Not So Happy 420 Day: Court Upholds Dismissal of Pot-Selling Bartender

Kollman & Saucier
Kollman & Saucier

On this 4/20, what could be more topical than a discussion of medical marijuana in the workplace?  As readers of this blog may recall, the subject has previously garnered our attention, given that it raises many sticky issues such as federalism, the business judgment rule, disability law, and the balance between employee privacy interests and employers’ interests in maintaining safe and healthy workplaces.

The Current Legal Regime Governing Marijuana

Even as popular support for legalizing marijuana has shifted over time and now stands at an all-time high, marijuana remains an illegal Schedule I substance under the federal Controlled Substances Act, as it has since President Richard Nixon signed the law in 1970.  Current Attorney General Jeff Sessions has not held back on his antipathy toward marijuana use, and it is widely expected that this administration will continue cracking down on drug users to a much greater degree than the previous one.

By contrast, at the state level, as the National Conference of State Legislatures (NCSL) notes, eight states and the District of Columbia have now legalized the recreational use of marijuana.  Eighteen states permit individuals to use marijuana for medical reasons.  Washington, D.C. and 21 states (including Maryland) have also decriminalized small amounts of marijuana.  (A decriminalization bill introduced earlier this year in Virginia failed.)  The resulting patchwork quilt between state and federal governments has caused a lot of head-scratching.

The Henry Case

What does all of this mean for employers?  As a federal court in Michigan recently explained, the short answer is that employers may continue to prohibit drug use or distribution in the workplace and assess discipline against employees whom they honestly believe violated their workplace anti-drug policiesHenry v. Outback Steakhouse of Fla., LLC, No. 15-10755, 2017 U.S. Dist. LEXIS 58570 (E.D. Mich. Apr. 18, 2017) (subscription required).  Because the case did not involve disability discrimination claims, there was no need for the court to analyze any reasonable accommodation issues, so that aspect of the topic is for another day.

Bobbie Henry worked as a server and bartender at an Outback Steakhouse in Flint, Michigan for over 17 years.  Outback’s Employee Handbook contains a drug-free workplace policy stating:

The illegal use, sale, or possession of narcotics, drugs, or controlled substances while on the job or on Company property is strictly prohibited and is a dischargeable offense.

The Michigan Medical Marijuana Act (Mich. Comp. Laws § 333.26424) permits an individual “qualifying patient” to receive a registry identification card allowing him or her to be free from criminal penalties or the denial of professional licensing as long as he or she complies with the statutory limits.  Significantly, that law – like many other state laws – does not provide the same immunity from other civil penalties.

There is no dispute that Henry was issued such a card and was licensed to grow and supply marijuana to four patients, including herself.  To make matters “curiouser and curiouser,” one of the patients to whom Henry could sell marijuana was her coworker, Davonte Smith.

On November 16, 2014, a kitchen manager reported being suspicious of drug activity after seeing two employees exchange money for a “small black object,” which was, in turn, taken out of the restaurant and exchanged with a third co-worker for a different small package.  Around the same time, the restaurant manager saw one of the same employees exchanging money with a fourth co-worker.

An investigation promptly ensued.  Management separately interviewed each of the four employees suspected of drug dealing, giving each the opportunity to explain themselves.  According to the store manager, who was present during the interview, at least one of the four implicated Henry as “dealing dope behind the bar,” which led management to conduct 15 additional interviews.  During this second round of interviews, two other Outback employees stated that Henry was selling marijuana on the store premises.  Unfortunately, it appears that nobody took written notes during these interviews.  In any case, after management consulted with, and received approval from, higher-level HR, all four employees observed in the November 16 incident – none of whom were over 40 – were terminated for “suspicious activity.”

Management then interviewed Henry.  Henry told them about her medical marijuana card and, while admitting that she had sold to Smith, she denied ever selling drugs in Outback or on Outback property.  Despite her efforts to explain herself, Henry was terminated that day for “distributing drugs to coworkers.”  At the time of her firing, Henry was 48 years old.

The court dismissed Henry’s subsequent lawsuit at summary judgment, rejecting her age discrimination and defamation claims.  Outback’s actions were permitted regardless of Henry’s medical marijuana card, the court explained, for two reasons.  First, it remains illegal under federal law to possess marijuana.  Second, Michigan’s law “does not impose restrictions on private employers’ and does not ‘provide[] protection against disciplinary actions’ by an employer.”  Op. at *26 (citing Casias v. Wal-Mart Stores, 695 F.3d 428, 435 (6th Cir. 2012)).  Thus, because the card did not authorize Henry to sell drugs on employer property, Outback was well within its rights to terminate.  There was no evidence of pretext, because Henry’s four co-workers who were terminated for drug-related conduct were all outside of the protected class.  (During litigation, it emerged that a fifth co-worker, also under 40, had been similarly terminated for unauthorized drug use.)

The court also refused to second-guess Outback’s decision under the business judgment rule, crediting the investigatory steps that the restaurant took:

Defendants did not set out to investigate Henry, but in the course of investigating four younger employees for suspected drug activity, they heard from multiple people that Henry was selling drugs to other [employees].  The management team took this information to higher-level HR within the company, and received authorization to terminate Henry.  And after Henry—along with five younger employees—was terminated pursuant to this investigation, she confirmed to management that she was selling drugs pursuant to her medical marijuana card.  And it has now come out . . . that Henry sold marijuana to Smith in the Outback parking lot at least once.

Nor was Outback punished for failing to take notes during its investigative interviews.  It was enough that the employer made a “reasonably informed and considered decision” before taking action, even if the pre-termination investigation was not perfect.

Lessons For Employers

The take-aways (in the employment law sense, not the Outback curbside pickup sense) from the Henry case are several:

  • Despite shifting state laws, employers need not tolerate the use of illegal drugs, including the federally banned marijuana, in the workplace. (Prescription drug use, on the other hand, is an entirely different matter that almost always involves ADA considerations.)
  • Encourage employees to report suspected drug use by co-workers, and ask for specific details (such as money or suspicious packages trading hands, or smelling suspicious odors) to understand the complaints of employees who do come forward.
  • When investigating suspected drug use, interview both the accuser and the accused, at a minimum. The interview should ideally be conducted in a private setting (such as an HR office), and management should take notes during the interview.
  • If the investigation leads you to believe that discipline is appropriate, consider your written policies, how those policies have been enforced in similar previous incidents, and consult necessary decision-makers (for example, higher-level HR) before taking action.
  • Document the adverse action you are taking and the reason(s) behind that action, and be prepared to justify how the action directly affected your ability to maintain a safe and healthy workplace, rather than being based on stereotypes about drug users in general.




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