(March 2004, Employer Update)
By Jeffrey S. Klein, Nicholas J. Pappas and Caroline H. Lee
Several months ago, Rush Limbaugh, a well-known radio show host, returned
to the airwaves following his admission that he has an addiction to painkillers
after spending five weeks away from work in drug rehabilitation.1 Rush
Limbaugh is not the first celebrity, and certainly not the first employee,
to return to work after battling a substance addiction. How he addresses
the long-term aspects of working while recovering from a substance abuse
is an issue he will have to work out with his employer.2 However, Mr. Limbaugh’s
situation highlights some of the issues that face all employers: namely,
what steps can employers take to prevent the negative impact of drug and
alcohol abuse in the workplace, and will these steps trigger state and
federal laws that have recognized that alcoholism and drug addiction can
be legally protected disabilities?
The Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12112(a), prohibits
discrimination against a qualified individual with a disability. Courts
have held that persons who are addicted to drugs or alcohol may be qualified
individuals with disabilities under the ADA.3 Notwithstanding this rule,
courts have held that persons who are current users of drugs or alcohol
are not qualified individuals with disabilities under the ADA.4 In light
of these legal principles, employers often face the difficult challenge
of disciplining employees who may claim that they are recovering addicts,
rather than “current users” of drugs or alcohol.
One device many employers have
begun to use in delivering discipline to recovering addicts, in a way that
seeks to avoid the appearance of discrimination based on addiction, is
the so-called “Last Chance Agreement” (“LCAs”). A Last Chance Agreement
is an agreement between the employer and the employee, typically used by
employers to discipline an employee who chronically under performs or repeatedly
violates workplace rules as a result of his or her addiction to illegal
drugs and alcohol, and has reached the point of discharge. A LCA is a structured
agreement that permits an employee to continue his or her employment (or
to even be reinstated), subject to certain conditions, which typically
include the following: suspension, successful completion of a treatment
program, submission to random or periodic substance testing at the discretion
of the employer, improvement in job performance, and an agreement to abstain
from using illegal substances and/or alcohol. LCAs often also typically
provide that in the event the employee resumes the use of illegal drugs
or alcohol, or the employee fails to meet performance standards, then the
employee’s employment will immediately be terminated without further warning.
The benefit of a LCA is that it
provides objective evidence that the employer is seeking to accommodate
the addicted employee and to assist the employee during his or her recovery.
In litigation, such evidence may be used to rebut an employee’s argument
that the employer was actually discriminating against the employee due
to his or her allegedly disabling addiction. The LCA also may be used to
rebut an argument by the employee that the employer failed to reasonably
accommodate his or her disabling addiction. An employee would be hard pressed
to argue that the employer did not reasonably make accommodations when
the employee agreed to the terms and conditions of the continued employment,
including participation in a rehabilitation program, and the parties agreed
that relapse would lead to immediate termination of employment.
Though LCAs appear to have significant benefits both for employers and
recovering addicts, a number of courts recently have questioned whether
LCAs may, in certain circumstances, violate the ADA. This article reviews
some of the cases and issues involved with the use of LCAs and how employers
can better utilize them without violating the ADA.
Drug and alcohol abuse has been estimated to cost American employers a
whopping $81 billion in lost productivity annually, according to the U.S.
Department of Labor.5 These numbers confirm that alcoholics and drug abusers
are not limited to the unemployed. Rather, studies show that the vast majority
of drug and alcohol users work. According to a 2002 study conducted by
the Substance Abuse and Mental Health Services Administration, there are
16.6 million illicit drug users in the United States aged 18 or older,
74.6 percent of whom were employed either full or part time. The numbers
are equally high for alcohol users, especially binge and heavy drinkers.
In 2002, there were 51.1 million adult binge drinkers, 80 percent of whom
were employed either full or part time; similarly, there were 15.2 million
heavy drinkers in 2002, and 79 percent of these were employed.6
In the face of these startling numbers, employers have attempted to protect
their businesses from the negative impact of drug and alcohol use at work
by increasing the use of LCAs. The challenge facing employers is to address
an employee’s problem with substance abuse and enable that employee to
return to work following a “binge,” while at the same time allowing the
employer to preserve its high standards for productivity and work performance
and not trigger liability under the ADA. As reflected in the two recent
cases discussed below, the LCA is a beneficial tool for employers, but,
if used improperly, may itself lead to liability under the ADA.
Two Recent Cases
The Eighth Circuit Court of Appeals recently upheld the dismissal of an
employee for drinking alcohol during non-work hours in violation of his
LCA, while the Ohio Third District Court of Appeals found that the termination
of an employee who was forced to sign a LCA while he was in rehabilitation
violated the ADA. While the two cases seem inconsistent, their holdings
can be reconciled because of different facts presented in each case. Although
the outcome for the employer differed in each case, both cases confirm
that a LCA can be an effective tool for employers if used appropriately
to discipline employee misconduct, but in a way that does not appear to
single out employees who are seeking treatment for a disabling addiction.
In Longen v. Waterous Co., 347 F.3d 685 (8th Cir. 2003), a panel of the
Eighth Circuit Court of Appeals held that an agreement calling for the
immediate dismissal of an employee with a history of substance abuse in
the event of future drug or alcohol use either inside or outside of the
workplace did not violate the ADA. In Longen, plaintiff Ira Longen was
employed by Waterous Company for over 20 years, but during that time had
a history of recurring substance abuse battles. He entered chemical dependency
treatment, unsuccessfully, for the first time in 1993, after which Waterous
learned of his chemical substance abuse problems. Longen and Waterous then
entered into a number of agreements in which the parties agreed that if
Longen successfully completed a treatment program, Waterous would allow
Longen to return to work without any discipline. Longen entered chemical
dependency treatment four more times while he was employed by Waterous.
Finally, Longen’s union and the employer negotiated a LCA that provided:
“Future use of any mood altering chemicals, including alcohol, or violation
of working rules generally related to chemical dependency will result in
immediate termination of employment from Waterous Company.”
Four years later, during non-work
hours, Longen was arrested and pleaded guilty to a charge of driving while
intoxicated. Upon learning of the conviction, Waterous terminated Longen’s
employment. Longen sued, alleging that the LCA and his termination for
off-work conduct violated the ADA, arguing that the ADA provides that an
employer “may require that employees shall not be under the influence
of alcohol...at the workplace.” 42 U.S.C. § 12114(c) (emphasis added).
In dismissing the lawsuit, however, the Eighth Circuit held that Section
12114(c) of the ADA refers only to the types of permissible restrictionsthat a company may impose on all employees at the workplace—regardless
of whether they are alcoholics or not; however, the ADA does not restrict
the types of further constraints that a party may place upon himself. In
other words, Longen placed separate restrictions on his own conduct when
he voluntarily signed the LCA. These restrictions to refrain from the “future
use of any mood altering chemicals” were broader than the restrictions
under the ADA, but the court noted that “these additional restrictions
were not gratuitous. Because of them, Longen was able to continue working
at Waterous.”7 Longen covenanted that he would refrain from any future
use of drugs or alcohol in exchange for valuable consideration—the opportunity
to continue working at Waterous. As a result, the Longen court found that
the LCA was a valid agreement and that Longen breached this agreement by
driving under the influence of alcohol (even though the drinking was done
off-work). As such, the court concluded that his termination was permissible.
The Longen court found that the restriction on any use of mood altering
substances, including during off-work hours, was permissible because Longen
voluntarily agreed to it as a condition of his continued employment. It
should be noted that in New York, the New York Legal Activities Law prohibits
an employer from taking action against an employee for the use of lawful
products off of work premises during non-working hours. See N.Y. Lab. Law
§ 201-d(2)(b). However, the New York statute permits employers to take
action against employees pursuant to “an established substance abuse or
alcohol program or workplace policy” or where it affects the employee’s
work performance. See N.Y. Lab. Law § 201(d)(4)(ii-iii). Under the ADA,
there is legislative history that suggests that an employer may make employment
decisions based on alcohol abuse during non-working hours.8 Moreover, several
courts have recognized a distinction between termination of employment
because of a disability and termination because of misconduct and held
that termination precipitated by misconduct does not violate the ADA.9
By contrast, the Third District
Court of Appeals in Ohio in DePalma v. City of Lima, Ohio, 2003 WL 22331986
(Ohio App. 3 Dist. Oct. 14, 2003), found that the LCA utilized by the employer
violated the ADA. In DePalma, the Ohio court held that a drug addicted
employee was not bound by a LCA that was agreed upon while he was actively
Anthony DePalma, a firefighter in the Lima Fire Department for more than
two decades, received very high scores on exams and numerous awards for
valor and dutiful service during his career. In 2000, he was promoted to
Assistant Chief. Later that year, however, he developed kidney stones and
was prescribed various narcotic pain medications to which he became addicted.
When he was no longer able to obtain the medications by prescription, DePalma
began to purchase them illegally and eventually began taking heroin. Realizing
that he had a drug addiction, he voluntarily checked into an addiction
treatment center. He was visited by the fire chief, who informed DePalma
that he would have to sign a LCA or else his employment would be terminated.
The department’s first indication of DePalma’s drug addiction was when
he sought treatment. No incidents had previously occurred to indicate his
The court held that forcing DePalma
to sign a LCA merely because he sought treatment for an addiction was in
violation of the ADA. The court found that DePalma’s termination was improper.
The court reasoned that the LCA was a form of discipline and that the fire
department changed the terms of his employment by forcing him to sign the
agreement once he entered rehabilitation:
His performance and behavior at work were excellent. However, once DePalma
voluntarily entered the treatment program, the City became aware of his
drug addiction and immediately changed the terms of DePalma’s employment
by having him sign the LCA...a written reprimand is discipline if it is
placed in an employee’s file and the implications of the writing continue
beyond the placement in the file. This court does not see any difference
between the LCA and a written warning that is placed in one’s file. Id.
Though Longen and DePalma reach different conclusions as to the enforceability
of the LCAs in the circumstances presented to them, the cases are reconcilable
and hold several important lessons for employers. For example, in Longen
the court concluded that the employer properly used the LCA as a form of
discipline for an employee who had a long history of work-related incidents
due to the use of illegal drugs and alcohol and was at the point of discharge.
In DePalma, however, the court concluded that the timing of the LCA and
the absence of any facts indicating the existence of any prior work violations
or performance issues provided an inference that the employer “disciplined”
an employee as a result of his status as a recovering drug addict, rather
than for work-related behavior. In order to avoid the result in Longen,
employers must strive for consistency in taking disciplinary actions that
may relate to behavior resulting from a covered disability and not take
action based on an employee’s status as a recovering addict.
As in all areas of employment law, employers should be careful when dealing
with alcohol and drug abuse in the workplace. In order to avoid violating
the ADA, employers should keep a well-documented record, as they should
in all areas of discipline. The following steps are suggested:
1) Implement a policy prohibiting the use of drugs and alcohol at work,
and working while under the influence of any controlled substances.10
2) Enforce the policy consistently. In other words, if an employer implements
a tardiness policy, it may enforce that policy against an individual with
an alcohol problem, but it must also enforce the policy in the same manner
against other employees.
3) Do not label any employees as “alcoholics” or “drug addicts.” Using
such a label may suggest, rightly or wrongly, that the employer “regards”
him or her as having a protected disability.
4) Discipline the misconduct, not the disability. In many situations, employers
may discipline or discharge an employee for alcohol abuse, despite the
fact that alcoholism may be a disability under the ADA, if that employee
has substandard performance or other disciplinary issues. An employee who
requests treatment, but who has not violated any employment rules, should
not be discharged solely on the basis that he/she requested treatment.
LCAs may play an important part
in effectuating a comprehensive program for dealing with recovering addicts
in the workplace. The LCA benefits the employee because it provides the
employee who is recovering from substance abuse problems with an opportunity
to rehabilitate and retain his or her job, rather than being discharged
after a first violation of a substance abuse policy. LCAs also benefit
the employer because they create a clear record showing that the employer
tried to accommodate the employee’s addiction. If the employer must discharge
an employee who has signed a LCA, the LCA provides an objective basis for
review by a court or arbitrator, which will indicate that the disciplinary
action was taken because the employee violated the LCA, not because of
the employee’s addiction.
- See Ray Richmond, Real Test Ahead For Contrite Limbaugh, MSNBC NEWS,
Nov. 18, 2003, available at http://www.msnbc.com/news/995048.asp.
- Recent articles discussing Rush Limbaugh’s return to work do not indicate
the terms and conditions on which he was allowed to return, or if he has
entered into a last chance agreement with his employer, Clear Channel Communications.
See generally John Gorman, John Gorman on Rush Limbaugh, RADIO DAILY NEWS,
Oct. 11, 2003, available at http://www.radiodailynews.com/viewpoints-gorman.htm;
Clear Channel Sees Record Profits In Quarter, TIMES-NEWS, Nov. 20, 2003,
available at http://www.magicvalley.com/news/business/index.asp?
- Alcoholism, like drug addiction, can qualify as an “impairment” under
the definitions of a disability set forth in the ADA. See Reg’l Econ.Cmty. Action Program, Inc. v. City of Middletown, 294 F.3d 35, 46-47 (2d
Cir. 2002); Altman v. New York City Health and Hosp. Co., 903 F. Supp.
503, 508 (S.D.N.Y. 1995). However, mere status as an alcoholic or substance
abuser does not necessarily imply a “limitation” under the definition
of a disabled individual under the ADA. Alcoholism and substance abuse
are not per se disabilities under the ADA—a recovering drug addict or
alcoholic must demonstrate that he or she was actually addicted to drugs
or alcohol in the past, and that the addiction substantially limits one
or more of his or her major life activities. See id.
- Congress did not expressly exclude current users of alcohol from the
ADA’s coverage, even though current users of illegal drugs are excluded.
See Mararri v. WCI Steel, 130 F.3d 1184-85 (6th Cir. 1997); Jurman v. Coca-Cola
Bottling Co., 2003 WL 22331986 at *1 (S.D.N.Y. July 31, 2003). Nevertheless,
employers appear to retain significant discretion under the “qualification”
prong of the ADA cause of action. See, e.g., Bailey v. Georgia-Pacific
Corp., 306 F.2d 1162, 1167 (1st Cir. 2002); Altman v. New York City Health
and Hosp. Corp., 100 F.3d 1054, 1060 (2d Cir. 1996). For an in-depth discussion
of how employers should deal with alcoholic employees, see Jeffrey S. Klein
and Nicholas J. Pappas, “How to Deal With Alcoholic Employees,” New York
Law Journal, October 7, 1996, p. 3.
- See United States Department
of Labor, Office of the Assistant Secretary for Policy, Working Partners
for an Alcohol- and Drug-Free Workplace, General Workplace Impact, available
at http://www.dol.gov/asp/programs/drugs/workingpartners/stats/wi.asp (last
visited Nov. 20, 2003).
- See id.; see also United States Department of Health and Human Services,
Substance Abuse and Mental Health Services Administration, Results from
the 2002 National Survey on Drug Use and Health: National Findings (2002),
available at http://www.samhsa.gov/oas/nhsda/2k2nsduh/Results/2k2Results.htm#toc.;
United States Department of Health and Human Services, Substance Abuse
and Mental Health Services Administration, New Release: 22 Million in U.S.
Suffer From Substance Dependence or Abuse (Sept. 5, 2003), available at
- 347 F.3d at 689.
- See Remarks of Senators Armstrong and Harkin, 135 Cong. Rec. S10,782
(daily ed. Sept. 7, 1989).
- See, e.g., Maddox v. Univ. of Tenn., 62 F.3d 843, 848 (6th Cir. 1995)
(employers permitted to discipline for egregious or criminal conduct, including
off-duty drunk-driving, regardless of disability); Despears v. Milwakee
Cty., 62 F.3d 635, 637 (7th Cir. 1995) (alcoholic employee demoted for
off-duty drunk driving arrest); Little v. F.B.I., 1 F.3d 255, 259 (4th
Cir. 1993) (employer permitted to discipline for egregious or criminal
conduct and could discharge an employee who was intoxicated while on duty
and was involved in several off-duty alcohol-related incidents); see also
Newland v. Dalton, 81 F.3d 904, 905 (9th Cir. 1996) (employer permitted
to terminate employee who attempted to fire assault rifle in a bar as part
of a “drunken rampage”).
- For more information on how
employers may successfully implement or maintain drug testing programs
to deal with drug abuse in the workplace, see Jeffrey S. Klein and Nicholas
J. Pappas, “Implementing and Enforcing Drug-Testing Programs—Part I,”
New York Law Journal, Aug. 3, 1998, at p.3. col. 1; Jeffrey S. Klein and
Nicholas J. Pappas, “Implementing and Enforcing Drug-Testing Programs—Part
II,” New York Law Journal, Oct. 5, 1998, at p.3, col. 1.