Weed Guards Due Overtime Though Marijuana Still Illegal Under Federal Law

Marijuana’s dual legal status—illegal under federal law, but legal under certain circumstances in many states—continues to create questions. Last week, the Tenth Circuit Court of Appeals addressed the interplay between two federal laws, the Controlled Substances Act of 1970 (CSA) and the Fair Labor Standards Act of 1938 (FLSA). Kenney v. Helix TCS Inc. (10th Cir. 2019).

A Colorado company providing security services to marijuana businesses argued that marijuana’s illegal status under the CSA meant that the FLSA was inapplicable to its business. The business also cheerfully concluded that this meant it was not required to pay overtime to its security guards. The company argued that its employees were violating the CSA by working there and should therefore not receive the proceeds of that violation (i.e., overtime pay).

The Tenth Circuit Court of Appeals rejected this argument, holding that the business was not excused from complying with federal overtime laws due to marijuana’s federally unlawful status. The court’s decision was consistent with a previous federal district court ruling in Oregon holding that an employee directly involved in the growing of marijuana was still entitled to protection under federal wage and hour law laws. Greenwood v. Green Leaf Lab LLC (Ore. 2017).

We should expect more and different cases along this vein until marijuana’s dual status is resolved.