No Reimbursement for Employees’ Pre-Hiring Drug Testing

Employers are required to reimburse employees for all expenses reasonably and necessarily incurred in the performance of their job. Labor Code 2802. But are employers required to reimburse employees for pre-employment expenses, such as drug testing? In a recent case, Johnson v. WinCo Foods, LLC, the Ninth Circuit held the employer had no such obligation.

WinCo operates supermarkets in California and other western states. When WinCo hires employees, it extends a contingent offer of employment. As part of the contingent offer, the employee is told there is a mandatory drug test, conducted as part of the pre-employment background check. WinCo controls the date, time, and location of the testing. WinCo pays the testing fee but not the applicant’s time and travel expenses to undergo the testing.

Alfred Johnson filed a class action lawsuit challenging WinCo’s refusal to pay for all pre-employment drug test expenses. WinCo removed the action to federal court, leading to cross-motions for summary judgment. In deciding that the time and travel expenses were not recoverable, the court observed that “Drug testing, like an interview or pre-employment examination, is an activity to secure a position, not a requirement for those already employed.” The court rejected the argument that because the employer controlled the time, place, and manner of the drug testing, it should be responsible to reimburse for the time and travel expenses.

There are two noteworthy points about this case. First, the employer was careful to make the drug testing a condition precedent, not subsequent, to employment. An applicant was not hired unless and until they passed the drug test. Employers should also be careful in structuring offers of employment to condition the offer on first passing a background check or drug test. The start of employment must always follow the satisfactory completion of the background check, not vice-versa. The court also distinguished cases involving temporary employment agencies because they were doing the employment agency’s work when they went to job interviews.

A copy of the case can be found here.

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