Regardless Of Your State Or Local Jurisdiction, Make Sure There Is A Bona Fide Medical Review Officer Reviewing Your Drug-Test Lab Results

by Dickinson, Mackaman, Tyler & Hagen, P.C.
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Dickinson, Mackaman, Tyler & Hagen, P.C.

“I recently reviewed a client-received copy of a letter a Medical Review Officer sent to an individual who tested positive on a random DOT drug test. It was  obvious to me that the individual didn’t have any clue about the many safeguards that are built into the DOT substance abuse testing regulations found in 49 CFR Part 40.  I include within that observation the standards or protocols of 49 CFR Part 40, Subpart F - Drug Testing Laboratories, of 49 CFR Part 40, Subpart G - Medical Review Officers and the Verification Process, and of 49 CFR Part 40, Subpart H - Split Specimen Tests.  Conversely, it was obvious to me that this MRO was not only very familiar with those standards and protocols, he (and it was a male) took his obligations as an MRO very seriously – to the benefit of both any tested individual and the employer of such individual.

I am a fan of the requirement of Iowa’s private sector drug testing statute that before the results of a test under that law are reported to an employer, a medical review officer must review and interpret any confirmed positive laboratory test results, as well as any relevant biomedical information. 

The federal case of EEOC v. M. G Oil Company, Case # 4:16-cv-04131-KES (S.D. S.D. 2018) is instructive for employers who conduct drug tests of applicants and employees, and highlights the employer’s obligation to be sure a medical review officer is involved in the process.  Read on.

M.G. Oil conditions employment upon successful completion of a post-offer, pre-employment drug test.   M.G. Oil had a contract with TestPoint Paramedical LLC to conduct those drug tests.  M.G. Oil contended that its contract with TestPoint required TestPoint to send any non-negative lab result to an MRO for review before those results were reported to M.G. Oil.  M.G. Oil contended that under this contract, TestPoint was required to involve an MRO, whose job would include determining whether the laboratory results were the result of lawful use of a drug.  If so, TestPoint was to report the test as “negative” to M.G. Oil.

After an applicant for a job at M.G. Oil was conditionally offered employment, she provided a specimen for a post-offer, pre-employment drug test.  M.G. Oil received a report of a “nonnegative” test result for her test from TestPoint.  M.G. Oil revoked her job offer.  The applicant reportedly then told M.G. Oil the non-negative test result was due to her lawful use of a prescription pain medication, but that did not change M.G. Oil’s decision to revoke her offer of employment.  In my opinion, most companies are not competent to evaluate any medical explanations of applicants who have a non-negative laboratory test result. Thus, in the abstract, I have no problem with the fact that M.G. Oil refused to change its rejection of this applicant for the position she sought.  I would believe that M.G. Oil believed that a function of the MRO review was to have a competent professional evaluate such explanations.

Claiming to fit the description in the Americans with Disabilities Act of a person with a disability, the applicant filed a formal complaint with the EEOC. The EEOC, itself, initiated litigation against M.G Oil in federal court in South Dakota over the incident.

Given the contractual relationship between itself and TestPoint, M.G. brought TestPoint into the EEOC’s ADA action as a third-party defendant.  For its claim against TestPoint, M. G. Oil asserted that if it was found liable for unlawful discrimination, TestPoint should be liable to it for all (indemnification) or part (contribution) of the judgement.  M.G. Oil contended this was because TestPoint either had breached its duties under the contract with M.G. Oil, or was negligent in failing to involve an MRO in the testing process. 

The EEOC promptly filed a motion to strike the third party complaint. TestPoint joined the EEOC’s motion to strike it from the litigation.  TestPoint also filed its own motion seeking dismissal of M.G. Oil’s claims against it for failure to state a claim upon which relief may be granted.

Stating that the Eighth Circuit Court of Appeals (which includes Iowa) has not ruled on the question of whether a third-party complaint for indemnity or contribution is permissible in an action under the ADA, federal judge Karen E. Schreier began her August 2017 ruling on the motions with an examination of the Supreme Court’s opinion in Northwest Airlines, Inc. v. Transport Workers Union.

Northwest Airlines arose out of a class action by female cabin attendants for violations of Title VII and the Equal Pay Act.  The decisions at issue in the Northwest Airlines case were made in accord with requirements contained in a collective bargaining agreement between Northwest Airlines and the Transportation Workers’ Union.  Hence, Northwest Airlines sought to bring TWU into the action as a third party defendant.  A unanimous Supreme Court did not allow it. 

The Supreme Court noted that the liability of an employer for unlawful discrimination is entirely a creation of federal statute.  The Court continued that while a federal court may have the power to interpret ambiguous or incomplete provisions of a federal statute, it does not have the power to “fashion a new rule, or to provide a new remedy which Congress has decided not to adopt.”  “The presumption that a remedy was deliberately omitted from a statute is strongest when Congress has enacted a comprehensive legislative scheme including an integrated system of procedures for enforcement.”  After Northwest Airlines, it is clear that an employer cannot bring a third party into Title VII litigation on claims of contribution or indemnity. 

Relying on Northwest Airlines, Judge Schreier dismissed M.G. Oil’s third party claims against TestPoint, removing TestPoint from the litigation.  Attorneys now have case law in the Eighth Circuit to prohibit an employer / defendant in an action under the ADA from successfully bringing a third party action against a third party defendant for indemnification or contribution.

The case continued without TestPoint.  On May 18, 2018, Judge Schreier approved a negotiated Consent Decree submitted for approval by the EEOC and M. G. Oil.  The Consent Decree has twelve numbered pages.  It includes an approved sample “Notice to Employees” that M.G. Oil is required to not only physically post but also post “on any intranet site where employees regularly have access.”  There also is required training for certain supervisory employees (with posting of the training materials on an M.G. Oil website so they are available to all employees) and periodic reports to the EEOC for two years. 

As part of the consent decree, an injunction was entered prohibiting M.G. Oil from rejecting an applicant, “based on a non-negative result of a drug test where the person’s result was confirmed by a Medical Review Officer (MRO), paid by [M.G. Oil], to be caused by lawfully prescribed medication.”  The terms of the injunction also require M.G. Oil to notify any of its vendors performing drug tests on applicants or employees that the vendors “must provide any applicant or employee who has a non-negative test result with a reasonable opportunity to explain the result, and that they shall permit the applicant or employee the opportunity to provide documentation that the non-negative result was caused by a lawfully prescribed medication.”

For non-lawyers, and maybe for some lawyers, the fact that MG. Oil is subject to an injunction is significant.  18 U.S. Code § 401 gives a federal court the power, “to punish by fine or imprisonment, or both, at its discretion, such contempt of its authority [as is found in a] [d]isobedience or resistance to its lawful writ, process, order, rule, decree, or command.”  (Emphasis added) There are no ranges, and no maximums, so the judge’s discretion is broad.  So, how mad is the judge at your contempt for her / his authority if you do not comply with a provision in a Consent Decree?

About one-half of one page of the Consent Decree is devoted to the “Individual Remedy.”  M.G. Oil will pay the applicant the total gross sum of $45,000.00. “Payment will be evidenced by issuance of an IRS form 1099.” 

Lessons for Iowa (and other) employers from M.G. Oil:

  1. If you are the employer challenged in an action under Title VII of the Civil Rights Act or the ADA, you are the one who will be “on the hook” for the judgment, settlement, or Consent Decree, even if your action was based on someone else’s faulty information or processes.  There is no shifting the responsibility to for “indemnification” or “contribution” to a third party within that lawsuit.  The results in Northwest Airlines and M.G. Oil do not preclude the employer from filing its own, separate lawsuit against the third party to seek indemnification or contribution, however.    
  1. The ADA excludes from the scope of individuals protected by the statue a person who “is currently engaging in the illegal use of drugs” if the employer takes action based on such use. The statute continues by excepting from the exclusion an individual who, “is erroneously regarded as engaging in such [illegal] use, but is not engaging in such [illegal] use.”  Thus, a person who has a physical or mental condition which is being treated by prescription medication, but whose prescription medication will yield a “laboratory positive” result in a drug test may be erroneously regarded as not protected by the ADA.  At least that is the case if an employer does not have procedures in place to determine whether that person is illegally using the prescription drugs.  Thus employers everywhere need to make sure their drug testing policies include some provision for the person tested to provide medical information that may explain the legality of laboratory-detected drug use, as well as to provide for a qualified medical review officer any relevant biomedical information before releasing test results to the employer.
  1. It makes good sense for employers covered by Title I of the ADA who are requiring a drug test of applicants or employees to have a vendor collect the specimen and (maybe another vendor) conduct the testing of the specimens.  I believe a company’s testing protocol should give the specimen donor (that is, the person who is being tested) the ability to provide relevant medical information that might explain the laboratory test result to a qualified medical professional.  DOT workplace drug testing regulations are probably the “gold standard” in this regard.  So check out those regulations at  49 CFR Part 40, Subpart F - Drug Testing Laboratories, of 49 CFR Part 40, Subpart G - Medical Review Officers and the Verification Process, and of 49 CFR Part 40, Subpart H - Split Specimen Tests.
  1. Employers also are encouraged to use a Medical Review Officer who meets the standards under the DOT regulations at 49 CFR § 40.121 in their testing policies or protocols.  And make sure the MRO follows the general standards of contacting the donor where there is a positive laboratory test result to seek information on whether legitimate medical information exists to explain it as a possible legal use. 49 CFR § 40.131(a).  (“When, as the MRO, you receive a confirmed positive, adulterated, substituted, or invalid test result from the laboratory, you must contact the employee directly (i.e., actually talk to the employee), on a confidential basis, to determine whether the employee wants to discuss the test result. In making this contact, you must explain to the employee that, if he or she declines to discuss the result, you will verify the test as positive or as a refusal to test because of adulteration or substitution, as applicable.”)
  1. Non-DOT employers, regardless of jurisdiction, are encouraged to make sure their Medical Review Officer will apply the appropriate federal and state standards applicable to the testing being done.  Blind adherence by the MRO to the DOT standards may get the employer in trouble.  For example, while use of marijuana remains illegal under federal law – and under DOT standards, an MRO with a “positive” laboratory result for marijuana will give a “non-negative” report to the employer – in some jurisdictions, an employee using medical marijuana in treatment of a chronic illness may qualify for protection under a state’s disability discrimination laws.
  1. Have the Medical Review Officer’s report come directly to you, the employer. If as an employer you have mandated following DOT protocols even for your non-DOT drug testing, the MRO should not confirm a positive laboratory test result to you and then tell you “but, there is a legitimate medical explanation.”  49 CFR § 40.163(c).  A MRO doing DOT testing has the “responsibility to report all drug test results to the employer.”  That DOT protocol MRO report is going to inform the employer of the “result of the test (i.e., positive, negative, dilute, refusal to test, test cancelled) and the date the result was verified by the MRO.”  Only if the MRO concludes that there is no legitimate explanation for the laboratory results is the MRO going to verify the laboratory results and tell the employer “[f]or verified positive tests, the drug(s)/metabolite(s) for which the test was positive.” 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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