Arizona Legislature Responds To Medical Marijuana Act’s
Anti-Discrimination Language With HB 2541

Employers received welcome relief when Arizona Governor Jan Brewer recently signed into law HB 2541.  At first blush, this bill appears simply to amend (albeit significantly) Arizona’s existing Employee Drug Testing Statutes (Title 23, Chapter 2, Article 14 of the Arizona Revised Statutes).  Those statutes establish certain procedures and requirements for employer drug testing programs and provide employers with legal protections when their programs comply with those procedures and requirements.

Far more importantly, however, HB 2541 gives back to compliant Arizona employers significant legal ground that they lost when Arizona adopted its Medical Marijuana Act (“MMA”), as discussed in an earlier Sherman & Howard client advisory.  For instance, HB 2541 protects these employers when they take adverse action against medical marijuana users and others suspected of being impaired by drugs or alcohol at work, and provides these employers with specific guidelines as to indicators of impairment.  Moreover, HB 2541 provides such employers with definitive guidance (and substantial latitude) in excluding medical marijuana users from safety-sensitive positions.

Background:  Arizona Medical Marijuana Act’s Effects On Employers

The legislature introduced HB 2541 in direct response to Arizona’s MMA, which voters approved in November 2010.  The MMA legalized, under Arizona state law, the use of medical marijuana for specific, debilitating conditions.[1] The MMA also prohibited employers from discriminating against employees based on their status as registered medical marijuana cardholders.

MMA’s “non-discrimination” provisions made two exceptions –  allowing employers to take adverse employment action (1) against a registered cardholder if failure to do so would cause the employer to lose a monetary or licensing-related benefit under federal law or regulations, and (2) against an employee if that employee used, possessed or was impaired by marijuana at work or during work hours.  As we noted when the MMA was enacted, the omission of any definition of the term “impaired” created a serious problem for Arizona employers.

New Law:  HB 2541’s Effects On Employers

No Liability for Actions Based on a “Good Faith” Belief of Use, Possession or “Impairment.”

HB 2541 amends Section 23-493.06, Arizona Revised Statutes, to provide no legal claim or liability against a compliant employer for any “actions based on the employer’s good faith belief that an employee had an impairment while working while on the employer’s premises or during hours of employment.”[2]  The term “drug” is defined to include any controlled substance under federal law, including medical marijuana.

By using the term “good faith belief,” HB 2541lowers the MMA’s standard of use, possession, or impairment, making it clear that an employer is not required to prove that an employee, in fact, was using, possessing or impaired by drugs or alcohol.  This is a major victory for Arizona employers. The new law defines an employer’s “good faith” to be a “reasonable reliance on fact, or that which is held out to be factual, without the intent to deceive or be deceived and without reckless or malicious disregard for the truth.”

Further, HB 2541 helps employers not only by filling the MMA’s gaping hole as to the meaning of “impairment,” but also by giving them guidance as to objective signs of impairment.  HB 2541 defines “impairment” to mean:  “symptoms that a prospective employee or employee while working may be under the influence of drugs or alcohol that may decrease or lessen the employee’s performance of the duties or tasks of the employee’s job position.”  Signs or factors that may indicate “impairment,” according to the new law:  an individual’s speech; walking; standing; movement or physical dexterity; agility; coordination; actions; demeanor; appearance; clothing; odor; irrational or unusual behavior; negligence in operation of equipment or machinery; disregard of workplace safety; involvement in a workplace accident causing damage to equipment, machinery or property, or causing injury to the employee or others; and any other symptom causing a reasonable suspicion about the use of drugs or alcohol.  This non-exhaustive list invites  employers to assert that other individual behaviors that are consistent with drug use, in a given situation, justify action.

No Liability for Excluding an Employee from a “Safety-Sensitive” Position When “Good Faith Belief” of “Current” Drug Use and Reduced Abilities to Perform.

HB 2541 also creates a new defense for employers that exclude employees from “safety sensitive positions,” and it broadly defines that term.  Thus, employers with compliant drug testing policies and programs cannot be liable for decisions that prevent an employee from working in a safety-sensitive position, as long as the decision is based on the employer’s “good faith belief” that the employee or applicant is engaged in the current use of any drug (including medical marijuana) that could cause an impairment or decrease an employee’s job performance.

HB 2541 not only defines “safety sensitive positions,” it also gives employers the latitude to designate other positions as “safety sensitive,” so long as they act with the “good faith” belief that the task could affect the safety or health of the employee or others.  Specifically, the new law defines “safety sensitive positions” to include positions where the employee operates, repairs, maintains or monitors the performance or operation of a motor vehicle, equipment, machinery, or power tools; works in the residential or commercial premises of a customer, supplier or vendor; or prepares or handles food or medicine.  “Safety-sensitive positions” also include all occupations regulated under Title 32 of the Arizona Revised Statutes – more than 40 categories of employees, including architects, engineers, cosmetologists, certified public accountants, funeral directors, nurses, private investigators, and security guards.  But most notably, HB 2541 allows employers to designate other positions as “safety-sensitive,” so long as the employer acts with a “good faith” belief that the task “could affect the safety or health of the employee “or others.”  Employers should note that in order for any position to be “safety-sensitive,” even those positions specifically enumerated in HB 2541, they must “designate” it as such, presumably in job descriptions or other business records.

Employers also gain leeway in that the “safety-sensitive position” defense relates specifically to “an employer’s reasonable belief” about an individual’s “current use of any drug.”  “Current use” is explained as “drug use that has occurred recently enough to justify an employer’s reasonable belief that involvement with drugs is ongoing.”  While this explanation is not crystal clear, HB 2541 does indicate that “current use” is not limited to a specific time frame and will be decided on a case-by-case basis.

Finally, to invoke this defense, the employer must have a “good faith” belief that the current use of a drug could cause an impairment or diminish the employee’s job performance or ability to perform his or her duties.  Again, favoring employers, HB 2541 provides that this belief may be based on testing results, warning labels on drugs, information from reputable reference sources, statements by the employee, and information from a physician or pharmacist.

Bottom Line:  Employers Should Continue to Proceed Cautiously With Registered Medical Marijuana Employees[3]

Employers should use these developments as a catalyst to review their drug testing policies and programs, to ensure that they comply with Arizona law.  Employers that appropriately amend their policies, programs, and job descriptions should be able to ameliorate the most extreme problems created by the Medical Marijuana Act.  Once appropriate policies and programs are in place, Arizona employers should train their managers and supervisors to recognize signs of “impairment” (as approved by the new law), to understand the new law’s definitions of “current use” and “safety-sensitive” positions, and to document their observations and safety concerns.

If you have questions about the impact of HB 2541 on your worksite, or if you want help modifying your drug and policies and programs, please contact a Sherman & Howard attorney.

[1] Marijuana remains an illegal controlled substance under federal law.  Notably, Dennis Burke, the U.S. Attorney for the District of Arizona, issued a letter on May 2, 2011, to the Arizona Department of Health Services.  The letter reiterates that marijuana is a Schedule I drug under the federal Controlled Substances Act and promised that his office “will continue to vigorously prosecute individuals and organizations that participate in unlawful manufacturing, distribution and marketing activity involving marijuana, even if such activities are permitted under state law.”

[2]  A separate, parallel provision of HB 2541 immunizes a compliant employer from liability for any actions based on the employer’s “good faith belief” that an employee “used or possessed any drug while on the employer’s premises or during the hours of employment.”

[3]  A less dramatic, but nevertheless important, provision of HB 2541 gives employers the right of access to the State’s medical marijuana registry, to verify an applicant’s or employee’s claim to be a medical marijuana user.  The MMA did not provide such access, leaving Arizona employers in no position to test the information given by an applicant or employee.  HB 2541 does prohibit employers from examining the registry for the purpose of taking adverse action because of an individual’s status as a registered medical marijuana user.

Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.

©2011 Sherman & Howard L.L.C.                                                    May 9, 2011