Kenney v. Helix TCS, Inc., No. 18-1105, 2019 WL 4557433 (10th Cir. Sept. 20, 2019)

Kenney v. Helix TCS, Inc., No. 18-1105, 2019 WL 4557433 (10th Cir. Sept. 20, 2019)
CANNANNEW REPORT

By Daniel De La Cruz October 31, 2019 The legalization of cannabis in several states had left a major question unanswered: is an employee who violates the federal Controlled Substances Act (“CSA”) by distributing cannabis as part of his or her job still subject to the federal Fair Labor Standards Act (“FLSA”), which provides for the payment of wages? On September 20, 2019, in Kenney v. Helix TCS, Inc., No. 18-1105, 2019 WL 4557433 (10th Cir. Sept. 20, 2019), a three-judge panel of the Tenth Circuit unanimously answered that question in the affirmative. The court explained that employers are not excused from complying with federal law simply because they are violating federal law in other respects (the so-called “illegality defense”). Most importantly, the court noted that employers in the cannabis industry should not gain an unfair advantage over other employers who are required to comply with federal law. Helix TCS, Inc. (“Helix”) provides security and inventory control services to cannabis businesses in Colorado. Robert Kenney, a Helix employee in Denver, regularly worked more than 40 hours each week but was not provided with overtime pay, as required by the FLSA. Kenney filed suit to claim the unpaid overtime, and Helix countered with a motion to dismiss, claiming that its employees, including Kenney, were exempt from the FLSA’s requirements. Helix argued that Kenney’s job activities during his employment were in clear violation of the CSA, and were, thus, not entitled to FLSA protections. The company explained that if cannabis industry employees were afforded the protections of the FLSA, the federal government would be sanctioning unlawful conduct. In other words, continuing to impose criminal sanctions on individuals for cannabis-related offenses, while simultaneously holding that the individuals engaged in those offenses are entitled to minimum wage and overtime for the same conduct, would be an…

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Source : Kenney v. Helix TCS, Inc., No. 18-1105, 2019 WL 4557433 (10th Cir. Sept. 20, 2019)

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