technology presents a host of potential legal issues that require the attention of both contracting parties and courts.

 

It helps to think of a smart contract as more of a software program than a traditional contract. Prior to creating a smart contract, the parties will still need to negotiate and agree on specific terms. Once those terms are settled, the agreement is then memorialized, or coded, in a smart contract. Smart contracts, and the underlying blockchain technology, permit mutually distrusting entities to agree on the state of relationship now and into the future. This is not unlike many services that provide similar confidence - banks, insurance companies, escrow providers, and even crowd funding websites all provide, to one degree or another, confidence to a third party about some fact. Problems can arise in smart contracts, however, from the characteristic that smart contracts, once coded, are both immutable and distributed.

While immutability gives parties a sense of security and trust, this distinct characteristic can potentially backfire. For example, if a party agreed to the terms of a contract as a result of undue influence, or if the terms are unconscionable, what is the process for unwinding the deal?  Perhaps a party wants to terminate the contract in anticipation of a breach. With smart contracts, stopping performance may be difficult, as there could be actions, such as payments, automatically scheduled to occur. If the code of the smart contract does not include some way to stop the automatic performance when necessary, fixing the problem becomes more costly and time-consuming. Unfortunately, in the absence of an "out" written within the code, a smart contract's distributed ledger does not provide an adequate safety net for these problems. While it is true that the transaction must be verified through a consensus of a peer-to-peer network, the nodes on the network do not verify whether the negotiations were fair or if the parties do some act that otherwise constitutes a breach of the contract.  The nodes only verify the parties' ability to execute the transaction that the parties coded. For example, the nodes determine whether there are sufficient funds in a bank account or whether a party has performed some required action. Therefore, consumers and attorneys alike will want to consider whether there should be an escape clause or process written into the code to override automatic performance that would generally be unenforceable or unjust.