Iowa Supreme Court Examines Private Sector Drug-Free Workplaces Statute

Since it was passed in 1998, Iowa’s Drug-Free Workplaces Act has been one of the most comprehensive and complex drug-testing statutes in the United States. On June 25, 2021, the Iowa Supreme Court issued a pair of decisions—Dix v. Casey’s General Stores, Inc. and Woods v. Charles Gabus Ford, Inc.—that provide an in-depth analysis of the requirements that Iowa’s drug testing statute impose on  employers and the level of compliance that employers must achieve to conduct enforceable testing.

Background

In 1998, Iowa passed its private sector drug-free workplaces statute (Iowa Code section 730.5). As described by the Iowa Supreme Court, this law is “a comprehensive statute creating a detailed scheme employers must follow in utilizing workplace drug testing.” The statute sets forth numerous and detailed requirements with which employers must comply when administering drug or alcohol tests of employees, including the procedure to be utilized; the notice that an employer must provide to an employee following a positive test; the group of employees who may be required to submit to unannounced, random testing; the contents of a written policy that must be maintained and disclosed to employees; and conditions for employer immunity from employee claims related to testing. On March 27, 2020, the Iowa Supreme Court granted review of Dix and Charles Gabus Ford, two significant cases interpreting provisions of the statute.

The Dix case involved an employer that amended its drug and alcohol testing policy to require employees in safety-sensitive positions to submit to unannounced random testing. Subsequently, the employer administered urine testing to a random selection of warehouse employees. Two of the employees who the employer tested worked in light-duty positions sorting returned cigarette boxes. The employer considered these employees as holding safety-sensitive positions because they worked near the operation of heavy machinery in a warehouse setting. The other two employees were in heavy-duty positions that required them to operate forklifts. Following administration of urine testing, three of the four plaintiffs tested positive. The fourth employee failed to provide a sufficient sample before leaving work and was deemed to have voluntarily resigned from employment.

Woods involved an employee whom the employer had randomly selected for a drug test. The employee tested positive for methamphetamine. After an independent service provider confirmed the positive result, a doctor who received the results made multiple attempts to contact the employee. Unable to reach him, the doctor sent the information to the employer, which then terminated the employee’s employment. The employer’s human resources director sent the employee a letter informing the employee of his drug test results, his right to obtain a confirmatory test, and his obligation to pay for a confirmatory test (though he would be reimbursed his expenses if the sample tested negative). The letter did not identify the cost of the confirmatory test. The letter was sent by certified mail but without return receipt requested.

The Court’s Analysis in Dix

In both Dix and Woods, the court expounded on multiple requirements of section 730.5 and explained when an employer’s failure to adhere to the provisions of section 730.5 would result in a violation of the law.

Substantial Compliance With the Statute

Early in the court’s Dix opinion, it addressed whether section 730.5 required strict compliance or “substantial compliance.” The court determined that an employer must achieve substantial compliance with the statute because that level of scrutiny “strikes a proper balance” between the interests of the employer and employee that the law seeks to achieve.

Statutory Immunity

The court also addressed the scope of statutory immunity afforded employers that establish drug-testing policies and administer testing programs in accordance with section 730.5. Specifically, the court explained the limits on the causes of action an employee may bring where an employer conducts a drug test or takes action based on a positive test result or an employee’s refusal to submit to a test. The court found that the statutory immunity provided under section 730.5 does not confer absolute immunity where a compliant policy is administered. Instead, the court concluded that the statute “immunizes employers from causes of action other than those arising from the employer’s violations of section 730.5, such as invasion of privacy or wrongful termination.”

Safety-Sensitive Designation

The court then addressed when a position is properly categorized as “safety-sensitive” under section 730.5. Under the statute, an employer may conduct “unannounced, suspicionless” drug or alcohol testing for one of three pools of employees. One of these pools includes “[a]ll employees at a particular work site who are in a pool of employees in a safety-sensitive position.” The court explained that the determination as to whether an employee holds a safety-sensitive position must be based “on the functions of the job an intoxicated person could be performing …, not just the environment in which the job is performed.” Based on this analysis, the court determined that an employee could not be designated as holding a safety-sensitive position based on the location of where the job was performed. In Dix, this meant that the light-duty employees could not be deemed to hold safety-sensitive positions regardless of the environment in which they worked and the heavy equipment used around them.

Justice McDermott filed an opinion concurring in part with the decision and dissenting in part, in which he criticized the majority’s reasoning regarding who may be deemed to hold a safety-sensitive position under section 730.5. Justice McDermott reasoned that the majority had incorrectly relied on cases involving public employers to define “safety-sensitive” position under section 730.5. Those cases, Justice McDermott explained, involved employers who were “constrained in conducting suspicionless drug testing under the United States Constitution’s Fourth Amendment search and seizure standards.” Justice McDermott concluded that such reasoning was inapplicable to a private employer like the one at issue in Dix. Further, he noted that section 730.5 refers to employees who are “designated by the employer as being in a safety-sensitive position,” which supports allowing an employer to make the determination as to whether an individual holds a safety-sensitive position. Although Justice McDermott raised these points in a dissenting opinion, they may be persuasive in future decisions related to section 730.5.

Selection Process

The court evaluated whether the employer had used a lawful selection process to determine which employees would be tested. The employer instructed the testing administrator to select for testing 90 percent of a pool of 184 employees scheduled to work; the remainder would be placed on an alternate list. The plaintiff employees challenged the employer’s testing process based on which employees had been included in the pool for selection. Due to absences on the day of the test, shift changes, and human error, the list had included multiple employees who had not worked on that day. In addition, there were employees who were not included on the list despite having been present on the day of testing. The court pointed to its earlier conclusion that an employer need only achieve substantial compliance to avoid liability. It determined that perfect testing administration is not required and that therefore a violation of the law had not occurred. The employer had achieved substantial compliance because it “allow[ed] some give in compiling the list for the selection process.”

Post-testing Communications

The court also analyzed the post-testing communications with the employees. With respect to section 730.5’s requirement that employees receive an opportunity to provide information relevant to the test, the court found there is no timing requirement that sets forth when the opportunity must occur. The court concluded that the employer had achieved substantial compliance when the medical review officer, who confirmed the employees’ test results, provided such opportunity. Lastly, the court addressed the statute’s requirement to provide a list of the drugs to be tested. The court again determined the employer had achieved substantial compliance because it had provided a list of the drugs to be tested during the distribution of its policy, and the testing at issue was the first to occur after employees received notice of the new policy. As guidance for other employers, the court described that section 730.5 requires that notice of the drugs to be tested “must be provided sufficiently contemporaneous to allow the selected employees to provide information about their medical history that would be relevant to the drugs to be tested.” The court cautioned “that employers would be well advised to provide a list with each testing.”

The Court’s Analysis in Woods

In Woods, the court’s substantive analysis was limited to whether the employer had substantially complied with section 730.5’s notice requirements. Among the notice requirements, section 730.5 requires that an employee receive written notice of his or her test results by certified mail, return receipt requested, and notice of the fee payable by the employee to obtain a confirmatory test. Here, the employer did not send notice to the employee by return receipt requested. Instead, the employer sent it only by certified mail. The court found that the difference in mailing services was marginal since the employee had not disputed that he had received notice of his positive test result.

Nevertheless, the court found that the employer had not complied with section 730.5 when it did not include the cost of the retest in the employee’s notice. The employer’s notice letter stated that the employee could obtain a confirmatory retest, that it would be at his cost, and that he had seven days to request the retest. The cost of the retest was not included. The court determined that that cost of the retest could be a significant factor in an employee’s decision to seek a retest. The absence of the cost in the employee’s notice denied the employee the chance “to make a meaningful decision.” Thus, the court found that an award of relief to the employee for the decision to terminate his employment based on the test results was appropriate.

Key Takeaways

Administering drug or alcohol testing programs in Iowa necessitates compliance with a detailed list of statutory requirements. The court’s analysis in Dix illustrates that some errors may not automatically lead to liability. For example, in Dix, the employer was allowed to direct the testing administrator to test a list of employees based on those scheduled to be in attendance on the selected day even though that list was inaccurate by the time testing occurred. Yet, as demonstrated by Woods, an error seemingly as small as neglecting to include in a notice letter the cost of retesting may be sufficient for an employer to be found in violation of the law. Employers that seek to conduct drug or alcohol testing in Iowa may want to review section 730.5 and their testing policies to ensure compliance with its requirements in implementing testing policies, providing the required supervisor trainings, administering each test, and informing employees of results.