Watch Out Oregon Cannabis Businesses: BOLI Gets Serious About Sick Leave

Oregon was one of the first west coast states to require employers to provide sick leave to employees. Oregon law requires cannabis business (as well as all other businesses) to provide at least 40 hours of protected sick leave a year to its employees. The law is still relatively new and therefore there have been few reported violations. However, on July 3, 2018 Oregon Bureau of Labor and Industries (BOLI) issued sanctions against Lioness Holdings, LLC DBA Tan Republic for violation of the sick leave laws. The BOLI order gives us an idea of what kind of penalties we can expect against businesses that fail to comply with the law.

Tan Republic’s employee handbook required employees to find coverage for their duties in the event of illness and to obtain a physician’s note. Sarah Levin, an employee of Tan Republic, requested to use her sick leave in mid-October. She was unable to find coverage for her shift and her manager requested she appear as scheduled for work. She did so and her illness progressed. The next day Ms. Levin again requested sick leave accommodations. Her manager requested she provide a physician’s note the same day.  Ms. Levin was unable to do so and the same day her employer emailed her informing her that she was suspended for 30 days due to misuse of paid time, insubordination, and lack of professionalism. Ms. Levin could not afford a 30 day suspension and did not return to Tan Republic after she received the email.

The Oregon sick leave law forbids employers from requiring employees to search for or find a replacement worker as a condition of the employee’s use of accrued sick time. BOLI easily determined Tan Republic violated the Oregon sick leave law by requiring employees to find coverage.

BOLI also determined Tan Republic took adverse employment action against Ms. Levin for her use of protected sick leave. BOLI determined Ms. Levin’s suspension was related to her request for sick leave rather than actual merit based misuse of paid time or insubordination.

Most significantly, BOLI linked Oregon sick leave law with Oregon retaliation laws. BOLI determined Ms. Levin was constructively discharged. Constructive discharge occurs when employment conditions are so awful an employee has no choice but to end the employment relationship. Here, BOLI determined Tan Republic should have reasonably known that Ms. Levin would end her employment relationship with them when they suspended her for thirty days. BOLI treated this as retaliation for Ms. Levin’s lawful use of sick leave. The constructive discharge finding is significant because BOLI used it to increase damages awarded to Ms. Levin. In total based on violations of Oregon sick leave laws and Oregon’s anti-retaliation laws BOLI awarded Ms. Levin $20,000 plus interest, payable by Tan Republic. Of note, BOLI did not break down the award based on the amount related to the violation of the Oregon sick leave law versus violation of the anti-retaliation laws. Regardless of the breakdown, this case is important going forward. Employers have been warned: comply with sick leave or face big penalties.

There is an easy yet important lesson to be learned from the Tan Republic case: it is much cheaper to allow your employees to take leave in accordance with Oregon sick leave laws rather than face a $20,000 bill plus attorney fees. As we have discussed in the past, employee handbooks are a necessity for every cannabis business. If yours has not been updated recently or does not contain a sick leave policy, now is the time to update.