Over this past year, Iowa appellate courts issued several decisions regarding employee drug and alcohol testing under Iowa Code Section 730.5.

Ferguson v. Exide

In Ferguson v. Exide Technologies, 936 N.W.2d 429 (Iowa 2019), the Iowa Supreme Court held that the civil cause of action set forth in Section 730.5(15) provides the exclusive remedy for wrongful termination based on improper drug testing. The plaintiff in that case, Ferguson, reported work-related elbow pain and was directed by the employer’s physician to undergo a drug and alcohol test. Ferguson refused and was terminated as a result. Ferguson filed suit under Section 730.5 and also asserted a claim for wrongful discharge in violation of public policy, a common law tort claim that has been recognized by Iowa law under limited circumstances. The employer, Exide, eventually conceded that it had not complied with Iowa’s drug and alcohol testing requirements, although the nature of the non-compliance was not articulated in the Iowa Supreme Court’s decision. Exide, however, consistently (before, during, and after trial) that the common law wrongful discharge claim was preempted by the statute. The case proceeded to a jury trial, which is available for a common law wrongful discharge claim but not the statutory claim. The jury awarded Ferguson $45,606.40 in lost wages and $12,000 in emotional distress claims. Ferguson also requested attorney’s fees as allowed under the statute and the court only awarded fees for the portion of work in the case devoted to the statutory claim.

The Iowa Supreme Court held that the civil cause of action provided by Iowa’s drug and alcohol testing statute provided the exclusive remedy for violation of the statute. It affirmed the award of attorney’s fees as determined by the district court and remanded with direction to vacate any portion of the jury’s award that would only be available under a common law theory (presumably the emotional distress damages) and enter judgment on the lost wages award.

Dix. v. Casey’s General Stores

In Dix v. Casey’s General Stores, Inc., 942 N.W.2d 1 (Iowa Ct. App. 2020), the Court of Appeals considered an appeal and cross-appeal of a consolidated case involving four former warehouse employees of Casey’s General Stores, Inc. (“Casey’s”) who were required to be drug tested in 2016 pursuant to Casey’s new drug testing policy.

Iowa Code Section 730.5 allows private employers in Iowa to conduct drug and alcohol testing in compliance with detailed safeguards set out in the code and consistent with the employer’s own written policy with proper notice to employees.  In Dix, the employer’s policy stated Casey’s would select employees for testing at “random” from “a pool of employees in a safety-sensitive position who are scheduled to be at work at the time testing is conducted.” The policy also stated, “All employees have an equal chance of being selected.”

Casey’s designated all warehouse employees as holding safety-sensitive positions and ended up testing all warehouse employees. Two of the plaintiffs, McCann and Eller, argued that they were not in safety-sensitive positions because they worked in a fenced off area performing light duty work involving tobacco returns. All told, the plaintiffs asserted six points of non-compliance with the Iowa drug and alcohol testing statute.

The district court found that Casey’s improperly designated McCann and Eller as being in “safety-sensitive positions.”  The district court also found that Casey’s did not give employees adequate opportunity to provide additional information relevant to the testing and Casey’s did not give the employees a list of the drugs being tested in violation of the statute. But the court also found the other two plaintiffs did not prove they suffered an adverse employment action as a result of these defects and were not, therefore, “aggrieved” under the statute.

The parties cross-appealed and the Court of Appeals affirmed the judgment in favor of McCann and Eller and also affirmed the denial of relief to the other two plaintiffs on an alternative basis. One of the issues on appeal was the scope of the so-called employee immunity clause in the statute which states as follows:

“Employer immunity. A cause of action shall not arise against an employer who has established a policy and initiated a testing program in accordance with the testing and policy safeguards provided for under this section, for any of the following:

a. Testing or taking action based on the results of a positive drug or alcohol test result, indicating the presence of drugs or alcohol, in good faith, or on the refusal of an employee or prospective employee to submit to a drug or alcohol test.”

Iowa Code § 730.5(11).  The Court of Appeals noted the circular nature of the clause as follows:

“The district court reasoned an employer who violates section 730.5 “is no longer immune from liability.” Thus the court rejected Casey’s immunity claim because the employer violated the statute by placing Eller and McCann in the safety-sensitive employees’ pool and by not providing a list of drugs to be tested or giving employees the opportunity to provide relevant information. That reasoning leads us on a somewhat circular path. An employer who violates the statute cannot benefit from the immunity, but an employer who does not violate the statute has no need for immunity because an employee would have no viable claim. We strive to construe the statute to avoid that circularity.”

Finding the statute ambiguous, the Court of Appeals looked to the legislative history of what it described as a “byzantine” law and concluded that the immunity clause was intended to protect employers from liability arising from conduct or non-compliance of third parties, such as testing laboratories. This, it held, Casey’s was not insulated from its own actions allegedly in violation of the law. It found that misclassifying light duty employees as “safety sensitive” was a violation of the statute but that Casey’s otherwise “substantially complied” with the statute. The decision suggests that Iowa courts give employees slightly more leeway for technical violations of drug and alcohol law than Minnesota courts do under Minnesota’s statute.

Whitman v. Casey’s General Stores

Casey’s was also involved in another drug and alcohol testing lawsuit.  In Whitman v. Casey’s General Stores, Inc., 940 N.W.2d 45 (Iowa Ct. App. 2019), an employee, Whitman, appealed denial of his motion for judgment notwithstanding the verdict and for a new trial after he lost before a jury. (Whitman was apparently entitled to a jury trial based on his companion claims for disability discrimination and failure to pay wages.) The undisputed facts were that Whitman used methamphetamine in his off- duty hours and was arrested for possession of illegal drugs. When the Human Resources (“HR”) director learned of the arrest it confronted him. Whitman admitted to the arrest and to smoking marijuana. Whitman also became “loud” and “chaotic” in the meeting. The company sent him for a drug test which later turned out to be negative. Meanwhile, the HR director found that Whitman had not disclosed previous criminal convictions. Before learning of the test results, the HR director made the decision to terminate his employment based on admitted drug use and failure to disclose criminal convictions on his job application. Not surprisingly, the Court of Appeals affirmed the jury verdict in favor of Casey’s. This case is a good example of how employers in Iowa (and Minnesota) may want to use admission of illegal drug use as the basis for termination of employment instead of a test result and may actually be better off not testing at all where an employee makes such an admission.

Wood v. Charles Gabus Ford

Finally, in Woods v. Charles Gabus Ford, Inc., 942 N.W. 9 (Iowa Ct. App. 2020), the Court of Appeals reversed dismissal of a claim under Iowa’s drug and alcohol testing statute where the employer failed to inform the employee of the cost of seeking a confirmatory re-test. The district court found that this oversight was not enough to establish that the employer did not “substantially comply” the law. Because the statute states that the employer “shall” inform the employee of the fee payable by the employee for a confirmatory test, however, the Iowa Court of Appeals held that the employer was not in substantial compliance. The appellate court found that other technical failures, such as sending notice by certified mail, but not “certified mail, return receipt requested” as required by the statute, was substantial compliance where it was undisputed that the employee received the notice.

Compliance with the many specific requirements under Iowa’s drug and alcohol testing law is complicated. Taken together, these cases show that employers face potential liability if proper procedures are not followed but Iowa courts will provide some leeway for de minimis oversights if the employer “substantially” complies with the law.

NOTE: The Iowa Supreme Court has granted review of the Iowa Court of Appeals decisions in both Dix v. Casey’s General Stores and Charles Gabus Ford so we may receive more clarity on the scope of “substantial compliance.”

Conclusion

If you have questions about compliance with Iowa drug testing law, contact the employment law attorneys at Trepanier MacGillis Battina P.A.

About the Author: Trepanier MacGillis Battina P.A. is an employment law firm located in Minneapolis, Minnesota. Their employment law attorneys can be reached at 612.455.0500.