Can a drug testing lab be sued for negligence in South Carolina if it mishandles an employee’s drug test? Yes, according to a recent decision issued by the South Carolina Supreme Court with potential ramifications for drug testing labs, employers, and employees who test positive for drugs. Shaw v. Psychemedics Corp., Opinion No. 27869 (S.C. March 20, 2019).

Like many employers in South Carolina, BMW requires employees to undergo drug testing due to various reasons. One of its employees tested positive for drugs based on the results of hair testing conducted by the testing lab, Psychemedics Corp. The lab used a nurse, from a local hospital, to obtain the hair sample.

The employee disputed the test result and, on the next day, submitted a hair sample to a different lab, which concluded that the employee did not test positive for drugs. The employee submitted this result to his employer. BMW declined to rely on the result from the lab retained by the employee, but did agree to have a second hair specimen tested by Psychemedics Corp. The employee tested positive again for drugs and lost his job.

The former employee sued Psychemedics Corp. alleging that it had negligently conducted his drug test. The drug testing lab claimed that it owed no legal duty – a prerequisite for a negligence lawsuit – to the former employee and asked the federal court to dismiss the lawsuit. Faced with this novel legal issue, the federal court certified the question to the South Carolina Supreme Court, which concluded that the testing lab owed a duty of care to employees who are required by their employer to participate in a drug test. The case returns to the trial court for further proceedings.

The following are some possible consequences of the court’s decision:

• Employees who test positive for drugs can sue the drug testing laboratory for negligence, seeking to recover all proximately caused damages, such as back pay or front pay.

• Employers should carefully select drug testing labs and consider requiring the labs to indemnify the employer against the lab’s negligence.

• Drug testing labs might seek to shift blame to the on-site person who initially obtained the sample (e.g. hair, urine) for testing. Or, the employee could name that person as another defendant in the lawsuit.