Smoke 'em if you got 'em.
Updated: Oct 7, 2020
There's so much money in legal marijuana that even employers on the periphery have money to burn ... on really bad legal arguments.
Helix TSC, Inc. provides armed security guards, inventory control, and compliance services to the legalized marijuana industry in Colorado. One of its security guards filed a collective action lawsuit against the company, alleging that it had misclassified him and other employees as exempt under the Fair Labor Standards Act (FLSA) -- and then improperly failed to pay them overtime when they worked more than 40 hours in a week. Helix cooked up a spectacularly losing argument in defense; getting smoked at every stage of the way before finally running out of fire on the courthouse steps of the U.S. Supreme Court.
The company actually argued that, because it already was engaged in activity that was illegal under one federal law (the Controlled Substances Act), its employees could not claim protections under another federal law (the FLSA)! In the company's own words, the:
protections of federal law ... are simply unavailable to an individual or business choosing
to participate in an industry that is criminalized under federal law.
The Trial Court rejected the company's half-baked argument, noting that “employers are not excused from complying with federal laws ... just because their business practices may violate federal law.” [I'm reminded here of Al Capone getting convicted for evading federal taxes, not for running a criminal enterprise.] The court, however, looked to the precedent of other federal courts already finding FLSA violations by employers who improperly paid their illegal immigrant employees. Oblivious to good reason and good sense, Helix appealed. You will not be shocked to learn that the Appellate Court affirmed the trial court, rejecting the company’s “illegality defense” and similarly observing that “just because an Employer is violating one federal law, does not give it license to violate another.”
Ever more dazed and confused, Helix asked the U.S. Supreme Court to hear its ... um ... case. And they really outdid themselves here, suggesting that the Appellate Court's decision:
confers the same rights on a mule trafficking methamphetamine for a cartel in Oklahoma
as it does on a driver ferrying marijuana through the streets of Denver.
Yesterday, the Justices tersely declined Helix's invitation.
Note to attorneys defending employers in federal court: don't compare your client to a drug cartel ... and certainly not one in Oklahoma!
In any event, the case goes back to the trial court where Helix will have to defend its employees' claims on their merits.