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Legal Update

    Human Resources Group of West Michigan

    Legal Update – December 2018

    By Andrew A. Cascini

    Miller Johnson

    Reefer Madness?  More Practical Tips for Employers

    In November, Michigan’s voters went to the polls and approved Proposal 1 by a 56% majority.  The result?  As of December 6, 2018, adults in Michigan are now lawfully able (at least under state law) to consume, possess, and transport marijuana for recreational purposes.  By endorsing Proposal 1, Michigan became the tenth state in the country to legalize the recreational use of marijuana. 

    If you’re wondering whether or not your memory has become a little… hazy, fear not – your mind isn’t playing tricks on you.  Miller Johnson wrote to you in this very space last month to address this topic.  At that time, we gave you the essential advice – Proposal 1 doesn’t necessarily mandate any change to your employee drug policies; zero tolerance drug policies are still very likely lawful and enforceable; and each of our clients should take this as an opportunity to reevaluate whether you want to test all or some employees for THC (the primary psychoactive ingredient in marijuana), by what means you want to conduct such tests (oral swab, blood, urine, hair?), and how your organization intends to react if an employee tests positive for consuming marijuana.  But since the law became enacted, we’ve been positively bombarded with inquiries from our employer clients that want more detail – what, exactly, does the law require them to do, and what recommendations can we offer about what they should do?  So let’s clear the smoke, and consider how the law has changed from some additional angles.

    A.What does Proposal 1 specifically do?

    First, it might be a little worthwhile to dig into Proposal 1’s actual text to see how the law operates.  Section 5 of the Proposal provides that it will henceforth be lawful for persons 21 years of age or older to possess, use, purchase, transport, or “process” 2.5 ounces or less of marijuana.  Section 5 also provides that it’s lawful for a person to store up to 10 ounces of marijuana in his or her private residence, and further provides that it’s lawful for any person in possession of marijuana to give any other person over the age of 21 up to 2.5 ounces of marijuana as long as the “weed-giver” neither advertises nor sells the marijuana to the “weed-receiver.”  So if you receive some edibles as a stocking-stuffer or party favor this holiday season, you have Section 5 to thank.

    Want to know how marijuana could potentially turn into big business here in the Mitten State?  Follow the money to Sections 7 through 11 of the Proposal.  There, you’ll find that the law requires Michigan’s Department of Licensing and Regulatory Affairs (“LARA”) to create a uniform marijuana sale and cultivation licensing scheme.  LARA is required to begin accepting applications for marijuana sales and cultivation establishments within 12 months of the Proposal’s enactment date, which means that wanna-be marijuana moguls might have to wait to submit their paperwork until December of 2019 at the latest.  Section 6 of the law also permits municipalities to limit or prohibit retailers from lawfully manufacturing or selling marijuana within their jurisdiction, but – crucially – Section 6 does not permit a municipality to prohibit or criminalize individual use, possession, or transport or marijuana.

    Section 4 contains a list of things that Proposal 1 doesn’t permit.  These restrictions include (among other things):

    • Driving a car or snowmobile, flying an aircraft, or piloting a boat “while under the influence of marijuana,” or consuming marijuana while doing any of the same;
    • Giving or selling marijuana to any person under the age of 21;
    • Possessing, using, consuming, or purchasing marijuana if you are under the age of 21;
    • Consuming marijuana in a public place or on the property of anyone who prohibits it;
    • Possessing marijuana in a school or in a corrections facility; or
    • Possessing more than 2.5 ounces in a residence without securing it in a locked container.

    Section 13 of the proposal imposes a 10% state excise tax on marijuana sales (which, by the way, is substantially lower than the marijuana excise tax imposed in Colorado, Oregon, or Washington).  The Proposal also specifically provides that no provision of the law is intend to change anything about Michigan’s Medical Marijuana Act, or to limit any right or privilege provided by that Act.

    B.How does it specifically apply to employers?

    For employers, the “money” language is in Section 4(3), which offers two opportunities for HR professionals to feel some relief:

    • Proposal 1 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.”
    • Proposal 1 does not require an employer “to permit or accommodate conduct otherwise allowed by this act in any workplace or on the employer’s property.”

      So what does that mean?  The impact of the second provision is a little clearer – it means that you don’t have to permit your employees to possess marijuana on your premises (including in employee parking lots or break areas!), and you certainly don’t have to permit employees to use or consume marijuana on the employer’s property for any reason.  And that’s unequivocally good news.

      As for the first provision, we don’t know really know for sure how that will be interpreted by Michigan’s courts, because Proposal 1 hasn’t been around long enough for any lawsuit relying on Section 4(3) to be brought.  It’s probably intended to protect employer rights to the same extent Michigan’s medical marijuana law, as that law has been interpreted by the Sixth Circuit Court of Appeals – that is, Section 4(3) was probably intended to mean that employers can terminate an employee who uses marijuana whether off-duty or on-duty, or who tests positive for marijuana regardless of whether or not the employee claims that he or she last consumed marijuana weeks ago.  But some of the details are murky.  Must employers prove that an employee violated a workplace drug policy before terminating an employee pursuant to it, or is reasonable suspicion coupled with a positive drug test enough?  And how do you prove whether an employee is “under the influence” anyway?  Courts will likely answer those questions soon enough.  For the time being, however, we recommend that all employers review their current drug policies with employment counsel as soon as possible to avoid being a test case.

    C.Dude, where are all my drug-free applicants?

    But as we said in last month’s update, Proposal 1 likely presents a more practical concern for employers than any strictly legal concerns.  It’s hard enough to find good help these days – the unemployment rate in Michigan has hovered between 4.4% and 4.8% throughout 2018, and there’s no end in sight for this labor shortage.  The law of supply and demand creates a pressure we’ve heard dozens of our clients lamenting – as the supply of qualified labor remains low, employers must offer higher and higher wages to even get a second look from applicants.  Sweating yet?  Now imagine that fewer and fewer of those applicants who are qualified can pass a pre-employment drug screen.  Yikes.

    Regrettably, we can’t offer much consolation.  According to a study by Marist University in 2016, 18.5% of all U.S. residents have used marijuana “once or twice” in the last year.  If you narrow the window to those residents who have used it in the last month (which is a significant measure, given that marijuana remains detectible in hair, blood, and urine for approximately one month following use), 11.4% of the population fits this description.  That rate is only increasing – 23% of people graduating high school in 2017 report having used marijuana at least once in the prior month.  And 28% of all U.S. residents polled in 2017 in a recent study report that they would be more likely to consider using marijuana if it is legalized in their state of residence.

    So what do we anticipate that the impact will be in Michigan?  That’s a tough question to answer without a crystal ball.  But we do know that there’s been an extreme uptick in the number of positive drug test results in many states that have recently legalized marijuana for recreational use – positive test results increased 20% in Colorado, 23% in Washington, and 43% in Nevada following legalization.  In terms of overall use, the federal Substance Abuse and Mental Health Services Administration has estimated that the rate of monthly marijuana use in Colorado increased by one-third for persons between 18-25 years of age, and doubled for persons over the age of 26.  If we apply those rates of change to the 2015 usage statistics in Michigan (which is admittedly a highly inexact means of estimating future use, but it’s probably the best we can do), we would see that 32.3% of Michigan 18-25 year olds and 20.1% of people 26 years or older might use marijuana monthly by 2020.  In short?  If you have a zero-tolerance workplace, you just might find that you’ve exempted somewhere between one-third and one-fifth of the state’s population from working for you.  High times, indeed.

    D.What should we do?

    First things first – don’t panic.  As discussed above, employers in Michigan still very likely have the power to choose whichever workplace drug policies might be appropriate for their business.  And remember that marijuana is still illegal under federal law, meaning that employers with employees subject to Department of Transportation testing requirements or the Federal Drug Free Workplace Act should stand steadfast behind a zero tolerance approach where required.

    But, as we’ve seen our clients react, we notice that most employers are taking one of three broad approaches:

    • Option One:  Hold the line.  Certain employers with traditional “drug free workplace” policies may want to make no change, continue testing for marijuana among employees or applicants just as they did prior to Proposal 1, and continue enforcing disciplinary policies or procedures if an applicant or employee tests positive for marijuana.
    • Option Two:  Continue pre-employment drug testing, but drop marijuana testing except in the “reasonable suspicion” or “post-accident” context. 
    • Option Three:  Stop pre-employment drug testing entirely.

    Each employer will want to adopt the approach that is right for that employer, and a Miller Johnson employment attorney can help you think through the issues and determine which of these approaches (if any!) is the right choice for your business.  For questions about this article or other matters, please contact the author of this article:

      Andrew A. Cascini (616) 831-1705; cascinia@millerjohnson.com.

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