Shortly after Jeri McVey reported to work July 9, 2003, she was surprised to find herself peeing into a cup. Her employer, Des Moines, Iowa-based National Organization Service (NOS), had decided to administer random drug tests. McVey tested positive for marijuana. As a federal contractor, the magazine subscription clearinghouse was required to meet federal “Drug-Free Workplace Act” standards. So McVey had to go.

McVey, however, didn’t go quietly.

In November 2003 she sued, alleging wrongful discharge, because NOS’s drug test did not comply with state law. NOS petitioned for summary judgment, citing the positive drug test and the fact McVey was an at-will employee. The district court granted summary judgment.

Not so fast, the Iowa Supreme Court said, in an Aug. 11 opinion from Justice James Carter. Citing factual questions about the legality of NOS’s drug-testing program under state law, the court reversed and remanded the case.

“You can’t ignore state drug-testing laws,” says Nancy Delogu, a shareholder at Littler Mendelson. “There are a lot of requirements in these laws, and nit-picky details got the employer into trouble.”

Getting Busted

Iowa’s drug-testing laws give employers flexibility in testing employees for alcohol, marijuana and other drugs and permit employers to conduct random drug tests under certain conditions. But as McVey v. NOS demonstrates, employers must follow the letter of the law in their drug-testing programs.

“The courts will apply a pretty strict interpretation of the statute,” says Roger Kaplan, a partner in Jackson Lewis.

The Iowa Supreme Court found NOS might have fallen short of the statute’s requirements when it administered McVey’s test. Specifically, Iowa law requires employers to inform employees and applicants in writing about the company’s drug-testing policies, and provide “uniform requirements for what disciplinary or rehabilitative actions an employer shall take” if an employee tests positive for prohibited substances.

McVey acknowledged receiving the company’s Drug-Free Workplace Act notice, but denied receiving notice of NOS’s specific policies. Further, Carter found the documents NOS presented didn’t satisfy the Iowa statute because they did not provide a uniform discipline policy.

The court also rejected NOS’s argument that the state’s public policy was on its side. Carter specifically disagreed with NOS’s reliance on Springer v. Weeks & Leo Co.–an opinion Carter wrote in 1988. NOS used Springer to argue public policy encourages a drug-free workplace, and therefore employers should be able to discharge at-will employees that test positive for drug use without restriction.

“The present dispute does not involve an issue of court-declared public-policy violations such as were found to exist in the Springer case,” Carter wrote.

In Springer, the court found an employer wrongfully discharged an employee because she had pursued a workman’s compensation claim, an action the court said “offends against a clearly articulated public policy.”

Carter said a more pertinent precedent was Tow v. Truck Country of Iowa Inc. In this 2005 case, a job applicant’s drug test came back inconclusive, and the employer unlawfully insisted the applicant pay the cost of retesting.

“Discharge from employment may be based on an employee drug-testing program only if that program is being carried out in compliance with the governing statutory law,” Carter wrote. Thus an employer cannot defend a firing on the basis of public policy if its procedures violate the law.

“Statutes involving drug testing impinge to some degree on the general employment-at-will doctrine, and so does the Civil Rights Act, OSHA and about a thousand other state statutes,” Kaplan says.

Dangerous Cocktail

McVey is an unusual case, but the situation that led to it could happen anywhere. Iowa’s drug-testing laws are typical of state drug-testing statutes–with a few exceptions. For example, Iowa employers must deliver positive test results via certified mail. Such peculiarities affect employers in virtually every state.

“Some state regulations provide technical requirements for lab procedures and other aspects of testing,” Kaplan says.

This can pose a particular challenge for multi-state employers, who face a hodgepodge of state and federal statutes and case law. Federal contracting guidelines might require observed specimen collections, for example, but several states restrict that practice.

As McVey demonstrates, employers risk wrongful discharge claims if their testing programs don’t meet all applicable standards–not just those that seem most pertinent to a given workplace.

“Companies regulated under Department of Transportation guidelines might assume DOT requirements are the gold standard, and that is not the case,” Delogu says. “Employers can’t assume their policies are in compliance.”