Seyfarth Synopsis: The Ninth Circuit recently concluded that job applicants are not entitled to compensation for time devoted to pre-employment drug tests because an employment relationship has not yet been formed. The Ninth Circuit held that the “control test” does not apply to job applicants, and that, under California contract law, the applicants had no contract for employment until they passed the pre-hire drug tests. Johnson v. WinCo Foods.
Facts
On August 23, 2017, Plaintiff Alfred Johnson filed a class action complaint in California state court alleging that he was an employee when he took a drug test as part of WinCo Food’s “contingent job offer.” Johnson asserted claims under the California Labor Code and California’s Unfair Competition Law, seeking compensation for the time and expenses (mileage) associated with traveling to, and taking, the drug test. (WinCo paid the cost of administering the drug test). WinCo Foods removed the case to federal court under the Class Action Fairness Act.
The District Court’s Decision
After the District Court granted Johnson’s motion for class certification, both parties moved for summary judgement on the substantive claims. The District Court granted summary judgment in WinCo Food’s favor, holding that Johnson and the class members were not employees when they took the drug test under either a “control theory” or “contract theory” of employment.
The Ninth Circuit’s Decision
The Ninth Circuit Court affirmed the District Court’s ruling, noting the lack of “authoritative California state court” guidance on this recurring issue. It declined to send the question to the California Supreme Court, however, because “California law is clear”: Johnson and the other class members “were not yet employees” when they took the drug tests and thus were not owed any compensation for any associated time and expenses.
The Court first held that the “control test” established by the California Supreme Court in Borello and Martinez does not apply to job applicants taking a drug test. This is because “control over a drug test as part of the job application process is not control over the performance of the job,” and “class members were not performing work for an employer when they took the preemployment drug test; they were instead applying for the job.”
The Court rejected Johnson’s suggestion that pre-employment drug screening is akin to the (possibly compensable) interviews that staffing agencies require individuals to attend prior to receiving job placements with staffing agency clients. The “key difference,” the Court noted, is that staffing agency workers “were doing the employment agency’s work when they went to the job interviews, whereas Johnson and fellow class members were not doing work for WinCo when they took the drug tests.”
The Ninth Circuit then addressed Johnson’s “contract theory”—namely, that an employment contract was formed the moment class members accepted WinCo Food’s contingent job offer, and that the drug test was merely a “condition subsequent” allowing WinCo to terminate the employment relationship in the event of a drug test failure. The Court rejected this argument, noting that “WinCo went to great lengths when the verbal offer was made to communicate that its job offer was conditional.” The Ninth Circuit therefore concluded that passing a drug test was a “condition precedent” to contract formation, such that there was no employment contract until the contingency was satisfied.
WinCo was represented by Seyfarth Shaw.
What Johnson Means for Employers
Johnson makes clear that employers do not need to compensate job applicants for the time and expenses related to drug testing during the application process (except for the cost of the drug test, which employers should bear), and that the employment relationship does not begin until the condition is satisfied. To avoid any doubt, employers should be careful to expressly articulate that an offer of employment is contingent on passing the drug test, and explain what must be done to satisfy the contingency.
