New Updates in Minnesota and New York Highlight Marijuana's Continued Challenges

The questions of marijuana reimbursement and use in the workplace continue to play out across the United States. In various states, courts have differed in their rulings of whether marijuana use for the treatment or management of pain should be reimbursed by workers’ compensation insurers. Employers have also had to grapple with the extent to which employees can be disciplined or dismissed due to the use of medical marijuana. Some states have even enacted legislation regarding these issues.

The most recent updates occurred in Minnesota and New York.

The Minnesota Supreme Court reviewed two cases where the lower courts had awarded reimbursement to an injured worker for medical marijuana. Let’s look at the findings below.

Musta v Mendota Heights Dental Center & Hartford Insurance Group

In the first case, Musta v Mendota Heights Dental Center & Hartford Insurance Group, Musta, a dental hygienist, suffered a neck injury on the job in February 2003. After two surgeries, one in late 2003 and another in August 2006, she continued to experience chronic pain and was prescribed narcotics to alleviate the pain. In 2009, she stopped using the drugs because of the side effects and it was determined she was permanently and totally disabled. In April 2019, she was certified to participate in the Minnesota medical cannabis program and began using medical marijuana to treat her pain. She submitted receipts for the cannabis to her employer requesting reimbursement for the treatment. However, Mendota Heights opposed paying for her medical cannabis treatment because cannabis is illegal under the federal Controlled Substances Act.

The initial compensation judge who heard the case declined to rule on the issue of the preemption and requested the Chief Administrative Law Judge certify the case to the Minnesota Supreme Court. In October 2019, the Court declined to accept the certified question and remanded the case back the lower courts to follow the appeal process established by the legislature. 

The compensation judge, on remand, noted that the use of medical cannabis is legal under Minnesota state law and nothing in the workers’ compensation law prohibits reimbursement. The judge also noted that Congress had put in place appropriations riders prohibiting the Department of Justice from criminally prosecuting an act that complies with a state’s medical marijuana laws. Based on these observations, the judge concluded that there was no real risk the employer or insurer would be prosecuted for reimbursing the medical cannabis so there was not a preemption of the state’s medical cannabis law due to federal law. Mendota Heights was accordingly required to reimburse Musta for her medical cannabis.  

The case was appealed to the Workers’ Compensation Court of Appeals (WCCA), which affirmed the judge’s ruling, while concluding “it lacked subject matter jurisdiction over the preemption issue.”  Mendota Heights appealed the ruling to the Minnesota Supreme Court, which ultimately reversed the decisions of the lower courts. 

Bierbach v Digger’s Polaris and State Auto/United Fire & Casualty Group

In the second case, Bierbach v Digger’s Polaris and State Auto/United Fire & Casualty Group, Bierbach suffered an ankle injury on the job and was later diagnosed with intractable pain. His treating physician recommended he enroll in the Minnesota medical cannabis program. Bierbach submitted his cannabis expenses for reimbursement under his workers’ compensation claim. The workers’ compensation judge awarded reimbursement for the cannabis. The WCCA affirmed the order on appeal.  

Digger’s Polaris and State Auto/United Fire & Casualty Group appealed the ruling to the Minnesota Supreme Count. There were four issues raised on appeal:

1. Did the WCCA lack jurisdiction to interpret federal law and determine a preemption?
2. Is the Minnesota law requiring reimbursement for an injured employee’s medical treatment preempted for cannabis by the federal Controlled Substances Act?
3. Did the expert opinion establish a proper foundation for the use of medical cannabis?
4. Was the use of medical cannabis by Bierbach reasonable and necessary?  

In the Musta case, the Court found the WCCA did lack jurisdiction to interpret federal law related to the preemption and determined the federal Controlled Substances Act did prohibit reimbursement for medical cannabis. That same reasoning applied to the first and second questions posed in the Bierbach case. In Bierbach, because the preemption finding settled the issue of reimbursement, the Court did not rule on the expert witness foundation and medical necessity issues. As in the Musta case, the Court reversed the lower court rulings requiring reimbursement on the basis that requiring reimbursement would force employers and insurers to violate federal law. The opinions were published on October 13, 2021. 

Minnesota in The Wider Picture

Minnesota joins a growing number of states where their Supreme Courts have ruled on the reimbursement of medical marijuana related to a workers’ compensation claim.  There is not unanimity among the state Supreme Courts when it comes to a preemption to reimbursement by the federal Controlled Substances Act. The Maine and Massachusetts Supreme Courts have ruled that the federal law preempts reimbursement, but in March 2021, New Hampshire’s Supreme Court found in the appeal of Pannagio that the federal Controlled Substances Act does not prohibit an insurer from reimbursing for medical marijuana. Similarly, the New Jersey Supreme Court rulings have led to reimbursement to injured employees. 

While Congress has publicly noted on several occasions over the last few years that they were going to address the legal status of marijuana, it doesn’t yet appear that they are anywhere close to a resolution on the matter. Consequently, the medical marijuana reimbursement conundrum will continue to plague the workers’ compensation system as more states embrace the legalization of medical marijuana.  

The Question of Cannabis Use in the Workplace: A Look at New York

In the meantime, in October 2021, the New York State Department of Labor published guidance for employers related to the rights of workers who are cannabis users. The FAQ document, “Adult Use Cannabis and the Workplace,” is based on New York Labor Law 201-D. The FAQs clarify that employers cannot discriminate against employees who legally use cannabis either recreationally or medically. The document also notes that employment action for legal use can only be taken when an employee exhibits signs of impairment, “meaning the employee manifests specific articulable symptoms of impairment.” The FAQ goes on to say:       

“There is no dispositive and complete list of symptoms of impairment. Rather, articulable symptoms of impairment are objectively observable indications that  the employee’s performance of the duties of the … position are decreased or lessened. Employers are cautioned that such articulable symptoms may also be an indication that an employee has a disability protected by federal and state law…” 

The FAQ also noted that observable signs of use that do not indicate impairment, such as the smell of cannabis and drug testing, cannot be used to take action unless signs of impairment are also present. Guidance on when and how an employer can control or restrict the use of cannabis by employees is also provided in the document.  

These two disparate actions highlight the mixed signals employers are receiving as it relates to cannabis in the workplace, their obligations to reimburse for it and their obligations to accommodate its use by employees. Each state has taken a different approach and, as more marijuana-related disputes are litigated, courts are proving time and time again to be divided on critical issues facing employers and the use of marijuana by their employees. Many expect Congress to ultimately act to remove marijuana from the list of Schedule I substances. It will take time, science and litigation to figure out impairment measures, impact on workplace injuries, efficacy as a medicine, accommodation in the workplace, and a host of other challenges faced by employers.

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