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Employee appeals firing after positive post-injury drug test for pot

Did Kohl’s Department Stores violate its own policy regarding workers who have a medical marijuana license when it fired an employee? 

Here’s the background in this case:

Justin Shepherd was hired by Kohl’s as a material handler at its distribution center in Patterson, CA in June 2006. He signed an agreement which included an at-will employment provision.

In August 2011, Shepherd was diagnosed with acute and chronic anxiety and received a recommendation for medical marijuana. Shepherd didn’t disclose his use of medical pot to Kohl’s.

In 2012, Kohl’s updated its personnel policies to include exceptions to its drug testing and substance abuse rules. Kohl’s employees in states with medical marijuana laws, including California, who had a valid medical pot prescription wouldn’t be discriminated against in hiring, termination or other employment action.

However, Kohl’s new policy also stated:

“Nothing in this policy prevents Kohl’s from imposing discipline, up to and including termination for any Associate who used, possessed or was impaired by marijuana at any Kohl’s location or in the performance of Kohl’s business.”

On Jan. 14, 2014, Shepherd strained his back at work while unloading cargo. As part of his medical treatment, he consented to a drug test. Two days later, Shepherd received word he tested positive for trace amounts of marijuana metabolites. Shepherd had used pot while off-duty several days before his injury.

A week after his injury, Shepherd was called into a meeting with a manager and HR who asked him about his drug test results. Shepherd showed them his paperwork for medical marijuana. At the end of the meeting, he was suspended from work.

Two days later, Shepherd spoke to another HR rep on the phone who was “unreceptive to any assertions that [Shepherd] was not under the influence at work, and only used marijuana in conjunction with his valid diagnosis for anxiety, stating, ‘You should have chosen a different medication.'”

One day after that phone call, Shepherd was fired for:

  • reporting to work in a condition unfit to perform his duties or under the influence of a controlled substance
  • violating a safety rule pertaining to specific work areas, and
  • acting “in conflict with the interest of Kohl’s.”

Shepherd sued Kohl’s for wrongful termination, believing the company violated its new medical marijuana policy that it adopted in 2012.

Kohl’s moved to have Shepherd’s lawsuit thrown out.

Did new drug policy change at-will status?

Kohl’s argued that Shepherd was an at-will employee. Shepherd argued that Kohl’s 2012 medical marijuana policy specifically protected employees who legally used medical marijuana.

A federal court found at-will employment agreements could be modified after a contract is signed to add termination protections:

“Here, a reasonable jury could conclude from [Kohl’s] policies and [Shepherd’s] testimony that the parties agreed, subsequent to his 2006 acknowledgment of the at-will nature of his employment, that [Shepherd] would not be discriminated against for his medical marijuana use, since he was a registered medical marijuana cardholder.”

Therefore, the court found Kohl’s hadn’t made the case for Shepherd’s lawsuit to be thrown out.

On Oct. 4, 2016, both sides filed a joint stipulation dismissing the case, signalling the two sides may have come to a settlement after the federal court’s ruling.

(Justin Shepherd v. Kohl’s Department Stores Inc., U.S. District Court for the Eastern District of California, No. 1:14-cv-01901-DAD-BAM, 8/2/16)

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