Court rules workers’ comp not voided by drug use

Businesses fear higher insurance costs

A recent ruling by the Arizona Court of Appeals may mean that workers hurt on the job who test positive for illegal substances can’t be denied workers’ compensation benefits in that state. An attorney familiar with the case says other states may or may not face similar challenges. For the past five years, Arizona businesses with drug-testing policies have been able to deny workers’ compensation claims when injured workers test positive for drugs. But a case stemming from denial of a construction worker’s benefits when he broke a wrist and knee on the job in 2000 and tested positive for several illegal substances might have ended that protection to employers.

In Grammatico v. The Industrial Commission, et al., the appellate court ruled 2-1 in June that David Grammatico’s employer was wrong to deny compensation benefits based on his positive drug screen. The court based its decision on its interpretation of the Arizona state Constitution, which states that employees injured by necessary risks inherent in their jobs are entitled to workers’ compensation. The decision is under review by the Arizona Supreme Court, and business advocates are urging that the appellate decision be reversed and the state Constitution amended.

Long-range implications

"If [Grammatico] is upheld, the court’s decision would give employees little incentive to be drug and alcohol free, knowing that if they get hurt on the job while under the influence, they can still collect benefits," says Michelle Bolton, Arizona state director of the National Federation of Independent Business.

Bolton contends that her chapter’s member businesses are additionally concerned with the effect the ruling might have on their insurance costs. She adds that Arizona’s largest workers’ compensation insurer has said that in light of the ruling, it might stop offering employers who have drug and alcohol policies the discount on premiums that it has offered in the past.

In most states, including Arizona, a worker may be barred from receiving workers’ compensation benefits if his or her on-the-job injury is caused by drug or alcohol use. However, in the Grammatico case, the employee argued that his use of drugs two days’ prior could not be proven to have caused the injury, and that state law did not require him to prove that the injury was not caused by drug use.

Tibor Nagy, a Tucson employment attorney familiar with the case, says if other states’ statutes have the same element challenged in the Grammatico case, employers in other parts of the country might face suits that are similar. "At the moment, I think it’s a case unique to our state."

For more information, contact:

  • Michelle Bolton, National Federation of Independent Business, Phoenix, AZ. Phone: (602) 263-7690. E-mail: Michelle.Bolton@NFIB.org.
  • Tibor Nagy, Attorney, Snell & Wilmer, Tucson, AZ. Phone: (520) 882-1228.