The N.J. Appellate Division Rules that Mandatory Drug Testing of Job Applicants Is Lawful

Introduction

In a case of first impression, the New Jersey Appellate Division has rejected a challenge to an employer’s requirement that all job offers be conditioned on the job applicant’s passing a drug test. Vargo v. National Exchange Carrier Association, 376 N. J. Super. 364 (2005). Plaintiff was terminated from a temporary position and had a job offer for a permanent position withdrawn by his employer, National Exchange Carrier Association (NECA), after he tested positive for morphine as part of the application process for the permanent position. Plaintiff contended that requiring him to pass a drug test as a condition of employment for a non-safety sensitive job violated a clear mandate of public policy and an invasion of privacy under the New Jersey Constitution. In a unanimous decision, the appellate court rejected these contentions and affirmed summary judgment in favor of NECA. The Court also affirmed summary judgment for NECA on plaintiff’s claims of handicap discrimination and retaliation brought under the New Jersey Law Against Discrimination, N.J.S.A. Section 10:5-1 et seq. (LAD). The court ruled that plaintiff failed to come forward with sufficient evidence that his drug test results were a “pretext” used by NECA to violate the LAD, as plaintiff failed to show that NECA selectively enforced its drug testing policy.

The Facts

Plaintiff worked at NECA through a temporary agency through which he was compensated as a Program Integrity Assurer in the company’s Schools and Libraries Division, reviewing applications from schools and libraries to determine their eligibility for monetary grants. In May 2001 his supervisor advised him of an opening for a permanent position in NECA’s Rural Healthcare Division. Plaintiff was aware of NECA’s policy to require all applicants for permanent positions to pass a drug test as a condition of employment. On May 21, 2001, plaintiff was offered the position contingent upon his passing a drug test scheduled for three o’clock that afternoon at Morristown Memorial Hospital. Plaintiff did not object to being tested. NECA’s drug testing policy was printed on the employment application plaintiff had completed and signed under the heading “Terms and Conditions of Employment.” NECA has had a drug-free workplace policy since the early 1990s, which originally applied only to applicants for permanent employment and not temporary employees. Before he left for the drug test, plaintiff provided NECA’s Human Resources Department with a note from one of his physicians, disclosing that he was taking prescription medication that might show up on his drug screen. He was told that NECA did not need this information unless and until the test results were “positive.” After plaintiff provided a urine sample at the hospital, the sample was sent to LabCorp, an independent clinical laboratory, for analysis. The sample tested positive for morphine.

Per company policy, NECA did not reveal to plaintiff what he tested positive for because applicants could research possible innocent causes of positive results and then present false information to the company as an explanation for their positive test results. Therefore, NECA preferred to ask applicants what they thought might have caused the positive result. After a retest of plaintiff’s urine sample came back positive, NECA’s manager of staffing, asked plaintiff to provide any information as to why he had failed the test, including whether he was taking any medications that he believed might have caused the positive result. Plaintiff mentioned that he had eaten a poppy seed bagel on the morning of his drug test. Subsequently, plaintiff provided documentation to NECA Human Resources personnel from his pharmacy identifying the medications he had taken in the 2 weeks prior to his drug test. NECA’s Executive Director of Human Resources directed that plaintiff’s urine sample be tested a third time.

At a subsequent meeting, based on alleged comments from one of the Human Resources personnel, plaintiff believed NECA did not want to employ him because of all of the legally-prescribed medications he was taking, including psychotropic medications. Plaintiff became upset and, as he left the meeting remarked: “I don’t know if you know who Norman Siegel is … but you may be getting to know him very well soon.” The Human Resources personnel at the meeting did not know that Norman Siegel was the head of the ACLU in New York, but they understood plaintiff’s remark to mean that plaintiff intended to sue NECA. Later, NECA Human Resources personnel telephoned LabCorp and spoke with the toxicologist who had been processing plaintiff’s tests who confirmed that none of plaintiff’s medications would have caused the positive result. They also asked the toxicologist whether eating a poppy seed bagel could have caused the positive result. The toxicologist responded that this was a possibility, but stated that the positive result could also have resulted from codeine or heroin use and that there was no way to definitively determine the source. Subsequently, after consulting with NECA’s legal department, The Executive Director of Human Resources instructed that Vargo’s job offer should be withdrawn and that the temporary employment agency be advised that plaintiff’s temporary assignment with NECA was being terminated based upon his positive drug test result.

The Court’s Opinion

Plaintiff brought suit against both NECA and LabCorp in the Law Division. He alleged that NECA’s drug test requirement constituted and invasion of privacy and violated a clear mandate of public policy because the job in question was not a safety-sensitive job. In this regard, he relied on the New Jersey Supreme Court’s opinion in Hennessey v. Coastal Eagle Point Oil Co., 129 N.J. 81 (1992), where the Court held that the random drug testing of current employees in non safety-sensitive jobs may provide grounds for a wrongful discharge claim based on a violation of a clear mandate of public policy. He also alleged that NECA terminated him in violation of the LAD because it perceived him as being disabled from all of the medications he was taking or because it perceived him to be a user of illegal drugs, and because he had threatened a lawsuit. Finally, he claimed that both NECA and LabCorp were negligent in using a “cut-off” level to determine that his test result was “positive” for morphine which was lower than the “cut-off” level currently used by the Department of Transportation.

In an extensive opinion, Judge Dumont in the Law Division granted the motions for summary judgment brought by both NECA and LabCorp, and plaintiff appealed. The Appellate Division affirmed largely for the reasons expressed by Judge Dumont.

As to plaintiff’s challenge to NECA’s drug testing policy, the appellate court adopted Judge Dumont’s reasoning that plaintiff’s invasion of privacy was negated because of a waiver on plaintiff’s part, such that plaintiff had no reasonable expectation of privacy. The waiver was evidenced by the circumstances that (1) NECA had a long-standing drug-free workplace policy and pre-employment drug screening policy for all applicants for permanent positions, (2) plaintiff knew of the policy when he signed the “Terms and Conditions of Employment,” (3) plaintiff volunteered personal medical information from the outset of the drug screening process, (4) plaintiff voluntarily submitted to a non-intrusive drug test in a private bathroom at the hospital, and (5) after the positive results were known, plaintiff presented his medication list to the NECA employees involved in the hiring and testing process.

As to plaintiff’s contention that NECA’s decision to refuse to hire him and to terminate him from his temporary position because he failed the drug test violated “a clear mandate of public policy,” the appellate court agreed with Judge Dumont that pursuant to Pierce v. Ortho Pharm. Corp., 84 N.J. 58 (1980), “plaintiff had failed to identify a specific expression of public policy that precluded NECA the right to discharge him with or without cause.” The court noted that “Sources of public policy include the constitution, statutes, administrative rules, regulations and judicial decisions. A ‘clear mandate’ exists when the public policy is ‘one that on balance is beneficial to the public.'” Although the Supreme Court in Hennessey found no violation of public policy because that case involved a current employee in a safety-sensitive position, whereas plaintiff was applying for a non-safety-sensitive administrative position at NECA, the court concluded that Hennessey did not proscribe mandatory pre-employment drug testing of all applicants. “The Court in Hennessey recognized that ‘The Legislature has defined the limits of other forms of [drug] testing …. and can more fully define the contours of the competing rights of employers and employees’ but, thus far, has not done so.” Thus, absent legislative action, there was no clearly defined mandate of public policy on which plaintiff could rely.

As to Plaintiff’s LAD claim that NECA’s decisions were based on its perception that plaintiff was suffering from a disability, the Appellate Division noted that Judge Dumont had correctly determined “that in light of NECA’s drug-free workplace policy and plaintiff’s inability to pass his drug test after three lab tests of his urine sample, NECA had met its burden of articulating a legitimate non-discriminatory reason for its decision.” Specifically with regard to plaintiff’s contention “that NECA’s articulated reason is pretextual and a ‘cover-up’ for the fact that NECA does not wish to hire someone with a dependency on six different prescription drugs, especially since some of the drugs, including Zoloft, were for the treatment of a psychiatric condition,” the appellate court ruled that Judge Dumont correctly found that “the record was devoid of any evidence that NECA applied its drug-free workplace policy in a selective manner or that it would have ignored plaintiff’s three positive test results if it had not learned about plaintiff’s prescription medications.” Additionally, the Appellate Division noted that NECA gave plaintiff the benefit of the doubt by asking LabCorp if the positive morphine result could have been from the ingestion of a poppy seed bagel. The appellate court saw no reason to disturb Judge Dumont’s conclusion that “upon confirming that plaintiff may or may not have been an illegal drug user, NECA was entitled to make the business decision not to hire plaintiff for permanent employment and to fire him from his temporary employment.” In addition, the Appellate Division ruled that assuming, but not deciding, the LAD protects persons “erroneously regarded” as engaged in illegal drug use, under the circumstances of this case “there was nothing improper or unlawful in [NECA’s] perceiving [plaintiff] as a user of illegal drugs.”

On plaintiff’s LAD retaliation claim alleging that NECA unlawfully terminated him from his temporary position only one day after his threat to sue NECA, the Appellate Division agreed with Judge Dumont that, even assuming plaintiff had made out a prima facie case of retaliation, plaintiff failed to produce any evidence that NECA’s articulated reason for his firing was pretextual, noting that plaintiff was unable to establish that, if he had not mentioned Norman Siegel’s name NECA would have overlooked his “positive” drug results and kept him on as a temporary employee.

Finally as to the negligence claims against NECA and LabCorp, the Appellate Division agreed with Judge Dumont that under the principles set forth in Majestic Realty Assocs., Inc. v. Toti Contracting Co., 30 N.J. 425 (1959), NECA could not beheld vicariously liable for any negligence by LabCorp in conducting the drug test and that, in any event, plaintiff had failed to establish that LabCorp had breached accepted standards of laboratory practice by using a lower “cut-off” level than used by the Department of Transportation to establish a “positive” result for opiates. The view of plaintiff’s expert that the higher “cut-off” level should have been used was merely a personal opinion and did not evidence a breach of accepted laboratory standards.

Conclusion

Vargo is of obvious significance in that it upholds the lawfulness of pre-employment drug testing programs in New Jersey. Employers should take care, however, that an applicant’s privacy concerns with regard to the manner in which the test is administered are adequately addressed. The case is also significant on the issue of “pretext” in discrimination cases. Although the plaintiff in Vargo presented evidence on his disability discrimination and retaliation claims that otherwise may have created issues of fact precluding summary judgment, that evidence could not trump the absence of evidence that NECA had selectively enforced its drug testing policy. Thus, when in defending a claim of discrimination an employer maintains that its actions were taken pursuant to company policy, whether or not it has selectively enforced its policy will likely become the key issue in the case.