In a case of first impression in New Jersey, 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). John Vargo was terminated from a temporary position and had a job offer for a permanent position withdrawn by his employer, National Exchange Carrier Association (NECA), after he failed a drug test which was part of the application process for the permanent position. He 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 Vargo's handicap discrimination claim, which was based on the contention that NECA perceived Vargo as disabled because he was taking a variety of legally prescribed medications. The court ruled that absent evidence that NECA selectively enforced its drug testing policy, Vargo failed to come forward with sufficient evidence that his failing the drug test was a "pretext" used by NECA to engage in handicap discrimination in violation of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. ("the LAD").
Vargo 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. Vargo 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, he was offered the position contingent upon his passing a drug test scheduled for three o'clock that afternoon at Morristown Memorial Hospital. Vargo 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, Vargo 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 Vargo provided a urine sample at the hospital, the sample was sent to an independent clinical laboratory for analysis. The sample tested positive for morphine.
Per company policy, NECA did not reveal to Vargo 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 Vargo 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. Vargo mentioned that he had eaten a poppy seed bagel on the morning of his drug test. Later, he provided documentation to NECA Human Resources personnel from his pharmacy identifying the medications he had taken in the two weeks prior to his drug test. NECA's Executive Director of Human Resources directed that plaintiff's urine sample be tested a third time.
Subsequently, NECA Human Resources personnel contacted the testing laboratory which confirmed that none of plaintiff's medications would have caused the positive result for morphine. As to whether eating a poppy seed bagel could have caused the positive result, the laboratory advised that this was a possibility but 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, NECA's Executive Director of Human Resources then instructed that Vargo's job offer should be withdrawn and that the temporary employment agency be advised that his temporary assignment with NECA was being terminated based upon his positive drug test result.
The Court's Opinion
Vargo brought suit alleging that NECA's drug test requirement constituted an 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 form the basis for a wrongful discharge claim base 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 because of all of the medications he was taking.
In an extensive opinion, Judge Dumont in the Law Division granted NECA's motion for summary judgment, and Vargo appealed. The Appellate Division affirmed largely for the reasons expressed by Judge Dumont.
As to Vargo'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 Vargo'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. Although the New Jersey Supreme Court in Hennessey found no violation of public policy because that case involved drug testing a current employee in a safety-sensitive position, whereas plaintiff was applying for a non-safety-sensitive 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 employee 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 handicap discrimination claim, 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 the testing lab whether 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."
Vargo is of obvious significance to private employers with drug free workplace policies in that it affirms their right to use job applicant drug screening without limits as to the types of jobs for which testing is required as a condition of employment and without need for individualized suspicion. Employers should take care, however, that a job applicant's privacy concerns with regard to the manner the test is administered are adequately addressed as they were in Vargo. The case is also significant on the issue of "pretext" in discrimination cases. When an employer defends a claim of discrimination by maintaining that its actions were taken pursuant to a non-discriminatory company policy, whether or not it has selectively enforced its policy will likely become the key issue on whether the employer is using the policy as a pretext to discriminate.
Richard S. Zackin is a Director in the Employment Law Department of Gibbons, Del Deo, Dolan, Griffinger & Vecchione. He can be reached at (973) 596-3869.