The practice of random drug testing pits management’s duty to protect the safety of its employees and customers against an employee’s right to privacy. Random drug testing screens employees for the use of drugs randomly, without suspicion or cause. The test usually includes the analysis of a urine specimen provided by the employee.

Many employees consider random drug testing an unreasonable and illegal invasion of their privacy.35 Although random drug testing is required by law for specific occupations where safety is critical, such as airline pilots and military personnel, it has been challenged in cases where the employer has other methods available to ensure a drug-free work environment. For example, the International Association of Fire Fighters will permit clauses in its labor contracts that allow drug testing based on “probable cause” but will not agree to random drug testing. Numerous employers also use preemployment drug testing as a condition of employment.36

Because no employee groups have succeeded in stopping drug testing under the U.S. Constitution, the legal battle between employee privacy and employer-mandated drug testing is being played out at the state level.37 Not only do state constitutions vary widely in their protections of employee privacy—for example, New Jersey and California have added employee privacy provisions to their state constitutions, whereas Utah and Texas have not38—but the courts’ interpretation of these protections has veered from one side to the other as well. For instance, the California Supreme Court dealt what was considered a death blow to random drug testing in that state when it ruled in 1990 that an employer must have a “compelling interest” to require employees not in safety-sensitive positions to submit to random drug tests.39 Pro-employee groups cheered the ruling, but four years later the California Supreme Court allowed the National Collegiate Athletic Association to conduct random drug testing of student athletes. The court said that the private sector, like the government, must abide by the state constitution’s right of privacy, but that the private sector can invade privacy for “legitimate” interests.40

Every professional sports league tests its athletes for drugs, including performance-enhancing drugs such as steroids and stimulants. Most of the professional sports leagues require random drug testing to deter the use of drugs by their athletes, as shown in the following examples:41

• ▪ Major League Baseball (MLB) requires each player to be tested twice a season, once during the first five days of reporting to spring training and again on a randomly selected date. In addition, 600 players chosen at random are tested a third time each year. A player who tests positive for a performance-enhancing drug is subject to three additional tests in a year, with incremental penalties of a 50-game suspension, a 100-game suspension, and then a permanent suspension. In August, 2013, 12 professional baseball players admitted to using performance-enhancing drugs and each player was suspended for 50 games during the baseball season that year.

• ▪ The National Football League (NFL) tests all players at least once a year as part of their training-camp physicals and randomly selects 10 players per team per week during the regular season for additional drug testing. Players can also be randomly selected for testing up to six times during the off-season.

• ▪ The National Basketball Association (NBA) allows players to be randomly tested no more than four times each season. Players testing positive receive incremental penalties of a 10-game suspension, a 25-game suspension, a one-year suspension, and then a permanent ban.

• ▪ The National Association for Stock Car Auto Racing (NASCAR) requires random drug testing as part of its substance abuse policy. Drug testing is conducted with all drivers beginning at the Daytona 500 race in February. Random testing includes all drivers, crew members, and NASCAR officials. Failure of a drug test results in an immediate, indefinite suspension; a third violation results in a lifetime ban.

Designing a random drug-testing policy poses numerous challenges. The HR staff can be helpful in counseling management on how to deal with some of the following issues:

• ▪ How should employees who have positive drug test results be treated? Should the manager discharge them or attempt to rehabilitate them?

• ▪ If an employee has a positive test for a legitimate reason, such as using a prescription drug or eating a poppy seed bagel (poppy seeds are the source of opium), how can the employer ensure that the employee is not charged with using illegal drugs? How can an employer protect employees from false-positive results in general?

• ▪ What can managers do to maintain security over urine specimens provided for the drug test so that they are free from adulteration designed to alter the results? Should managers require that employees be monitored while providing the urine sample to ensure its authenticity? Or does such monitoring violate the employee’s privacy rights?

Motorola’s random drug-testing policy was designed specifically to deal with these issues. Motorola decided to implement random drug testing after it estimated the cost of employees’ drug use in terms of lost time, reduced productivity, and health care and workers’ compensation claims at $190 million annually. This amounted to 40 percent of the company’s net profits.42

The jury is still out on whether the benefits of random drug testing outweigh the resentment and mistrust this policy often generates. A survey of workers at one of the nation’s largest railroads found that only 57 out of 174 respondents expressed support for periodic drug testing—and all stipulated that it was justifiable only for safety reasons. Many commented that drug testing undermined their loyalty to the company. One worker wrote:

I am a faithful and loyal employee. I felt like a common criminal, and I didn’t even do anything wrong. . . . I happen to have bashful kidneys. The first time I took a drug test it took me almost three hours of drinking water and coffee before I could give a sample. Needless to say I was upset, angry, humiliated, defensive, etc. . . .43

Employees’ anger and humiliation about random drug testing is compounded by the evidence that it does not help deter accidents: In 1991, a Federal Railroad Administration report found that only 3.2 percent of workers involved in railroad accidents tested positive for drugs.44

In order to avoid some of the disadvantages related to having employees submit to random drug-testing procedures, management in firms that are not involved with transportation or safety-sensitive jobs may decide to use either a preemployment drug test or a probable cause drug test.45 A preemployment drug test is given to each job applicant as part of the hiring process. For example, the preemployment drug test may be taken as part of a physical examination that a job candidate must take before being given a job offer. Those who fail the test are not hired.46 A probable cause drug test is given to employees who have accidents, engage in unsafe job behavior, or show behavioral signs of drug use, which may include having impaired judgment or slurred speech. Notice that neither the preemployment drug test nor the probable cause drug test is given on a random basis but instead is given either at a predetermined time (such as the time an employee is hired) or for a predetermined reason, such as having an accident or being reprimanded for unsafe conduct in the workplace. In a survey taken in 2004 by the American Management Association, 62 percent of U.S. firms reported using some form of drug testing.47

Moreover, there is an alternative to drug testing that does not invade employee privacy and that is much more reliable for determining an employee’s fitness for work: the performance test. For example, computer-based performance tests are available that test workers’ hand–eye coordination to measure their ability to do their jobs. Every morning at Silicon Valley’s Ion Implant Services, Inc., delivery drivers line up in front of a computer console to “play” a short video game. Unless the machine spits out a receipt confirming they have passed the test, they cannot climb behind the wheel of their trucks. What happens to workers who fail their performance tests? Some companies refer them to a supervisor, others to an employee assistance program. Besides being both more reliable and less invasive of employees’ privacy, performance testing has another advantage over random drug testing: It is cheaper. Performance tests cost from $0.60 to $1 per employee compared with the $10 per employee that the cheapest drug test costs.48

Many employers justify random drug testing on the grounds that drug use is illegal. In recent years, however, some companies have also begun testing employees who engage in legal activities, such as smoking. Exhibit 14.1 examines the controversy surrounding employer policies that reject all applicants who smoke on or off the job.

Experts estimate that employee theft costs U.S. business over $400 billion a year.49 “Theft” includes theft of merchandise, embezzlement, industrial espionage, computer crime, acts of sabotage, and misuse of time on the job. While the average annual loss a bank suffers from embezzlement is $42,000, the average computer crime costs around $400,000.50 A retail store loses an average of $213 in a shoplifting incident (when a store customer steals merchandise) but loses an average of $10,587 for an employee theft incident.51 The country with the highest level of shrinkage (losses from shoplifting and employee theft) is India; the countries with the lowest levels of shrinkage are Germany and Taiwan.52 Industrial spies who steal competitive trade secrets, such as software codes or plans for a microprocessor chip, may take property so valuable that its theft threatens the very existence of the business. Employees’ theft of time from employers can also be costly. Employees steal time when they take long lunches, use the telephone for private conversations, misuse sick leave for extra vacation time, or surf the Internet for personal reasons.

Companies are attempting to fight these various forms of theft by using electronic surveillance devices to monitor employees.53 In industries such as telecommunications, banking, and insurance, as many as 80 percent of employees are subject to some form of electronic monitoring.54 To eavesdrop on employees, companies use hidden microphones and transmitters attached to telephones and tiny fish-eye video lenses installed behind pinholes in walls and ceilings. In a survey published by Macworld magazine, more than 21 percent of respondents said they have “engaged in searches of employee computer files, voice mail, electronic mail or other networking communications.” Most said they were monitoring work flow or investigating thefts or espionage.55

The increased sophistication of computer and telephone technology now makes it possible for employers to track employees’ job performance electronically—for example, to count the number of keystrokes an employee makes on a computer terminal or determine how many reservations a travel agent books in a given time period.56 As noted in the chapter opener, air conditioning service employees who drive to serve clients can be monitored by special cell phones containing chips that are tracked by global positioning satellites so that the employer knows the employees’ location at any time and can compare it to where they are expected to be.57 This use of electronic monitoring has raised concerns not only about employee privacy, but also about the dehumanizing effect such relentless monitoring can have on employees.58 Many employees whose work is tracked electronically feel that monitoring takes the human element out of their work and causes too much stress. One study comparing monitored and nonmonitored clerical workers showed that 50 percent of monitored workers felt stressed, compared with 33 percent of nonmonitored workers; and that 34 percent of monitored workers lost work time because of stress-induced illness, compared with 20 percent of nonmonitored workers.59 Some research suggests that there is a higher incidence of headaches, backaches, and wrist pains among monitored employees.60

Employees are most likely to see electronic monitoring as legitimate when management uses it to control theft. But even in this area some managers have exceeded reasonable standards. For example, experts estimated that in 2000 thirty million U.S. workers were subjected to secret electronic monitoring.61 In one case, the nurses at Holy Cross Hospital in Silver Spring, Maryland, became quite upset after discovering that a silver box hanging on the locker room wall was a video camera monitored by the hospital security chief—who was a man.62

Some employers use electronic monitoring devices to control employee theft of time when they are on the company payroll. This wasted time is sometimes spent playing video games or visiting pornographic Web sites. Employers monitor to eliminate such wastage. In the retail industry, employee theft is monitored through the use of data-mining programs that are synchronized with video monitors to permit a more comprehensive look at activity at the cash register. With the press of a button, managers can highlight irregular register transactions on their computers and pull up corresponding video. This could enable companies to catch cashiers who cut deals for their friends or pocket cash refunds for themselves.63

To use electronic monitoring devices to control theft while not intimidating or invading the privacy of honest employees (who make up the majority of the workforce), managers should:

• ▪ Avoid secret monitoring, except with specific individuals whom managers have reason to believe are stealing from the company. In those cases, management should obtain a court order to perform the secret surveillance.

  

• ▪ If the company decides to monitor employees’ e-mail and Internet use, then management should provide guidelines to employees for exchanging e-mail messages and accessing Web sites. The guidelines may also state that employees should not access Web sites that are related to gambling, chat rooms, or online game playing, or sites with violent or sexually explicit images.64

• ▪ Find positive uses for electronic monitoring devices that are beneficial to employees as well as to the employer. Avis Rent A Car System, for example, has used monitoring devices to provide feedback on employee performance. This practice has been accepted as a valuable training tool.

• ▪ Develop a systematic antitheft policy and other practices to discourage theft, such as reference checks; pencil-and-paper honesty or integrity tests that screen out applicants who are likely to behave dishonestly; and internal controls that control the use of cash (accounting controls), merchandise (inventory controls), computers and databases (computer security controls), and company trade secrets (security badges and clearance procedures).

A controversial employment practice that affects individual privacy rights occurs when employers monitor the credit histories of job applicants during the hiring process and eliminate those with poor credit reports. The Manager’s Notebook, “Employers Are Using Credit Checks in Hiring Decisions,” explains how credit histories are being used in the employment process and why some parties believe that this employment practice is unfair.

MANAGER’S NOTEBOOK Employers Are Using Credit Checks in Hiring Decisions

Technology/Social Media

According to a 2012 survey by the Society for Human Resource Management, 47 percent of employers use credit checks when making a hiring decision. Using a credit check as part of an employment screening can be a simple data-driven way for a company to gather evidence on a potential employee’s reliability. Although most companies are selective in terms of using credit checks only for specific jobs, the survey found that 17 percent of the companies use credit checks for every hire. Privacy and civil rights advocates argue that employers are using credit histories unfairly to eliminate the people at the bottom of the income scale who are likely to be unemployed or belong to a minority. When a person loses a job they have difficulty paying their bills, and consequently their credit history collects some bad marks that make it even more difficult to find a job and improve their credit history. In addition, credit checks contain errors. In a Federal Trade Commission study, 25 percent of consumers identified errors on their credit reports that could affect their credit history.

Some lawmakers have been convinced that the use of credit checks in making employment decisions is discriminatory and infringes on privacy rights. A total of 25 states have proposed bills that are being debated that aim to restrict the use of credit histories in the hiring process. Currently nine states have adopted laws that limit the use of credit reports to evaluate people being considered for jobs.

Sources:Based on Rivlin, G. (2013, May 12). New York Times, Sunday Business, 1, 4; Emple, H. (2013, May 14). Putting the kibosh on using credit checks in hiring decisions. New America Foundation. www.assets.newamerica.net ; Acohido, B. (2011, April 8). Limits sought to employers’ use of credit reports. USA Today. www.usatoday30.usatoday.com .▪▪

Whistle-blowing occurs when an employee discloses an employer’s illegal, immoral, or illegitimate practices to persons or organizations that may be able to take corrective action.65 Whistle-blowing is risky because managers and other employees sometimes deal harshly with the whistle-blower.66 Although whistle-blowers often have altruistic motives, they may be shunned, harassed, and even fired for their efforts.67 For example:

• ▪ Jared Bowen, a Wal-Mart executive, gave the company information to investigate expense-account abuses and false invoices for as much as $500,000 made by vice chairman Thomas Coughlin that resulted in the board’s asking for Coughlin’s resignation from the company in 2005. Shortly afterwards, Wal-Mart also discharged Bowen, claiming that he had tampered with his college transcripts by reporting an inflated grade point average and number of college credits. Bowen filed a complaint with the U.S. Department of Labor claiming that Wal-Mart violated federal whistle-blower rules by firing him. In 2006 Bowen decided to drop the claims that he had made against Wal-Mart.68

  

• ▪ Two Federal Aviation Administration (FAA) inspectors became targets of intimidation after repeatedly alerting higher-ups to lapses in enforcement of safety rules at Southwest Airlines. Southwest Airlines knowingly flew 46 jet aircraft that had not received required inspections for cracks in the fuselage. One of the inspectors, Douglas Peters, testified how a supervisor issued a veiled threat—while holding a family photo Peters kept in his office—that Peters and his wife, also an FAA employee, would jeopardize their careers if Peters continued to press for safety issues. The Transportation Department investigated this incident and fined Southwest Airlines $10.2 million for safety violations, yet the supervisor who intimidated the whistle-blowers was only reassigned to another work site, and no disciplinary action was taken against him.69

• ▪ Bradley Manning, a U.S. Army private, disclosed thousands of pages of sensitive classified documents from the Department of Defense and State Department to the WikiLeaks Web site. The documents disclosed information on how the United States conducted its wars in Iraq and Afghanistan that included violations of international law and rules of the U.S. Army. Manning believed he was a whistle-blower and that his disclosure of the secret documents was a patriotic act that informed citizens of the missteps of Defense Department and State Department officials. However, Manning violated Army regulations and the Espionage Act when he leaked secret documents to the Internet, and the Army and the government treated him as a traitor rather than a heroic whistle-blower. After spending three years in a military prison, in 2013 Manning received a court martial and dishonorable discharge from the Army and a 35-year prison sentence for disclosing secret information to the public.70

Dealing with whistle-blowing requires balancing employees’ right to free speech with the employer’s right to prevent employees from disregarding managers’ authority or disclosing sensitive information to outsiders. Although whistle-blowers who work for the federal government and some state and local governments have certain legal protections, there is far less protection for private-sector employees, except in states that have enacted whistle-blower laws. Many times the whistle-blower is subject to the employment-at-will rule and may be discharged in retaliation for going public about an illegal or unethical company activity. A potential whistle-blower should have good documentation of the evidence of wrongdoing before disclosing it to others. The whistle-blower should also be prepared to deal with employer retaliation and have a contingency plan, which may include lining up another job in case the worst happens.

Despite all these risks, many employees have used whistle-blowing to call their employers to account. For example, Enron executive Sherron Watkins wrote a blunt memo in 2001 to Enron CEO Kenneth Lay warning him that the company might “implode in a wave of accounting scandals.” Instead of thanking her, management factions tried to squelch the bad news and intimidate her for not being a team player. After the financial scandal broke and became a media event, Watkins was praised for her courage and became a positive role model for whistle-blowers.71 For this reason, many companies have realized that it is in their best interests to establish a whistle-blowing policy that encourages people to reveal misconduct internally instead of exposing it externally. This way the company can avoid negative publicity and all the investigative, administrative, and legal actions associated with it.72 Figure 14.2 lists some of the most important elements of an effective whistle-blowing policy. Probably the most important is support by top management, including the CEO. Other important elements of a whistle-blowing policy are provisions for the whistle-blower to remain anonymous initially and to be protected from retribution. Some companies that have effective whistle-blowing policies are Bank of America, Pacific Gas & Electric, McDonald’s, and General Electric.73

The financial scandals at Enron and WorldCom prompted the passage of the Sarbanes-Oxley Act in 2002. The whistle-blower provision in Sarbanes-Oxley protects whistle-blowers from retaliation from the company or its employees and holds those who violate the law liable for both civil and criminal penalties. Enacted in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act strengthened the rights of whistle-blowers with provisions that both extend the time to file for an investigation that focuses on management financial misconduct and offer a pro-employee legal burden of proof for what it takes to win a case. Whistle-blowers who win can receive back pay, compensatory damages, and attorney fees along with reinstatement to their former jobs. The Internal Revenue Service (IRS) pays a reward to whistle-blowers who provide the agency with information on wealthy Americans who hide their assets or cheat on disclosing income when they pay their taxes. Whistle-blowers receive 30 percent of the sums of money recovered from tax cheats. In the 2012 fiscal year the IRS issued 128 whistle-blower rewards, and 12 of those were for sums greater than $2 million in unpaid taxes.74

Moonlighting is holding a second job outside normal working hours.75 Employees moonlight for different reasons. Some moonlight to earn extra income. When the economy is in a recession and employees are affected by pay freezes, work-hour reductions, or pay reductions, they may take second jobs to maintain their standard of living. Other employees work second jobs for the enjoyment of the work, such as an accountant who teaches an evening accounting class at the local university. In the United States, about 5 percent of employees with full-time jobs hold a second job. When an employer becomes aware of an employee who is moonlighting, it may be tempting for the manager of that employee to prevent the employee from working the other job. Restrictions on employees who moonlight may be appropriate in some situations to protect the employer’s interests; in other situations, such restrictions may be a violation of an employee’s rights. Consider the following situations:

• ▪ A sales executive manages his blossoming second job as a motivational speaker by cell phone and laptop during work hours on his day job.

• ▪ A police officer works a few evenings a week as a bouncer at a local nightclub.

• ▪ A truck driver has a job moonlighting during off hours as a local delivery person for a pizza restaurant.

Moonlighting brings with it the need to balance the rights of the employer, who expects employees to come to the workplace and be fully engaged in performing their jobs, with the rights of employees, who expect to be free to use their off-duty time any way they want, which includes working a second job.

The best way for managers to handle moonlighting is to treat it on a case-by-case basis rather than attempt to have a policy that restricts moonlighting for all employees. Management should rely on job performance and conflict-of-interest policies to manage moonlighting.76 The sales executive from the moonlighting situation already listed can be required by the employer to curtail his cell phone calls and laptop use for his motivational speaker business at the workplace and limit it to nonwork hours. Speaking with clients on the phone and scheduling business engagements on the laptop for the second job can detract from job performance as a sales executive and can be addressed as a performance issue. A full-time truck driver has the number of driving hours per day regulated by federal Department of Transportation (DOT) law. A second job that requires additional driving time can increase the legal liability of the trucking company for its driver to have an accident. The trucker who drives in excess of the driving time that is permitted will be in violation of DOT rules. In this situation, the trucking company can restrict its drivers from driving on a second job to remain in compliance with the law. In the situation where the police officer is moonlighting as a nightclub bouncer, this second job can be permitted as along as the officer is able to perform the job duties of a police officer at expected levels of performance, which includes coming to work alert and well rested.

An employer may need to restrict a specific employee from moonlighting when the second employer is a direct competitor and a conflict of interests exists. One video-game firm handles this situation by having its engineers and artists receive approval from managers in advance, and approval is likely as long as the work is not done for a competitor.77

The office is an inviting place for romance. People fall in love at work because that is where they spend much of their time and meet people with similar interests. Some controversial high-profile office romances, such as the affair between President Clinton and Monica Lewinsky, a young White House intern, have influenced many companies to view office romance with a critical eye. The challenge of dealing with an office romance forces management to balance the need to protect the company from its liability for preventing sexual harassment with the need to protect the privacy of employees during their off-duty hours so they feel free to develop romantic relationships with people of their choosing. The biggest danger occurs when a person in authority dates a subordinate. If the romance goes sour, the subordinate may claim that the boss forced the relationship, which opens the door for a sexual harassment case.78 A survey conducted by the Society for Human Resource Management (SHRM) found that 24 percent of employer respondents reported having had a sexual harassment claim filed against them as a result of a workplace romance.79

How organizations deal with office romance depends on the goals and culture of the organization. The U.S. military restricts personal relationships between officers and enlisted personnel when the relationship compromises the chain of command. In the military, the need for a highly disciplined, strongly bonded group of individuals is critical to a combat unit’s success. A minority of companies have enacted no-dating policies that attempt to eliminate the presence of romantic relationships at the workplace between employees. Enforcing no-dating policies can be difficult. A senior executive at Staples, an office supply company that instituted a no-dating policy, was forced to resign when it was revealed he was having a consensual affair with his secretary. Staples lost a valued officer, and the manager forfeited his lucrative job for violating company rules, even though he committed no illegal act.80

Other companies view office romance more positively by recognizing the beneficial effect it may have on employee morale due to the fact that many office romances lead to marriage. For example, Microsoft’s former CEO Bill Gates met his wife, Melinda French, at the company when she was a marketing executive. Representative of companies that do not interfere with office romance is Delta Airlines, which does not have any rule against dating between employees. Delta expects its employees to maintain a professional and business-like approach to work, which includes all work-related relationships. The only exception it makes is that the company does not allow a spouse or romantic partner to supervise the other. If that were to happen, one of the partners would be transferred to another work unit.81 Some companies go beyond tolerating office romance and condone it. At Princeton Review, a well-known New York test-preparation company, 6 of the 10 top executives, including the CEO and president, are married to people on the payroll. More than 40 couples who met at the company have married. So far there have been no divorces and no lawsuits—though more than 20 children have been born from these marriages. The CEO of Zappos, an online shoe retailer, encourages dating among employees as a form of work–life integration.82 The employment trend of longer work hours in U.S. firms suggests that more employees will be tempted to develop a romantic relationship with a colleague at the workplace. A recent survey on employee attitudes about office romance by the American Management Association revealed that 67 percent of respondents said they approved of dating at the office, and 30 percent said they had done it themselves.83 Management can be expected to look for guidance on how to deal with office romance from HR representatives as they struggle with balancing the privacy rights of employees with the company’s liability to prevent sexual harassment.

The following are some basic guidelines that employees should consider if they are involved in an office romance, according to Andrea Kay, a career consultant and author:84

• ▪ Think before you disclose your relationship to the office. Discuss with your partner how you will inform the office that you are in a relationship with a colleague. It is also important to plan who will be the recipient of this personal information, which may include someone in human resources, your supervisor, or coworkers.

• ▪ Know the rules regarding office romance in your company. According to a recent survey by the Society for Human Resource Management (SHRM), only 28 percent of companies have a formal written policy that covers dating in the workplace. Those companies that have a policy indicate who needs to be informed if there is a consensual relationship between two employees.

• ▪ It is recommended that the parties involved in an office romance behave in a subtle fashion in how they conduct their relationship at the office. Don’t flaunt the relationship. Public displays of affection should be kept to a minimum. Also, avoid sending love notes to each other on the company’s e-mail account.