The recent decision of Phillips v. Westcan, 2020 ABQB 764, considers the enforceability of an employment agreement requiring the employee to submit to random alcohol and drug testing.

With few decisions considering random alcohol and drug testing in the non-unionized context available, this decision is interesting for employers who may wish to implement random testing for safety-sensitive positions outside the context of a collective agreement.

Background

Mr. Phillips was employed as a driver with Westcan Bulk Transport Ltd (Westcan) to haul dangerous goods for long distances across remote areas of Canada.

Westcan has been carrying out random alcohol and drug tests on its drivers since at least 1999. The random alcohol and drug testing procedure was captured in the company’s alcohol and drug testing policy. Although there were a number of iterations since its implementation in 1999, the substance of the policy remained unchanged. 

Mr. Phillips was first employed by Westcan as a driver in December 2013. The alcohol and drug testing policy was in place during his first period of employment and was drawn to his attention. Mr. Phillips subsequently left Westcan in Spring 2015. 

When Mr. Phillips sought to be re-employed by Westcan in October 2015, he was required to sign an “Expectation Agreement” as part of his application. This stated that if his application was successful, he would be subject to the alcohol and drug testing policy, including random alcohol and drug testing, as a condition of his employment. Mr. Phillips agreed to this. 

Mr. Phillips’ application for employment was successful. The terms of his employment were laid out in an offer letter, which required him to agree to be bound by the company’s policies. Mr. Phillips was aware that the alcohol and drug testing policy was one of these policies. 

Having commenced his second period of employment with Westcan, Mr. Phillips then sought a permanent injunction to prevent Westcan from carrying out random alcohol and drug testing. Mr. Phillips claimed that even if random testing was a term of his contract, it was unconscionable and therefore unenforceable.

Decision

1. Term of employment

The Court held that Mr. Phillips had expressly agreed to random alcohol and drug testing as a term of his employment. When he agreed to be bound by the company’s policies, he knew that this included random alcohol and drug testing because (a) he was aware from his prior employment with Westcan that this was its policy and (b) this had been clearly stated in the Expectation Agreement.

2. Enforceability

Having determined that this was a term of his employment, the Court considered whether it was enforceable. Mr. Phillips took the position that this term of his employment should be unenforceable on the grounds of unconscionability. The Court disagreed and found that the term was enforceable.

The Court held that the general rule is that parties to a contract should be held to the terms of their bargain, even where this is an employment contract, unless the contract is contrary to employment standards, human rights and/or other legislation (none of which were raised by Mr. Phillips) or is otherwise unconscionable.

Citing Styles v. Alberta Investment Management Corporation, 2017 ABCA 1 (leave to appeal denied), the Court stated that to be unconscionable, the contract would need to be “sufficiently divergent from community standards of commercial morality”. In this context, where Mr. Phillips was hauling dangerous goods across remote parts of the country, with no supervision, the Court held that there was no such divergence from community standards.

As a result, the Court dismissed Mr. Phillips’ application for a permanent injunction, holding that the obligation to undergo random testing is an enforceable term of his employment contract.

3. Unilateral random testing

Although not strictly required, the Court also undertook a cursory review of whether Westcan would have been entitled to unilaterally impose random testing.

The Court applied the test in Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34 (Irving), stating that “Random testing may be justified if “it represents a proportionate response in light of both legitimate safety concerns and privacy interests.””

The Court firstly considered the nature of the work and concluded that it was inherently dangerous to drive “heavy trucks carrying dangerous goods over long distances.” 

The Court then considered the workplace, noting that Westcan had few alternative testing options available to it due to the vast nature of its operations. Drivers work away from the central terminals for extended periods with no in-person contact with other employees during that time rendering reasonable suspicion testing “virtually impossible”. The Court also noted that post-incident testing was “frequently impractical” due to the length of time it would take for a Westcan representative to travel to the remote areas the drivers operated within.

The Court further concluded that there was an issue with drug and alcohol use in the workplace.  Between 2014 and 2019, the rate of positive results on random tests was between 0.44% and 1.79%.  The previous three years had some of the highest rates, with 2019 seeing 1.79% of random tests coming back positive. The Court considered this to be comparable to the 2.7% positive rate cited by the Supreme Court of Canada in Irving as “an example of a demonstrated general problem with alcohol use in a dangerous workplace.” In addition, there was physical evidence of alcohol use at work with beer cans often found in trucks.

The Court concluded that, even if there was no enforceable contractual term, it would have upheld a unilaterally imposed random testing regime as being a proportionate response in this context where Westcan has “demonstrated enhanced safety risks, based on the significant rate of positive testing in random tests, physical evidence of alcohol use at work, a vast workplace and inherently dangerous work.”

Takeaways for employers

Employers in a non-unionized setting wishing to implement random alcohol and drug testing should ensure that their alcohol and drug testing policy is incorporated by reference into each employment contract, and ideally drawn to the employee’s attention at the outset of the employment relationship. 

Although there is no guarantee that an agreement permitting random testing will be upheld, this decision provides employers with some additional confidence that random alcohol and drug testing may be reasonable as part of a comprehensive safety program in some safety-sensitive work environments where there is evidence of a problem with alcohol or drug use in the workplace. 

The recent decision of Phillips v. Westcan, 2020 ABQB 764, considers the enforceability of an employment agreement requiring the employee to submit to random alcohol and drug testing.

With few decisions considering random alcohol and drug testing in the non-unionized context available, this decision is interesting for employers who may wish to implement random testing for safety-sensitive positions outside the context of a collective agreement.

Background

Mr. Phillips was employed as a driver with Westcan Bulk Transport Ltd (Westcan) to haul dangerous goods for long distances across remote areas of Canada.

Westcan has been carrying out random alcohol and drug tests on its drivers since at least 1999. The random alcohol and drug testing procedure was captured in the company’s alcohol and drug testing policy. Although there were a number of iterations since its implementation in 1999, the substance of the policy remained unchanged. 

Mr. Phillips was first employed by Westcan as a driver in December 2013. The alcohol and drug testing policy was in place during his first period of employment and was drawn to his attention. Mr. Phillips subsequently left Westcan in Spring 2015. 

When Mr. Phillips sought to be re-employed by Westcan in October 2015, he was required to sign an “Expectation Agreement” as part of his application. This stated that if his application was successful, he would be subject to the alcohol and drug testing policy, including random alcohol and drug testing, as a condition of his employment. Mr. Phillips agreed to this. 

Mr. Phillips’ application for employment was successful. The terms of his employment were laid out in an offer letter, which required him to agree to be bound by the company’s policies. Mr. Phillips was aware that the alcohol and drug testing policy was one of these policies. 

Having commenced his second period of employment with Westcan, Mr. Phillips then sought a permanent injunction to prevent Westcan from carrying out random alcohol and drug testing. Mr. Phillips claimed that even if random testing was a term of his contract, it was unconscionable and therefore unenforceable.

Decision

1. Term of employment

The Court held that Mr. Phillips had expressly agreed to random alcohol and drug testing as a term of his employment. When he agreed to be bound by the company’s policies, he knew that this included random alcohol and drug testing because (a) he was aware from his prior employment with Westcan that this was its policy and (b) this had been clearly stated in the Expectation Agreement.

2. Enforceability

Having determined that this was a term of his employment, the Court considered whether it was enforceable. Mr. Phillips took the position that this term of his employment should be unenforceable on the grounds of unconscionability. The Court disagreed and found that the term was enforceable.

The Court held that the general rule is that parties to a contract should be held to the terms of their bargain, even where this is an employment contract, unless the contract is contrary to employment standards, human rights and/or other legislation (none of which were raised by Mr. Phillips) or is otherwise unconscionable.

Citing Styles v. Alberta Investment Management Corporation, 2017 ABCA 1 (leave to appeal denied), the Court stated that to be unconscionable, the contract would need to be “sufficiently divergent from community standards of commercial morality”. In this context, where Mr. Phillips was hauling dangerous goods across remote parts of the country, with no supervision, the Court held that there was no such divergence from community standards.

As a result, the Court dismissed Mr. Phillips’ application for a permanent injunction, holding that the obligation to undergo random testing is an enforceable term of his employment contract.

3. Unilateral random testing

Although not strictly required, the Court also undertook a cursory review of whether Westcan would have been entitled to unilaterally impose random testing.

The Court applied the test in Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34 (Irving), stating that “Random testing may be justified if “it represents a proportionate response in light of both legitimate safety concerns and privacy interests.””

The Court firstly considered the nature of the work and concluded that it was inherently dangerous to drive “heavy trucks carrying dangerous goods over long distances.” 

The Court then considered the workplace, noting that Westcan had few alternative testing options available to it due to the vast nature of its operations. Drivers work away from the central terminals for extended periods with no in-person contact with other employees during that time rendering reasonable suspicion testing “virtually impossible”. The Court also noted that post-incident testing was “frequently impractical” due to the length of time it would take for a Westcan representative to travel to the remote areas the drivers operated within.

The Court further concluded that there was an issue with drug and alcohol use in the workplace.  Between 2014 and 2019, the rate of positive results on random tests was between 0.44% and 1.79%.  The previous three years had some of the highest rates, with 2019 seeing 1.79% of random tests coming back positive. The Court considered this to be comparable to the 2.7% positive rate cited by the Supreme Court of Canada in Irving as “an example of a demonstrated general problem with alcohol use in a dangerous workplace.” In addition, there was physical evidence of alcohol use at work with beer cans often found in trucks.

The Court concluded that, even if there was no enforceable contractual term, it would have upheld a unilaterally imposed random testing regime as being a proportionate response in this context where Westcan has “demonstrated enhanced safety risks, based on the significant rate of positive testing in random tests, physical evidence of alcohol use at work, a vast workplace and inherently dangerous work.”

Takeaways for employers

Employers in a non-unionized setting wishing to implement random alcohol and drug testing should ensure that their alcohol and drug testing policy is incorporated by reference into each employment contract, and ideally drawn to the employee’s attention at the outset of the employment relationship. 

Although there is no guarantee that an agreement permitting random testing will be upheld, this decision provides employers with some additional confidence that random alcohol and drug testing may be reasonable as part of a comprehensive safety program in some safety-sensitive work environments where there is evidence of a problem with alcohol or drug use in the workplace.