Labor & Employment

Federal wage law protects workers in state-licensed pot industry, 10th Circuit rules

  • Print.

marijuana and gavel

Image from Shutterstock.

A federal appeals court has ruled that the federal wage law protects a worker in Colorado’s state-licensed cannabis industry, even though marijuana remains illegal at the federal level.

The 10th U.S. Circuit Court of Appeals at Denver ruled on behalf of marijuana security guard Robert Kenney, who contended that his employer owed him overtime pay. The court allowed Kenney to proceed with his claim.

The National Law Journal and Law360 have coverage of the Sept. 20 decision.

“Case law has repeatedly confirmed that employers are not excused from complying with federal laws just because their business practices are federally prohibited,” the 10th Circuit said in an opinion by Judge Stephanie Kulp Seymour.

A contrary ruling would allow marijuana businesses to reap the benefit of failing to comply with wage-and-hour protections, Seymour wrote.

The case was closely watched by the marijuana industry and employment lawyers who advise cannabis businesses, according to the National Law Journal.

Kenney worked for Helix TCS, which offers inventory control and compliance services to marijuana businesses.

A lawyer for Helix TCS, Jordan Factor, told Law360 that the company was exploring options regarding further appeals.

“Every participant in the legal marijuana industry makes an implicit bargain, which is although they’re subject to all the restrictions of federal law, they receive no benefit under federal law,” Factor said.

Give us feedback, share a story tip or update, or report an error.