While the MORE Act and the SAFE Banking Act are generally expected to have an uphill battle in the senate, the cash-based nature of marijuana retails continues to make them
incredibly vulnerable to criminal activity. In Washington state, robberies on cannabis retail outlets have significantly increased in 2022, with a confirmed total of 72 armed robberies occurring so far this year according to a spreadsheet compiled by Uncle Ike’s owner, including at least one fatal incident. It’s currently unclear whether the MORE Act or the Safe Banking Act will pass the Senate anytime soon, and even if Safe Baking does pass, whether it will provide sufficient safeguards to remove cash at the point of sale.
Until the industry sees significant federal reform, cannabis retailers are left with a very real workplace safety issue that could potentially create liability for the employer/business owner. The Occupational Safety and Health Act, adopted by Washington State as the Washington Industrial Safety and Health Act, and codified at RCW 49.17 regulates health and safety standards for nearly all private and public sector employers. OSHA and WISHA define mandatory obligations that employers in certain industries wit
h a high likelihood of violence, such as late-night retail, must undertake to mitigate the risk of violence to employees. Although cannabis retail is not at this time recognized by OSHA and WISHA as an industry with a high likelihood of violence, both acts contain a general duty clause that states:
"Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees." Section 5(a)(1) OSHA
The Occupational Safety and Health Administration lists ‘risk of violence against community workers’ as a hazardous situation for which employers were cited under the general duty clause and ordered by OSHA to abate the hazard. In addition to the potential for citation by government agencies, the likelihood of civil liability for injuries sustained by employees or customers of a business resulting from armed robberies is increasing.
Generally, workers compensation provides immunity to employers for workplace injuries that fall under an L&I claim, but employers may be held liable for negligent hiring of inadequate security. This puts the employer in a difficult position because OSHA and WISHA impart a duty on employers to provide a safe workplace, and the hiring of security guards is an accepted and often effective method to mitigate the risk of harm to employees in the workplace. When an employer voluntarily provides security, a duty to provide adequate security, is created. In Vaughn v. Granite City Steel, the Illinois Appellate court awarded an employee’s estate $415,000 in a wrongful-death action when an employee was killed in the employer’s parking lot and the evidence showed that security was grossly inadequate.
Further, employers must consider premises liability as it pertains to potential injuries sustained by their employees or customers during an armed robbery. General tort principles have traditionally protected the business owner against premises liability for injuries sustained by invitees, but there are some exceptions, and the tide may be turning towards increased liability.
Section 344 of the Restatement (Second) of Torts, adopted by Washington, provides in relevant part:
Since the possessor is not an insurer of the visitor’s safety, he is ordinarily under no duty to exercise any care until he knows or has reason to know that the acts of the third person are occurring, or are about to occur.
In McKown v. Simon Property Group, the Washington Supreme Court applied Section 344 of the Restatement (Second) of Torts and determined that a business owner is ordinarily under no duty to exercise any care until it has reason to know the acts from the third person are occurring or are about to occur, but a duty can arise if “the place or character of his business, or his past experience, is such that he should reasonably anticipate careless or criminal conduct on the part of third person.”
The court in McKown focused primarily on the foreseeability of the shooting incident and whether the business owner owed a duty to invitees based on whether the act was foreseeable. Generally, claims against business owners for injuries, or even death, caused by third parties have largely failed on foreseeability grounds. In Commonwealth of Virginia v. Peterson, a case arising out of the killing of 32 people on the Virginia Tech campus, the Virginia Supreme Court first applied the general rule in Section 344 of the Restatement (Second) of Torts and found no liability and then applied the basic low-threshold foreseeability test of ‘know or have reasonably foreseen.’ The court still found that there were insufficient facts to conclude that the university had a duty to warn students about potential criminal acts of a third party as a matter of law.
However, more recently in Wagner v. Planned Parenthood Federation of America, Inc. the Colorado Court of Appeals considered an increased frequency of active shooter events and knowledge by the business owner of the risk of an active shooter attack. The plaintiffs in Wagner presented evidence that Planned Parenthood was aware of the risk of an active shooter, as well as expert testimony regarding security measures that the clinic could have taken that might have mitigated the risks of a shooter event. The court of appeals reversed the lower court’s finding that the shooting was not foreseeable as a matter of law and held that a jury could conclude that the defendant’s conduct was a substantial factor in the loss. The case is currently on appeal to the Colorado Supreme Court.
With armed robberies on the rise in the cash-based cannabis retail industry, the Wagner case raises concerns of employer foreseeability and potential causation issues for injuries that result from such event. Employers should employ security measures to decrease their liability and mitigate the risks of harm from an armed robbery, but such measures must be implemented diligently.