The Minnesota Court of Appeals recently gave employers some much-needed certainty about the statute of limitations for wrongful termination claims brought under the state's Drug and Alcohol Testing in the Workplace Act (DATWA).  In Sipe v. STS Manufacturing, Inc., et al. , A11-2082 (Sept. 25, 2012), the Court held that a 2-year statute of limitations applies to claims under DATWA. Yet, in doing so, the Court also held that wrongful termination claims brought under DATWA are intentional torts, increasing the likelihood for punitive damages.

Minnesota's DATWA law is arguably one of the nation's most restrictive drug testing laws, prohibiting employers from terminating employment on the basis of a first confirmed positive drug/alcohol screen, requiring employers to offer substance abuse treatment, and prohibiting adverse employment action on the basis of a breathalyzer alcohol screen. To add to such onerous limitations, Minnesota employers have not had the benefit of knowing how long DATWA-based wrongful termination claims can linger without being acted upon by a dismissed employee. Such actions must now be brought within 2 years, pursuant to Minn. Stat. § 541.07.  

In Sipe, STS Manufacturing (STS), through its staffing agency, Labor Ready/True Blue, required Terrance Sipe to submit to a drug/alcohol test, and he complied. Three days afterwards, in April 2008, STS and the staffing agency informed Sipe that he had failed the test and that he was to leave the premises immediately.  In May 2011 (about 2 years and 11 months later) Sipe filed a lawsuit against both employers alleging wrongful termination under the Minnesota Drug and Alcohol Testing in the Workplace Act (DATWA), Minn. Stat. § 181.951, et seq. 

In opposing the lawsuit, the employers argued that Sipe's claim was time-barred by Minn. Stat. § 541.07 (establishing a 2-year statute of limitations for numerous types of claims). Sipe countered by asserting that Minnesota's DATWA did not contain a specific statute of limitations, and that a 6-year time period was applicable under Minn. Stat. § 541.05. Up until the Minnesota Court of Appeals decided this case, case law was silent as to which time period applied.

Minnesota's DATWA affirmatively prohibits employers from terminating employees who test positive for the first time. Minn. Stat. § 181.953, Subd. 10(b).  Instead, Minnesota employers must offer a rehabilitation program upon a first positive test, and can legally end employment only after the employee refuses to participate in treatment.  Id.  Minnesota's DATWA can be a trap for the unwary, and often confronts employers with a dilemma of choosing to comply with state law (and risking safety issues of an employee working while impaired) or violating DATWA by ending employment. Although Sipe does not eliminate this difficulty, it now gives certainty that a 2-year statute of limitations applies to DATWA claims.

The Minnesota Court of Appeals upheld the dismissal of Sipe's claim and based its decision on two factors.

First, the Court viewed DATWA wrongful termination claims as intentional torts, citing precedent that applies "tort principles" to the at-will employment relationship when "the employee can demonstrate that the employer contravened some clear mandate of public policy recognized judicially or legislatively."  See Sipe, A11-2082 at 10 (citing Stowman v. Carlson Cos., 430 N.W.2d 490, 494 (Minn. Ct. App. 1988)).  In that analysis, the Court observed that terminating an employee upon a first confirmed positive drug/alcohol was an intentional act.  Id. at 11.

Secondly, the application of a 2-year statute of limitations, the Court held, was appropriate because Minn. Stat. § 541.07 contemplates actions "for the recovery of wages... when the gravamen of the action is a breach of the employment contract."  Sipe at 12 (citing Park Nicollet Clinic v. Hamann, 808 N.W.2d 828, 832 (Minn. 2011).

This ruling has serious implications for Minnesota employers. If the Sipe case stands, employers should expect that claimants will use concepts of personal injury and tort law to apply to other employment-based claims. Since a wrongful termination under DATWA is now considered an intentional tort, expect to see an increase in claimants seeking punitive damages (which is currently a high standard which must be pled by separate motion). By deeming DATWA violations to be intentional torts, the Court has made pursuing such claims to be more successful and profitable.

Most likely, the Appellant will appeal this ruling to the Minnesota Supreme Court. Due to the fact that this is a case of first impression as to DATWA, chances are good that certiorari will be granted.

Minnesota employers who use drug and alcohol tests for pre-employment, post-accident or based on reasonable suspicion should become familiar with procedures on complying with DATWA.