If someone on unemployment is offered a job that depends on passing a drug test and they fail the test, can the state cut off their unemployment benefits?
Plain-English summary
The Employment Security Commission (ESC) asked the AG a procedural question. North Carolina's unemployment statute disqualifies a claimant who, without good cause, refuses to accept suitable work when offered. N.C.G.S. § 96-14(3)(ii). The ESC kept seeing a fact pattern that did not fit cleanly into the existing process: a claimant gets referred to an employer, the employer offers the job contingent on a drug test, and the claimant fails the test. Under the ESC's existing procedures, nothing happened to the unemployment claim because no formal "refusal" of work was on the record. The Commissioners wanted to enact a procedure that would refer those cases to the adjudication department, where an adjudicator could decide whether the failed drug test amounts to a constructive refusal of suitable work and therefore disqualifies the claimant.
The AG agreed. The opinion identified N.C.G.S. § 96-4(b) as the source of rulemaking authority for the ESC and § 96-14(3)(ii) as the substantive disqualification basis. The AG noted that no North Carolina case was directly on point, but other-jurisdiction cases on constructive refusal supported treating the drug-test failure as a refusal of work. The AG also leaned on the long line of "misconduct" cases under the unemployment statute. Those cases say that misconduct is the "deliberate violation or disregard of standards of behavior which the employer has the right to expect of his employee." Being free of illegal drugs is a reasonable expectation. So the claimant who fails the test has, in effect, made the suitable offer impossible to accept by virtue of his own conduct.
The AG flagged the obvious procedural safeguards: the adjudication has to confirm the claimant was actually using illegal drugs, the test was reliable, and the failure was the cause of the lost offer. None of those factual findings can be skipped. The opinion held only that the ESC had the legal authority to adopt the regulation. The adjudication then runs the same as any other contested unemployment matter.
Currency note
This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
North Carolina's unemployment-insurance statutes have been substantially restructured since 1994, including changes to disqualification rules, the renaming of the administering agency, and amendments to the rulemaking framework. Drug-testing law more generally has also moved, including the federal Drug-Free Workplace Act framework and federal commercial-driver testing rules. For current practice, consult the current Chapter 96 and current Division of Employment Security regulations rather than relying on the 1994 sketch.
Common questions
Q: Does this mean any drug-test failure automatically ends my benefits?
A: At the time of the opinion, no. The AG said the ESC could adopt a procedure under which an adjudicator decides each case. The hearing examines whether the test was reliable, whether the claimant actually used illegal drugs, and whether the failure caused the lost offer. The disqualification is the outcome of an adjudication, not an automatic flip of a switch.
Q: Why is failing a drug test treated as "refusing" work?
A: The AG borrowed the concept of "constructive" refusal from out-of-state cases. The idea is that a claimant who, by his own conduct, makes himself unhireable for an otherwise suitable job has effectively turned the offer down. The employer was willing to hire; only the claimant's drug use blocked it.
Q: What if I was prescribed medication that triggered the positive result?
A: The opinion does not address that. It assumes the claimant was actually using illegal drugs. A claimant with a prescription or other lawful explanation would have an obvious response in the adjudication hearing, and the test reliability and cause questions the AG flagged would matter.
Q: Was the ESC required to adopt this procedure?
A: No. The AG only said the Commission had the authority to do so. The opinion answered a legal-power question, not a policy question. Whether and how to write the rule was up to the Commission.
Background and statutory framework
The North Carolina unemployment-insurance program runs on two pillars relevant here. N.C.G.S. § 96-14(3)(ii) sets a substantive disqualification: a claimant who fails, without good cause, to accept suitable work offered to him loses benefits. N.C.G.S. § 96-4(b) is the ESC's general rulemaking authority. The AG read them together to support the proposed regulation: § 96-4(b) is the engine, and § 96-14(3)(ii) is the substantive hook.
The "constructive refusal" doctrine the AG invoked comes from case law in other states dealing with claimants who discouraged a potential employer from extending an offer or who otherwise sabotaged the hire. The AG did not catalog those cases but accepted the Commission's research on the point.
The North Carolina misconduct cases the AG cited (Hagen v. Peden Steel Co., Douglas v. J.C. Penny Co., Miller v. Guilford County Schools) addressed the related but distinct question of when an existing employee's behavior amounts to disqualifying misconduct. The AG used them for their general principle: misconduct includes deliberate violations of behavior standards the employer is entitled to expect. Drug use was treated as falling on the wrong side of that line.
Citations
- N.C.G.S. § 96-14(3)(ii) (disqualification for failure to accept suitable work without good cause)
- N.C.G.S. § 96-4(b) (Employment Security Commission rulemaking authority)
- Hagen v. Peden Steel Co., 57 N.C. App. 363 (1982) (misconduct standard)
- Douglas v. J.C. Penny Co., 67 N.C. App. 344 (1984) (accord)
- Miller v. Guilford County Schools, 62 N.C. App. 729, cert. den., 309 N.C. 321 (1983) (accord)
Source
Original opinion text
January 10, 1994
Ann Q. Duncan, Chairman
Employment Security Commission of North Carolina
P. O. Box 25903
Raleigh, North Carolina 27611
Re: Advisory Opinion; N.C.G.S. 96-14(3)(ii); Termination of unemployment insurance benefits to an individual offered suitable work contingent on passing a drug test who then fails the test
Dear Ms. Duncan:
The Employment Security Commission of North Carolina (ESC) recently discussed a situation where an applicant was referred to a potential employer who offered employment upon condition the applicant pass a drug test. The applicant failed the drug test. The potential employer reported this information to the ESC, but no action was taken because this situation does not currently raise an issue on the unemployment insurance claim under the procedures now in effect.
To correct this obvious inequity, the Commissioners are considering enacting a procedure which requires that when a person receiving unemployment insurance benefits is offered suitable work contingent on passing a drug test and then fails the test, the issue of whether this person has constructively refused work under N.C.G.S. 96-14(3)(ii) is referred to your Adjudication Department. If the adjudicator determines that the person has constructively refused work, then the individual would be disqualified from receiving further unemployment insurance benefits. You ask whether the Commission has the authority to adopt such a procedure.
For reasons which follow, it is my opinion that N.C.G.S. 96-4(b) authorizes the Commission to adopt a regulation that would take care of this problem. Such a regulation would be based on N.C.G.S. 96-14(3)(ii), which allows unemployment benefits to be discontinued where the individual has failed without good cause "to accept suitable work when offered him."
I could not find a case directly in point in this or any other jurisdiction. Your staff found a number of cases from other jurisdictions which address the issue of constructive refusal of work where a claimant discouraged a potential employer from offering him a job or from hiring him. You are already familiar with these cases and their rationale from the brief provided by your staff, and I will not repeat any of that here.
From a common sense point of view, where a person is offered employment subject to passing a drug test, and that person fails the test, that person has constructively refused a suitable job offer. This assumes, of course, that the individual was using illegal drugs, that the drug test was reliable, etc. All of this would have to come out during the adjudication process. More often than not, common sense and the law run parallel to one another and are in harmony, as I believe is the case here. Although there are no cases directly in point, our courts have time and time again discussed the term "misconduct" in the context of eligibility for unemployment benefits. "'Misconduct' may consist in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee." Hagen v. Peden Steel Co., 57 N.C. App. 363, 365 (1982). In accord, Douglas v. J.C. Penny Co., 67 N.C. App. 344 (1984); Miller v. Guilford County Schools, 62 N.C. App. 729, cert. den., 309 N.C. 321 (1983). Being free from illegal drugs clearly is a reasonable expectation for any employer to have concerning his employees.
In conclusion, where an individual receiving unemployment benefits is offered a job contingent upon passing a drug test, and that individual fails the drug test, it is within the Commission's present authority to adopt a regulation that requires an adjudicatory hearing to determine whether that person was guilty of "misconduct" (the ingestion and use of illegal drugs such as marijuana or cocaine, etc.); and for that reason and due to his or her own fault, did not accept suitable work when it was offered.
Should you require anything further, please advise.
Andrew A. Vanore, Jr.
Chief Deputy Attorney General