Court Requires Employer and Insurer Pay for Employee’s Pot…Let Me Explain

The legalization of medical marijuana has created many headaches for employers and employment lawyers, as they consider how a state-legal but federally prohibited substance ought to be treated under disability and worker’s compensation regimes, zero tolerance workplace policies, and the like. New Mexico added a new wrinkle last week, when its court of appeals upheld the decision of a worker’s compensation judge ordering an injured worker’s employer and its insurer to reimburse the employee for his medical marijuana.

That’s right — the employee was using marijuana. And his employer and its insurer paid for it.

The case is Vialpando v. Ben’s Automotive Services (opinion available here). Gregory Vialpando suffered a major lower back injury while on the job for Ben’s Automotive. Over the course of several years, Vialpando underwent several surgeries, and was taking narcotic painkillers and anti-depressants to manage his permanent partial disability. Vialpando eventually obtained certifications from two of his doctors that he was eligible to receive medical marijuana under New Mexico’s Compassionate Use Act. A New Mexico worker’s compensation judge found that Vialpando’s use of MMJ was “reasonable and necessary medical care,” entitling him to reimbursement from his employer and the insurer under the state’s Worker’s Compensation Act.

Ben’s Automotive appealed on two grounds. First, it argued that the Worker’s Compensation Act did not cover medical marijuana. The court of appeals rejected this contention because the only prerequisite to coverage under the statute is that the service or medical care be “reasonable and necessary.” The fact that MMJ is obtained from marijuana dispensaries and not physicians or pharmacies directly was not conclusive, because, as the court pointed out, such a construction would be unworkable — medical equipment and supplies (among other things) are often obtained from a business or individual other than the “health care provider.”

The employer further argued that the federal Controlled Substances Act and decisions like Gonzales v. Raich (in which the U.S. Supreme Court refused to recognize a right to grow and use medical marijuana, citing the CSA), clearly demonstrated a federal policy hostile to MMJ, and that it should not be required to violate federal law by paying for Vialpando’s medical marijuana. The court again sided with Vialpando, noting that there was no direct conflict between state and federal law, as there was in Gonzales. Moreover, the question of federal policy with regard to medical marijuana is not so clear, said the court, pointing out that after last August’s Cole Memo, federal prosecutors are deferring to state law on the use of state-legal medical marijuana, save for specified enforcement priorities. The court also faulted Ben’s Automotive for failing to identify what federal law it would be violating by abiding by the worker’s compensation judge’s order.

The Vialpando decision is interesting for several reasons. First, obviously, is the novelty of being able to say that a court ordered an employer to pay for an employee’s pot. Second, the court formally relied upon the Cole Memo as an authority weighing against a holding that federal law should control. Third, is grappling with what the decision means for employers. Over on the Marijuana Law, Policy, and Reform blog, Alex Kreit argues that Ben’s Automotive could have easily come up with an example of a federal law the employer would violate by reimbursing its employee for medical marijuana, suggesting an employer might be liable as an accomplice. Other commentators have suggested conspiracy. We’re not sure if  we agree with these conclusions — at the very least it seems the analysis must be different where the employer is required by state law to provide medical marijuana under a worker’s compensation statute. Moreover, other controlled substances are dispensed as medicine that would be lawful for a patient with a proper prescription to possess (but not third parties), and no one is suggesting an employer who reimburses his employee for OxyContin is complicit in the commission of a crime.

Clearly these issues are messy, and, like so many others in the world of marijuana, will continue to be messy unless and until cannabis is rescheduled or exempted from the CSA. In the meantime, we applaud the New Mexico court of appeals for sticking its neck out just a bit and issuing a reasoned, straightforward opinion on the intersection of employment law and cannabis use. Employers and insurers in states with legalized marijuana better take note.



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