Substance abuse by employees — it’s one of the most difficult issues an employer can face. A 2002 national survey on drug use and health conducted by the U.S. Department of Health and Human Services indicated that of 16.6 million adult current illicit drug users, 74.6% (12.4 million users) are in the workforce.¹ Previous studies have found that an estimated 6.5% of full-time workers currently use illegal drugs while 8.6% of part-time workers are users.² The problem is not limited to illegal drug use. Another survey showed that an estimated 6.2% of adults who are full-time employees are heavy drinkers while more than 60% of adult workers know someone who has reported for work under the influence of alcohol or other substances.³

The cost of employee substance abuse is significant. According to one previous study, the estimated cost in one year to American businesses as a result of alcohol and drug abuse among the workforce was $81 billion, with $37 billion of that figure due to premature death and $44 billion due to illness.⁴ Out of those stated costs, 86% are attributed to drinking, and alcohol has been estimated to result in 500 million lost workdays annually.⁵ According to the National Cocaine Helpline, 75% of its callers admitted to having used drugs on the job, 64% indicated that drugs had adversely impacted their job performance, 44% stated they had sold drugs to fellow employees and18% said they had stolen from their fellow employees in order to support their drug habit.⁶

Some of the common problems caused by substance abuse in the workplace are: increased absenteeism; increased on-the-job accidents; increased use of sickness or disability benefits; lower productivity; poor or impaired relationships between co-workers; theft of company and co-worker property; employee domestic difficulties; employee financial difficulties; poor and/or impaired judgment and decision-making capabilities; diversion of supervisory and managerial time; damage to company property; disciplinary and grievance matters; workplace violence; criminal charges; and loss of employees.

In order to combat those problems, many employers have developed policies and programs to identify, and, if required, to discipline and discharge employees who use illegal drugs and abuse alcohol. Some employers even provide employees with rehabilitation opportunities. A well-drafted and properly implemented substance abuse policy can increase employee productivity, as well as help to reduce employee turnover, resolve issues among employees, lower health insurance costs, limit accidents and avoid consequences of poor decision making. However, avoidance of the issue or attempts to implement a poorly written policy will not only fail to reduce problems for an employer, but will create issues such as severe morale problems, loss of employees, and even litigation.

Employee substance abuse is impacted by federal as well as state and local laws. Specifically, many employers may run afoul of The Americans With Disabilities Act (ADA) in attempting to manage substance abuse problems in the workplace. The purpose of this article is to provide some guidance as to how the ADA and other laws impact the issue of substance abuse in the workplace, and how employers can attempt to deal with an issue that often produces serious consequences for both employers and employees.

Raytheon Co. v. Hernandez – The Americans With Disabilities Act

The Americans With Disabilities Act specifically permits employers to ensure that the workplace is free from illegal use of drugs and the use of alcohol and to comply with other federal laws and regulations regarding alcohol and drug use. The ADA specifically excludes current illegal drug users from any protection under the statute.⁷ However, the ADA also provides limited protection from discrimination for recovering drug addicts, as well as individuals who are alcoholics.⁸

The recent Supreme Court case, Raytheon Co. v. Hernandez, 124 S. Ct. 513 (2003), highlights some of the problems encountered by employers in this area. In Raytheon, the Court considered the case of Joel Hernandez, who had worked for Hughes Missile Systems for 25 years. (During the course of the case, Hughes Missile Systems was acquired by Raytheon Co.) When Hernandez reported to work on July 11, 1991, his appearance and his behavior indicated that he could be under the influence of drugs or alcohol. In accordance with company policy, Hernandez took a drug test and tested positive for cocaine. Hernandez later admitted that he had been drinking beer and using cocaine the night before the test. Hernandez’s conduct violated the company’s workplace conduct rules and as a result, Hernandez was forced to resign. Hernandez’s separation notice from the company listed the reason for his separation as “discharge for personal conduct (quit in lieu of discharge).”⁹

On January 24, 1994, Hernandez returned to the company and applied for rehire. On his application, Hernandez stated that he had been previously employed by the company and along with his application, provided two reference letters, one from his pastor, and the other from his Alcoholics Anonymous counselor stating that Hernandez attended Alcoholics Anonymous meetings regularly and was in recovery.¹⁰

An employee in the company’s Labor Relations Department reviewed Hernandez’s application and pulled his personnel files since Hernandez had indicated that he had previously worked with the company. Based on Hernandez’s separation information, the employee rejected the application in accordance with the company’s unwritten policy against rehiring employees who were terminated for workplace misconduct. The employee testified that she did not know that Hernandez was a former drug addict when she made the decision to reject his application and she did not see anything in his record of employment that would constitute a “record of” addiction.¹¹

Hernandez filed a charge of discrimination against his former employer with the Equal Employment Opportunity Commission. He claimed that the company did not give him a reason for its refusal to rehire him, but Hernandez believed that he had been denied re-employment in violation of the ADA because he was a former drug addict.¹²

In response to Hernandez’s EEOC claim, the company stated that his application was declined because of his demonstrated drug use while an employee and because there was no evidence to demonstrate he had been successfully rehabilitated. In addition, the company cited its right to deny re-employment to employees who were terminated for violation of company rules and regulations. The company filed a motion for summary judgment and Hernandez argued for the first time that the company’s no-rehire policy, though neutral on its face, violated the ADA because the policy had a disparate impact: it eliminated former drug addicts from re-employment whose grounds for termination resulted from their addiction. The district court granted the company’s motion for summary judgment but refused to consider Hernandez’s disparate impact claim because it had not been raised in a timely manner. ¹³

On appeal, the Ninth Circuit did consider Hernandez’s disparate impact argument and held that the company’s unwritten policy of not rehiring former employees who were terminated for violation of company rules violated the ADA as applied to former drug addicts who tested positive because of their addiction.¹⁴ According to the Ninth Circuit, the company’s application of a neutral no-rehire policy was not a legitimate, nondiscriminatory reason for rejecting Hernandez’s application and the court held specifically that “a policy that serves to bar the re-employment of a drug addict despite his successful rehabilitation violates the ADA.”¹⁵

The Supreme Court agreed to hear the case and was asked to decide whether the ADA confers some preferential rehire rights on disabled employees lawfully terminated for violating workplace conduct rules.¹⁶ However, the Court never reached that question. The Court concluded that Hernandez’s claim of discrimination was one of disparate treatment — a claim that he was treated less favorably than others because of some protected characteristic. The Court held that Hernandez had not timely pursued his disparate impact claim — a claim that an employment practice which is neutral on its face in fact falls more harshly on one group than another and cannot be justified by business necessity.¹⁷ In defending a claim of disparate treatment, an employer need only provide a legitimate nondiscriminatory reason for its action to defeat the claim. Therefore, in this case the Court concluded that the company’s stated reason for refusing to rehire Hernandez satisfied its obligation and further stated that the Ninth Circuit improperly applied a disparate impact analysis to the case.¹⁸ The Court vacated the Court of Appeals’ judgment and remanded the case for further consideration in light of its ruling.¹⁹

Lessons from Raytheon and Beyond — Workplace Practices

Although the Supreme Court did conclude that the company’s neutral no-rehire policy was a legitimate, nondiscriminatory reason for refusing to rehire Hernandez, the Court specifically did not reach the question it was initially asked to address: Do recovered or rehabilitated employees have some kind of special rehire rights, even though they may have been terminated for conduct that violated a company’s policies and procedures? What may an employer do to address a substance abuse problem or workplace violation, while protecting itself from liability under the ADA?

Under the ADA, an individual is “disabled” if the individual: (a) has a physical or mental impairment that substantially limits one or more major life activities;(b) has a record of such an impairment; or (c) is regarded as having such an impairment.²⁰

While current illegal drug users are not covered by the protections of the ADA, any individual who has successfully completed a drug rehabilitation program, or who is participating in a rehabilitation program, and is not a current user of illegal drugs, is covered by the ADA.²¹ Can an employer attempt to screen out substance abusers from its workforce? Under the ADA, an employer can make certain pre-offer of employment inquiries regarding an individual’s use of alcohol or illegal use of drugs. An employer may ask whether an applicant is currently using illegal drugs or whether the applicant drinks alcohol.²² However, an employer may not ask whether an applicant is a drug addict or an alcoholic and cannot inquire whether the applicant has ever been in a drug or alcohol rehabilitation program.²³

An employer may conduct tests to detect the illegal use of drugs. The ADA does not prohibit, require or encourage drug tests. Under the ADA, drug tests are not considered medical examinations, and an applicant can be required to take a drug test before a conditional offer of employment has been made. On the other hand, a test to determine an individual’s blood alcohol level is considered a medical examination and can only be used and required by an employer in conformity with the conditions of the ADA.²⁴

An employer may refuse to hire an applicant based upon a test result that indicates the current illegal use of drugs.²⁵ An employer may take that action even if an applicant claims that he or she has recently stopped using illegal drugs.

After a conditional offer of employment has been made, an employer may ask questions concerning past or present drug or alcohol use.²⁶ However, an employer may not use such information to exclude an individual with a disability, on the basis of a disability, unless the employer can show that the reason for the exclusion is job related and consistent with business necessity, and that legitimate job criteria cannot be met with some reasonable accommodation.

An employee can be required to take a drug test, whether or not such a test is job related and necessary for the business, and an employer can discharge or discipline an employee based upon a positive test result.

Alcoholics are protected under the ADA.²⁷ However, use of alcohol on the job or work-related consequences of alcohol use or abuse will not shield an individual from discipline or discharge. If an individual whose use of alcohol impairs job performance or conduct to the extent that he or she is not a “qualified individual” with a disability, an employer may discipline, discharge or deny employment.²⁸ An employer can prohibit the use of drugs or alcohol in the workplace and require that employees not be under the influence of alcohol or drugs in the work environment.²⁹ An employer can also require that employees who use drugs or alcohol meet the same performance standards and requirements as applied to other employees. The consequences of substance abuse — unsatisfactory or unacceptable workplace behavior, absenteeism, tardiness, poor job performance, workplace violence, disruptions or accidents — require no acceptance or accommodation on the part of an employer. While an individual may not be disciplined or terminated merely because she is an alcoholic, the job-related consequences of alcohol abuse may warrant or require a negative employment action.³⁰

The ADA does not require an employer to provide an opportunity for rehabilitation in lieu of discipline or discharge. However, some forms of rehabilitation may be required to be considered as a reasonable accommodation for a drug addict or alcoholic who is rehabilitated, not using illegal drugs or abusing alcohol, and who remains a qualified individual with a disability.³¹ For example, a modified work schedule to permit an individual to attend an ongoing self-help program might be viewed as a reasonable accommodation for such an employee.

Some employers have policies and programs that provide employee assistance and rehabilitation assistance to employees with substance abuse problems. While such programs are laudable and may improve employee retention and morale, employers must remember that any period for treatment in a rehabilitation program or facility is protected as a reasonable accommodation under the ADA and, if the employee qualifies, is also an instance of protected leave under the Family and Medical Leave Act.³² However, in order to be eligible, the individual must not be currently using illegal drugs. Upon the employee’s return to the workplace, an employer may require periodic drug testing.³³ An employer should keep in mind that once it provides and allows for employee rehabilitation, that rehabilitated employee gains protection under the ADA once he or she returns to the workplace, as a result of having a disability (alcoholism) or record of an impairment (recovered drug addict).

So what can an employer do to address the issue of substance abuse in the workplace? First and foremost, an employer should have a clear and straightforward policy that addresses the use of illegal drugs and alcohol in the workplace or while on company business. Any such policy should be reviewed by an employer’s legal counsel in order to ensure that it complies with applicable federal, state and local laws. Applicable laws may also impact the practice of drug testing, such as when and how drug tests may be used, what drug tests may be used, and confidentiality concerns.

Drug tests can be a useful tool in preventing and eliminating the consequences of substance abuse in the workplace. However, drug tests implicate many legal issues and are not foolproof. Drug tests must be conducted to detect the illegal use of drugs; however, such tests may also reveal the presence of lawfully used drugs. If an individual is excluded from a job because the employer mistakenly regarded him to be an addict currently using illegal drugs when the drug test actually revealed the presence of a lawfully prescribed medication, that employer would be liable under the ADA. To avoid such potential liability, an employer needs to determine whether the individual was using a legally prescribed drug. Because the employer may not ask what prescription drugs an individual is taking before making the conditional job offer, an employer may avoid such liability by conducting drug tests after making a job offer, even though such tests may be given at any time under the ADA. Since applicants who test positive for illegal drugs are not covered by the ADA, an employer can withdraw an offer of employment on the basis of illegal drug use.

If the results of a drug test indicate the presence of a lawfully prescribed drug, such information must be kept confidential under the ADA and under the requirements of many state and local laws, in the same way as any other medical record. If the results reveal information about a disability in addition to information about drug use — e.g., the applicant has diabetes, epilepsy, depression, etc. — the disability-related information is to be treated as a confidential medical record and no employment decision may be based upon the information obtained about that disability. ³⁴

Unless random drug testing is required by state or local law due to safety-sensitive jobs, random drug testing generally should be avoided because it may implicate the torts of invasion of privacy, defamation, intentional infliction of emotional distress, and in some instances, discrimination. In all circumstances, an employer should provide prior notice of its testing policies and follow reasonable drug testing procedures to ensure employee privacy. An employer should obtain prior written consent to allow drug testing.

If an employer chooses to conduct drug testing, certain circumstances are generally viewed as appropriate for such testing. Those situations include pre-employment screening of all job applicants; after a work-related employee incident; when an employee is seen using illegal substances or alcohol on the job; or when poor performance or behavior indicates substance abuse. An employer that conducts drug testing should hire a reputable testing laboratory. The employer should verify that its chosen testing laboratory has experience and a reputation of producing accurate results, and the employer should ensure that its lab uses legitimate and recognized testing procedures. The employer should also work with its laboratory to determine the substances for which its employees or applicants will be tested. An employer who implements a drug testing policy should ensure that its supervisors and managers are trained in the implementation and enforcement of that policy and in how to recognize possible signs of substance abuse in the workplace. Further, because drug testing is not a foolproof method of enforcement of a substance abuse policy, retesting should be considered for employees and job applicants who initially test positive in order to confirm the results of the initial test.

An employer who implements a policy concerning illegal drug use or abuse of alcohol may wish to terminate employees who refuse to submit to testing. As a general rule, no cause of action exists for wrongful discharge when terminating an at-will employee who refuses to submit to testing. Generally, courts are willing to accept discharge of an employee testing positive where an established drug policy exists, employees have received notice, managers and supervisors have been trained in the implementation and enforcement of the policy, and the policy is implemented so as to safeguard employees’ rights. However, it is imperative that, as with the implementation of any policy, substance abuse policies and drug-free workplace policies be consistently applied and enforced. As demonstrated by the Raytheon case, if an employer terminates an individual for violation of a workplace policy and then subsequently uses that violation as grounds for failure to rehire that individual, the employer must be certain that its mandates are regularly and consistently enforced. Any deviation or inconsistency may subject an employer to discrimination claims and state tort litigation.

Conclusion

The problem of substance abuse in the workplace has a significant impact on the productivity of America’s workforce. Every employer has an interest in taking appropriate steps to avoid the abuse of drugs and alcohol by its workforce. In pursuing such protections, however, employers must follow the necessary legal guidelines and requirements designed to protect employees’ individual rights. With proper legal guidance, employers can retain a healthier and more efficient workforce while avoiding the headaches of litigation.

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