CBD Oil Discrimination Case Highlights Challenges Employers Face With Drug Tests for Marijuana

This alert was originally published by Phelps on May 23, 2022, and was expanded for additional publication by Law360 under the title 2 Rulings on Employee CBD Use Offer ADA Takeaways.

In addition to navigating complex state marijuana laws, employers now need to consider their response to claims of false positive drug tests for CBD oil under the Americans with Disabilities Act.

Marijuana and CBD oil both contain amounts of marijuana metabolites, including the chemical THC. Unlike marijuana, which remains a Schedule I drug, CBD oil is legal under federal law.

Faced with the question of whether an employer needs to accommodate an employee for CBD oil use that triggers a false positive under the ADA, two courts reached very different conclusions. These cases highlight additional wrinkles for employers facing accommodation requests and discrimination claims based upon drug tests for marijuana.

In Huber v. Blue Cross & Blue Shield of Florida Inc., the U.S. District Court for the Eastern District of Louisiana refused in May to dismiss an ADA suit on summary judgment based upon the employee's CBD oil use.

The employer knew that the employee had a history of migraines and took CBD oil. They accommodated the employee on prior occasions for her migraines including granting leave.

However, when the employee tested positive for marijuana in a drug test in connection with her work on a federal contract, the employer sent mixed messages, initially assuring her that her CBD oil use would not be an issue, accepting her physician's note regarding CBD oil recommendation, then terminating her under the employer's drug-free policy.

In her lawsuit, the employee claimed that the employer had a duty to accommodate her CBD oil use for her migraines under the ADA, including accounting for a false positive drug test for marijuana.

The employer moved for summary judgment arguing, among other things, that a negative drug test was an essential job requirement for the employee under the federal contracts she worked on, that the employer reasonably relied upon a drug-testing consultant's finding that the test levels of THC were inconsistent with CBD oil use, and that the employer terminated two nondisabled employees during the same round of drug testing, one of whom also claimed a false positive result for CBD oil use.

The court denied summary judgment, finding a number of factual disputes. First, it determined there was a question of whether a negative drug test for marijuana was an essential job requirement for the employee, given that her written job description did not explicitly reference a negative drug test result and she only performed work peripheral to the federal contract.

The court also rejected the opinion of the drug-testing consultant concerning the THC level being inconsistent with CBD oil use including by taking judicial notice of a Louisiana statute providing a higher threshold for excusable range of marijuana test results.

As to evidence of discriminatory pretext, the court found that there was a factual dispute as to whether the employer terminated the employee due to the high health care costs for her disability, which totaled over $700,000.

Finally, the court held that by failing to account for the false positive, the employer did not offer a reasonable ADA accommodation for the employee's migraines and CBD oil use.

In Rocchio v. E&B Paving LLC, the U.S. District Court for the Southern District of Indiana in April granted summary judgment in favor of the employer, finding that the employer did not violate the ADA for terminating an employee based upon a positive drug test for marijuana that the employee claimed was triggered by CBD oil use.

The employer administered the test pursuant to its random drug-test policy, did not have prior knowledge of the employee's claimed disability, relied upon its third-party administrator's determination that the sample tested positive for marijuana and there was no legal explanation for the result, and was only informed by the employee that the result was due to CBD oil after it made its termination decision.

To avoid summary judgment, the employee made a number of arguments including that an employer violates the ADA for taking an adverse action against an employee who tests positive for a legal — as opposed to illegal— substance and that the employer's policy of terminating employees who test positive for drugs categorically regards them as users of illegal drugs and therefore as having an ADA impairment.

In rejecting the employee's arguments and granting summary judgment, the court determined that "no reasonable jury could find he was terminated because of a perceived impairment and not because of the positive drug test," that an employer can fire an employee for any reason that is not discriminatory including for use of a legal substance and that there was simply no evidence that the employer regarded the employee as disabled or had any notice of his disability or CBD oil use prior to making its termination decision.

As to the employee's failure-to-rehire claim when he later applied for his same position, the court held that no reasonable jury could find that the employee was not rehired for his former position not due to any perceived disability, but because he was only interested in his former job, which was unavailable when he applied.

There are several important takeaways from these two decisions that employers should consider when updating their policies and practices for marijuana tests.

First, a key difference between Huber and Rocchio is the employer's knowledge of the employee's disability and CBD oil use prior to taking an adverse employment action.

Under the ADA, an employee must show that the employer knew of the employee's disability or history of disability, or that the employer regarded the employee as disabled. A strong defense for the employer is pointing to the absence of this essential element in an employee's ADA claim, such as when the decision maker had no knowledge of the employee's claimed disability.

In Huber, it was undisputed that the employer had knowledge of the employee's migraines as well as CBD oil use for her migraines. Indeed, the employer had accommodated the employee's migraines in the past.

In Rocchio, the employee failed to allege a factual dispute that the employer had knowledge of his alleged disability or CBD oil use prior to his termination. Among other things, while the employee may have informed the third-party drug-testing administrator of his CBD oil use, there was no evidence that information was relayed to the employer prior to its decision.

Under the reasonings in these two cases, an employer should think twice before taking adverse action due to a positive marijuana test under its drug-free policy, particularly if it has knowledge that the employee has a claimed disability or is taking CBD oil.

While it may not be necessary, and may create an additional duty, to offer every employee the chance to explain a positive marijuana drug test, if an employer already has some knowledge of a potential disability or legal drug use for the disability, it may face legal risk by applying its drug-free policy in an inflexible fashion.

The ADA requires employers to engage in the interactive process of evaluating requests for an accommodation. Therefore, if an employee seeks an accommodation for a drug test due to legal use of a substance, such as CBD oil, employers should be mindful to avoid a black-and-white application of a drug-free policy.

It is also important to keep in mind that while the ADA does not require accommodation for illegal use of drugs, an employee can always argue that an adverse action was in fact due to their disability or legal use of a medicine.

While the Rocchio court found that no reasonable jury would find that the employee was terminated for anything other than a positive drug test for marijuana due to the employer's lack of knowledge of his alleged disability or CBD oil use, the outcome may be different if there was knowledge like in Huber.

Second, these decisions highlight the importance of having and enforcing a drug-testing policy that clearly articulates which employees will be subject to drug tests and at what stages.

The employer in Rocchio demonstrated that it tested the employee, an engineer, under its random drug test policy. There was no factual dispute that the engineer was subject to the random drug test policy.

In Huber, the court found it suspicious that the employee, a customer service representative, was subject to a drug test due to a claimed federal contract requirement after years of employment, most of which was remote employment.

The Huber court ultimately found a factual dispute as to whether drug testing was required for the employee because the employee did not work directly under the federal contract at the time of her testing and termination. A clear policy and application of that policy for drug testing employees actually covered under a federal contract may have alleviated the situation in Huber entirely.

Finally, both cases highlight the shortcomings of drug tests in accurately detecting marijuana use by employees. Detection levels are usually set by drug testing companies and employers often blindly rely upon these third parties for setting the standards and interpretation of the results.

In Huber, the court found factual issues with the employer's reliance upon a drug-testing consultant based upon the cited levels being lower than excusable range under state law. In Rocchio, the court did not question the employer's reliance upon the drug testing company's explanation that there was no legal explanation for the marijuana levels found in the test.

Another issue with drug tests for marijuana is the extended period in which marijuana stays in the system depending on the type of test administered. Detection of marijuana metabolites may also have no reliable correlation to intoxication level.

This is why an employer who relies upon a positive drug test result for marijuana and takes an adverse employment action against an employee for being intoxicated on the job must back up the positive test result with observable and objective signs, such as slurred speech, uneven gait, stumbling, etc.

Based upon these two decisions, as well as the shifting legal landscape of state marijuana protections, employers should consider limiting drug testing to necessary situations such as after accidents, reasonable suspicion, when filling safety-sensitive positions, and where mandated by federal contracts or law.

Outside of these situations, testing for marijuana randomly and at the preemployment stage may be a legal can of worms, opening the door to employers obtaining early knowledge of an alleged disability and medicinal uses that could subject them to increased liability down the road.

Please contact Rebecca Sha or any member of Phelps’ Labor and Employment team if you have questions or need compliance advice or guidance.