A three-judge panel of the Ninth Circuit ruled in Johnson v. WinCo, that new hires for a supermarket chain may not revive their class action lawsuit seeking compensation as employees for the time and expense of taking a drug test.[i]  The panel based its decision on the grounds that under California law, plaintiffs were not employees at the time of testing, and therefore, California labor law did not apply.

In 2017, plaintiff Alfred Johnson sued WinCo Foods, LLC (“WinCo”), a supermarket chain with over 130 locations and over 20,000 employees, seeking compensation for time and expenses required to attend a drug screening appointment as part of an interview process.  In March 2020, the district court granted Alfred Johnson’s bid for class certification and over 14,000 workers joined in the class action lawsuit.  Both sides moved for summary judgment. The district court granted WinCo’s motion for summary judgment, stating plaintiffs were not employees at the time the drug tests were administered.  The Ninth Circuit agreed with the district court and affirmed the district court’s judgment in favor of supermarket chain WinCo.

Plaintiffs argued that because the supermarket chain had control over how, when, and where the tests were administered, plaintiffs and WinCo had an employment relationship and therefore, plaintiffs should be deemed WinCo’s employees according to California law.  The Ninth Circuit disagreed stating California’s control test, which is used to determine whether an individual is an employee, takes into consideration the control over the performance of the work and not control over a drug test as part of the job application process.[ii]

The court rejected plaintiffs’ contentions stating control over a drug test as part of the job application process is not control over the performance of the job. The class members were not performing work for the employer when they took the pre-employment drug test.  They were job applicants, not yet hired – not yet employees.

Plaintiffs also argued that under California law plaintiffs were employees and the drug test should be regarded as a “condition subsequent” to their hiring as employees pursuant to Cal. Civil Code § 1438.  Cal. Civil Code § 1438 provides:

A condition subsequent is one referring to a future event, upon the happening of which the obligation becomes no longer binding upon the other party, if he chooses to avail himself of the condition.

Plaintiffs argued the employment contract was formed before the drug test was taken and WinCo could subsequently terminate the employment relationship in the event the employee failed the drug test.  The Ninth Circuit rejected this argument holding there was no condition subsequent because plaintiffs were not hired until they proved they were qualified. Moreover, there was no written contract at the time of the drug testing, and the drug test was a condition precedent, not a condition subsequent. The panel concluded that the class members did not become employees until they satisfied the condition of passing the employment drug test.

Accordingly, employers are encouraged to review their policies to ensure the policies comply with local, state, and federal labor laws relating to whether a contract of employment is created before or after conditions, such as drug testing, are satisfied.  Although the district court found in favor of the employer in Johnson v. WinCo, the outcome could be different if an employer allows a job applicant to begin work during an interview process or allows a job applicant to infer a condition for employment placement is a condition subsequent to employment.

[i] ALFRED JOHNSON V. WINCO FOODS, LLC, No. 21-55501 (9th Cir. 2022), Justia US Law, (Last Accessed July 6, 2022), https://law.justia.com/cases/federal/appellate-courts/ca9/21-55501/21-55501-2022-06-13.html.

[ii] Id.

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