Top Five Facts About the Drug-Free Workplace Act

When Colorado became the first state to recognize the Constitutional right to use marijuana for any reason by adults ages 21 and older, some employers wondered how this impacts their duties under the federal Drug-Free Workplace Act of 1988 (DFWA).

A brief background on the DFWA: President Reagan signed the Drug-Free Workplace Act nearly 25 years ago in 1988. The Act defines a "drug-free workplace" as a site for the performance of work done by a federal contractor or grantee in connection with a specific federal contract or grant at which employees are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession or use of any controlled substance. At this time “controlled substance” still includes marijuana. But that is not the end of the analysis.

By definition, the DFWA limits the “workplace” to the work site for certain “covered” employers. By its terms this does not include any other location where work for the contract is not performed. It does not require employers to prohibit the use of marijuana completely, and it does not apply to all employers.

1. Fact #1 – The DFWA does not apply to all private employers.

The DFWA only applies to certain federal contractors and grant recipients. A company is subject to the Act only if the value of a single contract is more than $100,000, or if it has any federal grant. Individuals with grants or contracts from any U.S. Federal agency are covered by the Act, regardless of dollar volume. Last year, only 21.7% of federal contracting dollars went to small businesses. Unless employers meet the specific requirements for coverage, the DFWA does not apply to them. The Act does not apply to those that do not have contracts or grants from the federal government, and it does not apply to employees who are not directly engaged in the performance of the covered contract or grant.

2. Fact #2 – The DFWA does not require employers to drug test employees.

The DFWA does not require or authorize drug testing. In fact, the legislative history of the Act indicates that Congress did not intend to impose any additional requirements beyond those set forth in the Act, which are very limited as discussed below. Specifically, the legislative history precludes the imposition of drug testing of employees as part of the implementation of the Act.

3. Fact #3 – The DFWA does not require employers to fire employees who use marijuana at home as authorized by Colorado Constitutional Amendments 20 and 64.

Nothing in the DFWA requires employers to fire workers for exercising their Constitutional rights to use marijuana while off-duty and outside the workplace. The law requires only that in case of a conviction for a criminal drug offense resulting from a violation occurring in the workplace, the employer may take one of two types of action. The employer may take disciplinary action, which may be a less severe penalty than termination, or may refer the employee for rehabilitation or drug abuse assistance program. The choice of which basic course to choose, as well as the specific discipline or treatment option, is left to the employer’s discretion and may be made on a case-by-case basis, provided all state and local laws are followed. “Conviction” is defined by the Act as limited to a finding of guilt, including a plea of no contest, or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or state criminal drug statutes.

4. Fact #4 – The DFWA does not require employers to report positive drug tests to the federal government.

The Act does not require employers to report positive drug tests to the federal government. The only reporting requirement is triggered solely if an employee is convicted of a drug offense occurring at the workplace.

5. Fact #5 - The DFWA does not preempt state and local laws.

The requirements of the Act “coexist with state and local law,” according to the United States Department of Labor. Colorado does not have any state statute governing drug testing in employment, and adults have a Constitutional right to use marijuana in Colorado. The City of Boulder Ordinance 5195 prohibits employee drug testing except in clear cases of probable cause, and where a written policy has already been provided to the work force. In general, Colorado employers should update their drug testing policies to account for the Constitutional right, or expect legal challenges.

6. Bonus Fact #6 – Employers who recognize Colorado’s Constitutional right of employees to use marijuana at home while off duty will not automatically lose federal contracts.

Nothing in the DFWA governs the use of marijuana outside of the covered workplace for companies. A company that is covered by the DFWA will be subject to penalties only if: 1) it fails to implement the six steps required to establish a drug-free workplace; or 2) the head of the agency determines that the company employs a sufficient number of individuals convicted of a criminal drug offense occurring in the workplace to indicate that the contractor has failed to make a good faith effort to provide a drug-free workplace. Even then, the head of the agency may waive any possible penalties in certain circumstances, and violations may not result in contract termination or loss of payments.

What does the DFWA actually require? Only 6 steps:

Covered employers must only:

1. Publish and give a policy statement to all covered employees informing them that the unlawful manufacture, distribution, dispensation, possession or use of a controlled substance is prohibited in the covered workplace and specifying the actions that will be taken against employees who violate the policy.

2. Establish a drug-free awareness program to make employees aware of a) the dangers of drug abuse in the workplace; b) the policy of maintaining a drug-free workplace; c) any available drug counseling, rehabilitation, and employee assistance programs; and d) the penalties that may be imposed upon employees for drug abuse violations.

3. Notify employees that as a condition of employment on a Federal contract or grant, the covered employee must a) abide by the terms of the policy statement; and b) notify the employer within five calendar days if he or she is convicted of a criminal drug violation in the workplace.

4. Notify the contracting or granting agency within 10 days after receiving notice that a covered employee has been convicted of a criminal drug violation in the workplace.

5. Impose a penalty on – or require satisfactory participation in a drug abuse assistance or rehabilitation program by—any employee who is convicted of a reportable workplace drug conviction. The “penalty” is up the discretion of the employer, and it may consist of a disciplinary warning - termination of employment is not uniformly mandated to comply with the DFWA. Employers should evaluate penalties on a case-by-case basis and seek legal counsel to avoid violating state law or the Americans with Disabilities Act in imposing any discipline.

6. Make an ongoing, good faith effort to maintain a drug-free workplace by meeting the requirements of the Act.
Employers have wasted millions of dollars on ineffective, invasive, and unnecessary drug testing that is not required by the DFWA. Drug tests cannot show impairment, if any, or even when marijuana use occurred. Many employers have relied on information provided by drug testing promoters who have an inherent conflict of interest on the topic.

It has long been recognized that widely cited cost estimates of the effects of drug use on U.S. productivity are based on questionable assumptions and weak measures, according to a report of the National Academy of Sciences. It is a challenge to locate a single case that has imposed liability on an employer for failing to have a drug testing policy, and despite beliefs to the contrary, the preventative effects of drug testing programs have never been adequately demonstrated.
The use of marijuana is a Constitutional right in Colorado. Companies should join employers who are embracing a more sensible approach to drug policies today and seek to understand what the Drug-Free Workplace Act really does – and does not – require. Only then can they release the unfounded myths of yesterday and work with their employees for a more productive tomorrow.

Kimberlie Ryan is the founding member of Ryan Law Firm, LLC, where she practices all aspects of employment law and has represented workers and advised employers regarding medical marijuana and the workplace. In addition to her law practice, she serves as a television legal analyst and is frequently called upon to write and speak about cutting edge employment issues. This article is for educational purposes only, and it should not be construed as legal advice for a particular situation. There may be other state and federal laws applicable to employers, and this article is limited to discussion of the DFWA. Consult with competent legal counsel for specific questions.