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High Stakes – Considerations for Contractors in Light of the Minnesota Legislature’s Anticipated Legalization of Cannabis

Category | Briefing Papers

Julia is a shareholder of the firm’s Construction Law Department.  She can be reached at 612.359.7622 or jdouglass@fwhtlaw.com.

Minnesota Democrats have pledged that they will pass legislation allowing recreational marijuana this session with their new majorities in both chambers of the state legislature.  This commitment marks the latest development in Minnesota’s ongoing progression toward marijuana use legalization, and the remarkably quick change in the law poses special risks and challenges for contractors who operate in an environment where operational, safety, and productivity concerns are paramount.

Current State of the Law in Minnesota

Prior to last summer, Minnesota employers who have policies in place for pre-employment drug testing or drug testing of current employees were aware of protections for those employees who were enrolled in the Department of Health Patient Registry Program for medical marijuana.  Under the laws related to that program, an employer cannot discriminate against a person enrolled on the registry in hiring, termination or any other employment decision upon a positive drug test for cannabis unless that individual was impaired or intoxicated by cannabis at his place of employment during his work hours.

Last summer, the Minnesota Legislature threw employers a new curveball when it legalized certain forms of cannabis for recreational use.  The law, which took effect in July 2022, allows anyone ages 21 and older to buy edibles and beverages containing up to 50 milligrams of hemp-derived tetrahydrocannabinol or THC per package.  Unlike other states which have previously legalized cannabis, the Minnesota Legislature frankly didn’t allow employers the time—much less provide any guidance—as to how or whether their pre-existing drug testing policies comported with the new law.

Another complication for employers under the Lawful Consumable Products Act passed last summer is that the statute protects consumption of a lawful consumable product during an employee’s non-work time.  The statute defines a “lawful consumable product” as a product whose use or enjoyment is lawful, and specifically includes food, alcoholic or non-alcoholic beverages, and tobacco. It is silent as to whether THC edibles are protected in the definition of “lawful consumable product” which further complicates an employment situation when an employee receives a positive drug test for THC.

Anticipated Changes and Challenges

It is fully expected that the Minnesota Legislature will broaden the legalization of marijuana this session beyond the initial legalization of THC edibles and beverages which was passed last summer.  In the construction industry in particular, the passage of any broader legislation raises a host of issues including the following:

  • •   Marijuana can remain in a user’s body for up to four weeks after the marijuana is consumed, so an employee who tests positive for a drug test may or may not be under the influence of a drug, especially if it was consumed several weeks before the drug test.  Currently, there are no drug tests on the market which can pinpoint the time in which marijuana or the type or strain of TCH or marijuana that was consumed.
  • •   For those contractors who have pre-employment drug testing policies, they will have to exercise greater discretion over whether to hire a prospective employee who tests positive for marijuana.  Depending on the position being filled, these employers will have to balance concerns with safety and risk with what will be deemed a legal activity.
  • •   There are no guidelines as to what constitutes a “marijuana impairment standard.”  For contractors who have implemented drug tests based on a “reasonable suspicion” standard, the lack of any established guidance on marijuana impairment will make these policies even more difficult to implement consistently and fairly.
  • •   Finally, for construction companies which operate inside and outside of Minnesota, those companies may potentially have to develop different drug testing policies specific to the jurisdictions in which they have employees.

Precedent from Other Jurisdictions

Given the quick changes to Minnesota law in such a short period of time, Minnesota courts have yet to weigh in on whether marijuana or THC will be considered a “lawful consumable product” or whether employers will be able to actually enforce zero tolerance policies against employees who test positive for marijuana.  Other courts, however, have had the opportunity to address these issues in recent years, and the decisions at least provide some indication of how Minnesota courts might address these issues in the future.

For example, in the Colorado Supreme Court has previously held that employers could enforce their zero tolerance policies against employees who are allowed to use medical cannabis under state law, even if the employee established that he used the marijuana during non-work hours.[1]  The Colorado Supreme Court stated that to be protected under the lawful consumable product statute in that state, the use must be “lawful” under both state and federal law.  Therefore, since marijuana is still designated as illegal under federal law, a Colorado employee testing positive for medical marijuana can be disciplined, including termination, for failing a drug test.

The Nevada Supreme Court incorporated that same analysis in August of 2022 when it affirmed that an employee couldn’t sue an employer after being fired for testing positive for marijuana following a post-work injury drug test.[2] The Court emphasized that because marijuana remains illegal under federal law, the employee’s off-duty use of marijuana could not have been “lawful use.”  The Court repeatedly highlighted that had the state legislature wished to protect all off-duty use of marijuana it could have done so when drafting the statute.

Key Takeaways

We don’t know what protections or guidance will be afforded to Minnesota employers in the next few months, nor do we know how Minnesota courts will respond to challenges and adverse employment decisions arising from an employee’s use of marijuana.  Given the serious safety concerns in the construction industry in particular, however, there are certain steps contractors can take now to better protect their workplaces and their employees:

  • •   Take the time to review—and if needed, update—your employment policies on drug testing and drug impairment.  Importantly, your policies should still make clear that (1) employees cannot come to work impaired by alcohol or other drugs, including marijuana; (2) employees are prohibited from consuming substances like alcohol or drugs at the jobsite; and (3) employees cannot sell or purchase alcohol, drugs, or drug paraphernalia at the jobsite and/or during work hours.
  • •   Reconsider the value of pre-employment drug testing for THC or marijuana.  With broader legalization, inevitably more employees will be testing positive from lawful consumption of those products.  Currently drug test results are binary—either an employee is “negative” or “positive.”  Until better drug tests are developed to determine the level of THC or marijuana in an applicant’s blood, it’s difficult to unequivocally determine whether an applicant’s legal use of THC is or should be a source of concern.  Moreover, making employment decisions based solely on the results of the current drug tests could still open employers up to liability if an applicant is using THC or marijuana products for a specific medical reason.  For these reasons, until a drug test can measure levels of THC or marijuana consumption, the pre-employment drug test has limited utility.
  • •   Develop more specific policies for “reasonable suspicion” drug testing.  Many employers and especially contractors require drug testing when they have a strong reason to believe that an employee may be acting under the influence of drugs or alcohol while on the job.  Better training for project managers and superintendents should be offered to help them better determine whether an employee might be under the influence of marijuana.  Companies should implement a specific “reasonable suspicion” protocol to determine that the reasons for the tests are uniformly documented and supported.
  • •   Continue to implement random, safety-sensitive drug tests for those employees whose work is vital to maintaining a safe jobsite.  Under current Minnesota law, after a positive test result, employees “must be given written notice of the right to explain the positive test and the employer may request that the employee or job applicant indicate any over-the-counter or prescription medication that the individual is currently taking or has recently taken and any other information relevant to the reliability of, or explanation for, a positive test result.”[3] The employee may then “submit information to the employer, in addition to any information already already submitted” to explain that result.  Accordingly, if an employee tests “positive” for THC or marijuana, employers may then learn more about the extent of the employee’s THC/marijuana use and make an informed employment decision based upon the explanation provided by the employee.  Again, however, the employer should further develop policies to ensure that adverse employment decisions being made about an employee’s THC or marijuana use are made on an established set of factors to ensure consistency and fairness.

Conclusion

The quick changes in Minnesota law regarding the legalization of marijuana and hemp-derived products like THC are forcing many employers to reconsider their employment policies, especially on drug testing.  Given the potential serious impacts that employee impairment could have on construction projects, contractors in particular should work with their counsel to review and update their employment policies to conform to the latest changes of the law as this legislative session continues.

[1] Coats v. Dish Network, LLC, 350 P.3d 849 (Colo. 2015)

[2] Ceballos v. NP Palace, LLC, 514 P.3d 1074 (Nev. 2022)

[3] Minn. Stat. § 181.953, subd. 6.  For a more complete review of Minnesota’s current drug testing laws, refer to Minn. Stat. § 181.950, et seq.

Announcements

Matt Collins will discuss Best Construction Law Practices for Subcontractors hosted by the Minnesota Concrete & Masonry Contractors Association on March 2 at 7:30 am (7:00 registration). Venued in Roseville, Minnesota, Matt will be discussing fundamental construction law principals that every subcontractor and supplier should know for running a successful business.  If you would like more information to attend, please click here.

Mark Becker was inducted as a Fellow into the American College of Construction Lawyers, an organization of nationally recognized construction lawyers. Dean Thomson was elected as the College’s President Elect. For more information click here.

Fabyanske, Westra, Hart & Thomson, P.A. is pleased to announce the recognition of nine attorneys, Mark Becker, Matt Collins, Rory Duggan, Gary Eidson, Marv Fabyanske, Kyle Hart, Jesse Orman, Dean Thomson and Tom Vollbrecht  by U.S. News Best Lawyers©, one of the oldest and most respected peer-review publications in the legal profession. Dean Thomson was also selected by Best Lawyers as 2023 Attorney of the Year in Construction Law. For more information click here.

This discussion is generalized in nature and should not be considered a substitute for professional advice. © 2023 FWH&T