Excerpted from a Bloomberg Law article by Khorri Atkinson

A recent federal appeals court ruling against Airgas USA LLC related to a disabled worker’s disputed positive drug test result sends a warning to companies about exercising due diligence before taking adverse employment actions, attorneys say.

The US Court of Appeals for the Sixth Circuit’s Jan. 31 order rejected Airgas’ argument that it had an “honest belief” that employee Murray Fisher used marijuana because it relied on information from a third-party drug screening company.

The doctrine shields companies from liability for allegedly discriminatory employment actions if they offer legitimate reasons based on incorrect information that they reasonably trusted at the time.

Yet the rule—a business-friendly defense used to escape employment discrimination and retaliation claims that hinge on indirect evidence of bias—isn’t a golden ticket to avoiding liability.

“This defense has been gaining in popularity and recognized by the courts,” said Amy Epstein Gluck, chair of Pierson Ferdinand LLP’s employment practice group.

But “it’s been successful most often when the employer does a complete investigation,” she said. “Timing matters.”

Fisher, who was using a legal hemp product to treat cancer-related pain, asked for a retest after telling the company that the hemp had caused the false positive result. Yet Airgas never told the drug testing company that Fisher was using hemp, nor did it ask whether the product could cause the test to come up positive for marijuana—”even though doing so would have been as easy as sending an email,” the court said.

That was enough to reverse a lower court’s decision tossing Fisher’s claim that the company illegally fired him in violation of Ohio’s disability law, the appeals court held.

The opinion highlights the perils companies face if they ignore their employees’ side of the story and carry out decisions without a proper investigation, said Sean Mack, co-chair of Pashman Stein Walder Hayden PC’s cannabis and hemp practice.

“It really underscores for employers that they need to listen to their employees,” he said.

For the full story, please click here.