Employers Are Not Required to Compensate Successful Job Applicants for Time and Travel Expenses Incurred During Preemployment

Key Takeaways:

• The Ninth Circuit decided the first authoritative precedent regarding who is responsible for time and travel costs incurred by California-based job applicants when they are required to undergo preemployment drug testing.
• As a result, employers are not required to compensate successful job applicants for the time and travel expenses related to drug testing during the preemployment process. 

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On August 23, 2017, Plaintiff Alfred Johnson filed a class action complaint on behalf of more than 14,000 job applicants in California state court against WinCo Foods (WinCo), seeking reimbursement for the time and travel expenses incurred while traveling to take a drug test.  Plaintiffs alleged that they were WinCo employees at the time they obtained a drug test.  The case was removed to federal court under the Class Action Fairness Act in November 2017, and a class was certified in March 2020.  On August 3, 2020, Plaintiffs filed their motion for partial summary judgment as to whether class members were WinCo employees. On August 3, 2020, WinCo filed its motion for summary judgment, or in the alternative partial summary judgment. The district court held that as a matter of law, WinCo was entitled to summary judgment as to the entire class on the issue of whether class members were employees at the time of drug testing. 

In appealing their loss to the Ninth Circuit in Johnson v. WinCo Foods, LLC, No. 21-55501, 2022 WL 2112792 (9th Cir. June 13, 2022), Plaintiffs argued that the district court erred because: (1) WinCo exerted control over the drug-testing process to classify Plaintiffs as employees; and (2) Plaintiffs were employees under California contract law because a contract formed when WinCo notified employees that they were required to obtain a drug test to secure their “contingent job offer.” Plaintiffs contended that a successful drug test was a condition subsequent to their existing contract. 

The Ninth Circuit rejected both arguments. First, the Ninth Circuit noted that “control over a drug test as part of the job application process is not control over the performance of the job.” Furthermore, the Ninth Circuit ruled that California’s “control test” does not apply to job applicants and “[d]rug testing, like an interview or preemployment physical examination, is an activity to secure a position, not a requirement for those already employed.” 

Second, the Ninth Circuit ruled that the drug test was a condition precedent and not a condition subsequent to an employment contract. Specifically, the Ninth Circuit highlighted that WinCo repeatedly reiterated that Plaintiffs’ hiring would not occur until their successful completion of a drug test. When WinCo made verbal employment offers, the WinCo hiring manager was instructed to emphasize to job applicants that the job offer was contingent on a successful drug test. In WinCo’s emails to job applicants, it indicated that these were “instructions related to the preemployment drug test.” The Ninth Circuit found that WinCo had gone to great lengths to communicate to job applicants that the offer was conditional. 

This ruling is significant because this is the first authoritative decision holding that employers do not need to compensate California-based job applicants for the time and expenses related to drug testing during the application process. As a best practice, employers should explicitly articulate to job applicants that an offer of employment is contingent on successfully passing a drug test.

Winston & Strawn Summer Associate Michelle Toro also contributed to this blog post.