IN THE SUPREME COURT OF IOWA
No. 19 / 02-0184
Filed April 2, 2003
ANDREW HARRISON,
Appellee,
vs.
EMPLOYMENT APPEAL BOARD and 
VICTOR PLASTICS, INC.,
Appellants. 
Appeal from the Iowa District Court for Polk CountEliza 
y, J. Ovrom, Judge.
Employer and Board appeal district court’s reversal 
of agency ruling that denied unemployment benefits
 to employee who failed workplace drug test.  AFFIRMED 
AND REMANDED.
Thomas D. Wolle of Moyer & Bergman, P.L.C., Cedar for 
Rapids, appellant Victor Plastics, Inc.
Richard R. Ramsey, Des Moines, for appellant Employment 
Appeal Board.
Jenny Schulz of Legal Services Corp. of Iowa, Cedar 
Rapids, for appellee.
TERNUS, Justice.
This case involves the interplay between Iowa’s workplace 
drug testing law, Iowa Code section 730.5 (2001), and 
an employee’s eligibility for unemployment benefitThe 
s.  appellant, Employment Appeal Board, denied unemployment 
benefits to the appellee, Andrew Harrison, on the ground 
of misconduct based on Harrison’s positive drug teThe 
st.  district court reversed the agency decision, concluding 
(1) the appellant employer, Victor Plastics, Inc.,
 had not complied with the statutory requirements for 
the drug test that provided the basis for the Boars 
d’finding of misconduct, and (2) as a consequence,
 the test results could not be used to support the
 Board’s finding.  On the Board and employer’s appwe 
eal, affirm.
I.  Iowa’s Workplace Drug Testing Law.
Our examination of the facts of this case will be more 
meaningful if we first review the drug testing law
 against which the employer’s actions must be judgwe 
ed.  Therefore, begin with a discussion of those portions 
of section 730.5 that are pertinent to this appeal
.
Iowa Code section 730.5 sets forth the requirements 
for workplace drug testing in the private sector. 
 Prior to 1998, it prohibited “random or blanket drug 
testing of employees.”  See Iowa Code § 730.5(2) (In 
1997).  1998, the legislature amended section 730.5 
to permit such tests.  1998 Iowa Acts ch. 1011.  Csection 
urrently, 730.5(4) states:
To the extent provided in subsection 8, an employer 
may test employees and prospective employees for the 
presence of drugs or alcohol as a condition of continued 
employment or hiring.  An employer shall adhere to
 the requirements of this section concerning the conduct 
of such testing and the use and disposition of the
 results of such testing.
Iowa Code § 730.5(4) (emphasis added).  The statute 
specifically permits the employer to use a confirmed 
positive drug test result “as a valid basis for disciplinary 
. . . actions pursuant to the requirements of the s 
employer’written policy and the requirements of this 
section,” including “termination of employment.”  emphasis 
Id. § 730.5(10) (added).
Subsection 7 of the statute outlines the testing pstating 
rocedures, that “[a]ll sample collection and testing 
for drugs or alcohol under this section shall be performed 
in accordance with” the specified conditions.  Id.
 § 730.5(7) (emphasis added).  The law requires that 
collected samples be split into two components.  IIf 
d. § 730.5(7)(b).  an initial screening of the first 
portion is positive, the results must be confirmed
 by a second test of the same portion using a different 
chemical process than was used in the initial screThe 
ening.  Id. § 730.5(7)(f)(1). second portion of the 
sample is reserved for “a second, independent confirmatory 
test as provided in paragraph ‘i’.”  Id. § 730.5(7
)(b).  Paragraph “i” states in relevant part:
If a confirmed positive drug or alcohol test for a
 current employee is reported to the employer by the 
medical review officer, the employer shall notify the 
employee in writing by certified mail, return receipt 
requested, of the results of the test, the employes 
e’right to request and obtain a confirmatory test of 
the second sample collected pursuant to paragraph 
“b” at an approved laboratory of the employee’s chand 
oice, the fee payable by the employee to the employer 
for reimbursement of expenses concerning the test.
  The fee charged an employee shall be an amount that 
represents the costs associated with conducting the 
second confirmatory test, which shall be consistent 
with the employer’s cost for conducting the initial 
confirmatory test on an employee’s sample.  If the
 employee, in person or by certified mail, return receipt 
requested, requests a second confirmatory test, identifies 
an approved laboratory to conduct the test, and pays 
the employer the fee for the test within seven days 
from the date the employer mails by certified mail
, return receipt requested, the written notice to the 
employee of the employee’s right to request a test
, a second confirmatory test shall be conducted at
 the laboratory chosen by the employee. . . .  If the 
results of the second test do not confirm the results 
of the initial confirmatory test, the employer shall 
reimburse the employee for the fee paid by the employee 
for the second test and the initial confirmatory test 
shall not be considered a confirmed positive drug or 
alcohol test for purposes of taking disciplinary action 
pursuant to subsection 10.
Id. § 730.5(7)(i) (emphasis added).
With this general frame of reference, we now turn to 
the facts of the case before us.   
II.  Background Facts and Proceedings.
Harrison was employed by Victor Plastics from January 
31, 2000, to December 11, 2000, when he was terminated 
because he tested positive for marijuana in a random 
drug test.  The test was conducted pursuant to an employer 
policy that provided for unannounced random testing 
of employees.  
On December 4, 2000, Mercy Occupational Health, an
 independent company used by Victor Plastics to perform 
random drug testing of its employees, notified Victor 
Plastics that Harrison had been selected to be one
 of the employees tested that day.  A urine sample
 was obtained from Harrison at the plant site.
On December 11, 2000, Mercy informed Harrison by telephone 
that his sample tested positive for marijuana.  Mercy 
also faxed a report to Victor Plastics with the test 
results.  That same morning Harrison called the cos 
mpany’human resource manager, Chris VeVerka, and informed 
her that he had tested positive for marijuana.  VeVerka 
testified at the later unemployment hearing that she 
informed Harrison during their phone conversation that 
he could pay to have a test done on the remaining sample 
and such a test would cost approximately $150.  (The 
record shows the initial screening and the first confirmatory 
test had a combined cost to Victor Plastics of $80
 to $100 per person.)  She said Harrison declined the 
test, indicating he did not want to spend the money 
as he had just paid off his credit card and was going 
on a trip, and because the second sample would not
 test any differently than the first sample.  Pursuant 
to a company policy stating “[a] confirmed positive 
drug test will result in termination,” VeVerka then 
informed Harrison he was fired.
VeVerka confirmed in her testimony that Victor Plastics 
did not notify Harrison in writing that he could request 
a second test.  Nor did VeVerka inform Harrison that 
if the second test was negative, Victor Plastics would 
have to reimburse him for the cost of the test.  She 
did not do so, she explained, because Harrison was
 not interested in doing a second test.  For the same 
reason, she thought it unnecessary to delay his termination 
in order to give him time to come up with the mone
y.
Harrison’s testimony at the hearing was substantially 
the same as VeVerka’s.  He said he told her he could 
not afford the test because he had just paid on his 
credit cards and had bought a nonrefundable plane ticket 
to visit a friend.  He stated he did not consider borrowing 
the money for the test because he “[d]idn’t have any 
time[;] [i]t was either you’re going to test or yore 
u’not.”  Harrison also denied smoking marijuana.  He 
confirmed at the hearing that he had not received written 
notification from the company concerning his positive 
test results.
Subsequent to his termination, Harrison applied for 
unemployment benefits.  A hearing officer denied his 
claim, ruling Harrison was disqualified from receiving 
benefits because he was discharged for misconduct.
  See Iowa Code § 96.5(2)(a) (“An individual shall
 be disqualified for benefits . . . [i]f the department 
finds that the individual has been discharged for misconduct 
in connection with the individual’s employment.”).
  The only factual basis for this disposition was s 
Harrison’positive drug test.  Harrison appealed.  After 
a hearing at which VeVerka and Harrison testified as 
outlined above, an administrative law judge upheld
 the hearing officer’s decision.  Harrison’s intra
-agency appeal to the Board was similarly unsucces
sful.
Harrison then sought judicial review.  He argued the 
drug test was illegal because Victor Plastics had not 
followed the requirements for random drug testing set 
forth in section 730.5 and, therefore, the test results 
could not be used as a basis for a finding of miscThe 
onduct.  district court overturned the agency’s deholding 
cision, that decision was affected by error of law
.  See Iowa Code § 17A.19(10)(c) (providing that court 
may reverse agency ruling affected by error of law
).  Relying on this court’s decision in Eaton v. Iowa 
Employment Appeal Board, 602 N.W.2d 553, 554 (Iowa
 1999), the district court concluded an employer must 
comply with section 730.5 before the Board may rely 
on a positive drug test to deny unemployment benefthe 
its.  Here, court noted, Victor Plastics had failed 
to follow the requirements of section 730.5 in several 
significant particulars.  The court concluded, thethat 
refore, the Board erred in relying on Harrison’s positive 
drug test to support its finding of misconduct.
The employer and Board appeal the district court’s
 decision.  Because the Board joined in the brief filed 
by the employer, references to the employer’s position 
and arguments on appeal apply equally to the Board
.
III.  Issues on Appeal.  
On appeal, the employer contends the district court 
erroneously concluded that it had not complied with 
section 730.5 and that this failure precludes the s 
company’reliance on the drug test as a basis for its 
claim of misconduct.  More specifically, Victor Plastics 
argues that it substantially complied with section
 730.5 because the “reasonable objectives” of the statute 
were met despite the employer’s failure to comply with 
the “technical notice provisions” of the law.
Harrison contends the statute requires strict compliance 
with its terms as evidenced by the legislature’s frequent 
use of the word “shall.”  See Iowa Code § 4.1(30) 
(stating use of the term “shall” implies a duty). 
 Even if substantial compliance is sufficient, Harrison 
disputes that Victor Plastics substantially complied 
with the statutory requirements.  He claims the employer 
failed to observe the notice provisions of the stafailed 
tute, to provide accurate information to him about
 the actual cost of a second confirmatory test, and 
failed to inform him that he would be reimbursed if 
the second test were negative.  In addition, Harrison 
asserts Victor Plastics failed to present evidence
 that it complied with the statutory requirements regarding 
(1) random selection of employees, (2) proper collection 
and labeling of Harrison’s urine sample, (3) a proper 
chain of custody of the sample, (4) certification of 
the laboratory and training of the personnel involved 
in testing his sample, and (5) the chemical testing 
processes used. Finally, Harrison contends the coms 
pany’written drug policy violates section 730.5 because 
it states the company “has instructed its medical review 
officer that no explanation for the presence of this 
substance [marijuana] should be accepted.”  See Iowa 
Code § 730.5(7)(c)(2) (“An employee . . . shall be
 provided an opportunity to provide any information 
which may be considered relevant to the test . . .
 .”); id. § 730.5(7)(g) (stating medical review officer 
must consider any information provided by employee
). Based on these violations and deficiencies, Harrison 
argues, the employer failed to prove that Harrison
 was terminated from his employment on the basis of 
a “confirmed positive drug . . . test result” within 
the meaning of section 730.5(10).
Although the parties dispute whether strict compliance 
with the statute is required or whether substantial 
compliance is sufficient, we do not find it necessary 
to resolve this disagreement.  Even if we assume an 
employer need only substantially comply with the provisions 
of section 730.5, we do not think that level of compliance 
was shown in this case.  In addition, we conclude the 
employer’s noncompliance with the notice requirements 
of the statute is sufficient to bar its reliance on 
Harrison’s drug test results to prove misconduct. 
 Therefore, we do not address the sufficiency of the 
employer’s proof with respect to its compliance with 
the technical requirements for testing.  Nor do we
 consider the validity of the employer’s drug testing 
policy.
IV.  Scope of Review.
Iowa’s Administrative Procedure Act, Iowa Code chapter 
17A, governs this court’s review of unemployment benefit 
cases.  See Lee v. Employment Appeal Bd., 616 N.W.2d 
661, 664 (Iowa 2000).  Pursuant to section 17A.19(we 
10), act in an appellate capacity to correct errors 
of law on the part of the agency.  Id.  
In terms of judicial review, the essence of the ems 
ployee’claim here is that there is not substantial
 evidence to support the agency’s finding of miscoSee 
nduct.  Iowa Code §17A.19(10) (allowing court to reverse 
agency decision if the agency’s action rests on a finding 
of fact “that is not supported by substantial evidThis 
ence”).  claim is based on the argument that the employer 
cannot use the positive drug test to show misconduct 
because the employer did not comply with section 7The 
30.5.  employee asserts the agency erroneously interpreted 
this statute in concluding that the statutory deviations 
were not significant enough to preclude reliance on 
the test results.  See id. (allowing court to reverse 
if agency’s action is “[b]ased upon an erroneous interpretation 
of a provision of law whose interpretation has not
 clearly been vested by a provision of law in the discretion 
of the agency”).  We note in this regard that we give 
no deference to the board’s intepretation of section 
730.5 in view of the fact that workplace drug testing 
is not within this agency’s area of authority.  Iowa 
Code § 17A.19(11)(6); Arthur E. Bonfield, Amendments 
to Iowa Administrative Procedure Act, Report on Selected 
Provisions to Iowa State Bar Association and Iowa State 
Government 70 (1998).
V.  Discussion.
A.  Substantial compliance.  We have previously held 
that substantial compliance is compliance with respect 
to those requirements that are necessary “to assure 
the reasonable objectives” of the statute are met.
  Superior/Ideal, Inc. v. Bd. of Review, 419 N.W.2d 
405, 407 (Iowa 1988).  Therefore, the starting point 
for our analysis is an identification of the purpose 
served by the notice provisions, which are contained 
in subsection (7) of the statute.
Based on even a cursory review of the testing procedures 
set forth in subsection (7), one can readily conclude 
that the legislature sought to ensure the accuracy
 of any drug test serving as the basis for adverse
 employment action.  See, e.g., Iowa Code § 730.5(collection 
7)(a) (of sample must be “in a manner reasonably calculated 
to preclude contamination or substitution of the stesting 
pecimen”); id. § 730.5(7)(e) (must be done at a certified 
laboratory); id. § 730.5(7)(g) (before positive results 
of drug test are reported to employer, medical review 
officer must review results, verify adequate chain
 of custody, and consider any information provided
 by employee).  The multiple testing required before 
a test is considered a “confirmed positive drug tefor 
st” purposes of disciplinary action is an example of 
the legislature’s attempt to assure the correctness 
of testing results.  Id. § 730.5(7)(f)(1) (requiring 
confirmation of an initial positive screening test
); id. § 730.5(7)(i)(1) (allowing employee the option 
of having a second confirmatory test done).
Although accurate testing inures to the benefit of
 both the employer and the employee, the provisions 
with respect to a second confirmatory test appear to 
be for the benefit and protection of the employee in 
particular in view of the fact that it is the employee 
who determines whether the second confirmatory test 
will be done.  The notice requirements at issue in
 the case before us relate to the employee’s opportunity 
to require a second confirmatory test.  Thus, in viewing 
whether the employer’s conduct in this case substantially 
complied with the statute, we must determine whether 
the employer’s actions reasonably accomplished the
 legislature’s objective to protect the employee from 
adverse employment action based on an erroneous test 
result.
As noted at the outset of our opinion, section 730
.5(7)(i)(1) requires that the employer give an employee 
written notice of a positive test result.  Such notice 
must be by certified mail, return receipt requesteThe 
d.  notice must inform the employee of his right to 
have a second confirmatory test done at a laboratory 
of his choice and it must tell the employee what the 
cost of that test will be.  Any fee charged by the
 employer must be consistent with the cost to the employer 
of the initial confirmatory test.  An employee has
 seven days to request a second test.
It is important to consider how these requirements
 serve to protect the employee.  A written documenparticularly 
t, one sent by certified mail, conveys a message that 
the contents of the document are important.  Thus,
 an employee receiving notice in this fashion would 
be more likely to consider his decision with respect 
to a second test to be an important one.  Likewise
, he would more deliberately reflect on his options 
and the ramifications of his decision.  The seven-day 
period given to the employee allows adequate time for 
the employee to make a thoughtful choice.  The requirements 
that the employee be informed of the cost of a second 
test and that he can choose the laboratory to perform 
the test ensures the employee’s decision will be a
 well-informed one, based on all relevant considerThe 
ations.  statute’s limitation on the amount an employee 
may be charged for a second test guarantees that an 
employee will be treated fairly and not be unreasonably 
discouraged from seeking a second confirmatory tes
t.
A review of the employer’s actions here reveals that 
very few, if any, of these goals were met.  The employee 
in this case was informed by telephone of his right 
to have a second confirmatory test done at his expHe 
ense.  was not told that he could choose the laboratory 
to conduct the test, nor was he told that he had seven 
days to think about it.  Finally, he was given a significantly 
inflated price for the test, a price that was not consistent 
with the cost of the initial confirmatory test to the 
employer.  Under these circumstances, Harrison would 
be more inclined to make a hurried decision without 
thinking through the alternatives available to him
. His choice would certainly not be a knowledgeable 
one, given the fact that he had incomplete and inaccurate 
information upon which to base his decision.
Under the factual scenario of this case, the protections 
provided the employee by the statute are virtually
 nonexistent.  Clearly there was not substantial cWe 
ompliance.  hold, therefore, that the board was wrong 
to discount the importance of the employer’s violations 
of section 730.5.
B.  Consequences of noncompliance.  In Eaton, we stated 
“[i]t would be contrary to the spirit of chapter 730 
to allow an employer to benefit from an unauthorized 
drug test by relying on it as a basis to disqualify 
an employee from unemployment compensation benefit602 
s.”  N.W.2d at 558.  As a result, we held that the
 Employment Appeal Board erred in that case by relying 
on such a test to support a finding of misconduct.
  Id.  Victor Plastics argues the same result is not 
warranted here because, unlike the test in Eaton, the 
test in this case was authorized by law and the employer 
merely failed to strictly follow the “technical notice 
requirements” of the statute.  We disagree. 
Although the legislature now allows random workplace 
drug testing, it does so under severely circumscribed 
conditions designed to ensure accurate testing and
 to protect employees from unfair and unwarranted The 
discipline. importance of these protections, including 
the procedural safeguards contained in section 730
.5(7), is highlighted by the statutory provision making 
an employer “who violates this section . . . liable 
to an aggrieved employee . . . for affirmative relief 
including reinstatement . . . or any other equitable 
relief as the court deems appropriate.”  Iowa Code
 § 730.5(15).  Although an employer is entitled to
 have a drug free workplace, it would be contrary to 
the spirit of Iowa’s drug testing law if we were to 
allow employers to ignore the protections afforded
 by this statute, yet gain the advantage of using a 
test that did not comport with the law to support a 
denial of unemployment compensation.
Our decision in Reigelsberger v. Employment Appeal
 Board, 500 N.W.2d 64 (Iowa 1993), a case upon which 
the employer relies, is distinguishable.  In that we 
case, upheld a denial of unemployment compensation
 based on a finding of misconduct that rested on the 
employee’s refusal to undergo treatment for his al500 
coholism.  N.W.2d at 64-65.  We noted that had the
 employer obtained a positive blood test under the
 drug testing law in effect at that time, it could
 have conditioned continued employment on the empls 
oyee’successful completion of alcohol treatment.  at 
Id. 66.  We held that the absence of such a test hdid 
ere, however, not prevent the employer from requiring 
the employee to seek treatment.  Id.  Our decision
 was grounded on the “special circumstances” present 
in that case, notably that there was “no question that 
Reigelsberger had a continuing problem with alcohoa 
lism, fact Reigelsberger acknowledged and of which
 [his employer] had actual knowledge.”  Id.  Therea 
fore, blood test to establish that fact was not critical 
to support the employer’s demand that the employee
 seek treatment.
In contrast, in the present case, there was no acknowledgement 
by Harrison that he had used marijuana; to the conhe 
trary, denied any use from the beginning.  Therefothe 
re, special circumstances underlying our decision in 
Reigelsberger do not exist here.  In addition, the
 role of the drug test at issue in Reigelsberger was 
quite different than the role played by the drug test 
here.  Harrison’s positive drug test was the basis
 for discipline and disqualification; it was the sole 
proof of misconduct.  In Reigelsberger, the omitted 
drug test related to a collateral issue; it would merely 
have verified an alcohol problem that all parties conceded 
existed.  The actual misconduct was the employee’s
 failure to seek alcohol treatment after being directed 
to do so, not his use of alcohol on the job.  Therour 
efore, decision in Reigelsberger is inapposite.
In summary, we hold the Board erred in relying on the 
results of Harrison’s drug test in deciding that he 
was not entitled to unemployment benefits.  In the
 absence of this proof, the agency’s finding of misconduct 
is not supported by substantial evidence.  Therefothe 
re, district court properly reversed the agency ruWe 
ling.  remand this case to the agency for an award
 of unemployment benefits.
 AFFIRMED AND REMANDED.