UPDATE 1-Wal-Mart worker, fired for legal pot smoking, sues

* Man with inoperable brain tumor, cancer sues

* Doctor recommended medical marijuana to reduce pain (Adds Wal-Mart statement)

NEW YORK, June 30 (Reuters) - A Michigan man has sued Wal-Mart Stores Inc (WMT.N) for firing him after he tested positive for medical marijuana he was using legally to treat pain from an inoperable brain tumor and sinus cancer.

Joseph Casias, 30, said he was fired late last year after five years of employment at a Wal-Mart store in his hometown of Battle Creek.

According to a complaint filed Tuesday with the Calhoun County District Court, Casias began using marijuana on his oncologist's recommendation after Michigan voters had approved medical marijuana use in 2008.

But the married father of two tested positive in a drug test given after he had twisted his knee at work, under a Wal-Mart policy requiring tests for all employees injured on the job, the complaint said.

"Joseph is an example of a patient for whom marijuana has had a life-changing positive effect," the complaint said.

Wal-Mart, "because it does not approve of the lawful medical treatment that relieves his pain, made him pay a stiff and unfair price," it added.

Greg Rossiter, a Wal-Mart spokesman, said the world's largest retailer was "sympathetic to Mr. Casias' condition," but defended the actions taken.

"Like other companies, we have to consider the overall safety of our customers and our associates, including Mr. Casias, when making a difficult decision like this," he said. "In this case, the doctor-prescribed treatment was not the relevant issue."

Wal-Mart is based in Bentonville, Arkansas.

Hired as a grocery stocker in 2004, Casias rose to become inventory control manager, and was named the Battle Creek store's associate of the year in 2008, the complaint said.

Fourteen U.S. states and the District of Columbia protect patients who use marijuana on doctors' recommendations, according to the American Civil Liberties Union, which helped Casias bring his case.

Still, within the last three years, state courts in California, Montana, Oregon and Washington have said employers need not accommodate users of medical marijuana, whose use remains illegal under federal law, court records show.

Casias is seeking an order that he be rehired, compensatory and punitive damages and other remedies.

The case is Casias v. Wal-Mart Stores Inc et al, Circuit Court of Calhoun County, Michigan. (Reporting by Jonathan Stempel; editing by Andre Grenon, Bernard Orr)