Jerrie Laverne Sims Vs. Nci Holding Corporation

• Court: Supreme Court of Iowa
• Decided: January 9, 2009
• Docket: 07–1468
• Status: Published

Opinion

IN THE SUPREME COURT OF IOWA No. 07–1468

Filed January 9, 2009

JERRIE LAVERNE SIMS,

Appellant,

vs.

NCI HOLDING CORPORATION, et al.,

Appellee.

Appeal from the Iowa District Court for Mahaska County, Dan F.

Morrison, Judge.

Employee appeals from decision denying a claim against his

employer for violation of a statute authorizing random drug tests.

AFFIRMED.

Steven Gardner of Kiple, Denefe, Beaver, Gardner & Zingg, L.L.P.,

Ottumwa, for appellant.

Sean M. Becker of Vinson & Elkins, L.L.P., Houston, Texas, and

Gene R. La Suer of Davis, Brown, Koehn, Shors & Roberts, P.C., Des

Moines, for appellee. 2

HECHT, Justice.

An employee was discharged from employment after his urine

sample tested positive for an illegal drug. The employer provided the

employee with oral notice of his right to a confirmatory retest of the

sample. The employee subsequently filed this action alleging the

employer violated Iowa’s “drug-free workplaces” statute by failing to give

written notice of his right to request a confirmatory test. The district

court found the employer substantially complied with the statute by

providing written notice six months after the termination, but entered

judgment in the employee’s favor for attorney fees and costs. Although

we reject the district court’s finding of substantial compliance with the

statutory written notice requirement, we nonetheless agree with and

therefore affirm that court’s denial of legal and equitable relief for

wrongful discharge under the circumstances of this case. As the

employer failed to substantially comply with the notice requirement,

however, we affirm the judgment against the employer for attorney fees

and costs.

I. Factual and Procedural Background.

Jerrie Sims worked as an Operator at the American Building

Components manufacturing facility in Oskaloosa between July 2005 and

March of 2006. American Building Components is a division of the NCI

Holding Corporation. Sims’s position required him to oversee the

operation of steel decoiling machines, program the computers controlling

them, and operate a forklift in transporting bundles of steel weighing

approximately 10,000 pounds. The district court found Sims was

employed in a “safety sensitive position.” See Iowa Code § 730.5(1)(j)

(2005) (defining a “safety sensitive position” as “a job wherein an accident 3

could cause loss of human life, serious bodily injury, or significant

property or environmental damage . . .”).

When Sims was hired by American Building Components, he was

provided with and acknowledged receipt of the company’s employee

manual. The manual contained NCI’s “Drugs, Narcotics, and Alcohol”

policy prohibiting employees from being present on company property

while under the influence of alcohol or illegal drugs. The policy informed

employees that the company would randomly administer drug tests, and

that a positive test result would subject an employee to an array of

potential sanctions including immediate termination.

Sims was randomly selected for a drug test administered for NCI

by Houston Medical Testing Services, a professional third-party

administrator. He was taken to a medical center where a sample of his

urine was collected for drug screening on February 22, 2006. The

sample was sent by courier to Medtox Laboratories for screening. The

collection and testing of the specimen were entirely consistent with the

requirements prescribed in Iowa Code section 730.5.

Sims’s sample tested positive for amphetamines and

methamphetamine, a result which was confirmed by gas chromatography

with mass spectrometry. Medtox Laboratories sent the test results to

Houston Medical Testing Services where they were reviewed by

Dr. Jeffrey Britton. Dr. Britton, a certified medical review officer,

concluded Sims was likely under the influence of illegal

methamphetamine at the time of the test. Dr. Britton then contacted

Sims and allowed him an opportunity to explain the positive test result.

Sims reported he had visited a dentist on the day before the test, but

Dr. Britton opined this history was unlikely to have produced a positive

test result. 4

Dr. Britton reported the positive test result to Nancy Pitcock, a

representative in NCI’s human resources department. Pitcock informed

Sims’s supervisor of the positive test results on March 16, 2006, and

instructed the supervisor to inform Sims. When Sims contacted Pitcock

later that day, she again informed Sims of the positive test results and

orally informed him of his right to undertake a confirmatory test at his

own expense.1 Sims rejected the prospect of a confirmatory test,

claiming he did not have adequate financial resources to pay for such a

test. NCI terminated Sims’s employment on March 16, 2006.

Sims filed suit against NCI on April 13, 2006, claiming the

company violated Iowa Code section 730.5 by failing to notify him in

writing by certified mail, return receipt requested, of (1) the results of the

test, (2) his right to request and obtain a confirmatory test at an

approved laboratory of his choice, and (3) the fee payable by him for a

confirmatory test. Sims also claimed NCI’s “Drug, Alcohol, and

Narcotics” policy failed to make disclosures required by Iowa Code

section 730.5(9)(a)(1). Sims sought a declaration that NCI violated

section 730.5, injunctive relief, compensatory damages including back

pay, punitive damages, and an award of attorney fees.

NCI sent Sims’s attorney a letter by certified mail, return receipt

requested, on August 18, 2006 informing Sims of his right to a

confirmatory test. The letter also advised Sims of NCI’s unconditional

offer to pay for such a test. Sims accepted NCI’s offer and requested the

test be conducted by Laboratory Corporation of America. This test

confirmed the previous positive test results.

1Consistent with Iowa Code section 730.5(7), the original sample collected from Sims on February 22, 2006 had been divided into two components so as to preserve a “sufficient quantity to permit a second, independent confirmatory test . . . .” See Iowa Code § 730.5(7)(b). 5

The parties submitted the case to the district court on stipulated

facts. In its ruling on the merits, the court observed “it is unclear from

the statute whether a six-month delay in providing notice is compliance.”

Noting “common sense would tell one that notice should be sent to the

employee within a few days of the employer obtaining the results of the

test,” the court nonetheless found the delay caused Sims no direct

damage. The court concluded NCI’s written drug policy was

noncompliant with Iowa Code section 730.5(9) because it failed to

disclose Sims’s right to request and obtain a confirmatory test. However,

because NCI ultimately provided Sims the opportunity for a retest which

confirmed the previous positive result, the district court found “NCI

substantially complied with the statute by what they did, not by what

their policy said or did not say.” Despite NCI’s delay in giving written

notice of Sims’s right to retest, the court found Sims was orally advised

of this right on March 16, 2006 and later advised in writing as well.

The district court did not award Sims back pay or reinstatement as

he was found to have suffered no direct harm as a result of his

termination. The court did, however, order NCI to pay Sims’s attorney

fees and the costs of the action because Sims brought the action “as a

direct result of NCI’s failure to comply with the plain language of [section

730.5].” See Iowa Code § 730.5(15)(a) (authorizing the court to impose

“any other equitable relief as the court deems appropriate including

attorney fees and court costs”).

Sims appeals, contending the district court erred in (1) finding NCI

substantially complied with Iowa Code section 730.5, and (2) failing to

grant the requested legal and equitable relief for wrongful termination.

NCI cross-appeals, challenging the court’s ruling ordering NCI to pay

Sims’s attorney fees and the court costs. 6

II. Scope of Review.

We review the district court’s legal conclusions for correction of

errors at law and affirm its findings of fact if they are supported by

substantial evidence. Iowa Rs. App. P. 6.4, 6.14(6)(a); Tow v. Truck

Country of Iowa, 695 N.W.2d 36, 38 (Iowa 2005). Evidence is substantial

if a reasonable mind would accept the evidence as adequate to reach the

same findings. Frontier Props. Corp. v. Swanberg, 488 N.W.2d 146, 147

(Iowa 1992).

III. Discussion.

A. Substantial Compliance. We have not previously determined

whether strict compliance with the notice provisions of section 730.5, the

“drug-free workplaces” statute, is required or whether substantial

compliance will suffice. See Harrison v. Employment Appeal Bd., 659

N.W.2d 581, 586 (Iowa 2003); see also Munn v. Kraft Foods Global, Inc.,

455 F. Supp. 2d 925, 933 (S.D. Iowa 2006) (noting the decision in

Harrison did not resolve the question of whether strict or substantial

compliance was required).

“Substantial compliance is said to be compliance in respect to

essential matters necessary to assure the reasonable objectives of the

statute.” Superior/Ideal, Inc. v. Bd. of Review, 419 N.W.2d 405, 407

(Iowa 1988). In the broadest sense, section 730.5 is intended to protect

an employer’s right to ensure a drug-free workplace. Anderson v. Warren

Distrib. Co., 469 N.W.2d 687, 689 (Iowa 1991) (noting employers should

be allowed to take steps to ensure a drug-free workplace). Viewed more

narrowly, the legislature’s intent was to “ensure the accuracy of any drug

test serving as the basis for adverse employment action.” Harrison, 659

N.W.2d at 586–87. Accurate drug testing inures, of course, to the benefit

of both employers and their employees. Id. at 587. 7

The notice requirement within the statute focuses more directly,

however, on the protection of employees who are required to submit to

drug testing. Id. Section 730.5(7)(i)(1) accomplishes this protective

purpose by mandating written notice by certified mail of (1) any positive

drug test, (2) the employee’s right to obtain a confirmatory test, and (3)

the fee payable by the employee to the employer for reimbursement of the

expense of the test. Iowa Code § 730.5(7)(i)(1). Such a formal notice

conveys to the addressee “a message that the contents of the document

are important” and worthy of the employee’s deliberate reflection.

Harrison, 659 N.W.2d at 587. We now decide that if the employer’s

actions fall short of strict compliance, but nonetheless accomplish the

important objective of providing notice to the employee of the positive test

result and a meaningful opportunity to consider whether to undertake a

confirmatory test, the employer’s conduct will substantially comply with

the statute.

B. Did NCI Substantially Comply? Having concluded

substantial compliance with the notice provisions of Iowa Code section

730.5 may suffice, we next consider whether NCI’s actions constitute

substantial compliance. The statute creates guidelines permitting an

employer to conduct random drug tests pursuant to a written policy. See

Iowa Code § 730.5. In conducting drug tests, “[a]n employer shall adhere

to the requirements of [section 730.5] concerning the conduct of such

testing and the use and disposition of the results of such testing.” Id.

§ 730.5(4). While the statute permits an employer to conduct drug tests,

it also mandates protections must be afforded to employees. See id.

§ 730.5(7). “Although an employer is entitled to have a drug free

workplace, it would be contrary to the spirit of Iowa’s drug testing law if 8

we were to allow employers to ignore the protections afforded by this

statute . . . .” Harrison, 659 N.W.2d at 588.

In assessing whether NCI’s actions substantially complied with the

notice requirements, we address two parts of section 730.5: (1) section

730.5(9)(a)(1), the written policy provision, and (2) section 730.5(7)(i)(1),

the written notice provision. We conclude NCI substantially complied

with the written policy provision, but failed to substantially comply with

the written notice provision.

1. Written drug policy. Section 730.5(9)(a)(1) mandates:

Drug or alcohol testing or retesting by an employer shall be carried out within the terms of a written policy which has been provided to every employee subject to testing, and is available for review by employees and prospective employees. Iowa Code § 730.5(9)(a)(1) (emphasis added). It is undisputed NCI had a

“Drug, Narcotics, and Alcohol” policy that was published in a manual

and provided to all employees. The manual provided in relevant part:

If an employee tests positive on the initial test, the specimen will be sent for confirmation testing. The confirmation test (GC/MS) shall use a portion of the same test sample withdrawn from the employee or applicant for use in the first test. A Medical Review Officer (MRO) will review all confirmed positive test results, and will also review “chain of custody” handling for all specimens.

Sims received the manual and acknowledged in writing that he read the

provisions detailing the company’s internal policies pertaining to random

drug testing and the consequences of a positive test result. The policy

did not, however, notify employees of their right to request and obtain a

confirmatory test.

Sims contends the written policy failed to comply with Iowa Code

section 730.5(9)(a)(1) because it failed to notify him of his right to insist

upon a confirmatory test. The district court agreed and found NCI’s 9

written policy did not comply with section 730.5(9), but nonetheless

found NCI’s delayed offer of a confirmatory retest amounted to

substantial compliance. Upon our review of the applicable statute and

the record in this case, we conclude NCI’s written policy did comply with

section 730.5(9)(a)(1).

Sims correctly asserts NCI’s written policy makes no disclosure of

his statutory right to undertake a confirmatory test. However, we find

nothing in section 730.5(9)(a)(1) requiring the written policy to make

such a disclosure. The express language of the statute mandates the

policy disclose “drug or alcohol testing or retesting by an employer.”

Iowa Code § 730.5(9)(a)(1) (emphasis added). It does not require the

policy to address testing or retesting requested by an employee.

Although the legislature could have mandated disclosure of the

employee’s right to a retest in the employer’s written policy, it chose not

to do so. It chose instead to require such a disclosure after a positive

drug test in the written notice sent to the employee as required by

section 730.5(7)(i)(1) when that information is most urgently needed by,

and useful to, the employee. We will not read into the statute a mandate

which is not present in the plain language. See Eaton v. Iowa

Employment Appeal Bd., 602 N.W.2d 553, 556 (Iowa 1999) (noting we

focus on what the legislature said in the statute); Anderson, 469 N.W.2d

at 688 (stating we will not mandate a requirement which is not present

in the statute).

Sims does not deny he was provided a copy of NCI’s written drug

policy. Indeed, he signed a form acknowledging he had received and was

aware of the policy. NCI’s written drug testing policy provided ample

information regarding the company’s random testing policy and the 10

procedures of its implementation. We conclude NCI’s written policy

complied with the mandates of section 730.5(9)(a)(1).

2. Written notice of positive test result. Section 730.5(7)(i)(1) states:

If a confirmed positive test result for drugs . . . for a current employee is reported to the employer . . . , the employer shall notify the employee in writing by certified mail, return receipt requested, of the results of the test, the employee’s right to request and obtain a confirmatory test of the second sample . . . and the fee payable by the employee to the employer for reimbursement of expenses concerning the test.

Iowa Code § 730.5(7)(i)(1). Although the district court aptly noted

“common sense would tell one that notice should be sent to the employee

within a few days of the employer obtaining the results of the test,” the

statute provides no specific timeline within which notice must be

provided to the employee. See id. In this case, NCI provided Sims with

prompt oral notice of his right to a confirmatory test, but delayed giving

written notice of this right until five months after Sims’s employment was

terminated.

We conclude the oral notice provided by NCI at the time of Sims’s

termination was insufficient to convey to Sims all of the employee

protections afforded by section 730.5(7). Standing alone it did not

constitute substantial compliance. Although it informed Sims of his

right to undertake a confirmatory test, the oral notice was incomplete and

failed to adequately convey the message that the notice was important.

See Harrison, 659 N.W.2d at 587 (noting a written notice sent by certified

mail conveys the importance of the message and the need for deliberate

reflection). Moreover, the oral notice did not serve to adequately protect

Sims from the consequences of a potentially erroneous test result.

We further conclude NCI did not come into substantial compliance

with its statutory obligation under section 730.5(7) when it sent written 11

notice to Sims several months after he was discharged. This long-

delayed notice was not given until after Sims filed suit alleging

noncompliance with the statute. Under these circumstances, we cannot

conclude NCI’s compliance was substantial.

C. Legal and Equitable Relief. Upon receipt of the positive test

result evidencing Sims’s violation of the written drug policy, NCI was

authorized to terminate Sims’s employment. Iowa Code § 730.5(10)(a)(3).

As the confirmatory retest eventually requested by Sims confirmed the

initial positive result, Sims’s employment was not adversely affected by

an erroneous test result. Accordingly, we affirm the district court’s

determination that Sims is not entitled to back pay, punitive damages, or

reinstatement of his employment.

D. NCI’s Cross-Appeal. NCI’s cross-appeal challenges the

judgment against it for attorney fees and court costs. Claiming it

complied with the statutory notice requirements, and emphasizing the

confirmatory test conclusively established Sims’s termination was

justified, NCI asserts it can have no liability whatsoever under section

730.5. As we have already rejected NCI’s claim of substantial compliance

with the notice requirement, we next consider whether the employer may

be held liable for a discharged employee’s attorney fees and the court

costs under the circumstances presented here.

The district court is authorized to grant “affirmative relief including

reinstatement or hiring, with or without back pay, or any other equitable

relief as the court deems appropriate including attorney fees and court

costs” against an employer who fails to comply with section 730.5. Id.

§ 730.5(15). Although NCI did, eventually, provide written notice, it had

not yet done so when Sims filed this action. Because NCI’s delay in

compliance with the notice requirements of section 730.5(7)(i)(1) 12

provoked Sims’s suit to enforce compliance, we conclude the district

court properly invoked its authority under section 730.5(15) to award

attorney fees and court costs. We therefore affirm the award of attorney

fees and court costs against NCI.

IV. Conclusion.

NCI’s written drug policy complied with the requirements of section

730.5(9)(a)(1). The district court erred in finding NCI substantially

complied with Iowa Code section 730.5(7)(i)(1) by providing Sims with

written notice of his statutory right to request a confirmatory test several

months after he was discharged, and after he filed suit to enforce his

rights under the statute. The district court correctly concluded, however,

that Sims is not entitled to damages or reinstatement for wrongful

termination of his employment. NCI was authorized to discharge Sims

under the statute upon receipt of the positive drug test, and the test later

requested by Sims only confirmed his violation of NCI’s anti-drug policy.

The district court nonetheless properly exercised its authority under the

circumstances of this case to order NCI to reimburse Sims for attorney

fees and costs incurred in litigation commenced as a consequence of

NCI’s failure to substantially comply with the notice requirement. Thus,

although our rationale differs from that of the district court, we reach the

same result, and therefore affirm.