Colorado marijuana companies are subject to federal labor laws despite being illegal, court rules

A U.S. appeals court has ruled workers in Colorado’s marijuana industry are subject to overtime pay rules and other federal labor protections even if the industry itself is federally¬†illegal.

The case at issue deals with Robert Kenney, a former employee at Helix TCS, a company that provides security and other services to marijuana companies in Colorado. In 2017, Kenney sued Helix in U.S. District Court for refusing to pay him overtime when he was regularly worked more than 40 hours a week as a security guard for Helix’s marijuana industry clients, an alleged violation of the U.S. Fair Labor Standards Act.

Helix’s attorneys moved to dismiss the case on the grounds that a federal court had no jurisdiction to hear the case “because Colorado’s recreational marijuana industry is in violation of the Controlled Substances Act,” per case documents. The district court rejected that motion but a panel of judges for the U.S. Court of Appeals for the Tenth Circuit was tapped to review that denial.

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