The 10th Circuit Court of Appeals has upheld a lower court’s decision, saying employers in the Colorado cannabis industry must adhere to the Fair Labor Standards Act (FLSA), despite cannabis’ federally prohibited status under the Controlled Substances Act (CSA).
The case involved Robert Kenney — a former security guard for Helix Inc, a cannabis security company — who claimed Helix refused to pay him, and other guards, overtime. Helix sought to dismiss the case, claiming the FLSA did not cover cannabis due to its illegality. The court disagreed on the grounds not complying with the FLSA would give the cannabis industry an unfair advantage over other employers, thereby encouraging employers to ignore regulations to compete. They also noted courts have long held the view that illegal activities such as gambling or employing undocumented immigrants are still covered under the FLSA.
Senior Judge Stephanie Seymour wrote, “The district court correctly reasoned and case law has repeatedly confirmed that employers are not excused from complying with federal laws just because their business practices are federally prohibited.”
Additionally, the court pointed out the FLSA has been amended since the CSA was passed to exclude various labor practices, but working in the cannabis industry has not been one of them.
“Congress has actually amended the FLSA many times since the enactment of the CSA without excluding employees working in the marijuana industry, despite specifically exempting other categories of workers.” — Excerpt from the 10th Circuit Court brief
The ruling covers other labor standards like minimum wage and is applicable nationwide.
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