Insurers false report of addiction to employer leads to ADA claim

Many public and private workplaces across the U.S. require drug testing, either as a condition of hiring or upon reasonable suspicion that an employee is using illicit drugs.

At the same time, the Health Insurance Portability and Accountability Act of 1996, known as HIPAA, limits employers’ access to employees’ private medical information to some extent. What actions can an employer take, and what if the situation involves prescription drugs?

A recent appellate case from the 10th Circuit may give some insight. A long-term FedEx employee, suffering from severe work stress, applied for short-term disability insurance coverage when he was unable to work. 

Unfortunately, the insurance company falsely reported to his employer that he had “filed a disability claim for alcohol or substance abuse.” In fact, that was not the case. True, he had been among the millions who had succumbed to addiction to a subscription opioid painkiller but had been receiving treatment for that before. Withdrawal from Suboxone, the medication for treating the addiction, played a role in his disability claim, but it was inaccurate to call it a behavior health or substance abuse claim.

However, FedEx policy was to drug test employees after becoming reasonably suspicious that they were abusing drugs. The phone call from the insurance company was enough for that, and FedEx told the employee he was now required to prove his drug-free status before he could return to work; that he would be subject to random drug tests for five years; and that he must keep FedEx apprised of any prescription medications he was taking.

Frantic, the employee called his employee assistance program and had them clarify for FedEx that his claim was not based on alcohol or substance abuse. FedEx refused to change its mind.

The employee did return to work, but after a couple of years he decided he could no longer tolerate what he felt was disability discrimination. He filed a lawsuit against the insurance company and FedEx, claiming discrimination and violation of the Employee Retirement Income Security Act, or ERISA.

All of his claims were denied by the trial court. On appeal, however, the federal circuit court revived one of his complaints. 

Drug testing is legitimate for the purpose of determining whether an employee suffers from a health problem, the court said. Also, FedEx acted reasonably in insisting upon the drug testing, considering the information they were given by the insurer. 

What FedEx did not have the right to do, according to the court, was insist upon being kept apprised of his prescription medications. That was an unlawful medical inquiry.