By Yvette Farnsworth Baker, Esq.
This information is provided for educational purposes only.  Reader retains full responsibility for the use of the information contained herein.

The legalization of marijuana is imposing costs on the public in many ways, both seen and unseen. The expense of litigation is one of the unseen costs of marijuana legalization. Changing marijuana law has already led to a flood of litigation, and the tide will continue, likely for decades. As of this writing there are 29 states with medical marijuana laws and 8 states that have legalized marijuana recreationally.  Employers are particularly at risk for marijuana litigation in states with legal medical or recreational marijuana, whether the employer prohibits marijuana or not and with the landscape changing weekly, it is important for all employers to carefully watch as this issue plays out in all states.

The Legal Risk to Allowing Marijuana Use

The risk of permitting marijuana use by employees is the risk of negligent hiring/retention and respondeat superior, legal doctrines in which employers are liable for the actions of dangerous employees. Employers who put no limitations on the use of intoxicating substances open themselves up to liability for the accidents or intentional misdeeds of marijuana-using employees. Employers cannot hide their heads in the sand; if they knew or should have known that an employee may be under the influence of intoxicants on the job, the employer is liable for the actions of that employee.

The potential cost to employers in negligent hiring or respondeat superior cases is very high in light of the harm that intoxicated employees can cause. In the Kentucky case of Allgeier v. MV Transportation Inc, the employer was ordered by a jury to pay $5 million due to the actions of an alcoholic employee. Compensation for the injuries suffered by the customer came to less than $1 million, but the jury awarded the customer over $4 million in punitive damages due to the employer’s negligent hiring and supervision of the employee at fault.

It is important to note that in the Allgeier case, it was not known whether the employee was actually under the influence of alcohol at the time of the accident. While she was tested for alcohol use, it was many hours after the accident and the test was negative. Despite this, the jury still believed that the employer was at fault for allowing an alcohol-abusing employee to serve in a position where she put customers at risk.

The Legal Risk to Prohibiting Marijuana Use

Unfortunately, employers who do test for marijuana use are not immune from litigation, either, thanks to the changes in the laws and trends in marijuana. The most recent wave of litigation in relation to workplace drug testing utilizes disability law, arguing that employers discriminate against disabled employees by prohibiting marijuana use. There are not accessible figures on what the money awards might be in these cases, but estimates for employment discrimination lawsuits of all stripes approximate that they average $125,000 for settlements and $200,000 for judgments. Settlements and jury awards are not the only costs in these lawsuits. The cost of a legal team is pricey, no matter if you win, lose or settle a case. Workplace distractions and loss of productivity also affect business, as executives and employees take time out of their workday to deal with litigation issues.

Other potential liability for marijuana testing includes wrongful termination suits, off-duty activity statutes (laws in certain states which prohibit workplace discipline for legal off-duty activities), and challenges to unemployment compensation or worker’s compensation denials.

What Can Be Done

Litigation can always be expected in new and changing areas of law. Clear laws that either prohibit marijuana or that protect employers’ right to ban use by employees save businesses an enormous amount of money. Disability discrimination laws can be amended to permit workplace discipline for medical marijuana use. State marijuana laws can specifically protect an employer’s right to prohibit off-duty marijuana use by employees. Steps such as these can save money and can keep workplaces safe for employees and for the public, while minimizing the need for costly and protracted litigation.

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