The 10th Circuit Court is set to hear Kenney v. Helix, a case regarding overtime wages for an employee of a business that grows and distributes marijuana. The case, upon appeal, is to address whether the Fair Labor Standards Act and the Controlled Substances Act, both federal statutes, apply to an employee of a business in Colorado that works with a substance that is legal within the state but illegal on a federal level.
Kenney is a former employee of Helix, a company that provides transport services and security to businesses that grow and produce marijuana. Kenney originally filed a suit claiming that he’s owed overtime wages, since the company incorrectly classified employees as exempt.
The initial ruling in the case was a denial of Helix’s move to dismiss. The District Court maintained that Helix failed to show reason for dismissal, despite citing that an employee of a marijuana business in Colorado could not be covered by the FLSA because the CSA directly forbids the business he worked for, making his earnings illegal.
In the appeal before the 10th Circuit Court, Helix maintains that employees of the marijuana industry in Colorado are aware their employment is technically illegal by federal standards, and their earnings are comparable to proceeds from drug trafficking.
Therefore, the employees are not covered by the FLSA and also, providing overtime wages to an employee like Kenney would reward him for illegal behaviour and thus not be a wage covered by the FLSA. Helix even goes so far as to say that Kenney’s wages may be funds that should be forfeited to the federal government, since they are illegally received gains.
The potential results of this case could be bad news for the Colorado job market, which just reported its best spring in almost 20 years.
Numerous other sectors, from the AI industry to cybersecurity are growing in Colorado, and that combined with the jobs created in the marijuana industry means that more Colorado residents found jobs than entered the job market in the spring of 2018.
This progress in the right direction may be stalled or reversed, however, if the decision for this case indicates wages from the marijuana industry could be forfeited to the government due to the illegal status of marijuana at the federal level.
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