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IMA Human Resources Blog

Second Chances: Employers Rethink Zero Tolerance Substance Abuse Policies

by Emmanuel V.R. Boulukos

Ice Miller LLP is an IMA Member

Like many states in the Midwest and across the country, Indiana has been hit hard by opioid abuse, and the abuse of other illicit substances. According to a 2019 report published by the Indiana State Department of Health, there were more than 1,800 drug overdose deaths in Indiana during 2017, the 14th highest rate in the U.S. The effects of this deadly epidemic impact all facets of a community, and the workplace is no exception. Employee wellness, safety, and absenteeism are all significant concerns.

In the past, many employers would not consider retaining an applicant or employee who failed a drug or alcohol screen. But in this tight labor market, and in light of our society’s evolving understanding of the nature of addiction, many employers are rethinking the zero tolerance approach to substance abuse and are building in mechanisms to allow employees a second chance. Typically, these second chance policies require the employee to take active steps to deal with the underlying issue, which helps increase the chances of long term success.

The key to making this approach work from a legal perspective is having the right policies in place—policies that are legally compliant and appropriately tailored to the realities of your workplace. Two primary considerations in building such policies are: (1) the potential risks and rewards of providing employees with a second chance; and (2) general legal restrictions related to drug and alcohol testing and the treatment of employees with substance abuse issues.

Balancing Risks and Rewards of Second Chance Policies

In terms of legal liability beyond the employment relationship, the main concern when retaining an employee who violates your substance abuse policy is a potential claim of negligent hiring or negligent retention. In other words, if you hire or retain an employee who fails a drug or alcohol screen and he or she injures someone within the course of his or her employment while under the influence, your company could be on the hook.
Consequently, in determining whether—and under what circumstances—to provide second chances, factors to consider include the level of danger inherent in the work being performed, potential risks to the public, and the ability to insure against potential liability. For example, a more liberal approach to second chances may be appropriate in an office or retail setting, while stricter return-to-work requirements or no second chances may be warranted in a heavy industrial environment.

Notably, a 2018 law passed by the Indiana Legislature (HEA 1007) provides a potential legal defense to employers who are sued for negligent hiring of an employee who was given a second chance after a positive drug or alcohol screen. In order to take advantage of this defense, employers must meet certain statutory requirements, which were fleshed out in guidance issued by Indiana Workforce Recovery earlier this year. Employers interested in establishing a program that complies with HEA 1007 should consult with counsel regarding the employer guidelines and the scope and availability of the potential defense.

Legal Restrictions Under ADA and FMLA

Regardless of whether your substance abuse policy provides for second chances or takes a zero-tolerance approach, it must be designed to comply with the limitations and protections provided by the ADA and Family and Medical Leave Act (FMLA), as well as state and local laws, where applicable.

As a general rule, when an employee tests positive for illicit drug use or is found to be under the influence of alcohol at work, he or she may be disciplined or terminated consistent with the employer’s policies, so long as those policies are enforced in a non-discriminatory manner. However, it is important to note that the ADA prohibits employers from discriminating against applicants or employees due to alcoholism, past drug addiction, or because they are receiving (or have received) treatment for a drug or alcohol problem. 
As far as the scope of permissible testing, under ADA and Indiana law, employers have wide latitude to test for illicit use of opioids and other drugs, whether in the pre-employment context or in terms of random or reasonable suspicion testing during employment.  But there are some key caveats, especially when it comes to alcohol testing and prescription medications.

In many substance abuse policies, testing for illicit drug use and alcohol are lumped together. This is a problem, because the ADA protects alcoholism as a disability, but not current illicit drug use. Because alcoholism is a disability for ADA purposes, the ADA’s strict rules about employer medical exams apply to alcohol testing. For most employees (with special exceptions for certain employees, such as drivers subject to mandatory testing under U.S. Department of Transportation safety regulations), that means alcohol testing can only be performed at the post-offer stage—i.e., the applicant has the job so long as he or she passes the screen—or based on a reasonable suspicion that the employee is under the influence.

Another key issue is the legal use of prescription opioids and other medications. In terms of testing, any good policy should provide that a medical review officer will contact the applicant or employee to determine whether a positive drug screen was the result of a legally prescribed medication. If it was, the test should be considered negative.

Of course, certain prescription medications also raise safety concerns. Because of the ADA’s limitations on medical inquiries, an across-the-board policy of requiring employees to disclose the use of prescription medications, including opioids, is not advisable. If there is a specific concern about safety or the employee’s ability to perform job functions due to a prescription medication, that concern needs to be analyzed within the ADA’s reasonable accommodation framework, which may include obtaining additional information from the treating physician.

Finally, under the FMLA, leave for substance abuse treatment is potentially protected leave if other general eligibility requirements for taking FMLA are met. The same is true of FMLA leave relating to a family member’s substance abuse treatment. Notably, the FMLA prohibits employers from interfering with an eligible employee’s right to take leave for these reasons, or retaliating against them for doing so.

The Right Fit for Your Workplace

Ultimately, beyond the obvious necessity of legal compliance, designing a good substance abuse policy is about finding the appropriate fit for your workplace. For many employers, that means providing a mechanism by which employees struggling with substance abuse can get back to work—under certain circumstances. With the right legal guidance, employers should not be afraid of breaking from the zero-tolerance model and taking a more nuanced approach that has significant potential benefits for the employer, the employee, and the community. 

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