Employer Can Terminate Employee for Medical Marijuana Use and Application of the Lawful Activity Statute, C.R.S. 24-34-402.5 - Hackstaff, Snow, Atkinson & Griess, LLC

Employer Can Terminate Employee for Medical Marijuana Use and Application of the Lawful Activity Statute, C.R.S. 24-34-402.5

The Lawful Activities Statute, C.R.S. 24-34-402.5

One of the exceptions to the general rule that an employer can terminate an at-will employee at any time for any reason as mentioned in an earlier post, Employees and Independent Contractors: The Basic Framework, is the statutory protection of an employee’s legal off-duty activities.  Under the Lawful Activities Statute, C.R.S. 24-34-402.5, with certain specific exception to the exception, an employee who is terminated due to the employee engaging in any lawful activity off the premises of the employer during nonworking hours may bring a civil action against the employer for lost wages and benefits due to the termination.

The Medical Marijuana Question

With the legalization of the medical use of marijuana in Colorado, employees have asserted that they cannot be terminated from employment for medical use of marijuana because such use is now, at least under Colorado law, legal.  However, as the reader may already know, such use is still illegal under federal law.  Accordingly, some employers have asserted that they still have the right to terminate employees who use marijuana legally off-duty under Colorado law, because such use is still illegal under federal law.

The Coats v. Dish Network Case

In breaking news this week, the Colorado Court of Appeals has ruled that medical use of marijuana under Colorado law is not a “lawful activity” protected under C.R.S. 24-34-402.5, at least not yet.

In Coats v. Dish Network, LLC, 12CA0595 and 12CA1704, April 25, 2013, the Plaintiff Brandon Coats is a quadriplegic licensed in the state of Colorado to use medical marijuana.  His employer, Dish Networks, fired Coats after he tested positive for marijuana in violation of the company’s drug policy.  Coats asserted, and the trial court assumed, that he only used medical marijuana off Dish property, and was never under the influence of marijuana while on the job.  Accordingly, Coats sued Dish Networks under the Lawful Activities Statute.  During the case, Dish filed a Motion to Dismiss the claim on the basis that the use of medical marijuana is not “lawful activity” under the Statute.

In evaluating the question of whether the use of medical marijuana is “lawful activity,” the Court first noted that all marijuana use is still prohibited by federal law.  Coats argued that the Colorado Lawful Activities Statute only referred to Colorado law, but the Court disagreed.  Because the term “lawful” is not defined in the Statute, the Court interpreted the language according to its ordinary meaning, i.e., that which is “permitted by law.”  As a result, the Court held that the term means that which is in compliance with both state and federal law.  The Court specifically noted that there are numerous activities governed exclusively by federal law, and there is no indication the legislature intended to prohibit Colorado employers from prohibiting off-the-job activity that is prohibited by federal law.  In fact, if the Colorado legislature wanted to protect employees from termination for engaging in federally prohibited activities, it can done so.


Medical marijuana use is not “lawful activity” preventing an employer from terminating an employee.  However, it should be noted that the company needs to have a policy it consistently enforces regarding drug use for its employees.  The same applies for other employee expectations.  Updating Employee Handbooks can be important in this process.