North Carolina Court Of Appeals Recognizes Wrongful Discharge Claim Based on Employer's Failure to Follow State Drug Testing Law

In Garner v. Rentenbach Constructors, Inc., 129 N.C. App. 624, 501 S.E. 2d 83 (1998), the North Carolina Court of Appeals ruled that an at-will employee terminated after testing positive for drug use could bring a wrongful discharge lawsuit against his employer because the employer failed to comply with one of the procedural requirements of North Carolina's employee drug testing law. This decision widens the scope of North Carolina's cause of action for wrongful discharge in violation of public policy. The employer has appealed to the North Carolina Supreme Court, which may eventually reverse the decision. Nevertheless, the Court of Appeals' ruling should spur employers in the Carolinas to re-evaluate their current drug testing policies and practices.

Garner had worked for Rentenbach Constructors for almost a year and a half before his termination. Six months after the company distributed a copy of its new substance abuse policy, Garner was asked to submit to a random drug screening. Garner's test results came back positive and his employment was terminated.

In his lawsuit, Garner argued that his test results were incorrect, and that Rentenbach Constructors had failed to follow the testing procedures set forthin N.C.G.S. § 95-232. This section requires, among other things, that employers use an "approved" laboratory to conduct or confirm employee drug tests. The statute defines an "approved" laboratory as "one which performs controlled substances testing and which has demonstrated satisfactory performance in forensic urine drug testing programs of the U.S. Department of Health and Human Services or the College of American Pathologists for the type of tests and controlled substances being evaluated." N.C.G.S. § 95-231(1). Rentenbach Constructors had contracted with a laboratory which was not "approved" under this definition to perform all of the company's collection and testing functions.

Because Rentenbach Constructors had terminated his employment based solely on the results of his technically improper drug test, Garner argued that his termination violated North Carolina public policy. In response, the company argued that since the statute already authorized the Commissioner of Labor to conduct investigations and levy civil penalties for violations, Garner was limited to those remedies and could not pursue an independent lawsuit. The company also argued that its inadvertent, technical violation should be excused because the company had acted in reliance on information provided by the laboratory. The court rejected both of these arguments. According to the court, the availability of alternative remedies did not prevent Garner from pursuing a wrongful discharge action based on the public policy exception to the employment-at-will rule. Additionally, because the company had failed to follow the clear "approved laboratory" requirement of the statute, the court considered its professed "good faith" irrelevant.

In the wake of Garner, any disciplinary action taken after a positive drug screen may be subject to challenge from both the Commissioner of Labor and an employee, unless North Carolina employers can demonstrate strict compliance with the drug testing law. If employers choose to collect and test samples in-house, they should make sure that sample collection procedures are fair and reasonable. In-house testing programs also must contain safeguards to limit substitution or "chain of custody" errors. Of course, samples testing positive for illegal substances must be sent to an "approved" laboratory for confirmation. If the employer chooses to shift all of the collection and testing responsibilities to an approved, third-party laboratory, an appropriate contractual arrangement may be necessary to limit the employer's exposure for the laboratory's potential errors.

South Carolina has not adopted similar procedural requirements for employee drug testing. However, employers in both states also may face lawsuits for invasion of privacy or intentional infliction of emotional distress if drug testing is carried out in a way that would be considered offensive to a reasonable person. Communicating results of drug tests beyond the management group or to others without a legitimate need to know the results may further expose the employer to liability for defamation. By adopting and enforcing a written substance abuse testing policy, employers can maintain compliance with applicable drug testing laws, and just as importantly, establish the credibility of the testing program in the eyes of the workforce.