Collateral Consequences of Weed – The Challenges of Cannabis in Claims

Use of cannabis, for recreational or medical purposes, is having an effect in workers’ compensation, employment and general liability cases. There are many unanswered questions including whether carriers must pay for medical marijuana, who receives the payments and what liability exists in relation to cannabis still being labeled as a prohibited substance under federal law. In this session at the 2020 CLM Workers’ Compensation and Retail, Restaurant & Hospitality Conference, panelists discussed the critical issues regarding lack of standards for testing and levels of impairment, comparative liability and admissibility of evidence.

Speakers included:

• Stephanie Burnstein, Attorney at Segal McCambridge Singer & Mahoney, Ltd.
• Ronald A. Mazariegos, Claim Executive at Arrowpoint Capital
• Donna Thomisee, Attorney at Lugenbuhl, Wheaton, Peck, Rankin & Hubbard

Marijuana is legal for medical use in 33 states and for recreational use in 11 states. This industry is seeing total annual revenues of more than $41 billion from the sale of legal cannabis. The issue of marijuana for medical use is not going away and has a direct effect on workers’ compensation, employment litigation and transportation claims.

Workers’ Compensation

The key issues regarding marijuana and workers’ compensation involve the question of whether employers are mandated to pay for medical marijuana, whether they retain any liability under the federal Controlled Substances Act and the lack of standard pricing, dosage and fee schedules. Over the past few years, court cases in several states have ruled on different aspects of these issues.

New York: New York allows medical marijuana use for several different ailments, but more than 50% of people are using it for treatment of chronic pain. New York public health law mandates that insurance carriers pay for an injured worker’s office visit, provided that the sole purpose for the visit is not to obtain medical marijuana certification. No cases have yet risen to the highest court of appeals, so the current position is that reimbursement is mandated as long as in-force protocols are followed.

New Jersey: Courts have ruled that carriers must reimburse for medical marijuana. In Hager v M&K Construction, courts found that carriers are not in violation of the Controlled Substances Act, provided they are following court orders and reimbursing the injured worker, rather than making payment directly to a dispensary. This decision is still up for appeal.

Maine: Courts found that employers do not have to reimburse for medical marijuana because it would violate the federal Controlled Substances Act.

Massachusetts: In Daniel Wright v Central Mutual Insurance, courts ruled that medical marijuana does not have to be reimbursed. However, they also found that medical marijuana was reasonable and necessary as it allows patients to transition from opioids. This case is still pending before the MA supreme court.

One of the major issues with medical marijuana in workers’ compensation is reimbursement procedures. Reimbursing an injured worker directly may be the easiest course of action, but there is a greater chance for diversion and fraud. Additionally, it does not allow for control over fill process and the injured worker can fill the prescription indefinitely without oversight. Depositing reimbursement into an account held by the injured worker’s attorney could be a viable alternative, but most attorneys do not want to take on that responsibility and it still leaves open the possibility for accounting processing errors. The most secure procedure might be through a Pharmacy Benefit Manager (PBM), similar to the method used with other prescriptions. This would prevent diversion and ensure that the injured worker stays true to the regimen. There are challenges with this as well, including the fact that there is no average wholesale pricing available for medical marijuana.

Employment Litigation

Claims of medical marijuana discrimination are not typically presented on their own. Medical marijuana use is generally secondary to another discrimination claim. It is important to note that these cases are subject to both state and federal laws, specifically the Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA), Equal Employment Opportunity (EEO) laws and the Drug-Free Workplace Act (which only applies to federal contractors and employees).

Federal Case Law:

In 2015, a court found that an employers’ inconsistent and shifting description of events could indicate discrimination. In 2016, it was ruled that an employer has a right to enforce their drug-free workplace policy, provided that they apply it fairly and consistently. In 2018, courts ruled that the Drug-Free Workplace Act does not apply to an employee’s off-work activity.

State Case Law:

Michigan – A court found, in 2019, that medical marijuana use does not constitute a protected class of citizens and that employers have a right to enforce a drug-free workplace policy.

Colorado – State statute does not require an employer to permit or accommodate medical marijuana use. Additional bills are being proposed.

Florida – In 2016, the state added an amendment allowing employers to create and enforce a drug-free workplace policy.

Pennsylvania – In 2016, courts ruled that employers cannot discriminate solely on the use of medical marijuana. There are limitations on use in the workplace, including operation of heavy machinery and automobiles.

New York – Courts prohibited employers from requiring applicants to submit to drug screening, with exemptions for truck drivers and police officers. Employees can still be screened after they are hired.

Texas – The state only allows for limited use of cannabis products, but a court found that there is no reason a teacher can be prohibited from teaching a class in Texas if that teacher used marijuana legally in Colorado.

California – Courts ruled that employers can terminate employees who are in violation of drug-free workplace policy, provided the policy is applied consistently.

Arizona – State prohibits termination because of a positive test unless the employee is under the influence on the work premises.

Employers should be aware of state laws in every location in which they operate. If they have a drug policy, it should be enforced consistently. This means if you are testing one person, you should be testing everyone. If you terminate one employee for a positive test, you should terminate all employees with positive tests. Additionally, the drug policy should be made very clear to applicants before they are hired.

Transportation Claims

Impaired driving laws vary widely by state, but generally fall into these four categories:

Zero Tolerance Law prohibits driving with any amount of THC and/or its metabolites in the body.

Per se law prohibits driving with a detectable amount of THC in the body that exceeds the legal limit.

Under the influence DUID requires the driver to be under the influence of or affected by THC.

Permissible inference law applies if THC is identified in a driver’s blood in quantities of 5ng/ml or higher. If so, it is permissible to assume that the driver was under the influence.

One of the largest issues with marijuana is that there is no current standard that can definitively determine impairment. Some states have created laws and new breathalyzer technologies are being developed, but there have not been enough scientific studies to back them. A simple positive test does not necessarily prove impairment, as THC can remain in the system for up to 30 days. More studies will be needed to get a handle on impairment levels. Despite the ambiguities, there are practical steps you can take during a transportation claim:

• Gather all medical records, including tests, and request that labs put a hold on any remaining blood samples. You may need them for retesting later.
• Gather all employment information on the driver, including 10-year motor vehicle record and any prior testing done for whatever reason.
• Gather all company policies regarding impaired driving or ensure that they are putting a litigation hold on everything.
• Request any available dash cam or body cam footage with the police report.
• If it was a serious crash and police investigated in more detail than everyday crashes, request all notes an interviews, which often include photographs and measurements.
• Hire a transportation attorney early in the process. Retaining reconstruction experts can be beneficial and cutting down on cross examiners implying that the experts didn’t “see things fresh.” Plaintiff attorneys often have experts examining things as soon as they are retained.
• Investigate the plaintiff, including social media activity.
• Read through notes of nurses and always get the EMS records. These people are usually first on the scene and often take detailed notes.
• Know the laws of the state in which the accident occurred.
• Ask the insured the hard questions. What you don’t know always comes back to bite you!