Cannabis remains illegal under federal law as a Schedule I drug, leaving states to craft their own marijuana-related laws in true patchwork fashion.  By now, most states have enacted at least some form of medical marijuana law.  State officials increasingly understand the benefits of medical marijuana for patients who have qualifying medical conditions.  But acceptance does not necessarily create clarity in the law.  What happens when an employee with a qualifying medical condition seeks reimbursement for medical marijuana through an employer’s workers’ compensation plan?  As with any cannabis-related question, the answer depends on the state in which the claim is made.

For purposes of workers’ compensation claims, a key question is whether medical marijuana use is considered a reasonable and necessary medical treatment.  Some states expressly permit such claims, others flatly deny them, and still others take a middle approach.  In many states, this issue has resulted in extensive litigation.  Minnesota has avoided the need for such litigation by being one of the few states that permit claims for medical cannabis under an employer’s workers’ compensation plan.

In July 2015, the Minnesota Department of Labor and Industry enacted new rules that redefine “illegal substance” to exclude a patient’s use of medical cannabis permitted by Minnesota law.  In other words, since 2015, medical marijuana has been a reimbursable form of medical treatment for workers’ compensation claims within the state.  In no small part, this is due to an increasing medical consensus that certain prior treatment protocols (i.e., long-term treatment plans involving opiate prescriptions) are no longer advocated for as strongly as they once were, particularly for post-injury intractable pain.  In fact, in Minnesota, legislators have determined that long-term treatment with opioid analgesic medication is expressly not the preferred approach for the treatment of workers’ compensation injuries unless certain stringent requirements are met.

It is important to remember that just because an employee has a qualifying medical condition and is registered in Minnesota’s medical marijuana program does not mean he or she will automatically be entitled to workers’ compensation benefits.  As always, claims are reviewed on an individual basis, treatment must be both medically necessary and reasonable, and there may be other disqualifying reasons.  But for employers based in Minnesota, the state has provided a pathway forward for workers’ compensation claims involving treatment by medical cannabis.   As such, employers should process employee claims involving medical marijuana as they do all other workers’ compensation claims.

A recent NLRB decision, SuperShuttle DFW, Inc. marks a renewed focus on entrepreneurship, giving businesses and workers greater flexibility in their relationships.  The decision is also a resounding victory for the franchise industry who, in recent years, have faced repeated threats to its core business model.  With a heightened focus on the entrepreneurial opportunity, franchisors are less likely to be determined joint employers with their franchisees based upon the degree of control they exercise to protect the franchise system and brand reputation.

The NLRB returned to its long-established common law test for independent-contractor status in a decision released last week, clarifying the role of entrepreneurial opportunity as an important part of the test.  The decision overturned a 2014 decision in FedEx Home Delivery which “fundamentally shifted the independent contractor analysis, for implicit policy-based reasons, to one of economic realities, i.e, a test that greatly diminishes the significance of entrepreneurial opportunity.”  Last week’s decision is a big win for the franchise community to businesses who engage workers to provide temporary or short-term services and to rideshare companies such as Lyft and Uber (who is currently engaged in litigation with the Board over this issue).

SuperShuttle DFW, Inc., involved shuttle-van-driver franchisees of SuperShuttle at DFW airport. In determining that the franchisees are not employees, the NLRB determined that the franchisees’ leasing or ownership of their work vans, their method of compensation, and their almost-unilateral control over their daily work schedules and working conditions provided the franchisees with significant entrepreneurial opportunity for economic gain.  These factors, along with the absence of supervision and the parties’ understanding of an independent contractor relationship, led the NLRB to hold that the franchisees are not employees.

In reaching its decision, the NLRB expressly overruled an Obama-era decision in FedEx Home Delivery, which ignored the realities of entrepreneurial opportunities in determining independent contractor status.

As we settle into the new year, I would like to share a few thoughts about what I believe is in store for us in 2019.

2019 Federal Legislation

It is unlikely there will be any new federal legislation in the next two years, with one exception. There has been some talk among the Republicans supporting a federal paid family leave. With Ivanka Trump being a close advisor to President Trump, it is possible that a federal paid leave statute could be enacted in 2019.

Local and State Government

In contrast to the federal landscape, we will continue to see increased regulation on the local and state level. I think we can expect to see more local governments enacting scheduling and sick and safe time ordinances, which will make it all the more difficult for employers which have offices or do business in other states. We will probably also see more counties and states increasing minimum wage beyond the federal minimum wage.

Multi-Employer Pension Plans

Multi-employer pension plans are creating a cloud looming over many construction and other companies. It has been estimated that over 10 million workers and retirees are covered by multi-employer pension plans. Many of these multi-employer pension plans are underfunded, if not insolvent, and it has been estimated that plans are underfunded by a total of $48.9 billion. The Pension Benefit Guaranty Corporation (PBGC) is a government insurance company that is intended to provide financial support for underfunded pension plans. The PBGC predicts that it will run out of money by 2025. A special Congressional committee was appointed to investigate new legislation regarding pension reform. 2019 may be the year in which Congress enacts legislation to save the PBGC as well as employees and retirees who participate in underfunded pension plans.

National Labor and Relations Board

I think we are going to see the NLRB continue its retreat from decisions made under the Obama administration. The NLRB is already considering revising the quicky election rules and the joint employer standard promulgated under President Obama. The NLRB has issued decisions which allow employers to have certain work rules and policies which the Obama NLRB disallowed. We should expect to see more employer-friendly decisions from the NLRB than we have seen previously.

The Me Too Movement

Obviously, the Me Too Movement has resulted not only in increased media attention on sexual harassment but in more claims of sexual harassment. In 2018, the EEOC filed 41 lawsuits alleging sexual harassment, which is a 50% increase from the previous year.  The EEOC also stated that it has recovered nearly $70 million through either litigation or settlement of charges of sexual harassment claims. This increase in sexual harassment claims is most likely going to continue into 2019.

Training

Lastly, the operative word in employment law in 2019 is training. Employees and supervisors need to be continuously trained on harassment, protected class discrimination and employer policies on equal employment, to name just a few. Employers will use new approaches in training, and there will be a focus on civility and respect, not just the legal definitions of protected class harassment.

These are just a few of the developments we can expect to see in 2019. I hope you all have a prosperous and productive year.

Earlier this year, Duluth passed its Earned Sick and Safe Time Ordinance, joining Minneapolis and St. Paul in requiring employers to provide their employees with paid sick and safe time leave, which the employees accrue over time and carry forward from year-to-year. Duluth’s ordinance goes into effect on January 1, 2020. Well before then, Duluth employers will need to understand the ordinance’s requirements and develop written policies implementing them for inclusion in their employee handbooks.

To Which Employers Does the Ordinance Apply?

The ordinance applies to all employers with five or more employees, defined as including any person who:

  1. “[P]erforms work within the geographic boundaries of the city [of Duluth] for more than 50 percent of the employee’s working time in a 12 month period,” or
  2. “[I]s based in the city of Duluth and spends a substantial part of his or her time working in the city and does not spend more than 50 percent of their work time in a 12 month period in any other particular place.”

Technically this means that the ordinance applies to employers located outside Duluth’s boundaries who have a sufficient number of employees working within Duluth’s boundaries. However, a decision earlier this year by the Hennepin County District Court held that Minneapolis’s ordinance was limited to employers located within Minneapolis’s boundaries, and this decision could provide guidance for similarly limiting the territoriality of Duluth’s ordinance in the future. Like the Minneapolis and St. Paul ordinances, Duluth’s ordinance does not apply to construction industry employees who are paid the prevailing wage rate.

What is the Rate of Accrual?

Under the ordinance employers must provide their employees with paid sick and safe time earned at a rate of one hour per 50 hours worked, for a maximum of 64 hours earned per year, and allow them to carry forward at least 40 hours from year-to-year. Employees begin accruing sick and safe time on their first day of employment, or once the ordinance goes into effect for existing employees, and after 90-days of employment they may use up to 40 hours of sick and safe time per year. Alternatively, employers can satisfy the ordinance by providing their employees with 40 hours of sick and safe time up-front after 90-days of employment, and an additional 40 hours of sick and safe time up-front at the beginning of each subsequent year. Employers do not need to pay out accrued sick and safe time upon their employees’ separation. Of course, nothing in the ordinance prohibits employers from providing more generous benefits to their employees, and if an employer chooses to provide its employees with paid vacation or paid time off, such benefits may already satisfy the ordinance’s requirements.

For What Purposes Can Employees Use Their Accrued Sick and Safe Time?

Employers must allow their employees to use their sick and safe time for absences resulting from the effects, treatment, care, prevention, or diagnosis of mental or physical illness, injury, or health conditions, as well as domestic abuse, sexual assault, or stalking, and for the care of family members suffering from the same conditions. Employers may require employees to comply with their customary notice and procedural requirements for absences and requesting sick and safe time so long as they do not interfere with the purposes for which the employees need the leave. For absences of more than three days, employers may require reasonable documentation to establish that the sick and safe leave is for a covered purpose.

Employers Must Track Employee Accrual and Use of Sick and Safe Time

The ordinance requires employers to track their employees’ sick and safe time balances and provide them their earned and used sick leave balances upon request. The ordinance further requires employers to provide employees with notice of their right to paid sick and safe leave. Although the ordinance does not specify whether this notice must be posted on employers’ premises, or set forth in their employee handbooks, we recommend that at a minimum employers prepare written policies implementing the ordinance’s requirements and include the policies in their employee handbooks.

As many know, the Family Medical Leave Act (FMLA) requires employers with 50 or more employees to provide up to 12 weeks of unpaid leave to employees with serious health conditions. That leave is only available to eligible employees, generally those who have been employed for at least a year and worked at least 1,250 hours over the prior year. Many employers believe they do not need to grant any leave if the FMLA does not apply to them. Other employers believe that their obligation to grant a leave ends once the 12 weeks afforded under the FMLA is exhausted. Unfortunately, both of these common beliefs are often incorrect, and can lead to big legal problems.

Reasonable Accommodation May Include an Extended Leave

Under the federal Americans with Disabilities Act (ADA) and the state Minnesota Human Rights Act (MHRA), an additional leave of absence beyond that required under the FMLA for larger employers may be required as a reasonable accommodation of an employee with a disability. All employers with 15 or more employees must look at leaves of absence as possible reasonable accommodations under the ADA and MHRA. The courts have generally held that in cases where an employee has exhausted their FMLA leave, or where the FMLA does not apply, an employer need not grant an additional leave when it is entirely indefinite as to when and if the employee will be able to return to work and perform their essential functions. The courts have also held that an additional year of leave is generally unreasonable and not required.  But in cases where the employee and his/her doctor have indicated it is likely the employee will be able to return to work after an additional leave of reasonable duration, then the ADA and MHRA can require that the additional leave be granted. What is a “reasonable” duration for the additional leave depends on the circumstances.

Engage in an Interactive Process

The ADA requires covered employers to engage in an “interactive process,” meaning a dialogue with the employee and, in some cases, with the employee’s doctor, to determine the nature of the need for the extended leave and the prognosis for when the employee will be able to return to work. Recently, Larkin Hoffman attorney Chris Harristhal successfully argued at the Minnesota Court of Appeals that the MHRA does not require employers to engage in this interactive process. That decision, however, is currently under review by the Minnesota Supreme Court. Regardless, all employers covered under the ADA and MHRA should engage in the interactive process with employees to determine the type of leave they are requesting, how it is related to their medical condition, and their expectation for when and how they will be able to return to work. This process should be documented, and undertaken for all employees regardless if they have exhausted their FMLA leave or are otherwise not entitled to it. The decisions regarding medical leaves are very fact specific, and all employers should proceed cautiously with guidance from legal counsel in handling them.