Presented by: Anthony L. Hall, Esq.

1. Woodstock & Workers’ Comp: How cannabis and workers’ compensation mix • September 2019 Presented by: Anthony L. Hall, Esq.

2. Seeing Through The Haze Cannabis has long been heralded for its calming properties - but lately it’s having quite the opposite effect on those that have to address it in the workplace context It seems that every month there’s a state or city that legalizes some form of cannabis use Summer of 69’ compared to today. Today we will talk about emerging issues and trends with regard to cannabis, the workplace & workers’ compensation

3. trendingfor cannabis • Scope of the issue (How many states does this effect)? • Use of MJ for treatment of WC injuries (what kind of injuries may be covered)? • If allowed, who pays for it and how? • Most states terminate wage replacement benefits under WC for “cause” or “good reason” termination. Can/should employers still terminate for failed post-accident MJ test? • Light Duty Job offers & Accommodation

4. trendingfor cannabis • Pre-employment & other drug screening • Cannabis today has higher THC concentrations than in the past, which can lead to greater levels of impairment. • Policies and accommodation (can we avoid WC accident in the first place)

5. trendingfor cannabis • Industry Specific and Other issues: • DOT drivers? • Safety sensitive positions? • Federal contractors?

6. State Cannabis Laws • Medical cannabis use is permitted in 33 states and the District of Columbia • More and more states have “legalized” recreational cannabis • California, Nevada, Washington, Colorado, Oregon, Alaska, Illinois, Michigan, Vermont, Massachusetts, Maine, DC • More state legislatures considering bills to legalize on some basis

7. State Legalization of Cannabis Use States that allow recreational and medical use States with comprehensive medical programs States that allow CBD or low-THC products States with no public cannabis access program

8. What sort of work-related medical conditions could be treated with medical cannabis? • Scientific confirmation that the cannabis plant contains active ingredients with therapeutic potential for pain relief, nausea control, stimulating appetite, and decreasing ocular pressure • Opioid Alternative? • With so much media attention surrounding overdoses and overprescribing issues related to opioids, cannabis could be an alternative • Lots of talk about pluses, but not a lot about minuses yet • Cannabis is the only drug with self-guided dosage

9. Who Pays For It? • New Mexico Court of Appeals decision regarding coverage of medical cannabis to treat work-related injuries • An automotive repair shop and its insurer must pay for an employee's medical cannabis • Chronic pain from a job-related back injury • "reasonable and necessary medical care” • Big problem is that most decisions are HO/AO level - not court cases

10. Who Pays For It? • Some states have specific laws: • New Mexico: you need a patient registry identification card, supervision, and monitoring, and a licensed practitioner for the drug to be compensable • Washington: law says that insurers may enact coverage or noncoverage for payment or nonpayment of medical cannabis at their sole discretion • Arizona doesn't require a workers' comp carrier or self-insured employer to reimburse for medical cannabis treatment costs

11. Who Pays For It? • Some states have specific laws: • New Hampshire: Insurer denied payment because “possession of marijuana is still a federal crime” that could expose an insurance carrier to criminal prosecution. The court said the board didn’t cite any legal authority or identify a federal statute in its decision • Supreme court found that labor appeals board was wrong to determine that workers’ compensation insurance can’t reimburse an employee for the cost of medical cannabis

12. Who Pays For It? • Some cases that have been adjudicated relate to self-insured employers that neither fall into the private or workers' comp insurer category; many states have remained silent on the issue of payment by an insurer • In some cases, reimbursement is being done on a voluntary basis, because it is deemed a reasonable and necessary treatment and/or because it is typically cheaper than other treatment options

13. Who Pays For It? • At least five states - Connecticut, Maine, Minnesota, New Jersey and New Mexico - have found medical cannabis treatment is reimbursable under their workers' compensation laws • Florida, North Dakota, and Michigan, meanwhile, passed laws excluding medical cannabis treatment from workers’ compensation reimbursement

14. Payer Concerns • Apprehensions around effects of cannabis on the injured workers themselves • Studies have shown that THC can create impairment at work, also psychosis in individuals who are prone to anxiety • Content isn’t consistent • Self directed dosage • Payers are reimbursing injured workers rather than covering it directly • Some think it will provide some level of insulation for the carrier or the self-insured from a federal prosecution because it is a Schedule 1 drug (e.g., New Hampshire and Mass Ct. decisions) • Believe a judge ordering you to pay for it may provide some level of insulation from the federal government • NOTE: effect on costs of claims/handling • How to price the drug/no unit price • If it is going to be as costly as other forms of mediation available, payers will be in the trenches fighting over it

15. Trends and Issues with Regard to Post Accident Drug Testing Post-accident drug test reveals MJ metabolite – now what? 2 issues: Compensability & Termination Lets use Nevada as a starting point and we can expand to broader issues and trends

16. Nevada marijuana& drug testing (Compensability) • For Workers’ Compensation purposes only blood test may be used (NRS 616C.230 & NRS 484C.110) • 2 ng/mL for MU (Delta-9-tetrahydrocannabinol) • 5 ng/ml for MJ Metabolite (11-OH-Tetrahydrocannabinol) • But, it creates irrebuttable presumption • Blood vs. Urine gets complicated • Statue does not specify whole blood or plasma testing • Since required for WC in Nevada, it is lawful • Practical ability to get draw timely should be considered • Drug policy should be explicit in consent to blood if you decide to use it • WC denial for impairment rules vary from state to state (Rebuttable presumption in Nevada if no blood test) • How does employer policy handle privacy rights?

17. Compensability • If an injury is compensable following a post-accident test that is positive for cannabis use (medical or recreational) - answer will be found in each state’s individual legislation • Example: in Wisconsin, if intoxication is the primary cause, then I compensation indemnity benefits can be reduced by 15 percent with a maximum reduction of $15,000 • Burden of proof is generally on the employer • Since cannabis can stay in a person’s system for 24 hours to 30 days and there is no consensus on just how much THC means a person is impaired, proving impairment is difficult • Just because a test comes back positive for THC doesn’t mean the individual was high at the time of the test • DOT-qualified drivers: given federal issues, state courts may be reluctant to approve medical cannabis treatment for work-related injuries

18. Post Accident Drug Testing (Termination)

19. Specific Issues With Drug Testing • The psychoactive effects which impair memory, learning, and perceptual motor skills may last 4-8 hours • The psychomotor skills may be impaired for as much as 24 hours • A positive test can occur weeks (or months) after employee has used cannabis • Passive inhalation of cannabis smoke can result in detectable levels of THC and its metabolites in urine • Tests don’t show the employee is necessarily impaired or under the influence at the time of the test Source: HHS Medical Review Officer Manual, effective 11/1/04

20. Nevada Recreational Cannabis Law (Termination) Rules: • Does not permit person to undertake any task under the influence that constitutes negligence; • Does not prohibit employer from having a “policy prohibiting or restricting actions or conduct otherwise permitted under…this act”

21. Nevada Medical Cannabis Law (Termination) Employers are not required to: • allow the medical use of cannabis in the workplace, or • except as discussed on next slide, modify the job or working conditions of a person who engages in the medical use of cannabis that are based upon the reasonable business purposes of the employer BUT . . .

22. Nevada Medical Cannabis Law (Termination) Employers must attempt to make reasonable accommodations for the medical needs of an employee who uses cannabis for medical purposes It is not a reasonable accommodation if it: • poses a threat of harm or danger to persons or property • imposes an undue hardship on the employer, or • prohibits the employee from fulfilling any and all of his or her job responsibilities

23. Massachusetts July 2017 • Employee with Crohn’s Disease, has cannabis card, is fired for testing positive for cannabis • Off duty use of cannabis was facially reasonable accommodation under their state version of ADA • Employer bears burden of showing use would be undue hardship

24. Massachusetts July 2017 • Cannabis “is as lawful as the use and possession of any other prescribed medication.” • Suit under state ADA law could proceed.

25. Hawaii (Sept 2017) • Only 2 months separating Mass and Hawaii decision • Employee with disability and lifting accommodations in place sues after fired for post-accident positive cannabis test • Court re-affirmed that ADA does not require cannabis as reasonable accommodation.

26. Hawaii (Sept 2017) • Court avoids substantive issues by dismissing case because his test was before he was registered on state cannabis registry • Employee argues pretext because policy prohibited “under the influence” and he claims he used days before and was not “under the influence.” • Court side-stepped and focused on policy being for drug free workplace and that state law did not require accommodation

27. Hawaii (Sept 2017) • Case brings to attention: What does the employer policy prohibit “under the influence”? No tolerance? Impairment? Lawful v. Unlawful use? • Policies must be updated and be state specific

28. New Jersey (Sept 2017) (Termination) • Employee diagnosed with cancer and prescribed cannabis as part of treatment; employee was in car accident (not his fault) and post-accident test showed cannabis; had a cannabis card, but was fired for positive cannabis test • Employee applied to a competitor and in background check competitor told he fired because “under the influence” • Court allowed claim of defamation to proceed but dismissed discrimination claim • In March 2019, appellate court reversed dismissal of discrimination claim and ruled state’s mandate that employers need not accommodate medical cannabis users in the workplace does not foreclose an action under the state’s discrimination laws when the employee was suffering from a disability and was not seeking to use cannabis during work

29. Michigan (October 2014)(Termination) • Court ruled that a medical cannabis user could be fired for failing the test but still be eligible for unemployment compensation

30. Colorado - Termination • Coats v. Dish Network • Brandon Coats, a quadriplegic, worked in customer service for Dish Network • Used medical cannabis at home to treat painful muscle spasms • Did not use cannabis at work, performed satisfactorily

31. Coats v. Dish Network cont. • Dish Network had a zero-tolerance drug policy • Coats tested positive in a random drug test • Dish Network terminated Coats under its policy • Coats sued, alleging violation of Colorado Lawful Activities Statute

32. Coats v. Dish Network cont. • Colorado Supreme Court – June 15, 2015 opinion • Termination of employee who tested positive for cannabis due to off-duty use was not a violation of the Colorado Lawful Activities Statute • Cannabis is illegal under federal law, so its use is not a “lawful activity”

33. Light Duty and Accommodations – while MJ Remains Illegal Under Federal Law • Cannabis is illegal under Controlled Substances Act • Schedule I drug – most dangerous of narcotics • Light Duty is a powerful tool in WC; however, may be compromised/risky if using MJ

34. Why is cannabis still Schedule 1? There is a high potential for abuse Lack of any accepted medical use No accepted safety standards for use under medical supervision Unable to regulate dosing standards USDOJ: DEA Denial of Application to Reschedule Marijuana August 12, 2016

35. If use a treatment under WC or taking Medical MJ Journal of the American Medical Association study found 43% of CBD oils tested had more THC than on label. This relates to prior slides about content not consistent and dosage self regulated

36. If use a treatment under WC or taking Medical MJ There is real risk to employer of liability if employee returns to light duty or under accommodation and injures someone else or even themselves However, state laws may require it:

37. California Case • Applicant Gary Ross suffered strain and muscle spasms in his back as a result of injuries while in the U.S. Air Force • He was a qualified individual with a disability under California’s anti-discrimination law and received governmental disability benefits • After failing to obtain relief from pain through other medications, Ross began to use cannabis as recommended by his physician • Was offered job as lead systems administrator conditioned on pre-employment drug test – he tested positive

38. California – No accommodation • California Supreme Court ruled that employers do not need to accommodate their employee’s medical cannabis use • Rejecting applicant for positive test did not violate the state’s anti-discrimination statute • California medical cannabis statute did not require accommodation Ross v. RagingWire Telecomm., 174 P.3d 200 (Cal. 2008) & followed in cases including March 2018 Picazo v. Randstad

39. Oregon Case • Individual suffered from anxiety, panic attacks, nausea, vomiting and severe stomach cramps • He obtained a registry ID card to use medical cannabis on the recommendation of his physician • Steel manufacturer hired employee on a temporary basis as a drill press operator • While working for employer, employee used medical cannabis one to three times per day, although not at work • Employee's work was satisfactory, and employer was considering hiring him on a permanent basis 

40. Oregon Case (continued) • Knowing that he would have to pass a drug test as a condition of permanent employment, employee told his supervisor that he had a registry identification card and that he used cannabis for a medical problem; he also showed his supervisor documentation from his physician • One week later, supervisor fired him

41. Oregon – No Accommodation • Oregon Supreme Court ruled that employer did not have a duty to accommodate use of medical cannabis • Federal law preempts sections of Oregon’s Medical Cannabis law • Oregon’s anti-discrimination protections did not apply when the employee was engaged in the illegal use of drugs under federal law • Compare to Mass and NV. • Light Duty or accommodation when taking MJ? Emerald Steel Fabricators, Inc. v. BOLI, 230 P.3d 518 (Or. 2008)

42. Drug-Free Workplace Act of 1988 • Applies to federal contractors with contracts of $100K or more and federal grantees • Employer must certify they will provide a drug-free workplace • Publish and give drug-free workplace policy to covered employees • Does not require drug testing; however Court in Montana held DFWA preempts state law for covered employers because possession prohibited by DFWA and allowed by state law and, therefore, conflict. • NOTE: Montana law expressly says no implied right of action or duty to accommodate. • If employee is convicted for a criminal drug offense resulting from a violation occurring in the workplace, the employer must take disciplinary action or refer the employee for rehab or drug abuse program

43. DOT Testing Regulations • Department of Transportation Drug and Alcohol Testing Regulation • applies to safety-sensitive transportation employees • Feb. 2015 – DOT issued Medical Cannabis Notice • “Medical Cannabis” that is legal under state law will NOT be a valid medical explanation for a transportation employee’s positive drug test result

44. Pre-Employment Testing • How relate to WC?

45. substance use in the workplace & WC • Substance abusers are five times more likely to file a workers compensation claim. • Roughly 35% of the industrial injuries that take place in the U.S. involve drugs or alcohol. • Substance abusers are 33% less productive on the job. • Absenteeism among substance abusers is significantly higher.

46. employeemarijuana use 55% more industrial accidents 85% more injuries 75% more absenteeism Crites-Leoni, Abbie. "Medicinal Use of Marijuana: Is the Debate a Smoke Screen for Movement Toward Legalization?" Journal of Legal Medicine (1998): 273-280. Journal. www.drugabuse.gov

47. where is drug-friendly culture getting us? • The Quest Diagnostics Drug Testing Index shows the greatest increase in use of all illicit drugs by U.S. employees in 12 years, based on laboratory drug test results. • According to the U.S. Bureau of Labor Statistics drug and alcohol-related deaths in the workplace soared in 2016 with a spike of more than 30% in a single year. • The BLS also shows that fatal work injuries in 2016 were the highest since 2008. https://www.questdiagnostics.com/home/physicians/health-trends/drug-testing https://www.bls.gov/news.release/pdf/cfoi.pdf

48. Fear-based decisions Rocky Mountain Employment Council Survey: Denver/Boulder employers removing THC from the drug panel • MSEC sent out surveys to 2,933 businesses and received 609 back, almost double the sample size of the 2014 survey • About 10% of companies in the Denver and Boulder areas — considered a single region in the survey — dropped marijuana from their pre-employment tests and 2% removed the drug it from all drug testing. • About 9% of the companies from Pueblo that responded omitted marijuana from pre-employment screening. Denver Posthttp://www.denverpost.com/2017/02/03/colorado-business-pot-drug-tests/

49. policies & practices What about removing THC from the drug screen? Employers will have increased risk of liability for accidents, injuries, damages and even fatalities. • Remember that 40% of workplace fatalities involve employee substance use • Substance users have 5x more accidents and injuries • NV and City of NY now prohibit pre-employment MJ testing (with some exceptions) Workplace Statistics: dol.gov

50. policies & practices What about increasing the THC limit? • How much is enough? • How much is too much? • Cut-off levels have been established by SAMHSA representing decades of scientific research • Employers are not toxicologists & should not assume liability for “allowing” employees to perceive a certain amount of THC is “safe”