Court Opinion

ID: 4698660
Source: CourtListenerOpinion
Date Created: 2021-06-25 14:05:17.968968+00
Date Added: 2024-06-11T08:05:56.291121
License: Public Domain

IN THE SUPREME COURT OF IOWA
                               No. 19–0002

           Submitted October 14, 2020—Filed June 25, 2021

LUCAS WOODS,

      Appellant,

vs.

CHARLES GABUS FORD, INC.,

      Appellee.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Polk County, Jeanie K.

Vaudt, Judge.

      An employer seeks further review of a court of appeals’ decision

reversing in part the district court’s judgment in favor of the employer on

an employee’s claim seeking relief for alleged drug testing violations.

DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT COURT

JUDGMENT        AFFIRMED    IN   PART,    REVERSED      IN   PART,    AND

REMANDED.

      Oxley, J., delivered the opinion of the court, in which all justices

joined.

      Harley C. Erbe (argued) of Erbe Law Firm, Des Moines, for appellant.

      Steven H. Shindler and James R. Hinchliff (argued) of Shindler,

Anderson, Goplerud & Weese, P.C., West Des Moines, for appellee.
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OXLEY, Justice.

      In this companion case to Dix v. Casey’s General Stores, Inc., ___

N.W.2d ___, ___ (Iowa 2021), we address the nuances of Iowa’s workplace

drug testing statute, the importance of complying with all aspects of its

notice provisions, and the consequences for failing to do so.     For the

reasons stated below, we affirm in part, reverse in part, and remand for

the district court to award appropriate relief.

      I. Factual and Procedural Background.

      Lucas Woods was employed by Charles Gabus Ford (CGF) as a lube
technician. On August 9, 2017, Woods was randomly selected for a drug

test conducted by Mid-Iowa Occupational Testing. The lab technician in

charge of collecting Woods’s sample rejected his first sample for being

insufficient. The technician testified that the sample appeared to have

been altered, as the color was a bright yellow-green, similar to Mountain

Dew. The technician flushed the first sample and instructed Woods to

drink water and provide a second sample, which Woods did. This second

sample tested positive for methamphetamine. The technician testified that

Woods admitted to him that he had used methamphetamine the weekend

prior to the test. Woods, however, denied telling the technician he had

recently used methamphetamine.

      According to Woods, when he brought his second sample to the

technician, the technician combined it with another sample that was

sitting out. Woods claims this other sample belonged to someone else.

      Later testing by Quest Diagnostics confirmed the positive result for

methamphetamine. Quest sent the results to a doctor, who confirmed the

results and attempted to contact Woods. The doctor’s staff attempted at
least four phone calls to the number they believed Woods provided on his

form and left voicemails. The number they called did not belong to Woods,
                                     3

which they later ascribed to difficulty reading his handwriting. After the

failed calls, the doctor sent the information to Mid-Iowa, which informed

Kelsey Gabus McBride, HR director at CGF.

      As a result, CGF fired Woods.        Following Woods’s termination,

Gabus McBride sent Woods a letter informing him of the results of his drug

test, his right to get a confirmatory test, and that he would have to pay for

a confirmatory test. The letter also explained that if the sample tested

negative, CGF would reimburse Woods the cost of the confirmatory test.

However, the letter did not include the cost for the test. It was also sent
by certified mail but without return receipt requested.

      Following his termination, Woods sued CGF under Iowa Code

section 730.5(15) (2017). He alleged CGF did not substantially comply

with section 730.5 because it did not inform him of the cost of the retest,

nor was the letter sent by certified mail with return receipt requested. In

a proposed order submitted after the bench trial, Woods also argued that

the test was invalid because CGF failed to adequately train the employees

who administered it.    The district court found the letter substantially

complied with section 730.5 and dismissed Woods’s petition.

      The court of appeals reversed. It found the manner the letter was

sent substantially complied with the statute despite not being sent return

receipt requested and the training issue was not preserved for review.

However, it concluded the contents of the letter did not substantially

comply with section 730.5 because the letter did not provide the cost of a

retest. CGF applied for, and we granted, further review.

      II. Standard of Review.

      The parties agree this case was tried in equity. Therefore, our review
is de novo. Dix, ___ N.W.2d at ___. “[U]nder a de novo review we will make

our own legal conclusions, as we are not bound by and give no deference
                                         4

to the trial court’s conclusions of law.” In re Est. of Johnson, 739 N.W.2d

493, 496 (Iowa 2007). To the extent the proceeding turns on questions of

fact, “[w]e give deference to the factual findings of the court but are not

bound by them.” Id.

      III. Analysis.

      Woods’s claims focus primarily on the notice he received following

his positive test for methamphetamine.         He argues that notice was

deficient in two respects: (1) it did not include the cost of a retest and (2)

it was not sent return receipt requested. He also alleges Gabus McBride
was not properly trained.

      A. Whether Charles Gabus Ford Complied with Section 730.5’s

Training Requirements. Woods argues Gabus McBride was not properly

trained to administer drug tests under Iowa Code section 730.5(9)(h).

However, Woods raised the issue for the first time in the proposed findings

of fact and conclusions of law he submitted following the bench trial, and

the district court did not rule on it.

      “It is a fundamental doctrine of appellate review that issues
      must ordinarily be both raised and decided by the district
      court before we will decide them on appeal.” This doctrine is
      based on the principle that “[i]t is not a sensible exercise of
      appellate review to analyze facts of an issue ‘without the
      benefit of a full record or lower court determination[].’ ”

UE Loc. 893/IUP v. State, 928 N.W.2d 51, 60 (Iowa 2019) (alterations in

original) (citation omitted) (quoting Meier v. Senecaut, 641 N.W.2d 532, 537

(Iowa 2002)).

      Because Woods did not raise this issue until after completion of the

trial, CGF did not present evidence of Gabus McBride’s training.           No

questions were asked about her training during trial testimony, by Woods
or CGF.    That Woods raised the issue a second time in his motion to

reconsider does not change the fact that CGF had no opportunity to
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present evidence about whether Gabus McBride was properly trained. It

is the employer’s burden to prove compliance with section 730.5, Iowa

Code § 730.5(15)(b), but the employee must first put the employer on

notice     of   the   employee’s   claims    so   the   employer   may   respond

appropriately. Cf. U.S. Bank v. Barbour, 770 N.W.2d 350, 354 (Iowa 2009)

(“A ‘petition need not allege ultimate facts that support each element of the

cause of action[;]’ however, a petition ‘must contain factual allegations that

give the defendant “fair notice” of the claim asserted so the defendant can

adequately respond to the petition.’ ” (alteration in original) (quoting Rees
v. City of Shenandoah, 682 N.W.2d 77, 79 (Iowa 2004))).

         CGF did not present evidence of Gabus McBride’s training, but, in

light of the fact that Woods did not raise the training issue until after the

close of evidence, this issue was not preserved. Cf. UE Loc. 893/IUP, 928

N.W.2d at 60 (“Our doctrine of error preservation ‘requires a party seeking

to appeal an issue presented to, but not considered by, the district court

to call to the attention of the district court its failure to decide the issue.’ ”

(emphasis added) (quoting Meier, 641 N.W.2d at 540)). Thus, we do not

decide whether Gabus McBride was properly trained. See id. (“The claim

or issue raised does not actually need to be used as the basis for the

decision to be preserved, but the record must at least reveal the court was

aware of the claim or issue and litigated it.” (emphasis added) (quoting

Meier, 641 N.W.2d at 540)).

         B. Whether Charles Gabus Ford Substantially Complied With

Iowa Code Section 730.5’s Notice Requirements. Iowa Code section

730.5(7)(j)(1) declares:

         If a confirmed positive test result for drugs or alcohol for a
         current employee is reported to the employer by the medical
         review officer, the employer shall notify the employee in
         writing by certified mail, return receipt requested, of the results
                                     6
      of the test, the employee’s right to request and obtain a
      confirmatory test of the second sample . . . at an approved
      laboratory of the employee’s choice, and the fee payable by the
      employee to the employer for reimbursement of expenses
      concerning the test. The fee charged an employee shall be an
      amount that represents the costs associated with conducting
      the second confirmatory test, which shall be consistent with
      the employer’s cost for conducting the initial confirmatory test
      on an employee’s sample.

(emphasis added).

      We   have     described   section   730.5   as   providing   “severely

circumscribed conditions designed to ensure accurate testing and to

protect employees from unfair and unwarranted discipline.” Harrison v.
Emp. Appeal Bd., 659 N.W.2d 581, 588 (Iowa 2003). In Sims v. NCI Holding

Corp., we held that section 730.5(7) is subject to a substantial compliance

standard. 759 N.W.2d 333, 338 (Iowa 2009). “Substantial compliance is

said to be compliance in respect to essential matters necessary to assure

the reasonable objectives of the statute.” Id. (quoting Superior/Ideal, Inc.

v. Bd. of Rev., 419 N.W.2d 405, 407 (Iowa 1988)). This standard recognizes

the detailed and often complex conditions placed on employers choosing

to use a workplace drug testing program while ensuring compliance with

the purposes and protections provided by the statutory scheme.

      The notice requirement of section 730.5(7)(j)(1) provides important

protections for the employee. Id.

      Section 730.5(7)([j])(1) accomplishes this protective purpose
      by mandating written notice by certified mail of (1) any
      positive drug test, (2) the employee’s right to obtain a
      confirmatory test, and (3) the fee payable by the employee to
      the employer for reimbursement of the expense of the test.

Id. The employer must “provid[e] notice to the employee of the positive test

result and a meaningful opportunity to consider whether to undertake a

confirmatory test” to substantially comply with section 730.5(7)(j)(1). Id.
Woods argues the notice sent by CGF did not substantially comply with
                                      7

section 730.5(7)(j)(1) in two respects: (1) CGF failed to include the specific

cost of a retest in the letter and (2) CGF failed to send the letter return

receipt requested.

      1. Cost of the retest. Iowa Code section 730.5(7)(j)(1) requires that

an employer provide notice to an employee with a confirmed positive test

result including “the fee payable by the employee to the employer for

reimbursement of expenses concerning the test.” A letter that does not

include the cost of a retest does not strictly comply with the statute.

Nonetheless, if the letter provides “a meaningful opportunity to consider
whether to undertake a confirmatory test,” Sims, 759 N.W.2d at 338, CGF

will have met its obligations by substantially complying with the statute.

      The letter, accompanied by a notice of termination for failing a drug

test, informed Woods he could obtain a confirmatory retest of the sample,

but it would be at his own cost and he had only seven days to make the

request. The required cost component of the notice was entirely missing

from the letter. The cost of a retest, even if one expects to be reimbursed

upon being exonerated by a retest, is vital information for making an

informed decision. Knowing whether a test will cost $10 or $100 or $1000

makes a significant difference in a decision whether to request a retest.

The cost of the retest may be entirely prohibitive for many who are unable

to raise the money in the short seven-day period, especially on the heels

of being fired. Even if the employee can obtain the money for the retest,

the temporary loss of the money can affect the employee’s ability to pay

bills in the short term. Woods testified the reason he did not request a

retest was that he did not know the cost and he was the sole provider for

his children. This is exactly the kind of situation where the cost of the
retest is important to allow the employee to make a meaningful decision.

Woods’s testimony that he might not have requested a retest had he been
                                       8

informed of the cost does not change whether CGF substantially complied

with the statute’s mandate.

        CGF’s compliance with the statute in many, or even most, other

ways does not excuse its complete failure to provide the cost of the retest,

which is a significant piece of information required to be included in the

notice. It is not enough that an employee may be able to find the potential

cost of a retest on his own. The statute requires the employer to provide

that information, and the employer is in the best position to know the cost

since the cost is, by statute, required to “be consistent with the employer’s
cost for conducting the initial confirmatory test.” Iowa Code § 730.5(7)(j).

Without knowing the cost of a retest, a person does not have “a meaningful

opportunity to consider whether to undertake a confirmatory test.” Sims,

759 N.W.2d at 338. CGF failed to substantially comply with the statute

by failing to include the cost of a retest in the letter.

        2. Return receipt requested. Woods’s final contention is that CGF

failed to substantially comply with section 730.5 because the letter it sent

him was not sent return receipt requested.         In Sims we explained the

formal notice required by the statute “conveys to the addressee ‘a message

that the contents of the document are important’ and worthy of the

employee’s deliberate reflection.”    Id. (quoting Harrison, 659 N.W.2d at

587). The ultimate question is whether the letter “provid[ed] notice to the

employee of the positive test result and a meaningful opportunity to

consider whether to undertake a confirmatory test.” Id.

        There is no dispute that Woods received the notice of his positive

test.   Woods advances no persuasive distinction between sending mail

return receipt requested and sending it by certified mail. Any difference
in conveying the serious nature of the letter is marginal. See id. Sending
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the letter by certified mail without return receipt requested substantially

complied with section 730.5(7)(j)(1).

      3. The remedy. Since the district court found CGF substantially

complied with the statute, it did not award Woods any relief. Normally, we

would remand for the district court to decide whether Woods was

“aggrieved” under Iowa Code section 730.5(15). See Dix, ___ N.W.2d at ___

(explaining that whether an employee is aggrieved “depends on the nature

of the violation”). Unlike in Sims, where the retest confirmed the positive

test results so the employee was entitled only to costs and attorney’s fees,
see 759 N.W.2d at 341 (“The district court nonetheless properly exercised

its authority under the circumstances of this case to order NCI to

reimburse Sims for attorney fees and costs incurred in litigation

commenced as a consequence of NCI’s failure to substantially comply with

the notice requirement.”), there is no way to determine whether Woods’s

retest would confirm his original positive test result because the sample

no longer exists. Thus, this case is more like Tow v. Truck Country of Iowa,

Inc., where an employer violated section 730.5(6)(b) with respect to a

prospective employee when it incorrectly informed him he was required to

pay for a retest after his preemployment drug test was deemed

inconclusive.   695 N.W.2d 36, 38–39 (Iowa 2005).        Even though the

employee declined to take the retest, we affirmed the district court’s award

of back pay under section 730.5(15)(a) for the employer’s violation of the

statute. Id. at 39–40. The same result applies here. Even though Woods

testified he might not have asked for a retest had he been informed of the

cost of the test, he was aggrieved when he was prevented from making an

informed decision, and there is no way to know what the outcome of the
retest would have been.
                                     10

      We note that Woods did not seek reinstatement, asking only for a

monetary award of back pay and front pay. “Front pay is a ‘form of relief

that assumes the plaintiff would have continued in [his or her] position

absent unlawful actions by the defendant.’ ” Channon v. United Parcel

Serv., Inc., 629 N.W.2d 835, 848 (Iowa 2001) (alteration in original)

(quoting Eileen Kuklis, Comment, The Future of Front Pay Under the Civil

Rights Act of 1991: Will it be Subject to the Damage Caps?, 60 Alb. L. Rev.

465, 469 (1996)). As an equitable remedy, courts may award front pay in

lieu of reinstatement where reinstatement is not practical or possible. Id.
The amount of front pay depends on whether, and how long, the employee

would have continued employment. See Smith v. Smithway Motor Xpress,

Inc., 464 N.W.2d 682, 687–88 (Iowa 1990). However, if the employee’s own

conduct would make reinstatement improper, a front pay award would

also be improper. See Sellers v. Mineta, 358 F.3d 1058, 1064 (8th Cir.

2004) (“[P]ost-termination misconduct of a type that renders an employee

actually unable to be reinstated or ineligible for reinstatement should also

be one of the ‘factual permutations’ which is relevant in determining

whether a front pay award is appropriate.” (quoting McKennon v. Nashville

Banner Publ’g Co., 513 U.S. 352, 361, 115 S. Ct. 879, 886 (1995))).

      We remand this case for the district court to determine what, if any,

equitable relief is appropriate based on the existing trial record.

      IV. Conclusion.

      CGF failed to substantially comply with section 730.5(7)(j)(1) when

it failed to include the cost of a retest in its notice to Woods. The judgment

of the district court is affirmed in part, reversed in part, and this case is

remanded for consideration of appropriate relief based on the existing trial
record.
                          11

    DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT

COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND

REMANDED.