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FEBRUARY 2014 issue of
Rental Management

Risk Management: What you need to know about employee drug testing

For most companies, employees represent the biggest asset, but also the biggest exposure to liability or loss. Thanks to the nature of their business, this is especially true for rental store operators and one reason they should give serious consideration to pre-hire, post-accident/incident and post-hire random drug testing, says Ben Hipps, senior business consultant for Employers Resource, a professional employer organization headquartered in Atlanta.

“Rental company employees who service and maintain rental equipment are placing a huge liability on the company,” he says. “If their employees are impaired when they service or repair equipment, they could cause injury to customers or other employees. Secondly, one of the biggest worries any retail owner has is employee theft. Statistically, users of illegal drugs are likelier to be involved in  shrinkage than non-drug users.”

Employee drug testing isn’t only handy for reducing risk and pilferage, it also helps prevent the hiring of problem employees since most drug users will avoid companies that drug test. However, employers with pre-hire drug testing programs aren’t in the clear. It’s common for applicants to clean up their acts during the hiring process and then once on board, return to drug use — activity not always easily detected.

For example, a rental company driver with a commercial driver’s license (CDL) was required to take a post-accident drug test. Instead, he quit his job, telling his boss that he wouldn’t pass the test. In response, the rental company owner decided to implement random drug testing for his entire staff. As soon as he announced the program, three more employees quit.

There are no real downsides to employee drug testing, says attorney Charles Wilson, partner with the labor and employment group in the Houston office of law firm Cozen O’Connor. Still, employers need to ensure they don’t inadvertently make a legal misstep.

Employers must confirm their drug testing company is testing only for illegal drugs, Wilson says. “You don’t want to focus on certain legal/prescribed drugs. There are a few cases where the EEOC [Equal Employment Opportunity Commission] has filed lawsuits against companies in part because they tested employees for legal drug use — even though, in my opinion, the employer was smart to do so.”

The EEOC’s position was that testing for legal drug use was a violation of the Americans with Disabilities Act (ADA), Wilson explains, adding that this is a recent area of scrutiny for the EEOC and that he expects more companies will be targeted.

The ADA also prohibits making any sort of medical inquiry during the interview process, Wilson says. “You can’t even do this in the face of an obvious injury,” he says. “For example, if someone is sitting in front of you with their arm in a cast or some other obvious injury, you can’t ask the individual what they may have been prescribed for it.”

The guidelines for pre-hire drug testing are straightforward and generally well-known, Wilson says. It can be done only after the position has been offered, with the hiring contingent upon passing. However, laws concerning random drug testing — which Hipps considers “the most effective form of testing” — can vary by state.

Hipps believes random testing of all employees is ideal, but some states may not allow this. Consider Vermont. Federal law permits random testing of employees with CDLs, says Lon Finkelstein, chief financial officer for Vermont Tent Co. , South Burlington, Vt. However, in Vermont, company-wide random drug testing is illegal; only new hires can be tested at the time of their employment, he says.

There also may be some state requirements about how much notice employers must give before implementing random drug testing, says Wilson, although generally, none is required. Employers could make the announcement one day and begin testing the next, he says. In order to avoid charges of discrimination, if not testing all employees, select specific positions — such as service and repair or counter staff — and test all persons in the position, rather than focusing on just certain individuals.

Hipps advises seeking professional assistance when crafting a drug and alcohol policy, since having a poorly written one can prove riskier than having no program at all. Don’t tuck this policy away in the handbook, says Wilson. Instead, make it a separate handout that current employees or new hires read and sign in front of you. He also recommends inserting the right to randomly inspect/search desks, lockers, computers and so on.

“By doing this,” he explains, “you’re taking away any expectation of privacy in the workplace where it concerns drug testing.”

Maura Paternoster is risk manager for ARA Insurance in Kansas City, Mo. For more information, call 800-821-6580 or visit  ARAinsure.com.




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