How the Colorado Supreme Court just confused every employer in America about marijuana by Kabrina Krebel Chang @FortuneMagazine June 17, 2015, 3:38 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Earlier this week, the Colorado Supreme Court unanimously confirmed that although medical marijuana is legal, employers have the power to fire workers if they fail company-sponsored drug tests. Monday’s ruling is the latest in a series of decisions around the country denying job protection to state-sanctioned medical marijuana users who medicate off-duty. More than that, the decision is significant in that it sends a message to employers across other states wrangling with adopting laws to a nascent industry that is illegal under federal law. Under federal law, marijuana is listed as a Schedule I drug—a drug with no acceptable medical use in treatment and a high potential for abuse. The U.S. Control Substance Act preempts any provision of state law that conflicts with the federal law. In the Colorado case, Brandon Coats used marijuana to help control his seizures associated with his quadriplegia. He had worked at Dish Network DISH for three years before he was fired for testing positive for marijuana, although he said he never medicated at work. The Court said that because marijuana is illegal under federal law, it cannot be considered a “lawful activity” under Colorado’s lawful activities statute. What’s more, although many state medical marijuana laws create an affirmative defense against criminal prosecution, they do not give patients an affirmative right to use marijuana. These inconsistencies are a recipe for confusion among employers and employees. Of the 23 states with medical marijuana statutes, eight address discrimination against employees who medicate. In some of the eight states, employers are prohibited from discriminating against employees because they are licensed to use medical marijuana in accordance with their state’s law. Other states go further. Arizona prohibits employers from discriminating against a registered user who has failed a drug test for marijuana — with two important exceptions. First, employers can act on the failed drug test if the employee used, possessed, or was under the influence of marijuana while at work. Second, they can act on the failed test if not doing so would jeopardize their status for federal funding or licensure. The question now is what does the Colorado Supreme Court decision mean for employers in a state thinking about legalizing medical marijuana? Until a law is passed, marijuana, medical or otherwise, remains illegal. If the state passes a law giving some protection to employees who are licensed to use marijuana, employers would have to carefully understand the requirements of the law and review their internal policies to ensure compliance. If a state passes a law that does not provide any employment protections for employees who medicate, employers are free to decide on their own on how to proceed. Large employers in states contemplating medical marijuana laws may be reluctant to wade into the difficult task of making exceptions to well-established management policies, even for top-performing employees, and therefore decide to follow the same strategy as Dish Network, which has 19,000 employees. Smaller companies however, may be willing to be more flexible because they attract less public scrutiny. Also, due to the higher relative costs of replacing employees, smaller businesses might be more willing to implement management policies that account for off-duty use of medical marijuana while also factoring in whether it affects an employee’s job performance or whether the business could reasonably accommodate the employee’s use. Whether efforts like these adequately and appropriately address the very real and sometimes conflicting concerns for employers about employee retention and drug use remains an open question. But one thing is certain: employers will have to decide what to do on a piecemeal basis and with little guidance from the law. Kabrina Krebel Chang is a clinical associate professor of business law and ethics at the Questrom School of Business at Boston University.