IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 23945

MARJORIE A. SMITH,
Claimant­Respondent,

v.

ZERO DEFECTS, INC.,
Employer­Appellant,
and
STATE OF IDAHO, DEPARTMENT OF LABOR,
Respondent on Appeal.

____________________________________
Appeal from the Industrial Commission. J.A. Shelton, Hearing Examiner.

The decision of the Industrial Commission allowing unemployment benefits is reversed.

Moffatt, Thomas, Barrett, Rock & Fields, Boise, for appellant.
Marjorie A. Smith, Boise, pro se respondent.
Hon. Alan G. Lance, Attorney General; Paul F. Kime, Deputy Attorney General,
Boise, for respondent on appeal.

_______________________________________

Smith v. Zero Defects, Inc., #23945

This is an appeal from the Industrial Commission's (Commission) decision to grant unemployment benefits to Marjorie A. Smith (Smith) who was discharged from her employment with Zero Defects. The Commission determined that the discharge was not for misconduct relating to Smith's employment.

Smith was employed with Zero Defects in its production department from September 20, 1994, to December 4, 1995. Zero Defects manufactures electronics equipment. It has a ``zero tolerance'' drug policy that provides, in relevant part, as follows:

2. Being at work under the influence of alcohol or drugs may result in discharge for the first offense.

F. ``UNDER THE INFLUENCE'' means being unable to perform work in a safe, efficient and productive manner; being in a physical or mental condition which creates a risk to the safety and well­being of the individual, other employees, the public, or company property; and/or havingany detectable level of alcohol or illegal drugs in the body.

Smith admitted that she received, read and signed a copy of the policy, and that she understood that she could be terminated under the terms of the policy if she tested positive for drugs. Following a random drug screening, Smith was discharged as a result of testing positive for amphetamines.

Smith filed a claim for unemployment benefits. Initially Smith was determined to be eligible for unemployment benefits, but Zero Defects challenged that decision, and the Redetermination Examiner reversed the decision. The Appeals Examiner reversed the Redetermination Examiner's decision and concluded that Zero Defects' determination that ``any'' level of drugs found in an employee's urine sample constituted misconduct was an ``arbitrary'' determination and was not a valid basis to deny unemployment benefits.

Zero Defects appealed to the Commission, requesting an opportunity to present additional evidence regarding Smith's test results. The Commission remanded the case to the Appeals Examiner to take the testimony of Dr. Paul Teynor, who supervised the testing of Smith's urine sample, and to accept additional test result documentation. Dr. Teynor testified to the procedures he employed and the opinion he had regarding the cause of Smith's positive test result. The Appeals Examiner concluded that: (1) Smith's ``tampering'' allegations were not supported by any competent evidence; (2) Zero Defects' policy to provide a drug­free work place was a reasonable policy and Smith was aware of this policy; and (3) Zero Defects met its burden of proving by a preponderance of the evidence that Smith was discharged for misconduct.

Smith v. Zero Defects, Inc., #23945

Smith appealed the decision to the Commission. The Commission adopted the findings of fact made by the Appeals Examiner, but reversed the Appeals Examiner's decision, concluding that, while Zero Defects' drug policy was reasonable in most respects, its ``zero tolerance'' standard was inconsistent with its stated philosophy and, thus, the policy was unreasonable. The Commission further concluded that a reasonable interpretation of Zero Defects' policy required a showing of impairment. Because Zero Defects had not presented any evidence that Smith was ``impaired'' on the job, the Commission concluded that Zero Defects had not met its burden of proving that Smith was discharged for misconduct in connection with her employment. Consequently, the Commission determined that Smith was eligible for unemployment benefits. Zero Defects appealed to the Idaho Supreme Court.

In an opinion released today, the Idaho Supreme Court reversed the Commission's decision to award Smith unemployment benefits. The Court held that the Commission erred in determining Smith was not discharged for misconduct in her employment. The Court concluded that Zero Defects' "zero tolerance" policy is an objectively reasonable policy, because Zero Defects had communicated its "zero tolerance" policy to Smith, and Zero Defects' "zero tolerance" standard is consistent with the stated objectives and goals behind its policy.

The Court also determined whether having "any" detectable level of illegal drugs in the body while being at work, which is an express violation of Zero Defects' policy, constituted misconduct in connection with employment such that Smith should be denied unemployment compensation. The Court held that Smith's actions constituted misconduct because: (1) she deliberately violated Zero Defects' reasonable rule, and (2) her conduct fell below the standard of behavior expected by Zero Defects, and Zero Defects' expectation was objectively reasonable in the particular case. Therefore, Smith's actions did constitute "misconduct" such that she should be disqualified from receiving unemployment compensation.