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Hospital May Be Liable to Client's Employee for Mishandling Drug Test

By Kathryn J. Russo
  • June 17, 2003

A hospital which collected urine samples for drug testing under a contract with an employer owes a duty of care to the employee being tested, and can be made to answer for damages to the employee caused by its negligence, including her termination from employment, the Pennsylvania Supreme Court has ruled. In Sharpe v. St. Luke's Hospital, ____ Pa. ____, 36 MAP 2001 (April 25, 2003), the court rejected the hospital's argument that because its agreement to act as a collection facility for the testing was with the employer, as a matter of law it could not be liable to the employee for any mistakes made during the collection.

Employee Renee Sharpe was directed to report to the hospital to undergo routine, random drug testing. Under its contract with the employer, the hospital collected the urine specimens and forwarded them to an outside laboratory for testing. The employee claimed that the chain of custody for her urine samples was adversely affected by numerous events which occurred at the hospital, as a result of which her urine specimen falsely tested positive for cocaine. When she disputed the result, at the employer's request, the hospital conducted an internal investigation and verified the chain of custody. Thereafter, the employer terminated her employment based on the positive test result.

The employee subsequently filed suit against the hospital in Pennsylvania state court asserting the hospital had "a duty of care to perform specimen collection in accordance with the Code of Federal Regulations governing specimen collection and in accordance [with] the requirements placed upon a medical facility pertaining to the appropriate and generally accepted standards [for] urine specimen collection." She alleged numerous instances where the hospital failed to meet those standards and, claiming deliberate and reckless misconduct by the hospital, averred harm to her reputation and economic status resulting from her termination.

The trial court granted summary judgment to the hospital holding that where a third party (such as the employer) has engaged an entity to perform employment drug testing, the employee may not thereafter maintain a negligence action against that entity. On appeal, over a strong dissent and a concurring opinion expressing serious reservations, the Pennsylvania Superior Court affirmed, declining to create a duty based on the "limited, passive role that [the Hospital] played in this case."

The Supreme Court of Pennsylvania reversed. It concluded the lower courts had focused too narrowly on the lack of a formal contractual relationship between the employee and the hospital. It found the relationship between the two sufficiently close to justify the imposition of a duty of reasonable care on the hospital. The employee had presented herself at the hospital in compliance with the employer's random testing directive, and the hospital was aware of that. As the court noted, the hospital "should have realized that any negligence with respect to the handling of the specimen could harm [the employee's] employment." The substantial harm deriving from inaccurate results (termination of gainful employment), the court reasoned, "would be a foreseeable consequence of a breach of the duty of reasonable care."

The court also found the hospital would be in the best position to ensure the non-negligent collection and handling of the specimens with the ability to limit its liability, so the consequences of imposing a duty on the hospital would not be unreasonable. Finally, the court stated, "the increase in mandatory employment - related drug screening and the potential ramifications of false positives create a substantial public interest in ensuring that the medical facilities involved in the testing exercise a reasonable degree of care to avoid erroneous test results occurring because of negligence."

Holding the hospital owed the employee a duty of reasonable care with regard to the collection and handling of the specimen for the purpose of employment-related drug testing, the court remanded the case for a jury trial on whether that duty was breached.

In an earlier case, a state intermediate court had reached an opposite conclusion regarding pre-employment drug screening, where the aggrieved applicant's claim for damages was characterized as too speculative and unsubstantiated to impose a duty on the third party entity. As the court noted, this case, on the other hand, involved the termination from existing employment, "thus setting forth a discrete and identifiable injury that [plaintiff] directly attributes to the Hospital's purported negligence."

Editor's Note: Hospitals that offer urine specimen collection or drug testing services to employers in Pennsylvania and other jurisdictions which follow a similar approach should weigh the economic benefits derived from these services against the risk of liability in a negligence claim. Where the benefits predominate, they should institute mechanisms to assure that proper collection, chain of custody and handling procedures (with due regard for protecting privacy interests), are prescribed and followed consistently.

If you have any questions, or would like to discuss further any aspect of drug testing law and policy development, please contact the legal counsel with whom you work, or if you desire, a member of the Jackson Lewis Substance Abuse Practice Group.

©2003 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

Reproduction of this material in whole or in part is prohibited without the express prior written consent of Jackson Lewis P.C., a law firm that built its reputation on providing workplace law representation to management. Founded in 1958, the firm has grown to more than 900 attorneys in major cities nationwide serving clients across a wide range of practices and industries including government relations, healthcare and sports law. More information about Jackson Lewis can be found at www.jacksonlewis.com.

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