Last week the Colorado Supreme Court decided to review a 2013 appellate court decision holding that Colorado employers may lawfully terminate employees for their off-duty use of medical marijuana even if they are not impaired on the job. Though oral argument has not yet been set, this case, Coats v. Dish Network, LLC (No. 13SC394), is sure to be closely monitored by employers nationwide due to the growing number of states that have legalized (or are currently considering legislation to legalize) the use of medical marijuana, and in some cases the recreational use of marijuana.

In a 2-1 decision issued on April 25, 2013, the Colorado Court of Appeals in Coats v. Dish Network, LLC upheld Dish Network’s termination of an employee for his off-duty medical marijuana use, concluding that because marijuana remains illegal under federal law, marijuana use is not “lawful” under Colorado’s Lawful Activities Statute (C.R.S. § 24-34-402.5), a provision of the Colorado Civil Rights Act. Under the Lawful Activities Statute, Colorado employers are prohibited from discharging employees for engaging in any lawful activity off the employer’s premises during non-working hours. As has been widely reported, the recreational use of marijuana has been legal under Colorado state law since January 1, 2013, and the medical use of marijuana has been legal under Colorado state law since 2000.

In 2010, Dish Network fired Brandon Coats, a licensed medical marijuana user, from his job as a customer service representative because he failed a random drug test. Coats, a wheelchair-bound quadriplegic who uses marijuana to control muscle spasms, alleged that he used marijuana within the limits of his license, never used marijuana on Dish Network’s premises and was never impaired on the job. Dish Network did not allege any reason for his discharge other than the failed drug test.

Because marijuana use of any kind remains illegal under federal law, the Colorado Court of Appeals concluded that medical marijuana use (otherwise legal under state law) falls outside the scope of Colorado’s Lawful Activities Statute. Citing Black’s Law Dictionary, Chief Judge Janice Davidson reasoned: “The plain and ordinary meaning of ‘lawful’ is that which is ‘permitted by law.’” Therefore, “an activity that violates federal law but complies with state law cannot be ‘lawful’ under the ordinary meaning of that term.” In dissent, Judge John Webb maintained that the statute’s undefined and “ambiguous” term “lawful activity” should be read in the context of the Colorado Legislature’s intent “to protect employees’ autonomy in their off-the-job activities, such as smoking and eating patterns that lead to obesity,” an area in which Congress has not attempted to legislate. “Recognition that protecting employees from discharge based on their off-duty conduct is primarily a matter of state concern favors measuring ‘lawful’ based on state law,” according to the dissent.

Accordingly, on January 27, 2014, the Colorado Supreme Court agreed to review the following two questions: (1) whether Colorado’s Lawful Activities Statute protects employees from discretionary discharge for lawful use of medical marijuana outside the job where the use does not affect job performance; and (2) whether the Medical Marijuana Amendment to the state constitution makes the use of medical marijuana “lawful” and confers a right to use medical marijuana to persons lawfully registered with the state.

The Colorado Supreme Court’s decision in Coats could have a far-reaching impact on employers, and its decision may ultimately find its way to the U.S. Supreme Court.

Currently, 20 states plus the District of Columbia have medical marijuana laws on the books. Two states, Colorado and Washington (ironically, the home states of this year’s Super Bowl participants, although the NFL will surely deny any correlation), have legalized the recreational use of medical marijuana. Oregon, Alaska, Rhode Island and possibly other states will likely vote on the legalization of marijuana for recreational use in 2014. Like it or not, the number of states legalizing marijuana is expected to rise as public opinion shifts on this issue. According to a Gallup poll conducted in October 2013, for the first time, a clear majority of Americans (58%) believe marijuana should be legalized (with 39% in opposition), which is in sharp contrast to the first time Gallup asked the question in 1969, when only 12% favored legalization (with 84% in opposition).

In August 2013, the U.S. Justice Department announced that as long as Colorado and Washington implemented “strong and effective regulatory and enforcement systems” regarding their newly legal marijuana industries, it would defer its right to challenge the new legalization laws, and would continue not to devote federal resources to “prosecuting individuals whose conduct is limited to possession of small amounts of marijuana for personal use on private property.”

At least 29 states have so-called “off-duty conduct” laws in one form or another, ranging from “smokers’ rights statutes which prohibit discrimination against tobacco users to statutes barring discrimination against an employee for using any lawful “product” away from the workplace to statutes protecting employees who engage in any “lawful activity” outside the workplace (with New York, California, Colorado and North Dakota among the states with the strongest protections) to statutes placing restrictions on an employer’s ability to discriminate against an employee based on his or her status as a medical marijuana patient (Connecticut, Maine, Rhode Island and Illinois) to statutes explicitly prohibiting employers from firing medical marijuana users based on a failed drug test unless it is shown that an employee was impaired while on duty (Arizona and Delaware).

Clearly, if Colorado’s law was as protective as those in Arizona and Delaware, the Dish Network could not have lawfully terminated Coats based on his failed drug test. Employers, however, can take solace in the fact that, for the time being at least, most states (including most of the states that have legalized medical marijuana and both states that have legalized recreational marijuana) do not have “off-duty conduct” laws that specifically curtail an employer’s ability to terminate marijuana users, and testing for marijuana is still permissible. That being said, the Colorado Supreme Court’s decision in Coats bears watching, as several states with similar “off-duty conduct” laws could see Colorado-like litigation concerning whether “lawful” off-duty activity includes state-sanctioned medical (or even recreational) marijuana use.