Weller v. Arizona Dept. of Economic Sec.

• Decision Date: 11 February 1993
• Docket Number: No. 1,CA-UB,1
• Citation: 860 P.2d 487,176 Ariz. 220
• Parties: Fred E. WELLER, Appellant, v. ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an Agency, and Blue Circle Atlantic, Inc., Appellees. 91-026.
• Court: Arizona Court of Appeals

Page 487

860 P.2d 487

176 Ariz. 220

Fred E. WELLER, Appellant, v. ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an Agency, and Blue Circle Atlantic, Inc., Appellees.

No. 1 CA-UB 91-026.

Court of Appeals of Arizona Division 1, Department B.

Feb. 11, 1993.

Review Denied Nov. 4, 1993. ^*

[176 Ariz. 221] Southern Arizona Legal Aid, Inc. by Erika Anne Kreider, Tucson, for appellant.

Grant Woods, Atty. Gen. by Bonnie E. Elber, Asst. Atty. Gen., Phoenix, for appellee (ADES).

Fennemore Craig by John J. Balitis, Donald Gilbert and Timothy Berg, Phoenix, for appellee (Blue Circle).

OPINION

LANKFORD, Judge.

This is an appeal from an Arizona Department of Economic Security ("DES") decision denying a claim for unemployment benefits. Although the employee's claim was initially allowed, on administrative review the DES Appeals Board ultimately determined that the appellant employee was discharged for work-related misconduct and was therefore disqualified for benefits pursuant to Ariz.Rev.Stat. ("A.R.S.") § 23-775. The Appeals Board held that the employee had committed misconduct by violating a known, uniformly enforced and reasonable rule imposed by his employer.

The central issue presented on appeal is whether the employer's rule is work-connected and reasonable, for only a violation of such a rule constitutes employee misconduct disqualifying the employee from unemployment benefits.

I.

On Monday, June 27, 1988, Fred E. Weller reported to work as a heavy equipment operator, just as he had done for more than twelve years. On this particular day, however, Mr. Weller's employer, Blue Circle Atlantic, Inc. ("Blue Circle") subjected him to a drug test pursuant to the employer's new mandatory drug testing policy. Blue Circle's drug testing policy required no cause to precipitate testing but was a sweeping policy permitting random testing of all employees. ¹

The record shows that the employer never observed Weller using drugs or alcohol at work. Nor were there ever any indications that Weller was intoxicated or impaired on the job, when the test was administered, or indeed at any other time during his twelve years of employment. Weller had never been arrested or convicted for any alcohol or drug-related offense. During his tenure with Blue Circle and its predecessor, Weller was involved in only two accidents, neither of which resulted in disciplinary action.

Blue Circle terminated Weller's employment on July 1, 1988, after Weller's urine sample tested positive for cannabinoid metabolites, the byproducts created by the body's interaction with the chemical ingredients of marijuana. Marijuana is, of course, an unlawful substance. A.R.S. § 13-3405.

An initial analysis was performed with an enzyme-multiplied immunoassay test or "EMIT." According to the record, the EMIT has a margin of error of approximately 5% for marijuana. A confirmatory analysis was performed by gas chromatography/mass spectrometer test (GC/MS), which has a reported accuracy rate of 99.99%.

Both tests yielded readings of 60 nanograms of cannabinoids per milliliter (ng/ml) of urine. A nanogram is one-billionth of a gram; a milliliter is one-thousandth of a liter.

Blue Circle set the threshold quantity of cannabinoids that would be regarded as a "positive" test indication of marijuana consumption. Blue Circle chose 50 ng/ml of cannabinoid metabolites in urine as the threshold. Below that level, an employee would be regarded as not having used marijuana; above that level, the employee would be deemed to have used the drug.

Mr. Weller testified at the administrative hearing that he had never used drugs or alcohol at work. Moreover, Weller testified that he was told that if there were any reason to believe that he would not pass the test, he should not take it. He responded that he would gladly take the test because he "had nothing to hide."

After Blue Circle terminated Weller's employment based on the urinalysis result, Weller filed a claim for unemployment benefits. A DES Deputy granted the benefits, determining that Weller had been discharged for reasons other than misconduct connected with his employment and that therefore, he was eligible for benefits.

Blue Circle contested this determination. However, the DES Appeal Tribunal affirmed the decision of the deputy. The tribunal found that the employer did not produce sufficient evidence of misconduct to refute the denial of misconduct by Mr. Weller. See Ariz.Admin.Code ("A.A.C.") R6-3-51190.

Blue Circle again appealed the decision allowing benefits. Blue Circle argued to the DES Appeals Board that its drug testing policy was a reasonable rule of employment. Blue Circle contended, as it does here, that any tested level of cannabinoid metabolites is misconduct which disqualifies employees from receiving unemployment compensation.

The Appeals Board agreed with Blue Circle and reversed the decision allowing benefits. The Board held that Mr. Weller had been discharged for violating the company drug testing rule, and that the violation constituted misconduct connected with his employment. Upon Weller's request for review of the Board's decision, the Board affirmed its conclusion that his termination was based on disqualifying misconduct. We granted Weller's application for appeal to this court pursuant to A.R.S. § 41-1993. Although Weller makes several arguments on appeal, the central question is this: Is Blue Circle's rule--that a positive test for any level of cannabinoid metabolites in urine alone warrants termination of employment--work-related and reasonable, such that violation of the rule disqualifies the employee from receiving unemployment compensation? We hold that it is not.

II.

We begin by stating what our opinion does not do. It does not decriminalize drug abuse. It does not forbid employers from terminating employees who abuse drugs. It does not prevent employers from conducting drug tests. It does not require that unemployment benefits be paid to those who abuse drugs in the workplace or who are intoxicated at work due to drug abuse elsewhere.

Instead, we hold only that the employer has not met its burden of proof in this case. The Legislature has confined disqualification from receiving unemployment benefits for the violation of a company rule to those violations which adversely affected the workplace in some way. The employer has the burden of proving that the employee's actions constitute disqualifying misconduct. Castaneda v. Arizona Dep't of Economic Sec., 168 Ariz. 491, 494, 815 P.2d 418, 421 (App.1991); Prebula v. Arizona Dep't of Economic Sec., 138 Ariz. 26, 672 P.2d 978 (App.1983). ² Whether Blue Circle met its burden of proving that Mr. Weller's test result was disqualifying misconduct is a question of law freely reviewable by this court. See Castaneda, 168 Ariz. at 494, 815 P.2d at 421. We therefore address whether Blue Circle proved that Weller's violation adversely affected the workplace.

Our opinion should not be read as requiring employers to retain workers who abuse drugs. The Legislature has not precluded employers from terminating employees who use drugs either on the job or off. Instead, it has merely protected the employee's right to receive unemployment compensation when the reason for the employee's termination was not demonstrably work-related. Misconduct justifying an employer in terminating an employee and misconduct disqualifying an employee from benefits are two distinct concepts. See Arizona Dep't of Economic Security v. Magma Copper Co., 125 Ariz. 389, 394, 609 P.2d 1089, 1094 (App.1980). In employment-at-will situations, an employee agrees to abide by the rules of his employer as a condition of employment. Therefore, an employee who violates the employer's rule may be terminated. Indeed, at-will employment may be terminated at the pleasure of either party with or without cause. Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370, 381, 710 P.2d 1025, 1036 (1985). Thus, an employer who terminates an at-will employee for failing a drug test ordinarily incurs no civil liability.

The present appeal does not involve any claim by Mr. Weller for civil damages: instead, he seeks unemployment compensation from the state. ³ Unlike the fairly narrow rules of civil liability for wrongful termination of employment, the unemployment compensation system is intended to be generously protective of workers and their families. The Arizona Legislature intended the Employment Security Act to lighten the burden which "so often falls with crushing force upon the unemployed worker and his family. The achievement of social security requires the protection against this greatest hazard of economic life." A.R.S. § 23-601.

On the other hand, the benefits are limited to "persons unemployed through no fault of their own." A.R.S. § 23-601. Consequently, an employee discharged for certain kinds of misconduct is not entitled to unemployment benefits. A.R.S. § 23-775(2). As discussed below, disqualifying misconduct is defined in the statutes and regulations.

To meet the legislative goals of the Employment Security Act, the Appeals Board must liberally interpret the law and the facts to grant benefits and narrowly to deny benefits. Munguia v. Department of Economic Security, 159 Ariz. 157, 162, 765 P.2d 559, 564 (App.1988). This court views evidence in the light most favorable to upholding the decision of the Appeals Board and will affirm the decision unless it is arbitrary, capricious, or an abuse of discretion. Castaneda, 168 Ariz. at 494, 815 P.2d at 421; Warehouse Indemnity v. Arizona Dep't of Economic Sec., 128 Ariz. 504, 627 P.2d 235 (App.1981). However, we may substitute our judgment for the agency's conclusions regarding the legal effect of facts. Id.; Gardiner v. Arizona Dep't of Economic Sec., 127 Ariz. 603, 605, 623 P.2d 33, 35 (App.1980).

III.

We must follow the Legislature's provisions regarding eligibility for unemployment benefits. The Legislature has defined...