WinCo Foods LLC operates a U.S. supermarket chain. When WinCo hires new employees, a Hiring Manager calls successful applicants to extend a conditional offer of employment. The offer is contingent upon the successful completion of a “pre-employment background check and drug test.” WinCo pays the drug testing fee but does not pay for travel expenses or the time required to test.
In 2017, a successful applicant named Alfred Johnson sued WinCo on behalf of himself and other employees and successful applicants. He sought compensation for the time and expense associated with the drug testing. Johnson advanced two primary contentions.
First, Johnson claimed he was an employee during the drug test because California applies a control test to determine whether an employment relationship exists, and WinCo controlled the administration of the drug test.
Second, Johnson contended that under contract law, the drug test should be regarded as a “condition subsequent” to his hiring as an employee.
The Ninth Circuit Court of Appeals dismissed both of Johnson’s contentions.
The Ninth Circuit first elaborated on the California control test, which assesses whether an employer controls the manner and means of performing a job or accomplishing the desired service. Here, WinCo directed Johnson to undergo a drug test at a certain place and time. The Ninth Circuit noted that employers also direct applicants to appear for interviews at a certain place and time; undergo writing or skills tests or even interview in a panel or in another way. None of these are required of someone who is already employed. Simply put, the level of control WinCo had over applicants during the application process was not enough to “magically convert applicants into employees.”
Under contract law, an employment contract can be formed before or after a certain condition is satisfied. Johnson argued that the drug test was a condition subsequent, meaning that the employment contract was already created and WinCo could terminate the contract in the event of a drug test failure. WinCo argued the opposite, contending that the drug test was a condition precedent, meaning that an employment contract is not created until the applicant successfully passes the drug test.
Here, WinCo unequivocally communicated to applicants that the job offer was conditional and that the pre-employment drug test was a condition of WinCo’s contingent offer. WinCo’s communication to applicants proved that the drug test was a condition precedent, one that must be satisfied before an employment contract and relationship is formed.
Because both of Johnson’s theories failed, the Ninth Circuit held that Johnson and his class members were not employees when they underwent the required drug test and were not entitled to reimbursement for related expenses.
Johnson v. WinCo Foods, LLC, 37 F.4th 604 (9th Cir. 2022).
Note:
The goal of the job applicants who filed this case was to trigger California Labor Code Section 2802. That law requires employers to reimburse employees for work-related expenses. This case highlights that a properly worded conditional offer of employment prevents an applicant from becoming an employee until the stated conditions have been met. Note too that in California: 1) pre-employment drug testing in the public sector may only be used for “special needs” jobs, such as positions that supervise children or that are safety sensitive; and 2) as of January 1, 2024, employment-related drug-testing in California cannot look for non-psychoactive cannabis metabolites, unless a federal contract or federal funding requirement specifies otherwise.