Economic Development, Law, and Small Business & Startups

Risk specialists blunt about marijuana impacts

Attorney, insurer say recreational use legalization holds no ‘positive benefits’ for small business owners.

January 25, 2019
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The Family Business Alliance recently held a workshop to address the “burning questions” employers have about the effects of marijuana legalization on their businesses.

The West Michigan-based resource organization held the event, “The Impact of Marijuana Legislation on Family Businesses,” Jan. 23 at Rhoades McKee law firm in downtown Grand Rapids.

Ian Northon, a management-side labor and employment attorney at Rhoades, and Randy Boss, a partner and certified risk manager at independent insurance agency Ottawa Kent in Jenison, spoke at the members-only event.

Afterward, they discussed the topics addressed during their presentation with the Business Journal.

Northon said employers should know first and foremost that with marijuana still illegal on the federal level, employers that have federal work contracts or employees who are licensed through federal agencies must continue prohibiting the use of marijuana during work hours and still perform drug testing, or their contracts and grants will be at risk under the Drug-Free Workplace Act.

Boss said Michigan employers that are not required to comply with the DFWA may continue to write and enforce their own workplace drug policies and violating those policies can still be considered a terminable offense.

“Michigan is an at-will state, which means (employers) can fire somebody for no reason, a good reason, a bad reason, as long as it’s not an unlawful reason, and so to me, that doesn’t change anything with this marijuana act as it has been passed,” Boss said.

“It does not prohibit employees from taking discipline, even up to and including termination over this issue. What it does is it makes it now a civil infraction or in some cases completely lawful to use marijuana for certain ages with certain amounts outside of the workplace.”

THC remains in the system for one to 30 days depending on the dose and potency of the substance smoked or ingested, according to Mayo Clinic. This means it will show up on drug tests long after the effects have worn off, Boss said, making it imperative for employers to learn how to detect impairment in more specific ways.

“Employers need to concentrate on more ‘reasonable suspicion training’ for the supervisors because marijuana … requires a different type of test than alcohol, where they just test them and they’re either impaired or not. Just because somebody tests positive for marijuana doesn’t mean they’re impaired. The only way you can tell is if you’ve got some training to see what the signs are,” Boss said.

Both Boss and Northon said small business owners often don’t have policies in place to address marijuana use, but they should.

Northon said recreational marijuana should be treated like alcohol, with the only difference being that alcohol is not illegal under federal law. Consistent, written policies should be developed, communicated and applied.

Boss said depending on the type of business, employers have three main options for the way they address marijuana use: zero tolerance, where employees who test positive are immediately terminated; last chance, which allows employees a final opportunity to comply with policy by participating in an employee assistance program that provides medical counsel; or a hands-off approach, where the employer asks no questions.

According to Occupational Safety and Health Administration regulations, the latter two approaches are not an option for positions within a company that are considered “safety sensitive,” such as operating heavy machinery, long-haul truck driving or in some way being responsible for the safety of others. Employers should institute a written zero-tolerance policy for those workers to avoid wrongful death or injury liability, Northon said.

Safety and federal compliance are just two of the concerns that employers have — another is performance. Boss said it’s easy to get into stereotypes about the effects of marijuana, but it’s a big concern for some managers.

“Historically, marijuana has been associated with relaxing and chilling out, not with diligence and hard work,” he said. “So, you can have performance issues if you’ve got somebody that you’re expecting to show up at work, punch in and bust their tail and work hard for eight hours, there is going to be some suspicion whether that will happen at the same rate. A lot of that is stereotyping, and a lot of that is not evidence-based, but … that’s a concern employers have, is that their workforce may change over time and become less hardworking and less diligent if they are too lax on this issue.”

He said other concerns are “collateral effects” of recreational use, such as marijuana being shared around on the job from older workers to underage workers; the risk of increased sexual harassment incidents due to weaker inhibitions; quality control issues; poor attendance; and a tighter labor market due to fewer workers passing drug screenings.

Northon said Michigan risk managers and attorneys have looked to Colorado as a test case to study what the effects of legalization have been in that state since recreational use was legalized in 2014. But the “slow pace of the law” makes it hard to gather evidence.

Colorado has, however, seen an uptick in marijuana-related auto accidents, poison control calls, possession on school campuses and emergency room visits, according to Boss and Northon.

So far, although medical and recreational use advocates tout the health benefits of cannabis, Northon and others in his profession say they haven’t found “any positive benefits” relating to the workplace.

With that in mind, Northon said employers should be “proactive and realistic” about their policies, knowing there’s no one-size-fits-all approach for small business owners because risks vary from one industry to another.

Rather than getting into debates with employees about the correlation of substance use with behavior after the fact, Northon said it’s important for a written policy on the front end to dictate policies for conduct and consequences for violations.

A good way to ensure the policy is compliant for each employer’s particular situation is to consult with legal counsel or risk managers, he said.

“It’s kind of like Murphy’s law where, if you don’t think about it, you’re almost inviting bad things to happen,” Northon said.

“Ultimately, this is just like any other new statute. Employers have to first make themselves aware of it, see how it’s going to affect them and then put together a plan for dealing with it.”

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