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Colorado Cannabis Workers Entitled to Overtime Pay. Employer’s Defense goes Up in Smoke

After losing at two court levels on its argument that Colorado cannabis industry workers were not entitled to overtime pay because the business is illegal under federal law, the U.S. Supreme Court has decided that it will not give the employer a third bite at the apple. The Supreme Court’s denial of review means that the prior appeals court decision holding that the overtime laws do apply to and protect cannabis workers in Colorado is the final word and the law. 

Cannabis industry workers are entitled to overtime pay.

The Supreme Court’s decision removes any doubt that cannabis industry workers are, and have always been, entitled to overtime pay under federal labor law. Workers who have been denied overtime pay over the past 2-3 years now have a clear path for claims to recover up to double their unpaid back overtime wages. 

Case Background

The case was originally brought by a former employee of Helix TCS, Inc. (“Helix”), which provides security services for businesses in Colorado’s legalized marijuana industry. The lawsuit against Helix was brought under the Fair Labor Standards Act (“FLSA”), alleging that Helix misclassified him and similarly situated workers as exempt from the FLSA’s overtime obligations. As a result of this misclassification, employees regularly worked more than forty hours per week, but were paid a salary with no additional premium for overtime.

Helix moved to dismiss the employee’s claim based on the Controlled Substance Act (“CSA”), arguing that the FLSA does not apply to or protect the workers because Colorado’s recreational marijuana industry is in violation of the Controlled Substances Act. 

Just because an employer is violating one federal law, does not give it license to violate another.

As the appeals court noted, “case law is clear that employers are not excused from complying with federal laws” because of their other federal violations, and that “[t]he employers’ argument to the contrary rests on a legal theory as flawed today as it was in 1931 when jurors convicted Al Capone of failing to pay taxes on illicit income.” 

Similar Oregon Case

In a nearly identical case brought by marijuana workers in Oregon, the court reached the same conclusion – despite any violations of federal drug laws, employees were protected by the FLSA and entitled to overtime pay.  

The Oregon court relied on a legal advice memo written for the National Labor Relations Board to conclude that any possible violations of the CSA are not relevant to whether the FLSA’s protections apply to workers in the marijuana industry. Considering arguments nearly identical to those made by Helix, the court in Oregon concluded that any possible violations of the Controlled Substances Act are not relevant to whether the FLSA’s protections apply to marijuana industry workers, and that there is no inherent conflict between the FLSA’s requirements and the Controlled Substances Act’s prohibition of marijuana.

Have a Claim for Back Overtime Pay?  

If you have worked in the legalized cannabis industry and have not been paid overtime, you may have a claim to recover up to double your back wages. Because of the strict time limits imposed by the labor laws, procrastination can be costly. If you have any doubts as to whether you have received proper compensation, contact the experts at The Lore Law Firm for a free and confidential review.

Call 1-866-559-0400 or submit your information using our convenient Case Evaluation form for a FREE and CONFIDENTIAL review of your circumstances – because time is money.