Construction Law: Puff, Puff, Don’t Pass

Last Chance Agreements & Marijuana Offenses

Dillon Fulcher, Cotney Construction Law


(Editor’s Note: Dillon Fulcher is an attorney at Cotney Construction Law with extensive experience on a range of construction and related matters. Cotney Construction Law is an advocate for the roofing industry and General Counsel of Western States Roofing Contractors Association. Fulcher can be reached at (866) 303-5868.)


Your employee has tested positive for marijuana. What do you do next? You could fire them, or, perhaps, you could give them one last chance. However, how do you formalize that last chance while also protecting yourself? You can enter into what is called a Last Chance Agreement, or Second Chance Agreement, with the employee. These agreements set out the terms of ongoing employment, require compliance with the company’s policies and practices, and state that further violations will result in additional disciplinary action.

In a drug-free workplace, an employer should have policies and procedures set in place which govern the occurrence of drug tests, which drugs they test for, and consequences if a test is failed. Typically, a failed drug test could be contested by an employee, but the employee could be sanctioned or terminated if the drug offense is verified. However, some employers are moving towards offering the employee the chance to enter into a treatment program to retain their job. These treatment programs can be combined with oversight by the employer to ensure that the employee is on a path to drug-free success. This world of Last Chance Agreements has recently been popularized due to marijuana, as it has seen a noticeable increase in use with the current legal trend.

As you have no doubt seen, marijuana appears to be on a path of legalization whether in the recreational, or the much more common, medical realm. Nine states, as well as Washington, D.C. and Canada, currently allow legal recreational marijuana use. In the West, these are: Alaska, California, Colorado, Nevada, Oregon, and Washington. While legal recreational use is starting to grow, legal medical use has already expanded to 31 states, as well as Washington, D.C.

It is this medical use that may give some employers pause as they implement drug-free workplaces that prohibit the use of marijuana. Federally, courts have continued to hold that marijuana use is not protected by the Americans with Disabilities Act (ADA). In the seminal case of James v. City of Costa Mesa, the Court of Appeals for the Ninth Circuit held that marijuana use permitted by state law, but prohibited by federal law, is an illegal use of drugs for purposes of the ADA, even if it was doctor recommended. It is this illegal use of drugs that is critical because the ADA actually allows use of controlled substances if taken under supervision by a licensed health care professional, and thus their use is not considered illegal. Yet, because of marijuana’s status under the Controlled Substance Act, it has no currently accepted medical use in treatment in the United States.

Beyond present laws, it is important to be aware of the changing legal landscape for marijuana employment protections. In Colorado there is a proposed Marijuana Consumer Employment Discrimination Protection Bill, which would prohibit firing an employee for a positive drug test for traces of marijuana unless the person used, possessed, or was impaired by marijuana during the hours of employment.

As you can see, the employment landscape with regards to marijuana is fraught with obstacles. That is why it is so important to have comprehensive policies and procedures implemented concerning drug use and testing. One way to protect yourself is to provide the employee with a Last Chance Agreement. The way that the Last Chance Agreement works is that company policy requires drug testing for marijuana. Then, if an employee contests a failed test, the results would be verified. Once verified, the employer may offer a contract that describes the violation, outlines that the employee is receiving a written disciplinary notice, lays out the company’s expectations, confirms that the employee understands this is the last chance, and also states that the employee understands that his or her employment is still at-will, if applicable. Other specific terms should be provided by your attorney.

The point of the Last Chance Agreement is to provide notice that failure to abide by a specified set of employment conditions will result in disciplinary action or termination. These agreements should include provisions suspending the employee for some period of time, requiring the employee to enter a rehabilitation program, allowing the employer to monitor progress in the program, and requiring the employee to submit to additional drug tests.

Last Chance Agreements can be a great way to retain employees that need additional help but are willing to work on their compliance with company policies. However, a decision to implement a Last Chance Agreement should be evaluated in light of federal laws, state laws, workplace safety, and contract law. Due to these complications, and technicalities, you should engage an attorney who can help you navigate the landscape of marijuana-related employment issues.

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