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Can an Employer Rescind a Job Offer after an Employee Tests Positive for Marijuana?

Marijuana and Employment

Following the passage of Colorado’s Amendment 64 in 2012, employers and employees have faced a multitude of challenges and issues relating to the consumption and possession of marijuana by employees. One question that frequently arises is whether an employer may rescind an offer of employment based upon a prospective employee’s positive test results for THC, the chemical responsible for marijuana’s psychological effects. The answer, like so many answers to legal questions, is “maybe, depending on the circumstances.” The legality of an employer’s decision to rescind a job offer following a positive test for marijuana involves the application of Colorado law, including the at-will employment doctrine, statutes providing protections for employees, and common law rules that make certain promises made by an employer legally enforceable.

The Offer Can be Rescinded Under the At-Will Employment Doctrine

Most employers and employees have some familiarity with the at-will employment doctrine. The doctrine provides that — subject to important exceptions, some of which are described below — an employer may terminate an employee with or without advance notice and for any reason or no reason at all without giving rise to a claim for damages. While the doctrine’s application to a current employee is obvious, most courts will consider and apply the doctrine in determining whether a job offer may be lawfully rescinded. Therefore, whether an employer may rescind a job offer following a positive drug test will turn on whether any exception to the at-will doctrine applies. We examine some of the exceptions below.

Exceptions to the At-Will Employment Doctrine

Statutory Law: Colorado’s Lawful Off-duty Activity Statute – C.R.S. § 24-34-402.5: If an Employee Is Doing Something at Home that is Legal (including under Federal law), the Employee Should Not Be Fired. Marijuana is illegal under Federal law, so the Offer can be Rescinded.

Section 24-34-402.5, C.R.S., generally provides that it is unlawful for an employer to terminate an employee due to that employee engaging in any lawful activity off the premises of the employer during nonworking hours. Perhaps ironically, Section 24-34-402.5 has at times been dubbed the “Smoker’s Bill of Rights,” because one of its original purposes was to create a protection for smokers who faced discrimination in the workplace. It has been determined, however, that this “Smoker’s Bill of Rights” applies only to smokers of tobacco and not marijuana.

In Coats v. Dish Network, L.L.C., the Colorado Court of Appeals determined that when considering whether an activity is “lawful” under Section 24-34-402.5, courts must consider the application of Federal law. Marijuana is still illegal under Federal law. Since marijuana remains a Schedule I controlled substance under the federal Controlled Substance Act, Section 24-34-402.5 does not prohibit an employer from terminating an employee because the employee has consumed marijuana. It follows that Section 24-34-402.5 does not prohibit an employer from rescinding a job offer if a prospective employee fails a drug test for marijuana.

Statutory Law: Obtaining Workers by Misrepresentation – C.R.S. §§ 8-2-104 and -107. The Offer Can Be Rescinded unless the Employer Represented that Marijuana use would be tolerated.

Sections 8-2-104 and -107, C.R.S., provide that it is unlawful for an employer to induce, influence, persuade, or engage an employee to change from one place of employment to another, or to bring an employee into the State of Colorado, through or by means of false or deceptive representations, false advertising, or false pretenses concerning the conditions of the employment. An employee who is induced to engage with an employer in violation of the rule is entitled to not only an award of actual damages, but also an award of reasonable attorney’s fees.

The statutes may apply where an employer accidentally or intentionally makes representations, false advertisements, or any other false pretenses used to induce an employee to change his or her place of employment against any person, corporation, company, or association, directly or indirectly, causing such damages. In addition to all actual damages such workers may have sustained, they shall be entitled to recover such reasonable attorney fees as the court shall fix, to be taxed as costs in any judgment recovered. Thus, if an employer has made any representations to a prospective employee – whether in advertisements, publicly available policies, or otherwise — suggesting that the employer will condone or allow the use of marijuana by prospective employees, then the employer may be bound to its abide by its own representation. In such cases, the employer may not be able to rescind a job offer without giving rise to a claim for damages.

Common Law: Promissory Estoppel, Breach of Contract, Negligent Misrepresentation. An Offer May Not Be Rescinded if the Employer Indicated that Marijuana Use Would Be Tolerated or if a Contract Exists that Is Not Dependent on the Drug Test.

An employee whose job offer is rescinded following a positive test for marijuana may also be able to pursue common law claims for promissory estoppel, breach of contract, or negligence misrepresentation. Each of these claims may operate as an exception to the at-will employment doctrine in appropriate circumstances.

A claim for promissory estoppel may arise where the prospective employer makes a “promise” to a prospective employee that the employer will condone or allow the use of marijuana by prospective employees. If the prospective employee reasonably relies upon the “promise,” and the employee takes some detrimental action thereupon (e.g. giving up higher paid job, moving, etc.), then a Colorado court may determine that the employer will be required to provide monetary compensation to the injured employee. A “promise” in this context can arise in an employer’s advertisements, publicly available policies, or otherwise; any “sufficiently specific” representation by an employer suggesting that the employer has taken on an obligation may suffice.

An aggrieved prospective employee may also pursue a claim for breach of contract, assuming that the parties have a contract that operates as an exception to the at-will employment doctrine. An employer may restrict its own right to discharge an employee or rescind a job offer by manifesting its willingness to enter into a bargain in such a way as to justify the prospective employee in understanding that assent was invited by the employer and that the employee’s assent would conclude the bargain. Employers should make crystal clear when an offer of employment is conditioned upon the employee’s passing a test to determine if the employee has used marijuana. An employer should also make it clear when the employer has no intention to be bound by its own policies or procedures to avoid the creation of a contract or implied contract.

Finally, an employer may also create an exception to the at-will employment doctrine by misrepresenting its own policies surrounding the use of marijuana, either intentionally or negligently. If a misrepresentation is made by accident, a prospective employer may still face monetary liability to an aggrieved prospective employee. As before, an employer’s careless statement made in an advertisement or other representation to a prospective employee may result in the employer being unable to rescind a job offer without incurring potential monetary liability to a prospective employee. This area of the law is constantly changing and this article is not meant to be comprehensive on all factual scenarios that may arise. Please contact Cinthia Manzano with any questions regarding employment and marijuana.

Damien Zumbrennen is no longer with the law firm of Frascona, Joiner, Goodman and Greenstein, P.C.
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