On September 7, 2005, a California Court of Appeal, in Ross v. Ragingwire Telecommunications, Inc., held that a company may refuse to employ an individual because he or she is using marijuana in accordance with the Compassionate Use Act of 1996.

In September 2001, the Defendant, Ragingwire Telecommunications, Inc., hired the Plaintiff, Gary Ross, as a lead systems engineer. Ragingwire required Ross to take a drug test and Ross took the drug test several days before he began working. On September 20, 2001, Ragingwire informed Ross that he was suspended because Ross tested positive for Tetrahydrocannabinol, the main chemical found in marijuana.

Ross gave Ragingwire a copy of a note from his physician recommending that he use marijuana to help alleviate chronic back pain. On September 25, 2001, Ragingwire terminated Ross because of his marijuana use.

Ross filed a lawsuit claiming that the termination violated the California Fair Employment and Housing Act (“FEHA”). More specifically, Ross alleged that Ragingwire discriminated against him based upon his disability because it failed to provide him with the reasonable accommodation of permitting him to use marijuana in accordance with the Compassionate Use Act. Ross also claimed that his termination was in violation of a public policy created by the passage of the Compassionate Use Act and that Ragingwire also breached an implied contract that it would only terminate Ross for good cause.

The Court held that the Compassionate Use Act only decriminalized medicinal marijuana use under California state law. The Compassionate Use Act did not, and could not, decriminalize marijuana use under federal law. The Court noted that if a company is compelled to permit marijuana use in the workplace, it might be subjected to a search conducted by federal authorities. Another potential consequence is that an employer might be precluded by the Drug-Free Workplace Act from contracting with the state because the state requires a contracting business to certify that it prohibits the possession of controlled substances in the workplace.

The Court rejected Ross’s claims because the FEHA does not require an employer to accommodate an employee’s medicinal use of marijuana. Although some employers might be willing to employ persons who are using marijuana pursuant to the Compassionate Use Act, the Court determined that the language of the FEHA did not permit a court to require employers to do so. The Court also rejected Ross’s public policy claim because the Compassionate Use Act only confers a right to use medicinal marijuana free from state criminal sanctions – it does not confer any employment protections. Similarly, the Court found that Ragingwire’s reason for terminating Ross constituted “just cause,” and thus the Court did not need to consider Ross’s implied contract claim.