Category Archives: Colorado

August 29, 2013

DOJ Will Not Challenge State Marijuana Legalization Laws – New Federal Enforcement Policy Unlikely to Affect Colorado Employers

On August 29, 2013, the U.S. Department of Justice (DOJ) announced that it will not challenge the state ballot initiatives in Colorado and Washington that legalize the possession and use of small amounts of marijuana under state law. The DOJ makes clear, however, that marijuana remains an illegal drug under the federal Controlled Substances Act. This clarification means Colorado employers may still enforce their drug-free workplace policies and take appropriate action when an employee or applicant tests positive for marijuana.

DOJ Expects States to Enforce Strict Regulatory Schemes

In its August 29, 2013 Guidance Regarding Marijuana Enforcement, the DOJ identifies eight enforcement priorities for federal law enforcement and prosecutors, such as preventing distribution of marijuana to minors, preventing the diversion of marijuana from states where it is legal to other states, and preventing drugged driving and the exacerbation of other public health consequences of marijuana use. The DOJ states that it expects that states and local governments to not only establish, but also enforce robust controls in their marijuana regulatory schemes to meet its federal objectives. The guidance instructs federal prosecutors to review marijuana cases on an individual basis, weighing all available information and evidence but to no longer “consider the size or commercial nature of a marijuana operation alone as a proxy for assessing whether marijuana trafficking implicates the Department’s enforcement priorities . . .” The DOJ further stated that if states fail to develop or enforce a strict regulatory scheme and the stated harms result, federal prosecutors will step in to enforce federal marijuana priorities and may challenge the regulatory schemes in those states.

Courts in Colorado Uphold Employer Terminations for Employee Marijuana Use

In April 2013, the Colorado Court of Appeals ruled that terminating an employee who tested positive for marijuana following his off-duty, off-premises use of medical marijuana did not violate Colorado’s lawful activities statute. Coats v. Dish Network LLC, 2013 COA 62. Brandon Coats, a quadriplegic who obtained a license to use medical marijuana under Colorado’s Amendment 20, was fired for violating his employer’s drug policy after testing positive for marijuana. Coats asserted that he never used marijuana on his employer’s premises, was never under the influence of marijuana at work and never used marijuana outside the limits of his medical marijuana license. He sued his employer, Dish Network, alleging that his termination violated Colorado’s lawful off-duty activities statute, CRS § 24-34-402.5(1), which prohibits an employer from discharging an employee for engaging in “any lawful activity off the premises of the employer during nonworking hours.”

The Coats court looked to the plain meaning of the term “lawful” in the statute and decided that “for an activity to be ‘lawful’ in Colorado, it must be permitted by, and not contrary to, both state and federal law.” Because marijuana was, and remains, illegal under federal law, the court held that marijuana use is not a “lawful activity” under the Colorado lawful activities statute and therefore, the employer did not violate the statute when it terminated him for testing positive for marijuana.

Earlier this week, the federal district court in Colorado ruled that enforcement of a drug-free workplace policy is a lawful basis for an employer’s decision to terminate an employee who tests positive for marijuana, whether from medical or any other use. Curry v. MillerCoors, Inc., No. 12-cv-2471 (Order Granting Motion to Dismiss, D.Colo. Aug. 21, 2013). In granting the employer’s motion to dismiss, the federal court rejected all of the former employee’s claims related to his medical use of marijuana that resulted in a positive drug test and his termination under the employer’s drug policy. Significantly, the court dismissed his disability discrimination claim under Colorado’s anti-discrimination statute as a matter of law, finding that it was lawful for the employer to discharge the employee under its drug-free workplace policy despite the employee’s allegation that he was terminated because of using medical marijuana to treat disabling medical conditions. Judge John L. Kane wrote “anti-discrimination law does not extend so far as to shield a disabled employee from the implementation of his employer’s standard policies against employee misconduct.” In dismissing the employee’s claim for violation of Colorado’s lawful activities statute, Judge Kane relied on the Coats decision and similarly ruled that because marijuana use is illegal under federal law, the employee’s medical marijuana use was not a “lawful activity” under the statute.

DOJ’s Announcement Should Not Change Workplace Decisions

The DOJ’s announcement of relaxed marijuana enforcement in states that have legalized marijuana does not alter employers’ ability to enforce their drug-free workplace policies. On the contrary, because the DOJ reinforced that marijuana remains an illegal drug under federal law, the analysis used by courts in Colorado to uphold termination decisions based on positive drug tests should continue to apply. Employers should create or revise their drug policies to state that use of any drug that is illegal under state or federal law will violate the policy. Employers then should enforce their policies in a consistent and uniform manner, regardless of the legalization of marijuana use in Colorado.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

July 22, 2013

Myriad of Social Media Privacy Laws Create Havoc for Multi-State Employers

By Elizabeth Dunning

Does your company request that your employees and applicants provide user names and passwords to their personal social media accounts? Do you require applicants to log onto their online accounts in your presence so that you can view their content? Perhaps you ask employees to “friend” their supervisors. If you haven’t followed new developments in state employment laws, you may not realize that such activities are unlawful in some states. In just two years, eleven states have passed social media privacy laws that prevent employers from accessing employees’ and applicants’ personal online accounts. Each state law differs in certain respects, making it difficult for multi-state employers to adopt a uniform and consistent social media policy. To help sort things out, we highlight here the primary differences in the state social media privacy laws.

States with Workplace Social Media or Internet Privacy Laws

The eleven states that have enacted social media or internet privacy laws affecting employers to-date are: Arkansas, California, Colorado, Illinois, Maryland, Michigan, Nevada, New Mexico, Oregon, Utah and Washington. All but one of these states protect the access information for both current and prospective employees, with New Mexico only protecting the log-in information of applicants.

Differences in State Social Media Laws

Generally, all of these states prohibit an employer from requesting or requiring an employee or applicant to disclose his or her user name, password or other means of accessing his or her personal social media accounts. Many of these states also make it unlawful to discipline, discharge, discriminate against or penalize an employee, or fail to hire an applicant who refuses to disclose his or her access information to personal social media accounts. However, that’s where the uniformity in the laws generally ends. The following chart highlights numerous key differences between the state laws.

Legal Provision	States Recognizing Provision
Prohibits employers from requesting that employee add employer representative or another employee to his or her list of contacts (e.g., “friend”)	Arkansas, Colorado, Oregon and Washington
Prohibits employers from requesting employee to access his or her personal social media account in the presence of the employer (“shoulder surfing”)	California, Michigan, Oregon and Washington
Prohibits employers from requesting employee to change the privacy settings on his or her personal social media accounts	Arkansas, Colorado and Washington
Specifically permits employers to view and access social media accounts that are publicly available	Arkansas, Illinois, Michigan, New Mexico, Oregon and Utah
Exception when access required to comply with laws or regulations of self-regulatory organizations	Arkansas, Nevada, Oregon and Washington
Exception for investigations of employee violation of law or employee misconduct	Arkansas, California, Michigan, Oregon, Utah and Washington (Colorado and Maryland limit this exception to investigation of securities or financial law compliance)
Exception for investigation of unauthorized downloading of employer’s proprietary, confidential or financial data	Colorado, Maryland, Michigan, Utah and Washington
Inadvertent acquisition of personal log-in information while monitoring employer systems not a violation but employer not permitted to use the log-in information to access personal social media accounts	Arkansas, Oregon and Washington

As you can see, the differences in the laws exceed the similarities, making it difficult for an employer operating in more than one covered state to comply with all applicable provisions. Even the definition of covered social media accounts varies by state, creating even more inconsistencies.

Would a Federal Law Help?

With eleven laws in place and almost 20 additional states considering social media privacy bills, the issue seems ripe for a federal bill that would bring some uniformity to the protections offered to employees and applicants. In February 2013, the Social Networking Online Protection Act, which offers such workplace protections, was introduced into the U.S. House of Representatives. Unfortunately, it has languished in committee and is not expected to pass. In addition, a federal law on the issue will likely only simplify the web of state laws if it specifically preempts state law. Without federal preemption, we might face two sources of law on the issue, federal and state, which might muddy the waters even more. In any event, it does not appear that a federal law will be enacted before additional states enact their own laws, leaving employers to struggle with the variances in state law.

Best Practices for Complying with Social Media Privacy Laws

With the vast amount of information available on social media and the increased use of social networking platforms for business purposes, it is likely that most employers will at some point need to access or review content on an employee’s or applicant’s social media account. Perhaps it will be for an investigation of an employee who downloaded proprietary information or perhaps it will be to confirm derogatory statements about the company made by an employee. Whatever the reason, the first step is to recognize that these laws exist and you will need to review which, if any, apply to your company and/or the employee involved. Remember that you are generally free to access publicly available social media content. However, if one of these state laws applies, consult with legal counsel before accessing (or requesting access to) any personal social media accounts to determine what restrictions and exceptions are applicable to your particular circumstances.

Establish a social media policy specifying that employees are not permitted to disclose or post proprietary or confidential company information on their personal social media accounts. Make a clear delineation between company/business-related social media accounts where you control who speaks on behalf of your organization, and personal accounts where employees do not represent the views of the company. Be careful that your social media policy does not run afoul of the National Labor Relations Act by interfering with employees’ right to discuss their wages and working conditions in a concerted manner. Communicate your policy to your employees through normal channels, such as your employee handbook, online policy/intranet, etc.

Train your supervisors, managers and human resources staff on these laws. Sometimes supervisors or HR folks think it is acceptable to ask an employee to “friend” them online, or to ask for their log-in information to view pictures or other benign posts. Despite good intentions, company representatives could get you into legal trouble so advise them of these laws and your restrictions on requesting access to personal social media accounts.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

June 10, 2013

Fired for Dating a Client, Employee Fails to Prove Violation of Colorado’s Lawful Activities Statute

By Mark Wiletsky

Dating a client is probably never a good idea. In some professions, it is a violation of ethical responsibilities. In other cases, it may be bad for business when the relationship goes sour. In the case of a family advocate for a social services organization, it created the appearance of a conflict of interest. That conflict of interest saved a small Colorado employer from being liable for a violation of Colorado’s Lawful Activities statute when it terminated the family advocate for dating a client. Ruiz v. Hope for Children, Inc., 2013 COA 91.

Romantic Relationship as Lawful Activity Conducted Outside of Work

Charlotte Ruiz worked as the only family advocate at a small non-profit social services organization in Pueblo called Hope for Children. Seledonio Rodriguez became a client of Hope for Children when he attended a court-ordered fathering class there. Ruiz didn’t meet Rodriguez until he completed his first class and needed assistance to sign up for a second class. Shortly after completing his second class, Rodriguez ran into Ruiz at the Colorado State Fair and sometime thereafter, they began dating. When Hope for Children’s executive director learned about the romantic relationship, she told Ruiz she could not continue to work for the organization if she wanted to continue to date Rodriguez. Ruiz refused to give up the relationship, so she was fired.

Ruiz sued Hope for Children alleging that she was terminated in violation of Colorado’s Lawful Activities Statute, which prohibits terminating an employee for engaging in a lawful activity outside of work. After a two-day bench trial, the judge concluded that Ruiz was indeed terminated for engaging in a lawful activity outside of work. However, the judge also found that the relationship raised a conflict of interest, or at least, the appearance of a conflict of interest which kept the termination from violating the statute.

Conflict of Interest Defense to Lawful Activities Statute

Colorado’s Lawful Activities statute provides defenses that allow an employer to restrict employees’ off-duty, off-premises lawful activities, namely when the restriction: (1) relates to a bona fide occupational requirement or is reasonably and rationally related to the employment activities and responsibilities of a particular employee or group of employees; or (2) is necessary to avoid a conflict of interests with any responsibilities to the employer or the appearance of such a conflict of interest. Before this opinion, no Colorado appellate opinions interpreted these statutory defenses. In the Ruiz case, the Court of Appeals ruled that the conflict of interest defense was not limited to financial conflicts or an actual interference with the employee’s ability to perform a job-related duty. Instead, the Court stated that the determination of a conflict of interest, or appearance of one, must be made in light of the facts and circumstances of each particular case looking at both the context and industry involved.

In Ruiz’s case, the Court agreed that there was sufficient evidence to support the trial court’s conclusions that Ruiz’s romantic relationship with a client created an appearance of a conflict of interest with her job duties. The relevant facts in this case included that: (a) Ruiz might be called to testify in court about Rodriguez’s completion of his court-ordered fathering class; (b) Hope for Children does not “close” its files and frequently worked with families over the course of many years, meaning Rodriguez would always be considered a client; (c) most of the organization’s budget was from a state agency grant and referrals from the agency would be negatively affected by permitting employees to date clients; (d) a romantic relationship between an employee and a client would negatively impact the credibility of the social services organization, as testified to by a former director of another social services agency and board member; and (e) the organization’s funding might be revoked if it allowed its employees to date clients. Based on the appearance of a conflict of interest created by Ruiz’s relationship with Rodriguez, the Court agreed that Hope for Children’s termination of Ruiz fell within the statutory defense language contained within the Lawful Activities statute and therefore, did not violate the statute.

What do we learn from this case? First, be cautious before terminating an employee for otherwise lawful, off-duty activities, at least in Colorado and other states that protect such conduct. Second, a romantic relationship can be a lawful, off-duty activity under the Lawful Activities statute. Therefore, if you terminate an employee for a romantic relationship, be sure you are on solid footing to establish a defense to a wrongful termination claim.

May 7, 2013

Small Colorado Employers Face Higher Damages for Discrimination Claims

By Mark Wiletsky and Steve Gutierrez

Small businesses beware: your employees now have more incentive to sue you. As of January 1, 2015, employees can recover compensatory and punitive damages for employment discrimination claims against businesses that employ between one to fourteen people under Colorado’s Job Protection and Civil Rights Enforcement Act of 2013, signed into law by Governor John Hickenlooper on Monday, May 6, 2013. But don’t despair. By taking some proactive steps now, businesses can minimize their exposure to potential claims.

Increased Exposure for Small Employers

Colorado’s new anti-discrimination law changes the landscape for small employers by allowing compensatory and punitive damages against Colorado’s small businesses (with 1-14 employees), along with attorneys’ fees and costs to the employee if he or she prevails, back pay, front pay, interest, and other potential relief. Thankfully, the new Colorado law contains some safeguards against outrageous damage awards that would likely put small employers out of business. For businesses with 1-4 employees, compensatory and punitive damages are capped at $10,000. For businesses with 5-15 employees, such damages are capped at $25,000. Businesses with greater than 15 employees are subject to the existing damages caps found in the federal anti-discrimination laws.

The availability of these damages to employees of businesses with fewer than 15 employees will likely result in more discrimination cases filed in Colorado against small businesses, significantly raising the potential exposure for small business owners. That is especially true given that such claims may be filed in state court, which is often viewed by attorneys representing employees as a more favorable forum for such claims.

Age Discrimination No Longer Cut Off at Age 70

The Job Protection and Civil Rights Enforcement Act of 2013 also eliminates the age 70 cutoff for age discrimination claims brought under Colorado law. This brings the state law into line with the federal Age Discrimination in Employment Act which does not have an upper age limit. Consequently, employees age 40 and older are protected from employment discrimination under both state and federal law.

Good Faith Efforts May Avoid Punitive Damages

Under the new Colorado law, employers will not be subject to punitive damages if they can demonstrate good-faith efforts to prevent discriminatory and unfair employment practices in the workplace. In addition, no punitive damages are available in a lawsuit involving a claim of failure to make a reasonable accommodation for a disability if the employer can demonstrate good-faith efforts to identify and make a reasonable accommodation that would provide the disabled employee with an equally effective opportunity and would not cause an undue hardship on the employer’s operation. Small businesses should begin those good-faith efforts now so that policies and procedures to prevent and respond to discrimination are in place when the law goes into effect.

Steps Small Businesses Should Take to Minimize Risk

Unfortunately for small businesses, the mere threat of a lawsuit, however meritless, may stretch tight resources to the breaking point. That is why it is so important to take proactive measures now, which will help minimize the risk of such lawsuits. Among other things, small businesses should:

1) Adopt and distribute policies that prohibit discrimination, harassment, and retaliation in the workplace. Require new and existing employees to acknowledge their receipt of these policies, preferably on an annual basis.

2) Train supervisors, managers and employees. Everyone in the workplace should be trained on your anti-discrimination policies and procedures with specialized training provided to supervisors and managers who must recognize harassment and discrimination and know what to do when they observe it or receive a complaint. In small workplaces, dealing with complaints of discrimination or retaliation can be difficult. Still, if you address it promptly and appropriately, you will be in a better position to avoid or defend against a claim.

3) Document performance issues. We often see meritless lawsuits filed because legitimate performance concerns were not shared with the employee or appropriately documented. If an employee has performance issues, be sure to get it in writing. Focus on the problem, give concrete examples, and warn the employee that a failure to achieve immediate and sustained improvement may result in termination.

4) Arbitration agreements. Consider whether it would be appropriate to have employees sign an arbitration agreement. Such agreements take discrimination claims out of the civil court system, and generally allow for a more streamlined resolution. However, arbitration is not necessarily cheaper than a court proceeding; in fact, in some cases it might cost more. Be sure to consider all the benefits and burdens of arbitration before relying on such agreements. And if you prefer arbitration, make sure your agreement complies with all applicable legal requirements.

Essentially, small employers need the same policies and procedures to deal with discrimination as larger employers do, even though many smaller employers simply do not have the same resources. Take the next 18 months before the law becomes effective to educate yourself, your supervisors and your employees on discrimination issues and take the steps that will help minimize your risk to the damages that will be available soon to aggrieved employees.

May 6, 2013

Colorado Restricts Employers’ Use of Credit Reports

By Mark Wiletsky

Employers using credit reports to evaluate applicants and employees take note: Colorado recently enacted the “Employment Opportunity Act” limiting the use of credit reports in employment decisions. In passing this law, Colorado joins eight other states–California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington–in restricting employers from obtaining and/or using credit history information when evaluating applicants and employees. The new Colorado law exempts certain job positions from the prohibition on the use of credit reports, but the exceptions are very fact specific. Employers need to analyze the job responsibilities of the position at issue in order to determine if they may use credit information under this new law.

Prohibition on the Use of Consumer Credit Information for Employment Purposes

Effective July 1, 2013, section 8-2-126 of the Colorado Revised Statutes provides that an employer shall not use consumer credit information for employment purposes unless the credit information is substantially related to the employee’s current or potential job. This means that Colorado employers are prohibited from using credit information in the employment context except in those limited situations where credit or financial responsibility is substantially related to the job. The type of information prohibited under this law includes any written, oral or other communication of information that bears on a consumer’s creditworthiness, credit standing, credit capacity or credit history. This includes a credit score, but does not include the name, address or date of birth of an employee associated with a social security number.

“Substantially Related” Analysis Looks to Job Responsibilities

When determining whether a particular position falls within the exception where credit information is “substantially related to the employee’s current or potential job,” employers may not rely on an informal, best-guess determination. Instead, employers must carefully analyze whether the job in question meets the parameters detailed in the new law.

Under Colorado’s law, “substantially related to the employee’s current or potential job” is defined to apply to positions that:

1) Constitute executive or management personnel or officers or employees who constitute professional staff to executive and management personnel, and the position involves one or more of the following:

A) Setting the direction or control of a business, division, unit or an agency of a business;

B) A fiduciary responsibility to the employer;

C) Access to customers’, employees’, or the employer’s personal or financial information (other than information ordinarily provided in a retail transaction); or

D) The authority to issue payments, collect debts or enter into contracts; OR

2) Involves contracts with defense, intelligence, national security or space agencies of the federal government.

Consider this example: you are hiring a human resource specialist who will administer employee benefits within your company. May you obtain and use a credit report on applicants for this position? Assuming this position does not involve federal defense, intelligence, national security or space agency contracts, you first must determine if this position is an executive or management position, or alternatively, if this position is considered professional staff to an executive or manager. In our example, the employee benefits specialist position may or may not be an executive or management position at your company. If not, the position may be considered professional staff to an executive or manager if the position reports to an HR Director, Vice President or other similar high level manager or officer. If we assume this position meets this threshold determination, you next must analyze if the position involves one or more of the four areas of responsibilities where credit information will be deemed substantially related. Because an employee benefits specialist is likely to have access to employees’ personal and perhaps financial information, it appears to fall within the third area of responsibility where credit information will be deemed substantially related to the job, but the answer is certainly not clear-cut.

Requesting Employee Consent to Obtain a Credit Report

In addition to the prohibition on the use of credit information for employment purposes, the new Colorado law prohibits employers or their agents from requiring an employee to consent to a request for a credit report that contains information about the employee’s credit score, credit account balances, payment history, savings or checking account balances, or savings or checking account numbers as a condition of employment unless:

1) The employer is a bank or financial institution;

2) The report is required by law; or

3) The report is substantially related to the employee’s current or potential job andthe employer has a bona fide purpose for requesting or using information in the credit report and is disclosed in writing to the employee.

The written disclosure requirement here is a new procedural step with which most employers meeting this exception will not be familiar. Employers meeting these criteria now need to provide applicants/employees with a notice of their business purpose for requesting credit information.

Employee May Be Allowed to Explain Circumstances Affecting Credit

In those cases when an employer is permitted to use credit information because it is substantially related to the job, an employer may ask the employee to explain any unusual or mitigating circumstances that affected their credit history. For example, if the credit report shows delinquent payments, the employer may inquire further allowing the employee to explain circumstances that may have caused the delinquencies, such as an act of identity theft, medical expense, a layoff, or a death, divorce or separation.

Adverse Action Disclosure Required

If the employer relies on any part of the credit information to take adverse action regarding the employee or applicant, the employer must disclose that fact and the particular information relied upon to the employee. This disclosure must be made to the employee in writing but can be made to an applicant via the same medium in which the application was made (e.g., if the application was submitted electronically, this disclosure may be sent electronically).

FCRA Obligations Still Apply

Employers who are permitted to obtain and use credit reports under the Colorado law must also comply with the requirements of the Fair Credit Reporting Act (FCRA) in order to obtain a credit report from a consumer reporting agency. These additional FCRA duties include:

1) Providing a clear and conspicuous written disclosure to the applicant/employee before the report is obtained, in a document that consists solely of the disclosure, that a consumer report may be obtained;

2) Getting written authorization from the applicant/employee before obtaining the report;

3) Certifying to the consumer reporting agency that the above steps have been followed, that the information being obtained will not be used in violation of any federal or state equal opportunity law or regulation, and that, if any adverse action is to be taken based on the consumer report, a copy of the report and a summary of the consumer's rights will be provided to the consumer;

4) Before taking an adverse action, providing a copy of the report and a summary of FCRA consumer rights to the applicant/employee; and

5) After an adverse action is taken, sending an adverse action notice to the employee/applicant containing certain FCRA-required statements.

Credit Check Compliance

Colorado employers need to review and update their background check policies as they relate to conducting credit checks on applicants and existing employees. In addition to FCRA obligations, employers wishing to use credit reports have additional restrictions and duties under state law.

Employers now must analyze whether each position for which they wish to obtain credit reports meets the “substantially related to the employee’s current or potential job” criteria. If the position meets that criteria and the employer wishes to obtain a credit report on an applicant or existing employee, the employer first must provide a written disclosure to the applicant/employee describing the bona fide purpose of obtaining the credit information. If the credit report reveals questionable or negative information, the employer may (but is not required to) ask the applicant/employee to explain any unusual circumstances that may have led to the unfavorable credit information. If the employer rejects the applicant/employee for the position based in any way on the credit report, the employer must provide the required FCRA adverse action notices as well as a written explanation of the particular information in the report that led to the employer’s decision.

Multi-state employers face unique challenges when obtaining and using credit reports for employment purposes as they must comply with various state laws that now restrict such use. Given the intricacies of complying with the FCRA and applicable state laws, employers are wise to consult with their counsel to review and update their credit check policies.

April 25, 2013

BUZZ KILL: Employee Legally Fired For Off-Duty Marijuana Use

By Emily Hobbs-Wright & Brad Williams

The Colorado Court of Appeals issued a precedent-setting decision today upholding an employee’s firing for off-duty marijuana use. Citing federal law, the court held that using pot during non-working hours is not “lawful activity” under the state’s lawful off-duty activity statute. The decision provides the first direct guidance on terminating workers for off-duty marijuana use since Amendment 64 legalized the drug’s use and possession last November.

The case involved a quadriplegic employee licensed to use pot under the state’s medical marijuana amendment. The company terminated his employment after he tested positive for drugs in violation of company policy. The terminated worker claimed that he used the drug within the limits of his license, had never smoked on his employer’s premises, and had never been under the drug’s influence at work.

In the lawsuit, the terminated worker claimed that the company’s actions violated Colorado’s lawful off-duty activity statute, which prohibits termination for any “lawful activity” conducted off an employer’s premises during nonworking hours. Before today, Colorado courts had never squarely addressed whether the statute prohibits termination for off-duty marijuana use, when it is permitted under Colorado law.

Invoking a dictionary definition of the term “lawful,” the Court of Appeals held that “for an activity to be ‘lawful’ in Colorado, it must be permitted by, and not contrary to, both state and federal law.” Because marijuana use remains illegal under federal law, termination for off-duty pot-smoking does not violate the statute. The court also noted that its interpretation maintained the “balance between employer and employee rights” reflected elsewhere in Colorado law.

The decision is hugely important for Colorado employers. Amendment 64, like the medical marijuana amendment before it, did not require employers to “permit or accommodate” pot use, and expressly permitted policies restricting such use. But before today, courts had never previously decided whether state or federal law defines “lawful activity” under the statute.

The decision may not be the final word. Further appeal to the Colorado Supreme Court is possible, and other legal theories based on disability and similar laws remain untested. But for now, the decision provides the best guidance yet on terminating marijuana users, suggesting that courts will protect employers’ rights to enforce drug policies notwithstanding Colorado’s legalization of marijuana. It further reinforces the importance of employers defining illegal drugs as those prohibited under both state and federal law in drug policies.

This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

March 19, 2013

Checklist for Complying with the New FMLA Regulations

Have you updated your Family and Medical Leave Act (FMLA) policy and poster? You should have. New regulations that implement changes to the FMLA went into effect on March 8, 2013. Covered employers need to take action now to ensure compliance with the new rules.

A summary of the changes to the FMLA as well as a checklist for complying with the new regulations is available here. Be sure to update your FMLA policies, poster, certification forms and notice of rights immediately. In addition, ensure that your leave administrators, supervisors and human resources personnel are trained on the new rules. FMLA compliance isn't hard, but it does take work!

February 26, 2013

Who Owns Your Employees’ LinkedIn Profiles? The Answer Might Surprise You.

By Mark B. Wiletsky

If your employees use LinkedIn to establish and maintain contacts for business purposes (such as sales), what happens to those accounts—and contacts—when the employee quits or is fired? Can an employer who has access to an employee’s LinkedIn profile change her password and replace information in her profile following her termination? No, says at least one federal judge in Pennsylvania recently, though that case is not yet over. As explained below, employers should be careful before assuming that they own their employees’ LinkedIn profiles.

Employer Access to High Level Executive Profiles

Edcomm, Inc., a banking education company, strongly urged its employees to create LinkedIn accounts using their company email addresses as a business networking tool. It had employee policies governing online postings and specified that if employees identified themselves as an Edcomm employee, they needed to use a specific template that contained pre-approved content about the company and referred to the company’s website. The company provided a photographer to take professional photos for employee use on their LinkedIn accounts. It also allowed some Edcomm employees to access, develop and administer the LinkedIn accounts of senior management, such as responding to invitations, inviting new contacts and researching good news stories to include on their LinkedIn pages.

After being acquired by another company, Edcomm, Inc. terminated its company president and founder, Linda Eagle, as well as several other top executives. After her termination, Edcomm locked Eagle out of her LinkedIn profile by changing her password. It then changed the information on the profile to that of the new acting CEO.

Company Argues LinkedIn Account was Akin to a Client List

Eagle sued Edcomm alleging numerous violations of state and federal law, including invasion of privacy by misappropriation of identity, misappropriation of publicity, identity theft and conversion. Edcomm argued that the LinkedIn accounts were used to contact new clients and promote the company’s services. As such, the company claimed that its take over of Eagle’s account was similar to the company keeping possession of a client list after an employee is terminated.

The Judge didn’t buy it. At a recent hearing, Judge Ronald Buckwalter stated that Edcomm likely had no right to change Eagle’s LinkedIn password and change her profile information. He noted that the company had no internal policy that would hand over ownership of employee profiles when employees left the company and that the LinkedIn accounts belonged to the individual employees.

Be Prepared For An Employee’s Departure

Although it is wise to implement a social media policy to address employee use of company information on personal or company-sponsored social media accounts, you need to be wary of who owns the rights to such information. First, as indicated in the Edcomm case above, you risk potential invasion of privacy and other claims. Second, the employee might have rights to the account independent of the employer, as established in an agreement between the service provider and the employee. At a minimum, consider implementing specific policies that address these issues up front, and consider what services your employees are using to establish and maintain connections with clients. The fact that contacts are connected through LinkedIn, Facebook, or some other social media site can significantly impact an argument that such contacts are protectable trade secrets. Lastly, don’t forget that forcing access to employees’ social media can be risky. Four states have enacted legislation to prohibit or restrict employers from asking for social media access and many other states are currently debating similar restrictions.

November 2, 2012

Marijuana in the Workplace: Amendment 64 – Same Can, More Worms for Colorado Employers

By Emily Hobbs-Wright

Amendment 64 would, among other things, allow individuals age 21 and over to possess and use one ounce or less of marijuana. If the Amendment passes next week, employers will face increased uncertainty when it comes to the enforcement of workplace drug testing policies. A reckoning is inevitable because the debate over the scope of employers' rights to terminate workers who use marijuana outside of work and then test positive in violation of company policy has been brewing for several years in the context of Amendment 20 (which decriminalized the use of medical marijuana by registered patients). Amendment 64 does not clarify the extent of employers' right to terminate for marijuana use. On the contrary, it fans the flames by incorporating language that fueled employment litigation in the medical marijuana context following Amendment 20's passage, and by extending coverage to the general workforce, not just a handful of employees who are registered medical marijuana patients.

The debate to date

In November 2000 Colorado voters approved Amendment 20, which authorizes patients with certain debilitating medical conditions to receive from the State of Colorado a registry identification card allowing them to obtain and use marijuana without threat of criminal prosecution by the state authorities (but not the federal government).

With regard to employers' rights, Amendment 20 states: "Nothing in this section shall require any employer to accommodate the medical use of marijuana in any workplace." Both sides of the debate agree that this language preserves employers' right to prohibit employees from using marijuana at work, regardless of whether employees hold medical marijuana cards.

The parties sharply diverge, however, on the subject of whether Amendment 20 preserves employers' right to prohibit medical marijuana users from reporting to duty under the influence of, or having trace amounts of, the drug in their systems due to off-duty use. This issue typically arises when an employee tests positive for THC (the psychoactive constituent found in marijuana) in a random or post-accident workplace drug screen. Because most workplace drug testing policies prohibit employees from using illegal drugs as defined by federal or state law, employees are typically terminated following such positive results.

In recent years, medical marijuana cardholders who have been terminated from jobs for failing workplace drug screens have argued that the "in any workplace" language allows employers to regulate medical marijuana use at work, but not during non-working hours. These legal arguments take many forms, but the predominate themes in litigation to date are that (1) medical marijuana use is not illegal under state law and (2) employers should not be permitted to regulate an employee's off-duty medical marijuana use absent evidence that a worker is actually impaired at work. One obvious Colorado law that is triggered in the context of this argument is Colorado's lawful off-duty activity statute, which makes it unlawful for employers to terminate workers for engaging in lawful activities outside of work during non-working hours.

On the flipside, employers assert that Amendment 20 does not place any obligation upon companies to accommodate employees who use medical marijuana. Employers are free to enforce their drug testing policies and to prohibit the use of illegal drugs, including marijuana, whether medical or not, even when the use occurs off the worksite during non-working hours. Employers further assert that the Amendment is intended to provide certain individuals with an affirmative defense against criminal prosecution, but not to restrict employers' rights. Moreover, because marijuana is still illegal under federal law, an employee's use of marijuana outside of work is not a "lawful" activity that is covered by Colorado's lawful off-duty activity statute.

To date, Colorado courts have not squarely addressed whether employers can lawfully terminate employees who use medical marijuana outside of work during non-working hours and subsequently fail workplace drug screens. The Colorado Court of Appeals came close to weighing in on the issue in 2011 when it upheld the Colorado Industrial Claim Appeals Office's (ICAO's) decision to deny unemployment benefits to a worker, Jason Beinor, who was terminated for violating his employer's zero-tolerance drug policy after testing positive for marijuana in a random drug test. See Beinor v. Indus. Claim Appeals Office, 262 P.3d 970 (Colo. App. 2011).

Beinor argued that the Colorado Constitution protected his marijuana use because he used marijuana for medicinal purposes outside of work and was in the process of obtaining a registry card. In its opinion, the Court of Appeals made the following observations: (1) marijuana remains a Schedule I controlled substance under federal law and cannot be lawfully "prescribed;" (2) Amendment 20 provides an exemption from criminal prosecution – it does not grant medical marijuana users the "right to use the drug in any place or in any manner;" and (3) medical marijuana users do not have an "unfettered right to violate employers' policies and practices regarding use of controlled substances." However, the court cautioned that its holding was limited to the issue of whether the ICAO properly denied unemployment benefits. By contrast, the court was "not deciding whether the amendment limits an employer from discharging an employee for using medical marijuana." Thus, while the decision provides some helpful guidance into the direction Colorado courts would likely take in the future if faced with the issue, the debate concerning the extent of employers' right to terminate employees for engaging in off-duty use of medical marijuana remains unresolved.

Employers' rights under Amendment 64

Amendment 64 does not provide any additional guidance on this issue. The Amendment contains three provisions that address employers' rights. First, like Amendment 20, Amendment 64 does not require employers to "permit or accommodate" the use of marijuana "in the workplace." Second, employers may have policies restricting the use of marijuana by employees. Third, employers may prohibit and regulate the "possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana" on their property.

Thus, like Amendment 20, Amendment 64 opens the door for employees to argue that employers may regulate marijuana use inside the workplace, but may not impede employees' right to use marijuana outside of work. However, unlike Amendment 20, which provides an affirmative defense to criminal prosecution, Amendment 64 would decriminalize marijuana use under state law. Additionally, Amendment 64 purports to allow employers to retain policies restricting employees' use of marijuana; however, the Amendment does not specify whether such restrictions may lawfully extend to off-duty use. If the arguments lodged in the context of Amendment 20 are any indication, employees who are terminated for testing positive for marijuana will likely continue to argue that employers' policies may only regulate use and possession on company property.

Employers' drug testing policies at center stage

If Amendment 64 passes, employers' drug testing policies will be at the heart of workplace disputes over employees' marijuana use. Because marijuana use is expected to grow if the Amendment passes, employers may expect that a greater number of employees will likely test positive for the drug in random screens. This increase in positive tests, in turn, will likely lead to a greater number of challenges by employees terminated for violating their employers' zero-tolerance policies. Further, because marijuana use would be lawful at the state level, employers would no longer be able to argue, as they did in the Amendment 20 context, that marijuana is illegal under both state and federal law.

Moreover, if Amendment 64 becomes law, employees who lose their jobs because of a drug screen revealing trace amounts of marijuana in their urine will likely argue that their employers' drug testing programs infringe upon their right under the Colorado Constitution to use marijuana outside of work. In other words, they (or their advocates) will likely take the position that, if a worker is not under the influence of marijuana at work and does not pose a safety risk, an employer may not lawfully terminate his or her employment. Workers will likely further argue that there must be outward signs of impairment at work in order for employers to legally terminate their employment.

Employers, on the other hand, will likely be forced to take a firm and even stance when interpreting and enforcing drug testing policies prohibiting the use of marijuana. Inconsistent application of such policies may expose companies to discrimination claims based on a "disparate impact" or other theory of discrimination. The practical problem that employers may face is that, unlike breathalyzer tests which can easily detect whether someone is under the influence of alcohol at work, urine tests cannot easily detect the level of marijuana impairment. Marijuana may be present in an individual's urine for several weeks. Blood tests may detect the level of marijuana in a person's system with greater accuracy, but they are more invasive and still do not pinpoint when a person actually used the drug. Further, impairment at work can go undiscovered until an accident occurs. This creates an unacceptable risk of exposure for companies which have a duty to protect employees and the public from harm. Policies that prohibit use altogether avoid these and other issues and allow employers to implement drug testing programs with greater efficiency.

Ultimately, marijuana remains a Schedule I controlled substance under federal law. Amendment 64 is clear on that point. Thus, if marijuana is legalized in Colorado, employers will need to take care to ensure that their drug policies expressly prohibit the use of illegal drugs as defined by federal law. Of course, employees who are fired or disciplined for testing positive for marijuana will still likely argue that federal law cannot usurp their right to use marijuana under Colorado's Constitution. However, employers may be able to justify their decision to continue enforcing drug testing policies through reference to federal supremacy or common sense arguments.

Bottom line

If Amendment 64 becomes law, it will ultimately be up to the courts or the legislature to settle the debate and provide employers with the clarity that the Amendment currently lacks. Resolving the unsettled issues could take months, or even years. In the meantime, employers would likely be in the trenches for the foreseeable future, incurring legal fees and spending more internal resources navigating employee grievances.