Medical Marijuana in Michigan: Appeals Court Rules on Employee Eligibility for Unemployment Benefits

Author: Marta Moakley, XpertHR Legal Editor

February 24, 2015

The Michigan Court of Appeals has ruled that individuals who are state-approved medical marijuana users under the Michigan Medical Marihuana Act (MMMA) should remain eligible to receive unemployment benefits under the Michigan Employment Security Act. The appeals court based its decision in Braska v. Challenge Manufacturing Co. (concerning three consolidated appeals) on the fact that the provision of unemployment benefits constitutes state action, and the state may not impose a penalty (such as disqualifying a medical marijuana plan participant from receiving unemployment benefits) under the MMMA's immunity provision.

The appeals court did not reach the issue of whether the MMMA would apply in situations involving actions taken solely by a private employer. However, based on the Braska ruling and current tax law, it is possible that an employer may be required to pay increased contributions to the unemployment compensation fund based on the award of unemployment benefits to fired employees who are also medical marijuana users.

All three employees involved in the consolidated appeal were terminated based on drug-free workplace policies set forth in employee handbooks. One of the employers in the consolidated cases conducted random drug tests, and another conducted drug tests based on reasonable suspicion.

The MMMA does not require an employer to accommodate the workplace use of medical marijuana, nor does it require that an employer allow an employee to work under the influence of marijuana. In addition, a 2012 decision by the federal 6th Circuit Court of Appeals in Casias v. Wal-Mart Stores, Inc., which found that the MMMA does not regulate the conduct of private employers, remains applicable to these workplace situations in Michigan.

Although a number of states in addition to Michigan have passed measures allowing varying levels of access to medical marijuana, the drug continues to be classified as a Schedule 1 substance (i.e., the drug has a high potential for abuse, there is no currently accepted medical use and there is a lack of accepted safety for use) that is illegal under the Federal Controlled Substances Act. However, the US Department of Justice has not challenged state laws legalizing marijuana use for either medical or recreational purposes. Under Michigan's Public Health Code Section 333.7214, marijuana is listed as a Schedule 2 controlled substance (i.e., the drug has a high potential for abuse, there is an accepted medical use with severe restrictions and the abuse may lead to severe dependence) so long as it is manufactured, obtained, stored, dispensed, possessed, grown or disposed of in accordance with the MMMA.

The Braska decision constitutes something of a departure in how the medical marijuana law has been interpreted by Michigan courts. Since the approval by voters of a state medical marijuana program in 2008, certain court decisions have interpreted the MMMA in a restrictive fashion, especially with respect to the provisions regulating manufacture, delivery and use of medical marijuana. However, program participation may increase given new medical marijuana rules that reduce application fees for most qualifying patients.

The Michigan Supreme Court has three pending cases regarding the MMMA's provisions regarding the manufacture and delivery of medical marijuana and the extent of immunity to any qualified patient and caregiver. The high court heard oral arguments on the cases this past January 15.