Ohio's medical marijuana law and unemployment compensation: Will discharge be “just cause"

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Ohio’s medical marijuana law becomes fully operational in September of this year. The law legalizes medical marijuana in Ohio, establishes a regulatory regime for its production, dispensation and use, and creates broad protections for employers. Nevertheless, Ohioans continue to grapple with the law’s employment implications, including how the law affects unemployment compensation benefits.

Ohio’s new law allows those with certain specified medical conditions to obtain a license to possess and use medical marijuana so long as the medical marijuana is “recommended” by a qualified physician. It also legalizes the possession (but not use) of amounts of medical marijuana for those with valid “caregiver” status. In contrast, the law protects the employer’s right to a zero tolerance drug policy even when that means individuals might be discharged for no reason other than having a valid medical marijuana license.

However, will the discharge in this situation be considered a “just cause” termination and defeat an unemployment compensation claim? Imagine the following scenario: An employee possesses a valid Ohio medical marijuana license. Her employer has a zero tolerance drug and alcohol policy in its employment handbook. The employer discovers that employee has been under the influence of medical marijuana in the workplace. Employer then discharges the employee – which it has an express right to do under the medical marijuana law. Employer later challenges the ex-employee’s claim for unemployment compensation benefits.

Under pre-existing Ohio law, employees terminated for “just cause” are ineligible for unemployment compensation benefits. “Just cause” under Ohio law means that a person with “ordinary intelligence” would consider the discharge to be justifiable. Stated another way, “just cause” means that the employee must somehow be at fault and have exhibited an unreasonable disregard for the employer’s interests. Even before the new medical marijuana law came into being, an employee who knowingly violated an employer’s drug policy would often be disqualified from unemployment compensation benefits.

The Ohio medical marijuana law, however, includes an express unemployment compensation “just cause” provision. The law states specifically that a person discharged from employment because of medical marijuana use is discharged for “just cause” so long as the employee otherwise violated the employer’s drug-free workplace policy, zero-tolerance, or other policy. This statutory “just cause” unemployment compensation rule applies only to “use”, and not to legal possession by a caregiver. The benefits disqualification also seems to be limited to situations where the ex-employee violated an existing, written employer policy. For the moment, however, the statute does not expressly require that the employee have had prior actual or constructive notice of the employer’s drug policy to be disqualified from unemployment compensation benefits.

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