Workers Comp Report: High Court Not Sympathetic to High Employees — The Intoxication Defense Remains Potent

Under Iowa workers’ compensation law, if an injured employee tests positive for alcohol or drugs, there is a presumption of intoxication and causal relationship to the injury. Unless successfully rebutted, the employee is not entitled to workers’ compensation benefits.   Iowa Code §85.16(2). Since it was amended in 2017, the “intoxication defense” statute has been strictly interpreted by the agency, and has proven difficult to overcome. In the first appellate decision involving the statute, the Iowa Court of Appeals confirmed the broad application of the defense, even when an employer arguably violates Iowa’s drug testing laws.

Davis v. Gordon Food Service, Inc. involved a truck driver who sustained a back injury while unloading goods at a hospital. Davis, No -22-1944, 2024 WL 702395 (Iowa Ct. App. February 21, 2024). During the course of his treatment and immediately following the incident, a urine test was conducted, per the employer’s protocol. The urine test returned positive for methamphetamine. Because of the positive drug test, the worker was terminated from his employment and his workers’ compensation claim was denied. 

At the arbitration hearing, the employee admitted to a long history of meth use, including using it a few days before the accident. He testified he was not entirely surprised by the positive result, but stated he was not high on the day of the accident. The employer introduced an expert report which identified several reasons the drug test was valid. The employee objected to the admissibility of the report, claiming it violated Iowa’s private employer drug testing laws. Specifically, he argued the employer violated Iowa Code § 730.5(7), which requires test administrators to obtain a “split sample” at the time of testing, such that there is sufficient quantity for both the employer’s testing and a “second, independent confirmatory test” if requested by the employee. 

Finding no mention of drug testing requirements in the intoxication defense statute, the deputy commissioner admitted the expert report, found the worker had failed to rebut the presumption of intoxication, and awarded no benefits. The commissioner affirmed the decision in its entirety, and his decision was affirmed by the District Court on Judicial Review. 

The Court of Appeals affirmed. In doing so, they looked to the significant overhaul of workers’ compensation laws in 2017 and found the legislature “did not include any reference to regulations for drug-testing, whether by cross-reference to § 730.5 or otherwise.” The Court of Appeals was not persuaded by case law pertaining to the denial of unemployment benefits for failure to comply with § 730.5, finding those cases inapplicable in the workers’ compensation context. The Court also noted the “constitutional difficulties” that might result with the commissioner’s application of the drug-testing laws pertaining to private employers, but not public employers. The Court rejected the employee’s contention that allowing employers to violate the drug testing laws and still use those results to deny workers’ compensation benefits, renders the statute superfluous. The Court found the statute was not “toothless”, noting the restrictions in the unemployment context, the private right of action, and potential injunctive relief afforded by Iowa Code § 730.5(15)(a)(1). The Court further held there was substantial evidence of the employee’s failure to rebut the presumption of intoxication.

An Application for Further Review was filed and resisted. The Supreme Court denied the application on April 16, 2024.

Work Injuries and Drug Testing as Part of Medical Treatment

Under certain limited circumstances, an employer may rely on a drug or alcohol test conducted as part of the treatment of an injured employee for a work-related injury and take adverse action against the employee without running afoul of the Iowa Drug Testing Statute. For example, the statute provides, at section 730.5(7)(m) (emphasis supplied):

“Notwithstanding the provisions of this subsection, an employer may rely and take action upon the results of any blood test for drugs or alcohol made on any employee involved in an accident at work if the test is administered by or at the direction of the person providing treatment or care to the employee without request or suggestion by the employer that a test be conducted, and the employer has lawfully obtained the results of the test. For purposes of this paragraph, an employer shall not be deemed to have requested or required a test in conjunction with the provision of medical treatment following a workplace accident by providing information concerning the circumstance of the accident.”

Thus, an employer may rely on the results without running afoul of the statute if:

• The specimen tested was blood (as opposed to urine, breath, hair, or other specimen)
• The test was administered by or at the direction of the person providing treatment or care to the employee;
• The test was not performed at the direction or suggestion of the employer and/or by the employer’s occupational medicine provider under a standing order from the employer to perform such tests on individuals injured at work; and
• The employer obtained the results lawfully; for example, when the employer is informed by the insurance carrier of the reason the carrier is denying compensability of the comp claim.

While the ruling is favorable for employers from a workers’ compensation perspective, unless the employer is confronted with a situation described in 730.5(7)(m), private employers are still wise to follow Iowa’s drug testing laws. Civil remedies for violations include reinstatement of hiring, with or without back pay, or other equitable relief and/or injunctive relief, including attorney fees and court costs. Iowa Code § 730.5(15). In addition, if the drug testing rules are violated, an employee may not be disqualified from receiving unemployment benefits based upon misconduct, despite a positive drug test.

Davis v. Gordon Food Service, Inc., has not answered all questions. One issue not discussed or explained by the Davis court is, had Davis held a commercial driver’s license, whether section 730.5 would have been applicable in the first instance. Employees who are operating commercial vehicles and required to hold a commercial driver’s license are expressly exempted from coverage under the Iowa Drug Testing Statute; they are covered by Federal DOT drug testing regulations. This area remains a particularly complicated one for employers, and rife with traps for the unwary.

Nyemaster Goode’s Labor and Employment and Workers’ Compensation practice groups regularly advise employers in navigating Iowa’s byzantine drug and alcohol testing laws and how to address workers’ compensation claims. We recommend that employers not take any adverse action against injured intoxicated employees until they have discussed the situation with competent counsel.