A federal appeals court in Minnesota has held that the Minnesota drug testing statute applies to an applicant tested in Minnesota, even though the applicant was being hired for a job in another state.  Olson v. Push, Inc., No. 14-3160 (8th Cir. Feb. 22, 2016).

Push, Inc., a Wisconsin corporation, hired Olson, a Minnesota resident, for a job in West Virginia.  Olson accepted the job and underwent a pre-employment drug test in Minnesota.  He started working in West Virginia three days later.  When the drug test result came back as “dilute” five days later, Push treated it as a positive result and terminated Olson’s employment.

Olson filed suit in Minnesota, alleging violation of The Minnesota Drug and Alcohol Testing in the Workplace Act (“DATWA”), which prohibits an employer from terminating an employee for a first-time positive drug test result.  Given that Olson had already commenced working, he was no longer an applicant.  The law defines “employer” as “a person or entity located or doing business in [Minnesota] and having one or more employees.”

Push removed the action to federal court based on diversity jurisdiction.  Although Push conceded that it was “doing business” in Minnesota, the district court dismissed the complaint because it interpreted “doing business” under DATWA to mean “relevant business—namely, the employment for which [the entity] is conducting drug testing” and therefore DATWA did not apply.

The Eight Circuit Court of Appeals reversed, finding that:

DATWA contains no language limiting its application only to drug testing of those employees whoseemployment is directly related to an employer’s Minnesota business activities; rather, the legislature drafted DATWA broadly to encompass all employers that are located in Minnesota, and all employers that conduct business in Minnesota.  We also note that the Supreme Court of Minnesota would not read into a statute a requirement that the legislature has purposely or inadvertently omitted; thus, contrary to the district court’s interpretation, we decline to read into DATWA’s statutory definition of “employer” a requirement that there be a nexus between the drug testing and “relevant business.”

The Court further explained that “a broad construction of ‘employer’ is eminently compatible with DATWA’s purpose, which is to provide employees additional protections in relation to employer-requested drug and alcohol testing.  Moreover, in any case, the definition of “employer” is constrained by the bounds of due process.  In order for a state’s substantive law to be constitutionally applied in a particular case, the state must have a significant contact or a significant aggregation of contacts with the parties or the underlying facts giving rise to the litigation, creating a state interest, such that the application of its law is neither arbitrary nor fundamentally unfair.  In sum, the Court held that DATWA applied to this case because Push did business in Minnesota, hired a Minnesota resident and permitted the pre-employment drug test to be conducted in Minnesota.

Employers doing business in Minnesota and conducting drug testing in Minnesota should take note.  This case also highlights the importance of waiting for receipt of the pre-employment drug test result before permitting an applicant to begin working.