Smith v. Zero Defects, Inc.

• Decision Date: 19 May 1999
• Docket Number: No. 23945,23945
• Citation: Smith v. Zero Defects, Inc., 980 P.2d 545, 132 Idaho 881 (Idaho 1999)
• Parties: Marjorie A. SMITH, Claimant-Respondent, v. ZERO DEFECTS, INC., Employer-Appellant, and State of Idaho, Department of Labor, Respondent on Appeal. Boise, January 1999 Term
• Court: Idaho Supreme Court

Page 545

980 P.2d 545

Marjorie A. SMITH, Claimant-Respondent, v. ZERO DEFECTS, INC., Employer-Appellant and State of Idaho, Department of Labor, Respondent on Appeal.

No. 23945.

Supreme Court of Idaho,

Boise, January 1999 Term.

May 19, 1999.

Moffatt, Thomas, Barrett, Rock & Fields, Boise, for appellant.

Marjorie A. Smith, Boise, pro se respondent.

Hon. Alan G. Lance, Attorney General; Paul F. Kime, Deputy Attorney General, Boise, for respondent on appeal.

SCHROEDER, Justice.

This is an appeal from the Industrial Commission's (Commission) decision to grant unemployment benefits to Marjorie A. Smith (Smith) who was discharged from her employment. The Commission determined that the discharge was not for misconduct relating to her employment.

I. BACKGROUND AND PRIOR PROCEEDINGS

Smith was employed with Zero Defects in its production department from September 20, 1994, to December 4, 1995. Zero Defects manufactures electronics equipment. It has a "zero tolerance" drug policy (the policy) that provides, in relevant part, as follows:

2. Being at work under the influence of alcohol or drugs may result in discharge for the first offense.

F. "UNDER THE INFLUENCE" means being unable to perform work in a safe, efficient and productive manner; being in a physical or mental condition which creates a risk to the safety and well-being of the individual, other employees, the public, or company property; and/or having any detectable level of alcohol or illegal drugs in the body.

(Emphasis added). The policy requires employees to submit to urine tests on a random basis. Zero Defects' stated philosophy behind the policy is as follows:

Zero Defects believes that a healthy and productive work force that is free from the effects of illegal drugs and alcohol is important not only to Zero Defects, but also to our employees, our customers, and the local community. The abuse of drugs and alcohol creates a variety of workplace problems including increased injuries, absenteeism, theft, added cost to benefit plans, a decrease in employee morale, productivity and safety, and a decline in quality of products and services. This drug and alcohol testing policy and procedure is intended to meet our objective of safeguarding Zero Defects and its employees and customers, and the local community, and to encourage employees to seek professional assistance for substance abuse problems.

Smith admitted that she received, read and signed a copy of the policy, and that she understood that she could be terminated under the terms of the policy if she tested positive for drugs.

Smith, along with several other employees, was selected at random for a urinalysis drug screening. Her urine sample tested positive for amphetamines in the amount of 2,799 ng., with a cutoff level of 500 ng. She was discharged as a result of her positive drug test.

Smith filed a claim for unemployment benefits. During a hearing to determine her eligibility, she claimed that her urine sample had been tampered with prior to the test. Initially Smith was determined to be eligible for unemployment benefits, but Zero Defects challenged that decision, and the Redetermination Examiner reversed the decision, concluding that there was no evidence that Smith's urine sample had been tampered with and that Zero Defects had "satisfactorily established that [Smith] violated a known company policy, constituting misconduct."

The Redetermination Examiner's decision was reversed by the Appeals Examiner. The Appeals Examiner determined that because Zero Defects did not provide information indicating how far above its cutoff level the amphetamines in Smith's urine sample was, Zero Defects had failed to meet its burden of proving that Smith violated its drug policy. The Examiner concluded that Zero Defects' determination that "any" level of drugs found in an employee's urine sample constituted misconduct was an "arbitrary" determination and was not a valid basis to deny unemployment benefits.

Zero Defects appealed to the Commission, requesting an opportunity to present additional evidence regarding Smith's test results. The Commission remanded the case to the Appeals Examiner to take the testimony of Dr. Paul Teynor, who supervised the testing of Smith's urine sample, and to accept additional test result documentation. Dr. Teynor is a medical doctor who routinely reviews workplace drug test results to determine whether a medical explanation might cause a positive test.

Dr. Teynor testified to the procedures he employed and the opinion he had regarding the cause of Smith's positive test result. He stated that after testing the urine sample, he telephoned Smith to ask her if she was on any medication. She told him that she had been on several medications for a cold and back pain at the time of the testing. Dr. Teynor testified, however, that he believed these medications "would not have caused this positive test," and he expressed his opinion to Smith during their telephone conversation. According to Dr. Teynor, Smith then told him that she remembered taking her sister-in-law's prescription diet pill the weekend before the test. The diet pill would account for the amphetamines in her urine sample. Smith did not have a prescription for the diet pill. Dr. Teynor concluded that Smith had a positive test for amphetamines and reported his findings to Zero Defects. Prescription diet pills are controlled substances, and under section 37-2732(c) of the Idaho Code (I.C.), consumption by a person other than the one for whom the controlled substance is prescribed is illegal.

The Appeals Examiner concluded that: (1) Smith's "tampering" allegations were not supported by any competent evidence; (2) Zero Defects' policy to provide a drug-free work place was a reasonable policy and Smith was aware of this policy; and (3) Zero Defects met its burden of proving by a preponderance of the evidence that Smith was discharged for misconduct.

Smith appealed the decision to the Commission. The Commission adopted the findings of fact made by the Appeals Examiner, but reversed the Appeals Examiner's decision, concluding that, while Zero Defects' drug policy was reasonable in most respects, its "zero tolerance" standard was inconsistent with its stated philosophy and, thus, the policy was unreasonable. Relying on Merriott v. Shearer Lumber Products, 127 Idaho 620, 903 P.2d 1317 (1995), the Commission concluded that a reasonable interpretation of Zero Defects' policy required a showing of impairment. Because Zero Defects did not provide any evidence that Smith was actually "impaired" on the job, the Commission concluded that Zero Defects had not sustained its burden of proof that Smith was discharged for misconduct in connection with her employment. Consequently, the Commission determined that Smith was eligible for unemployment benefits. Zero Defects filed a timely appeal from the Commission's decision.

II. STANDARD OF REVIEW

The proper standard of review was set forth in Merriott:

This Court reviews decisions of the Industrial Commission for errors of law, and to determine whether the Commission's findings are supported by substantial and competent evidence. Whether an employee's behavior constitutes misconduct, rendering that employee ineligible for unemployment benefits under I.C. § 72-1366(e), is a question of fact. The Commission's conclusion in this regard will therefore be upheld if it is supported by substantial and competent evidence in the record.

127 Idaho at 621-22, 903 P.2d at 1318-19 (citations omitted).

III.

THE COMMISSION ERRED IN DETERMINING SMITH WAS NOT DISCHARGED FOR MISCONDUCT IN HER EMPLOYMENT.

Unemployment benefits are not available to an employee "discharged for misconduct in connection with his employment." I.C. § 72-1366(e) (1995). ¹ Misconduct in connection with employment means:

1. A willful, intentional disregard of the employer's interest;

2. A deliberate violation of the employer's reasonable rules; or

3. A disregard of the standards of behavior which the employer has a right to expect of his or her employees.

Folks v. Moscow Sch. Dist. No. 281, 129 Idaho 833, 837, 933 P.2d 642, 646 (1997). The Commission must consider all three grounds to determine if there has been misconduct. Dietz v. Minidoka County Highway Dist., 127 Idaho 246, 248, 899 P.2d 956, 958 (1995). "The burden of proving employment-related misconduct lies with the employer." Folks, 129 Idaho at 837, 933 P.2d at 646.

"[T]he test for misconduct in standard-of-behavior cases [the third ground] is as follows: (1) whether the employee's conduct fell below the standard of behavior expected by the employer; and (2) whether the employer's expectation was objectively reasonable in the particular case." Merriott, 127 Idaho at 622, 903 P.2d at 1319 (quoting Puckett v. Idaho Dep't of Corrections, 107 Idaho 1022, 1023-24, 695 P.2d 407, 408-09 (1985)). "The employee's disregard of a standard of behavior need not be subjectively intentional or deliberate." Folks, 129 Idaho at 837, 933 P.2d at 646.

The first issue is whether Zero Defects' "zero tolerance" policy is an objectively reasonable policy. The second issue is whether having "any" detectable level of illegal drugs in the body while being at work, which is an express violation of Zero Defects' policy, constitutes misconduct in connection with employment such that Smith should be denied unemployment compensation.

A. Zero Defects' Policy Is Reasonable.

The Commission concluded that Zero Defects' policy was unreasonable because it defines the term "under the influence" to mean "any detectable level of alcohol or illegal drugs in the body," and that by defining "under the influence" in this manner, the policy is inconsistent with the goals and objectives expressed in Zero Defects' statement of philosophy. Relying on this Court's decision in Merriott, the Commission concluded that a reasonable interpretation of the term "under the influence" requires a showing of...