Court Rules That Colorado Cannabis Companies Are Subject to Federal Labor Laws

A U.S. Court of Appeals ruled Sept. 20 that Colorado’s cannabis industry is subject to federal labor laws, such as overtime pay rules, despite federal prohibition.

The ruling stemmed from a lawsuit filed by Robert Kenney, a former Helix TCS employee who sued the company in U.S. District Court in 2017 after it refused him overtime pay in his role as a security guard for Helix’s cannabis industry clients, according to a Denver Post report. The case alleges that the company’s refusal to pay overtime is a violation of the U.S. Fair Labor Standards Act.

Helix’s attorneys moved to dismiss the case, the Denver Post reported, arguing that a federal court has no jurisdiction to hear the case because cannabis remains illegal at the federal level. The district court rejected the motion, and the decision was appealed in the U.S. Court of Appeals for the Tenth Circuit.

The appeals court has now upheld the district court’s decision to reject Helix’s dismissal of the case, with Senior Judge Stephanie Seymour ruling that employers are not exempt from federal laws solely because cannabis remains federally illegal, according to the Denver Post. Seymour further argued that denying employees in the cannabis industry federal labor protections would give their employers an unfair advantage and encourage others to circumvent regulations, the news outlet reported.

The case now goes back to the district court.

More Court Rules That Colorado Cannabis Companies Are Subject to Federal Labor Laws