Workforce.com

Drug Testing's Negative Results

October 3, 2003

Joseph Reilly, a bearded middle-aged man who is the founder and president of Florida Drug Screening, Inc., stands at a lectern in a Washington, D.C., hotel meeting room less than 300 yards from the White House. His topic is selling employee drug-testing programs to small and medium-sized businesses. Reilly is preaching to the choir. He’s speaking to 85 colleagues who are assembled at a daylong workshop organized by the Drug and Alcohol Testing Industry Association.

    The attendees are an earnest-looking group of primarily boomer-aged entrepreneurs and executives who seem utterly unconcerned about shifting attitudes toward their industry. As he speaks, members of the audience nod and scribble notes in "Drug and Alcohol Testing Programs for Non-Mandated Employers" workbooks.

    What Reilly doesn’t mention, and no one else in the room brings up, is this: the drug-testing industry is coming under scrutiny, its value questioned as never before. While the efficacy of drug testing continues to be a subject of debate, there is a more relevant question being raised at businesses where testing isn’t a federally mandated safety requirement. Does workplace drug testing pay? While many in the field and their colleagues in government and industry speak optimistically of a time when every American worker, from the CEO on down, will have to prove his drug-free status, there’s been a small but significant shift in corporate thinking. Under the pressure of hard times, neither the philosophical nor the economic reasons for drug testing are as convincing--or affordable--as they once were.

    Last year the American drug-testing industry conducted between 20 and 25 million tests and had revenues of $737 million, a growth of only 1 percent from the previous year. The drug-testing industry grew at an annual rate of 12.5 percent during the 1990s. However, two years ago, according to the latest survey conducted by the American Management Association, 61 percent of companies administered drug tests to job applicants--down from 68 percent in 1996. In July, Quest Diagnostics Inc., a leading processor of employee drug tests, which also provides diagnostic services to the medical industry, reported a 9 percent increase in revenue in the second quarter even though there was a 10 percent drop in the drug-testing portion of its business.

    Reduced hiring during the recession is responsible for much of the drop. But there are other causes. Meldron Young, the American Management Association’s human resources practice consultant, says that a growing number of employers regard off-work-site marijuana use, which produces more than half of all positive results on non-mandated drug tests, as not worth the time, expense or hard feelings it costs to detect. "You have people moving into the upper echelons of corporate America now that kind of take the stance that if [casual off-site drug use] isn’t affecting the person’s performance, it’s not an issue."

A small, quiet revolt
    The main theme of Reilly’s speech is his own belief in the complete necessity, the absolute righteousness, of workplace drug testing. "Many of the fears and misconceptions surrounding drug testing have been resolved in the minds of employers," he declares. "The science of drug testing has passed the test of time."

    That was not the conclusion of top executives at electronics giant Hewlett-Packard three years ago, shortly before they decided to drop drug testing. So few applicants were testing positive, a company spokesperson said at the time, that the procedure was no longer cost effective. Cisco and Sun Microsystems, like many other high-tech firms that attract highly skilled, self-motivated employees, have never conducted drug tests.

    Neither does Trader Joe’s, a 200-store nationwide specialty supermarket chain. Carol Impara, vice president for human resources, says that the company doesn’t test because of the value it places on creating employee trust. "Basically, it’s wanting to show that we trust people, and showing that from the start," she says. "Our managers aren’t sitting in their offices, they’re out there with everybody else. It’s a team effort."

    On the other hand, a number of firms whose CEOs or workforce executives were recommended by DATIA members as proud, satisfied consumers of their drug-testing services, including Sheetz, a fast-growing chain of convenience stores, and Carrier West, a heating and air conditioning distribution company in Denver, either refuse to comment or don’t respond to telephone calls. Other firms that will comment offer statements that are less than illuminating. Hewlett-Packard, for instance, has backed off its two-year-old financial explanation for suspending drug testing and now cites its companywide code of conduct, summarized by the phrase "HP must maintain the highest standards of integrity," as the reason it no longer tests for drug use. Its arch rival Dell Inc. cites the exact same reason for taking the opposite approach. It tests every one of its approximately 42,000 employees.

    One significant reason for this inconsistency is that no companies that administer such tests have conducted any studies of either the efficacy or effect of their own drug-testing programs on the bottom line. Beverly Potter, a consultant on corporate drug testing and co-author of both Drug Testing at Work: A Guide for Employers andPass the Test: An Employee Guide to Drug Testing, says that to do so would be at best irrelevant and at worst embarrassing. "They’re worried about their image," Potter says. "They’re afraid that to say they don’t support drug testing implies that they support drug use."

    She and other critics of drug testing charge private-industry drug testers with capitalizing on such corporate caution. They rely on vague ROI figures extrapolated from decades-old research studies. The by-no-means undisputed results of these studies are used to show the undeniable financial incentives of screening for the presence of marijuana, cocaine, heroin, PCP, amphetamines and up to a dozen or more other illicit substances in employees’ bodies. The benefits are said to include increased productivity, fewer accidents, lower health-care costs and decreased employee turnover. The next rhetorical bulwark is the Drug-Free Workplace Act of 1988, which requires companies doing $25,000 or more in business with the federal government per year to certify that they are, well, a drug-free workplace. The act does not, however, require a drug-testing program.

    Additional arguments for drug testing include the absolute necessity of preventing drug-induced workplace accidents. It is also argued that drug testing can work as a kind of informal IQ test to screen out job applicants too dim to abstain before a pre-announced drug test, and that the average employee is revolted by the prospect of working alongside unsafe or work-shirking individuals who are under the influence of drugs. Professional drug testers also introduce the possibility of armies of drug-addicted job applicants showing up at the front door of employers that don’t do drug tests after being turned away by drug-testing employers.

    Given a cost of only $25 to $35 per urine test per employee, down to $14 to $28 for companies of more than about 10,000 employees, these talking points were surefire deal clinchers during boom times. Moreover, in an era when DARE chapters are in most school districts despite evidence that they do little to prevent student drug abuse, and an anti-drug-testing position can be easily twisted by politicians or competitors into a "pro-drug" stance, most companies are loath to even mention the matter of drug testing. But with a stagnating economy, the pro-testing arguments are not the slam-dunks they once were.


"Now employers look at drug testing like everything else and say, ‘Where’s the payoff?’ And if nobody sees a payoff, programs get cut--or, more often, cut back."


    The American Management Association’s Meldron Young says that many companies that previously demanded drug tests of both job applicants and current employees are now testing only job applicants. Lewis Maltby, president of the liberal National Workrights Institute in Princeton, New Jersey, points out that the economic climate has significantly changed corporate attitudes about drug testing. "Initially, in the late ’80s or early ’90s, employers looked at drug testing and said, ‘Why not?’ " Maltby says. "Now employers look at drug testing like everything else and say, ‘Where’s the payoff?’ And if nobody sees a payoff, programs get cut--or, more often, cut back."

Dynamite data
    The meatiest part of Reilly’s presentation is his own tried-and-true sales pitch, which he illustrates with the aid of a felt-tip pen and a whiteboard. Since 17 percent of the American population are currently substance abusers, he says, and since substance-abusing employees cost their businesses a national average of $7,000 apiece per year, the ROI yielded by yearly drug tests is a stunning 288 percent. Additionally, companies that use drug testing enjoy reduced absenteeism and turnover, increased productivity and fewer accidents.

    What he doesn’t mention is the considerable body of research that supports the economic case against drug testing. Much of this research was conducted by respected academicians and government agencies. The most convenient access to this information, however, is through two unabashedly political organizations: the National Organization for the Reform of Marijuana Laws and the American Civil Liberties Union.

    On NORML’s Web site, nestled among advertisements for polo shirts made of hemp-based cloth and appeals against police harassment of "rave" parties, is a reference to a 1990 article in Scientific American by John Horgan, one of that publication’s senior writers at the time. He explores the genesis of a finding by the federal government’s National Institute on Drug Abuse that illegal drug use costs American society $47 billion, in 1990 dollars, per year.

    "Here’s how the figure was derived," Horgan writes. "In 1982 NIDA surveyed 3,700 households around the country. The Research Triangle Institute, a NIDA contractor in North Carolina, then analyzed the data and found that the household income of adults who had ever smoked marijuana daily for a month, or at least 20 out of 30 days, was 28 percent less than the income of those who hadn’t. The RTI analysts called this difference ‘reduced productivity due to daily marijuana use.’ They calculated the total ‘loss,’ when extrapolated to the general population, at $26 billion. Adding the estimated costs of drug-related crimes, accidents and medical care produced a grand total of $47 billion for ‘costs to society of drug abuse.’ "

    In Horgan’s opinion this conclusion is scientifically indefensible. Marijuana-reform activists and representatives of other civil-libertarian organizations chime in that urine tests, which register positive for marijuana use if the test subject has used the drug even once in the previous one to three months, are the wrong instruments for filtering out hard-core users anyway.

    Other anti-drug-testing arguments are available from the ACLU, which in 1999 issued a little-noticed 28-page report titled Drug Testing: A Bad Investment. This report criticizes the methodology and conclusions of studies frequently cited by members of the drug testing industry. It confirms the workforce-wide substance-abuse figure of 17 percent--but adds that the substance most often abused is alcohol.

    Most claims of reduced absenteeism, turnover and injuries, it contends, are based on several late-1980s studies of postal and power workers, which the ACLU interprets quite differently. The organization says that the studies are either inconclusive or show no correlation between drug use and poor or dangerous workplace performance. The ACLU concedes that one postal study does show a correlation between drug use and turnover/termination. It also points out that the same data shows an equally strong correlation, unmentioned by the pro-drug testers, between the likelihood of a new postal worker quitting or being fired and simply being African-American.

    The ACLU report also quotes a much longer but no less obscure study, Under the Influence? Drugs and the American Work Force, also commissioned by NIDA. Among that 1994 study’s conclusions, the ACLU points out, were that the data "[does] not provide clear evidence of the deleterious effects of drugs other than alcohol on safety and other job-performance indicators" and that "widely cited cost estimates of the effects of alcohol and other drug use on U.S. productivity are based on questionable assumptions and weak measures." The ACLU report also includes a Kaiser Permanente study that compared the medical histories and health-care costs of people who used marijuana and those who did not. Kaiser found no significant differences. Theoretically at least, that means that pot-smokers don’t strain their employers’ health-plan budgets any more than their abstinent cohorts.

    The ACLU cites an $11.7 million drug-testing program, conducted in 1990, that uncovered 153 drug users out of 29,000 government employees tested. The organization calculates that it cost taxpayers $77,000 for each drug abuser found by the program. Then, as its pièce de résistance, the ACLU points to yet another study, this one commissioned by a pro-labor publication, Working USA, and carried out by economists from Le Moyne College, a small Jesuit-run school in Syracuse, New York. The 1998 report, it says, proves that drug testing can actually decrease productivity. It allegedly does this by dissuading talented high-tech workers, who have a choice of employers, from working for companies that they feel do not trust them or respect their privacy. This limits the already small and select hiring pool for these companies.

    The drug-testing industry generally treats these reports with scorn. It advises doubters, in effect, to value the drug testers’ experiences on the front lines above dry, abstract studies and, above all, to consider just who is making the arguments against them. Susan Ramsden, a forensic toxicologist who is founder and president of Comprehensive Medical Center, a drug-testing service in Sacramento, California, says that whatever the national statistics happen to show, she does business in what she believes to be the illegal amphetamine production and consumption capital of the world, parts of Northern California.

    "If I go into warehouses, small construction companies or temp agencies that use day labor, we’ll have as high as a 30 percent positive drug rate," Ramsden says. "When I get a call from a business owner, saying, ‘Oh my God, I just was told we have a problem,’ or ‘I’ve just found some drugs,’ I’ve sometimes found 100 percent of his employees positive for amphetamines."

    Eric Hess, a DATIA board member and vice president of drug and alcohol testing services for U.S. Investigations Services in Annandale, Pennsylvania, scans the 1999 ACLU report and says, "This was written around the time in which the ACLU was trying to fortify a position that states should legalize marijuana use." He mentions the increased abuse of amphetamines and "designer drugs" like Ecstasy in recent years, and declares that the ACLU policy is badly out of date. Referring to the organization’s stance, he adds, "This is obviously a political commentary."

Flashback
    The modern history of workplace drug testing began in 1986, when President Ronald Reagan signed an executive order declaring all federal agencies drug-free workplaces. In 1991 President George Bush the elder signed the Omnibus Transportation Employee Testing Act, which, among other measures, mandated pre-employment and post-accident drug and alcohol testing for safety-sensitive workers such as truck drivers, airline pilots, and maritime, pipeline and railway workers. Unannounced random drug tests for 50 percent of all safety-sensitive workers per year were mandated. Over the years, as the percentage of positive tests has stabilized at about 2 percent, the random-testing requirement has been progressively lowered to 25 percent for several industries, including airlines and railroads.

    Private industry initially adopted non-mandated testing programs enthusiastically. Although civil libertarians and marijuana advocates quickly took employers like Southern Pacific and Times Mirror Co. to court, accusing them of invading their privacy or conducting illegal searches, a number of cases established the right of private employers, under the "at will" employment principle, to mandate pre-employment drug tests. To a lesser extent, other cases gave employers the right to institute tests on current employees on the grounds of reasonable suspicion. Nancy Delogu, a partner in the Washington, D.C., office of Littler Mendelson, a large labor and employment law firm, says the playing field has been tilted toward employers since the early 1990s. "We haven’t seen a new restriction on [workplace] drug testing in years," she says. William Rittenberg, a lawyer in New Orleans who is a member of NORML’s legal committee, is also familiar with the situation and agrees that employers have the upper hand. "I get calls from fired private-sector workers all the time," he says. They tell him they’ve tested positive. "I tell them, ‘I’m sorry. I’m afraid you’re out of luck.’"

    This may not be the case for much longer. When the economy picks up, say experts brave enough to tackle the uncomfortable subject, employers facing a sellers’ market will have to put aside their feelings and assumptions and address the subject of drug testing anew. Companies certainly will be against employee drug use, but they’ll make their point about their disapproval of drugs without testing bodily fluids, says Roger Herman, a management consultant and head of The Herman Group in Greensboro, North Carolina. "They’ll have to be more open, more tolerant."

    Like the supposed economic benefits that brand-new publicly funded NFL stadiums bring to their local economies, or the effectiveness of "boot camps" in turning teenage delinquents into productive citizens, the absolute necessity of employee drug testing now has the status of a concept that, well, just feels right, conclude many of those close to the issue. For complicated and mostly admirable reasons, few companies are inclined to question these good feelings too deeply. But much of the data on drug testing is inconveniently and annoyingly contrary to the conventional wisdom and can not be ignored.

Workforce Management, October 2003, pp. 35-40 -- Subscribe Now!