Minnesota Court Applies 2-Year Limit To Drug/Alcohol Testing Law, Increases Likelihood Of Punitive Damages In Employment Claims

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...