Dura Automotive Wins New Trial Under ADA On Fired Workers' Challenge to Drug Policy

Aug. 26 — A Tennessee auto glass manufacturer that fired production employees who tested positive for prescription drugs that potentially affect their ability to operate machines safely may not be liable under the Americans with Disabilities Act, a divided U.S. Court of Appeals for the Sixth Circuit ruled Aug. 26.

In a 2-1 decision, the Sixth Circuit reversed an $870,000 district court judgment in favor of six former employees of Dura Automotive Systems Inc., who prevailed at a jury trial on their claims the company's drug testing program violated the ADA as a medical exam and disability-related inquiry without business justification.

The Sixth Circuit majority said the district court erred by holding as a matter of law that Dura's testing program was a medical examination or disability-related inquiry under the ADA, which an employer must prove is job-related and consistent with business necessity.

Instead, the court said Dura's program wasn't intended to force employees to disclose health conditions or potential disabilities but rather to determine if an individual's drug use made it unsafe for the person to operate machinery. Dura gave employees who tested positive an opportunity to stop using such drugs but terminated those who didn't do so.

A jury on remand should resolve factual disputes about whether Dura inquired into employees' health conditions or whether the information about legal drug use gleaned from the testing program inevitably disclosed to the company the nature of an employee's impairment or disability, the court said.

Dissent Would Uphold Plaintiffs' Victory

In dissent, Judge Julia Smith Gibbons said the majority too narrowly interpreted the ADA's restrictions on medical exams and disability-related inquiries as well as an Equal Employment Opportunity Commission enforcement guidance.

“Because Dura's drug-testing protocols did not disclose what precise impairments its employees had, only that they had impairments, the majority reasons that [Dura's] conduct was lawful,” the dissent said. “But nothing in the statute, the EEOC's guidance, or our case law counsels so narrow an interpretation.”

“Congress prohibited medical inquiries unless job-related and justified by a business necessity,” Gibbons wrote. “There is no business justification for an employer to inquire into whether its employees are impaired if the employer is going to disregard the nature and limitations of that impairment. I would hold that [the ADA] proscribes inquiries designed to determine whether an employee is impaired, just as it proscribes inquiries designed to determine an employee's specific impairment.”

Dura in 2012 had settled for $750,000 a separate ADA lawsuit brought by the EEOC regarding the company's policy of testing plant employees for legally prescribed drugs and alleged failure to keep those results confidential.

Dura's program wasn't meant to force disclosure of health conditions or potential disabilities, the appeals court said, but rather to determine whether drug use made it unsafe for a person to operate machinery. A jury should resolve factual disputes about whether Dura asked about health conditions or whether it got information about the nature of a worker's disability, the majority said.

Policy Adopted After Workplace Accidents

The ADA provision, codified at 42 U.S.C. § 12112 (d)(4)(A), prohibits employers from requiring “medical examinations” or from “making inquiries of an employee as to whether such an employee is an individual with a disability” unless the employer shows the examination or inquiry is “job-related and consistent with business necessity.”

Dura, which manufactures windows for cars, trucks and buses at a Lawrenceburg, Tenn., plant, in 2007 instituted a new substance-abuse policy after experiencing some workplace accidents attributable to employees' use of illegal and prescription drugs.

The policy barred employees from “being impaired by or under the influence” of alcohol, illegal drugs or legal drugs, including prescription and over-the-counter medications, if the employees' use of such drugs endangered others or affected their job performance.

Under a testing program run by Freedom From Self (FFS), a third-party administrator, employees who tested positive for “machine-restricted” drugs had their drug use reported to Dura. The company then informed the employees they would be terminated if they continued to use medication that contained warnings against use while operating machinery.

Jury Ruled for Fired Employees

Seven Dura employees fired under the company's policy sued under the ADA in 2008. They alleged violation of the ADA's medical exams and inquiry provision as well as the act's prohibition on employers using qualification standards that tend to screen out individuals with disabilities (42 U.S.C. § 12112(b)(6)).

The federal district court initially ruled that the plaintiffs, even though they didn't allege any disabilities, had standing to pursue an ADA qualification standards claims. In 2010, however, the Sixth Circuit ruled that only individuals with qualifying disabilities could pursue ADA claims alleging an employer used unlawful qualifications standards.

On remand, the district court held a jury trial only on the plaintiffs' claims that Dura violated the ADA's medical exams and inquiries provision. During the 2011 trial, the district court held as a matter of law that Dura's testing program was a medical exam or disability inquiry within the meaning of the ADA provision.

The jury subsequently rejected Dura's job-relatedness and business necessity defense, returning an $870,000 verdict for six fired employees. The district court denied Dura's post-trial motions and entered judgment for the plaintiffs.

Dura appealed, arguing the district court erred by holding as a matter of law that the company's drug testing program was a medical exam or disability-related inquiry under the ADA.

Beyond Alcohol and Drug Testing

Writing for the Sixth Circuit majority, Judge Deborah L. Cook said whether Dura's drug testing was a “medical examination” or “disability inquiry” under Section 12112 (d)(4)(A) “presents a close question because the ADA leaves those terms undefined.”

Although many ADA provisions shield only “qualified individuals with a disability” from discrimination, the court said Section 12112 (d)(4)(A) protects all employees from medical inquiries, regardless of whether they have a disability.

Dura argued that its drug-testing protocol sought no information about employees' physical or mental health, or even employees' general use of medications, but only whether employees ingested illegal drugs or prescription medications with machine-operation warnings.

Dura's testing, implemented by a third party to avoid unnecessary disclosure of employees' conditions, “defies easy categorization,” the court said. A separate ADA provision that exempts testing for “illegal use of drugs” from the act's restrictions on medical exams “offers little guidance here, because Dura's screening for prescribed medications exceeded its parameters,” the court said.

Both parties cited an EEOC enforcement guidance, issued in 2000, that defines “medical examination” and “disability-related inquiry” and provides examples, though none addresses Dura's specific type of drug testing, the court said.

The EEOC guidance outlines seven factors to consider in determining whether an employer's program is a “medical examination,” including “whether the test is designed to reveal an impairment or physical or mental health,” the court said.

The district court reasoned that if the ADA prohibits urinalysis testing for alcohol use, as the EEOC guidance suggests, then the act also must ban testing for other legal substances, including prescription medications, the Sixth Circuit said. “While this logic has facial appeal—especially given alcohol's association with vice and medicine's with virtue—it fails here,” the court said.

The EEOC itself offers “contrary instructions” on alcohol testing, as the ADA states that employers “may require that employees shall not be under the influence of alcohol” at work and the EEOC has said employers may test for that purpose, the court said.

The ADA's drug-testing exemption also “reaches further than the district court acknowledged,” the Sixth Circuit said. By permitting testing as to “the illegal use of drugs,” as opposed to the “use of illegal drugs,” the ADA appears to contemplate “circumstances where employees abuse medications not prescribed to them,” the court said.

A drug's legality therefore doesn't settle the medical examination question, the court said.

EEOC Guidance Applied

Four factors laid out in the EEOC's guidance seem to “tip the scales” toward finding Dura's testing program was a medical exam, while two others appear inconclusive, the court said.

But “arguably the most critical factor,” whether the test is designed to reveal an impairment or the employee's health condition, favors Dura, the court said.

“Dura denies using its drug-testing protocol to reveal impairments or health conditions, and a fair reading of the record supports this,” Cook wrote. “Far from a ‘free peek into an employee's medical history,' the evidence shows that Dura abstained from asking plaintiffs about their medical conditions, and only one plaintiff suggested that Dura directly asked her to identify the medication she was taking.”

The plaintiffs offered no evidence showing how FFS's urinalysis or post-test reporting of machine-restricted medications revealed information to Dura about their medical conditions, the court said. Rather, the urine tests revealed only the presence of certain enumerated chemicals, the court said.

The EEOC as an amicus said the presence of anti-seizure medication in a test result, for example, could divulge that specific impairment, but the court said it wouldn't “elevate this possibility into the probability necessary for ruling on this issue as a matter of law.”

“Although some prescription medications may reveal more than meets the eye because of brand-name recognition and ubiquitous marketing campaigns, an employer might struggle to discern medical conditions from the prescription drugs discovered here, which included a number of prescription pain relievers,” the court said. “Arguably, this attenuated testing protocol—with a narrow focus on substances containing machine-operation restrictions, as opposed to all prescription drugs—reflects Dura's effort to avoid obtaining information about employees' medical conditions and to avoid discriminating against all employees who take prescription drugs.”

The court said it can't decide “as a matter of law” that Dura used the drug tests to seek information about employees' medical conditions or “even that such revelations would likely result.”

At least one plaintiff claimed Dura directly asked her about her prescription medication and fired her for not reporting her use of the drug, the court said. If that testimony is credited, “a jury could reject Dura's explanation” for its drug testing “as a pretext for screening out potentially disabled employees,” the court said. But this “fact-sensitive inquiry presents a genuine issue of fact inappropriate for judgment as a matter of law,” the court said.

For similar reasons, the court said a reasonable jury also could find Dura didn't engage in “disability-related inquiries,” as illuminated in the EEOC's guidance.

“Dura denies asking employees about their general prescription-drug usage,” the court said. “Viewing the evidence in its favor, Dura's third-party-administered test revealing only machine-restricted medications differs from directly asking employees about prescription-drug usage or monitoring the same.”

A jury also could reasonably conclude Dura implemented a drug-testing policy “in a manner designed to avoid gathering information about employees' disabilities,” the court said.

Dura's testing protocol “pushes the boundaries” of the EEOC's medical exam and disability inquiry definitions and “certainly goes further” than “what the ADA's drug testing exemption specifically permits,” the court said.

But accepting as reasonable the EEOC guidance's definitions of medical exam and disability-related inquiry, the court said a jury “could decide these issues either way.” The Sixth Circuit therefore remanded for trial on whether Dura's drug testing constituted a medical exam or disability inquiry.

Judge Danny J. Boggs joined in the decision.

Dissent Cites ‘Blanket' Firing Policy

In dissent, Gibbons said regardless of whether the Dura drug tests were “initially designed” to seek out information regarding employees' health, they violate the ADA when considered along with the company's “blanket-firing policy” regarding employees with tests indicating use of certain legal drugs.

“[A] reasonable jury could conclude only that [the tests] were designed to detect an employee's health condition in order to carry out the unlawful purpose of the blanket firings,” the dissent said.

If the drug program were designed only to disclose machine-restricted medications for safety purposes, Dura wouldn't have any reason to fire plaintiffs whose doctors ensured Dura the employees could safely perform their jobs while taking medication, Gibbons wrote.

“This leads to the inescapable conclusion that Dura's drug tests, far from being designed to ferret out employees who could not safely operate machinery, were actually designed to reveal impairments in physical or mental health,” the dissent said.

John A. Beam III of the Equitus Law Alliance in Nashville represented the employees. Ben Boston of Boston Holt Sockwell & Durham in Lawrenceburg represented Dura Automotive Systems. James M. Tucker of the EEOC in Washington represented the EEOC as amicus.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Text of the opinion is available at http://www.bloomberglaw.com/public/document/Velma_Bates

Source BNA