The Colorado justices ruled that because marijuana is illegal under federal law, Coats' use of the drug couldn't be considered legal off-duty activity.
"There is no exception for marijuana use for medicinal purposes, or for marijuana use conducted in accordance with state law," the court wrote.
Coats and his lawyers said after the ruling that the decision at least clarified the matter for workers.
"Although I'm very disappointed today, I hope that my case has brought the issue of use of medical marijuana and employment to light," Coats said in a statement.
Attorneys for Dish Network and the state of Colorado, which filed a brief in support of the company, were not immediately available for comment.
Twenty-three states and Washington, D.C., allow medical marijuana. Alaska, Colorado, Oregon, Washington state and Washington, D.C., have legalized recreational sales, though court cases so far have involved medical patients.
The Colorado Constitution specifically states that employers don't have to amend their policies to accommodate employees' marijuana use.
Coats was paralyzed in a car crash as a teenager and has been a medical marijuana patient since 2009, when he discovered that pot helped calm violent muscle spasms. He was a telephone operator with Dish for three years before he failed a random drug test in 2010 and was fired. He said he told his supervisors in advance that he probably would fail the test.
The Associated Press
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