Cross-Border Implications of the Canadian Cannabis Act in New York Workers’ Compensation Law

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The rapid evolution of both medical and recreational marijuana creates unique issues for employers and insurers. Although this may be a statement of the obvious, it is especially true in New York, a state which shares a 445-mile border with Canada.

Recreational marijuana may soon be legal in Canada, after its Legislature approved the Cannabis Act in June of this year. The proposed law would make it legal for anyone over the age of 18 to possess marijuana in limited quantities. It also allows Canadians to grow up to four marijuana plants in their home.

Many employers in New York, especially Western New York cities like Buffalo, employ Canadian citizens who traverse across the border for their daily commute. Large American corporations will eventually make significant investments in Canadian cannabis businesses, both in financial and in human resources. Imagine a scenario where a Canadian citizen, who is also a New York employee, legally uses cannabis before leaving for work, only to suffer an injury at work in New York the same day that implicates the legal consumption of cannabis. Can the claim be denied simply because the claimant used cannabis, regardless of its legal status? Would the legal use of cannabis before work constitute a safety violation and a basis for a defense? Would there be any significant legal effects whatsoever?

First, the basics. In New York, a claim for workers’ compensation benefits can be denied if the injury was caused solely by the intoxication of the worker (New York State Workers’ Compensation Law Section 10). The Workers’ Compensation Law also has a presumption that an injury was not caused solely by the intoxication of the worker ( Section 21[4]). The presumption creates a high barrier for the employer to overcome.

In the case of Thompson v. Wiltsie Construction Company, Inc., 72 A.D.3d 1373, 898 N.Y.S.2d 739 (3d Dep’t 2010), a New York court affirmed the establishment of a case under the New York State Workers’ Compensation Law where 18 hours after an accident the injured worker had a positive urinalysis for marijuana. In this case, the claimant fell at work injuring his feet. The next day, his urine sample tested positive for high levels of marijuana. Mr. Thompson admitted use of the drug a few days before the accident, but he denied any use on the day of the accident. The claimant’s condition was described as normal by his co-worker, his supervisor and the EMTs who treated him at the scene. This condition (or lack of a condition) was also confirmed when Mr. Thompson’s intake was done at the hospital. The Appellate Division affirmed on appeal stating that in order to overcome the presumptions of Workers’ Compensation Law Section 21(4), an employer must show that “unless ‘all the evidence and reasonable inferences there from allow no other reasonable conclusion than that intoxication is the sole cause’ of claimant’s injury.’”

Other than reaffirming the high level of proof needed by an employer to overcome the presumptions in Workers’ Compensation Law Section 21 to show that intoxication is the sole cause of an otherwise compensable accident, the court indicated that a possible safety violation was irrelevant as to determining the compensability of the accident.

Another open question is whether the employer can terminate a New York employee and a Canadian resident who fails a drug test. Under New York Labor Law Section 201-d, an individual may not be terminated from employment for engaging in lawful recreational activities. What remains unclear is whether the activity must be lawful only in New York or just lawful wherever the employee engaged in the activity.

New York trends favorably towards the liberalization of cannabis laws, both from a recreational and a medical standpoint. Its status as a Canadian border state enhances the relevancy. Employers and their insurers should continue to follow the latest developments in this area to remain informed as to the current state of this rapidly changing state of affairs.


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