Last Monday, former Wal-Mart manager Kathryn Silva filed an ADA disability bias claim in the Middle District of Pennsylvania that alleged Wal-Mart terminated her because she refused to sign a “last chance agreement.” The agreement required her to admit to substance abuse, undergo regular drug screening, and enroll in a substance abuse program. At the time, Silva was purportedly afflicted with several conditions, including arthritis, sciatica, scoliosis, anxiety, and high blood pressure. She alleged that her doctors prescribed her medications to treat these medical conditions and enable her to perform the essential functions of her job. She further alleged that Wal-Mart declined to confirm that her doctors had legally prescribed her medication to treat her medical conditions.

Due to her medical conditions, Silva is likely a “qualified individual” with a disability under the Americans with Disabilities Act (“ADA”)—an individual who, with reasonable accommodation, could perform the essential functions of the employment position that she held. See 42 U.S.C. 12111(8). ADA prohibits “covered entities”—generally employers with 15 or more employees—from discriminating against qualified individuals because of their disabilities. ADA does not, however, protect employees or applicants who are “currently engaging” in the illegal use of drugs. See 42 U.S.C. 12114(a).

While it may seem obvious to employers that ADA does not prevent them from terminating substance abusers, they must be careful. ADA protects qualified individuals with disabilities who are “erroneously regarded” as engaging in illegal drug use. On the facts of Silva’s complaint alone, she appears to fit into this category. Thus, if true, Wal-Mart’s decision to terminate her for refusing to sign the last chance agreement may be a costly one.

This does not mean, however, that employers may not take steps necessary to ensure drug-free workplaces. The ADA permits testing for illegal drug use. A drug test is not considered a medical examination under the ADA. As a result, employers may conduct testing of applicants or employees and make employment decisions based on the results. Employers should be cautious, however, not to make employment decisions based on drug test results that an employee’s medically necessary and legally prescribed drugs may have impacted. On the other hand, if the employer can demonstrate that the employee cannot perform the essential functions of the position when taking the medication, then the employer may take action.

While a test for illegal drugs is not a medical examination under the ADA, a test for alcohol is. Thus, employers generally may not test job applicants for alcohol before offering them a position. With respect to current employees, employers may test them for alcohol if they have a reasonable belief that they are under the influence of alcohol at work. They may also test employees following a workplace accident. Finally, employers may maintain and enforce rules prohibiting employees from being under the influence of alcohol or illegal substances in the workplace. As a best practice, employers should implement policies that explain: when drug or alcohol testing may occur; how it will be administered; and that the results of the tests will be confidential. Employers should also check state and local laws regarding drug and alcohol testing.