Executive Summary: Employers with operations in multiple states have long known that Minnesota has the most restrictive drug and alcohol testing law in the country. To make matters more difficult for employers, the Minnesota law, by its terms, applied to any employer that "did business" in Minnesota, regardless of the employer's location or the location of the employment relationship at issue. Employers won a major court victory this week, however, when a federal court in Minnesota ruled that, despite its terms, the state's drug and alcohol testing law does not apply to employment relationships outside of Minnesota.
In the case at issue, a non-Minnesota company, which also does business in Minnesota, offered a Minnesota resident a job in another state. After accepting the offer, the employee submitted to a pre-employment drug/alcohol test, which was administered in Minnesota.
The employer received the drug test results after the employee had begun his new job, and based on those results ("diluted"), terminated his employment. The employee then filed suit, alleging that his discharge violated the Minnesota Drug and Alcohol Testing in the Workplace Act ("DATWA"). Among other things, the DATWA prohibits an employer from terminating an employee based on an initial screening result unless the employer verifies the result through a confirmatory retest.
The defendant, which was represented by Andy Tanick, the Managing Partner of FordHarrison's Minneapolis office, immediately brought a motion to dismiss, arguing that applying the DATWA to a non-Minnesota employer hiring someone to work outside of Minnesota would violate principles of state sovereignty as well as the employer's Constitutional right to due process. The plaintiff argued in response that the DATWA's definition of "employer" included any business located in, or doing business in, Minnesota, regardless of the location of the employment.
On August 19, 2014, the United States District Court for the District of Minnesota issued its decision, granting the defendant's motion to dismiss the Complaint.
The court held that under principles of state sovereignty, "it is beyond the power of a state to impose its laws upon another state." Thus, the court ruled that the DATWA, despite its broad definitions, can apply only where the employer or the employment relationship is located in Minnesota. According to the court, the state of the employee's residence and the location of the drug test itself are both irrelevant, because they are not referenced anywhere in the statute. The court further agreed with the defendant that applying the DATWA outside of Minnesota would lead to various absurd results. Finally, while the court did not reach the defendant's due process argument, it did note that applying the DATWA outside of Minnesota risked violating the Constitution's Commerce Clause, by allowing a state to regulate interstate commerce, which is solely within the domain of Congress.
Bottom line for Employers: Most non-Minnesota employers probably never imagined they were subject to Minnesota's drug and alcohol testing law when hiring an employee to work outside of Minnesota. That assumption, however, was contrary to a technical reading of the law's definitions, leading to DATWA lawsuits by non-Minnesota employees against unsuspecting non-Minnesota employers who did business in Minnesota. Those lawsuits should no longer occur, because the Minnesota federal court has clarified that despite its broad language, the state's drug/alcohol testing law does not apply where the employer and the employment relationship are both outside of Minnesota.