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Hennessey v. Coastal Eagle Point Oil Co.

New Jersey Superior Court, Law Division


Decided: April 28, 1989.

JAMES HENNESSEY, PLAINTIFF,
v.
COASTAL EAGLE POINT OIL COMPANY, DEFENDANT

Smith

SMITH, DONALD A. JR., J.S.C.

This matter is before the court on cross motions for summary judgment. Plaintiff James Hennessey filed his action challenging the legality of the drug screening policy of defendant Coastal Eagle Point Oil Company and his discharge as a result of such program.

The court concludes that the discharge of plaintiff Hennessey was in violation of public policy and therefore must be set aside. Plaintiff's motion is granted; defendant's motion denied.

Coastal Eagle Point Oil Company operates an oil refinery along the Delaware River in West Deptford Township covering 1000 acres and employing approximately 330 employees. It refines crude oil into various products as did its predecessor, Texaco, Inc., from whom it purchased the refinery on May 21, 1985. The refinery operates 24 hours a day refining and transporting product by pipeline to various parts of the plant or tank farm, and loading and unloading ships and rail cars.

Plaintiff James Hennessey was employed by Coastal from May 21, 1985 to the date of his discharge, June 13, 1986, as a lead pumper in the tank farm. He had been a previous employee of Texaco, Inc. and when the plant was purchased all Texaco employees were discharged and Coastal then hired employees deemed necessary to operate the refinery. Mr. Hennessey was an employee-at-will, there being no employment contract nor union contract. As lead pumper, Hennessey worked in the control room of the tank farm directing gaugers in the movement and storage of product throughout the tank farm and plant.

Hennessey had worked for Texaco and for Coastal without incident for a total of 13 years and had been characterized by his supervisors, Hoey and Turner, as an above average worker. He had never been previously disciplined or observed as being under the influence of alcohol or drugs. On June 9, 1986 Hennessey, while at work, was subjected to a random drug test by way of a urine sample. On June 13, 1986 his employment was terminated because the same indicated positive for drugs, (marijuana and valium).

When plaintiff commenced employment with Coastal in May, 1985, there was no written policy regarding drugs or controlled substances, nor was Coastal performing random drug testing of employees. Coastal's policy regarding alcohol, drug and substance abuse went into effect on June 21, 1985. At that time a three-page document entitled "Company Policy on Alcohol, Drugs and Controlled Substances" was personally given to the company's employees. A copy is attached as Exhibit A.

During the refinery start-up time, after May 21, 1985, for the following few months, all employees were given physicals as part of their initial hiring. Apparently, because of the number of employees hired and the start-up, these physicals were post-hiring but were considered pre-hiring physicals which included urine samples. Pursuant to the policy, any employee who tested positive for drugs was given a second chance, and permitted to remain employed and to seek rehabilitation in lieu of discharge. Approximately 15-20 employees fell into this category. Plaintiff at that time did not test positive.

On January 30, 1986 a document was distributed to all Coastal managers which ended the company's prior practice of permitting employees who tested positive for drugs to seek rehabilitation in lieu of termination. The document was only directed to managers and included no instructions that it be forwarded to employees. Plaintiff never received a copy of this document nor was he made aware of the change in policy.

Without further notice to the employees, random drug testing began in the spring of 1986 with the testing of four employees including plaintiff. On June 9, 1986 plaintiff was randomly selected and compelled to submit to a urinalysis. Refusal to submit was grounds for termination. This was the result of the January 30, 1986 "Departmental correspondence" from George Orescan, Vice President and General manager, to all managers directing them in turn to adverse all supervisors that if any employee is found to be in violation of company policy regarding drugs and/or alcohol, a request by the employee for rehabilitation will not be a mitigating factor. (Exhibit B attached.) No employees were aware of this document. No company employee meetings were held and no written policy was given to the employees after the June 21, 1985 notice, nor were the employees or supervisors ever made aware of what procedures would take place, how testing would be done or how the results of the tests would be utilized.

For the following reasons violation of public policy is found.

Article I, para. 7 of the New Jersey Constitution directs that:

[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrant shall issue, except upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the papers and things to be seized.

It has been determined in State v. Novembrino, 200 N.J. Super 229, 238 (App. Div. 1985) aff'd 105 N.J. 95 (1987) that a search conducted for the purposes of obtaining evidence of criminal activity is unreasonable and therefore unconstitutional unless it meets the probable cause and warrant requirements. There are, however, exceptions to this rule requiring a search warrant. Warrantless searches are permitted upon the showing of probable cause or some individualized suspicion less than probable cause where these exceptions exist. State v. Valencia, 93 N.J. 126, 136 (1983). New Jersey v. T.L.O., 469 U.S. 325, 342, 105 S. Ct. 733, 744, 83 L.Ed2d 720 (1985).

In the present case although a threat of criminal exposure was contained in the drug testing notice of June 21, 1985, the purpose of the testing, it was argued, was for plant, public and employee safety.

The non-criminal ramifications of search and seizure safeguards are most noticeable in the area of drug screening by a public institution. A mandatory urine test involving the submission of a urine sample for the purpose of drug screening has been held to constitute a search and seizure under the New Jersey Constitution. Fraternal Order of Police v. City of Newark, 216 N.J. Super 461, 466 (App. Div. 1987) and Allen v. Passaic County, 219 N.J. Super 352 (Law Div. 1986).

The court, in Fraternal Order, dealt with the non-criminal aspect of search and seizure when it struck down a detailed regulation calling for the drug screening of all police officers of a narcotics unit. The court reasoned that random drug testing was "unconstitutional in the absence of some reasonable individualized suspicion." Id. at 471. In so ruling, the court further recognized that "the reasonable individualized suspicion test fairly accommodated the legitimate interest of employee privacy without unduly restricting the public employer's opportunity to monitor and control the use of drugs by its employees." Id. at 473.

Similarly, the court, in Allen, held that the appropriate standard to be applied, in a situation where the Sheriff of Passaic Co. ordered all personnel in his department to submit to mandatory urinalysis, is that of reasonable suspicion. Id. at 380.

The holdings of Fraternal Order and Allen are clear and precise; without individualized reasonable suspicion drug testing in the public workplace is unconstitutional. Both cases involved drug testing/screening of public employees by public employers. The decisions were predicated wholly upon state action and constitutional violations. Notwithstanding, the holdings of Fraternal Order and Allen pronounced a standard of general public policy regarding drug screening throughout the workplace, which applies to public as well as private employment.

The question now presented is whether the "reasonable suspicion test" carries over from the public sector into the private sector where a private employer subjects its private employee to random, compulsory urinalysis for the purpose of drug screening.

New Jersey is a leader in the protection of a private, at-will employee's right to be free from discharge based upon reasons contrary to public policy. It is well established that "an employee has a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy." Pierce v. Ortho Pharmaceutical, 84 N.J. 58, 72 (1980). The New Jersey Supreme Court, in Woolley v. Hoffman-LaRoche, Inc., 99 N.J. 284 (1985) affirmed

No longer is there the unquestioned deference to the interests of the employer and the almost invariable dismissal of the contentions of the employee . . . . [t]his Court [is] no longer willing to decide these questions without examining the underlying interests involved, both of the employer's and the employee's, as well as the public interest, and to the extent to which our deference to one or the other serve[s] or disserve[es] the needs of society as presently understood. Id. at 290-291. [Emphasis added.]

Leading cases in this area where New Jersey courts have found dismissal of at-will employees to be a violation of public policy are: Velanteas v. Colgate-Palmolive Co., 109 N.J. 189 (1988), (employees who are in good faith pursuing information relevant to discriminatory discharge are protected by New Jersey public policy); Cemicchio v. Alden Leeds, Inc., 223 N.J. Super 435 (App. Div. 1988), (discharged at-will employee has cause of action against employer where dismissal was retaliatory for employee filing complaint with OSHA, relying on strong public policy in New Jersey favoring safety in the workplace); Slohoda v. UPS, 193 N.J. Super 584, 594 (App. Div. 1984), (summary judgment for employer was reversed where employee contended that his discharge for engaging in adultery with co-worker violated his right to privacy, and therefore was against public policy).

Fraternal Order and Allen are clear expressions of New Jersey public policy regarding drug screening. Whether it be a private or public employer, a "free-for-all" approach to drug testing cannot be tolerated. New Jersey public policy mandates that drug testing only be conducted in the workplace upon a good faith showing of individualized reasonable suspicion.

Defendant is unable to cite any facts or circumstances which even attempt to meet the standard of reasonable suspicion in plaintiff's case. There was never any complaint of suspicion in plaintiff's case. There was never any complaint of suspicion of plaintiff's drug involvement. He had performed his work without incident. He carried out his duties without impairment and he was characterized as an above average employee. Coastal having failed to meet the standard, plaintiff's discharge must be viewed as a clear violation of public policy.

Defendant argues that the hazardous nature of an oil refinery and plaintiff's job within the refinery dictate the necessity for random drug testing without probable cause and without reasonable suspicion. As a matter of public policy, courts have recognized a small number of ultra-hazardous/public hazard employment situations where drug tests of public employees are accepted without any showing of reasonable suspicion; situations involving high voltage electric wiring, (Allen v. City of Marietta, 601 F. Supp. 482 (N.D.Ga. 1985); correction officers in medium or maximum security prisons; (Mack v. U.S., FBI, 653 F. Supp. 70 (S.D. N.Y. 1986) aff'd 814 F.2d 120 (3d Cir. 1987); and particular nuclear power plant employees, (Rushton v. Nebraska Public Power District, 653 F. Supp. 1510 (CD. Neb. 1987); and railroad employees after an accident, (Skinner v. Railway Labor Executives' Association, 57 U.S.L.W. 4324 (March 21, 1989).

The random sampling of all defendant's employees, including clerical personnel, belies this argument. Nor can the oil refinery industry, as proposed by defendant, come within the category of a "pervasively regulated industry" or closely supervised business where random searches are tolerated. For example, random testing has been legislatively permitted and judicially sustained in the absence of probable cause in cases involving the liquor industry, State v. Zurawski, 89 N.J. Super 488 (App. Div. 1985), aff'd o.b. 47 N.J. 160 (1966); the drug and pharmaceutical industry, State v. Rednor, 203 N.J. Super 503 (App. Div. 1985); the horse racing industry, State v. Dolce, 178 N.J. Super, 275 (App. Div. 1981); and casino gambling, In Re Martin, 90 N.J. 295 (1982), because these are highly regulated industries, and most recently, the customs service, National Treasury Employees Union, et al v. VonRaab, 57 U.S.L.W. 4338 (March 21, 1989).

Fraternal Order and Allen do not stop at the "reasonable suspicion" standard for the taking of a drug test, but further require that if that standard is met then the actual testing procedure as implemented must also be "reasonable."

Defendant's actions do not even reach this "reasonable" prong. If it did, however, the facts fail to show any logic or reasonableness in the testing procedure itself. Reasonableness in testing follows reasonable suspicion. Both are necessary to render a drug testing program valid. A drug testing program administered after reasonable suspicion is still invalid if conducted in an unreasonable manner without proper safeguards. Fraternal Order and Allen.

From the depositions of Michael Hoey, Employee Relations Manager at Coastal, and Mr. Turner, plaintiff's immediate supervisor, it is evident that the drug testing in this instance was performed in an unreasonable and obtrusive manner.

The pertinent facts evidencing the unreasonableness of the policy warrant repeating. Beginning June 21, 1985 the initial drug testing policy of Coastal went into effect. All employees received a three-page document discussing company policy. During the months following employees were given physical examinations as part of their hiring requisites. These examinations included urine samples. The policy was such that any employee testing positive for drugs was given a second change, permitted to remain employed and to seek rehabilitation in lieu of discharge. Plaintiff did not test positive at this time.

Thereafter, however, this policy was abandoned and a new unannounced program was developed in January, 1986 which neither informed nor gave employees a second chance. Only management was apprised of this new policy. The new program was implemented in the spring of 1986 without any notice to supervisors or general employees. The new drug testing policy consisted of random drug testing of employees whose names had been drawn from a container by a non-supervisory employee, and where positive, termination resulted. This new policy was unreasonable aside from the fact that no individualized suspicion invited the tests in questions. There were no standards adopted concerning the test whatsoever; no standard for on-the-job impairment; no written procedures were formulated; or discussion of alternative or less intrusive means of enforcing the policy; there was no stated scientific basis established; the program provided the employees with no right to seek counsel and no opportunity to request a second testing opinion to question or dispute the results. The monitoring of a person's urine by anyone is "an intrusion upon the most private kind of conduct. Both in concept and in practice, that intrusion is profoundly demeaning." Fraternal Order, 216 at 474.

The policy of Coastal thus failed both tests; it was done at random with no individual suspicion and carried out with no guidelines. For these reasons the entire procedure is a violation of public policy and a violation of the employee's right as an at-will employee.

An important analogy exists between the developing public policy regarding drug testing/screening and the New Jersey policy prohibiting the use of lie detectors in employment. In 1981, New Jersey adopted legislation (N.J.S.A. § 2C:40A-1) prohibiting the use of lie detector tests as a condition of employment or continued employment except where an employer dealt with controlled dangerous substances. Thereafter, in 1983, the statute was amended as follows:

(2) the employee or prospective employee is or will be directly involved in the manufacture, distribution, or dispensing of, or has or will have access to, legally distributed controlled dangerous substances; and (3) the test, which shall cover a period of time no greater than 5 years preceding the test, and except as provided in this section, shall be limited to the work of the employee or prospective employee and the individual's improper handling, use or illegal sale of legally distributed controlled dangerous substances. The test may include standard base-line questions necessary and for the sole purpose of establishing a normal test pattern. Any employee or prospective employee who is required to take a lie detector test as a precondition of employment or continued employment shall have the right to be represented by legal counsel. A copy of the report containing the results of a lie detector test shall be in writing and be provided, upon request, to the individual who has taken the test. Information obtained from the test shall not be released to any other employer or person. The employee or prospective employee shall be informed of his right to present to the employer the results of an independently administered second lie detector examination prior to any personnel decision being made in his behalf by the employer. (N.J.S.A. § 2C:40-1)

Obviously, the legislature, in 1983, recognized the need for guidelines and safeguards where testing was permitted.

In State v. Community Distributors, Inc., 123 N.J. Super 589 (Law Div. 1973), aff'd 64 N.J. 479 (1974), the Supreme Court summarized this underlying public policy and purpose of the restricted use of lie detector tests in the workplace as follows:

There is no judicial control when an employer subjects his employee to a lie detector test and there is no licensing or other objective method of assuring expertise and safeguard in the administration of the test and the interpretation of its results. Nor is there any assurance of the true voluntariness for the economic compulsions are generally such that the employee has no realistic choice.

Although the New Jersey Legislature has not acted regarding the conduct of drug testing as it has with lie detector testing, it is obvious that case law has given us guidelines for drug testing which are analogous to the safeguards and guidelines statutorily established for polygraph testing. The public policy considerations are virtually identical in both. New Jersey courts have consistently held that public policy must be broadly construed, and that sources of public policy include both federal and state constitutional provisions, judicial decisions, statutes, administrative regulations, professional codes of ethics and other meaningful and pertinent documents, opinions or concerns. Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 72 (1980); Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 403-404 (1960).

Based upon the foregoing, plaintiff's summary judgment motion as to liability is granted and the matter will proceed to trial on the issue of damages.

EXHIBIT A - 1

DEPARTMENTAL CORRESPONDENCE

Date June 21, 1985

COMPANY POLICY ON ALCOHOL, DRUGS AND CONTROLLED SUBSTANCES

ALL EAGLE POINT EMPLOYEES

George L. Orescan

We are very anxious to help all of our employees succeed in their new careers with Coastal Eagle Point Oil Company, and are committed to doing everything possible to ensure the safety and well being of our employees. In this connection, and to avoid any possible problems in the future, I feel it is important to clearly communicate the attached policy regarding alcohol, drugs or controlled substances to all employees.

For the well being of our employees we consider this to be a very serious matter and want you to understand that any violations of this policy may lead to immediate termination. Additionally, please keep in mind that federal and state laws may require the company to notify law enforcement agencies of certain violations.

Consistent with our desire to help every employee, we urge anyone who recognizes that they have a habit or problem which may be in violation of this policy to inform a member of management of their situation. In these cases we will work with the employee to encourage rehabilitation.

With the quality of the work force that we have at Eagle Point, we do not anticipate any problems; however, it is clearly to the benefit of everyone that there be no misunderstandings in such a crucial area. If you have any questions, please contact your supervisor, Mike Hoey, or me.

GLO:cr

Attachment

COMPANY POLICY ON ALCOHOL, DRUGS AND CONTROLLED SUBSTANCES

It is the company's policy to maintain a safe, productive working environment for everyone, and to safeguard company property. As part of this policy, the company prohibits the use, sale, transfer or possession of alcohol, drugs or controlled substances on any company premises or work sites. In addition, the company prohibits any employee from being at work under the influence of alcohol, drugs or controlled substances. The company also prohibits any visitor, contractor, or employee of any contractor from being on company premises or work sites while under the influence of alcohol, drugs or controlled substances. For purposes of this policy the following definitions are applicable:

(1) Alcohol. Alcohol includes all intoxicating beverages that contain alcohol, including beer and wine.

(2) Drugs and Controlled Substances. Drugs and controlled substances include all substances not prescribed by a licensed physician for use by the person possessing them. The company will determine at its sole discretion what is a drug or controlled substance. Any questions about whether or not a substance is a drug or controlled substance should be directed to your supervisor.

Anyone taking a drug or other medication, whether or not prescribed by the employee's physician for medical conditions, which is known or advertised as possibly affecting or impairing judgment, coordination, or other senses or which may adversely affect the ability to perform work in a safe and productive manner, must notify his or her supervisor or other management official prior to starting work in any of the company's facilities. The supervisor or management official will decide if the employee can remain at work on the company's premises or work site and what work restrictions, if any, are deemed necessary.

In order to insure that each individual is provided a safe workplace, the company reserves the right to conduct searches or inspections of employees and their personal effects and vehicles located on the company's premises. These searches may be made without prior warning and may be conducted with the assistance of electronic devices, search dogs and representatives of law enforcement agencies. The company may require that an individual may at any time be required to give a urine or blood sample in order to determine compliance with this policy. A refusal to provide a sample means that there is a presumption of a violation of this policy. Any employee who violates or refuses to comply with this policy may be disciplined, including discharged.

Visitors or contractors who come onto the company premises are also subject to all provisions of this policy.

EXHIBIT B

DEPARTMENT CORRESPONDENCE

Date January 30, 1986

Drug/Alcohol Policy

All Managers

George Orescan

Dep't CEPOC Executive

I want to briefly review with you our policy regarding employees that may have a drug or alcohol problem. As in the past, we continue to encourage employees that have a problem to come forward and seek help. As you know, any employee that recognizes a problem and seeks help will receive it to the best of our ability. On the otherhand, if an employee is found to be in violation of the Company Policy regarding Drugs and/or Alcohol a request by the employee, at that point, to seek rehabilitation will not be a mitigating factor regarding discipline. Please communicate to those Supervisors under you that we are sincerely interested in helping employees to the extent possible before a problem develops in the point.

19890428


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