Often, employers ask if an employee drug test is ever considered a consumer report and does it need to follow the Fair Credit Reporting Act (FCRA).

To answer these questions, we consulted with four industry experts to get their opinion.

Jackson Lewis Law Firm

Our understanding to date that a drug test is not a consumer report and that the Medical Review Officer (MRO) procedure in essence serves as the “check and balance” just as the consumer disclosure / adverse action procedures do for a background check

[However]… the class action lawyers are circling the background check arena and it could potentially be $1k per each time the process is not followed if the court buys the argument.

In my experience CRA’s are becoming more aggressive in advising clients to use caution regarding the issue.

Arnall Golden Gregory Attorneys at Law—Washington Counsel to the National Association of Professional Background Screeners (NAPBS)

Even with a TPA, it depends on the facts as to whether the reporting of the drug test results constitutes a consumer report subject to the FCRA.  The FTC staff opinion letter and Hodge v. Texaco (975 F.2d 1093 (5th Cir. 1992) lay out the following parameters with respect to drug testing results and the FCRA.

  • If the drug test results are in a report from a CRA to an employer – treat it as a consumer report subject to the FCRA.  If the report is coming from eVerifile treat as a consumer report subject to FCRA.
  • If a drug lab provides the results directly to the employer – it is not a consumer report under the FCRA.   It is subject to the “transactions and experiences” exclusion because the drug test relates directly to an “experience” between the lab and the individual.  There is no outside information in the report.
  • If a TPA is involved it depends.  Look at the facts and consider whether they are an intermediary and consequently a CRA.  If the TPA is an intermediary who contributes to (or takes any action that determines) the content of the information conveyed to an employer, it’s a CRA. However, if the intermediary simply acts as a “go-between” between the employer and drug lab, it would not be a CRA. Thus, an intermediary that provides only mechanical services (i.e., arranges for a lab test, collects and forwards samples to the lab, and transmits test results) it likely would not be a CRA “assembling or evaluating” a consumer report and the drug test results provided to the employer would not be a consumer report.  At the other end of the scale, an intermediary that retains copies of tests performed by drug labs and regularly sells this information to third parties for a fee is a CRA whose reports of drug test results are “consumer reports” covered by the FCRA.

Largest Third Party Administrator / Largest Drug Testing Company in the Country

We do not typically see it categorized under FCRA. The only exception would be in a case where the result is ‘bundled’ into an overall pass/fail disposition that also includes FCRA- covered reporting information.

As long as the drug result disposition is represented as a separate decision point relative to the candidate, it does not require FCRA notifications.

Leading Third Party Administrator / National Drug Testing Provider

No, a drug test is not a Consumer Report.

To learn more about employee background screening and drug testing, contact eVerifile today.

Disclaimer: The information contained in this document may or may not reflect the most current legal developments; accordingly, information in this document is not promised or guaranteed to be correct or complete, and should not be considered an indication of future results. eVerifile and Legal Counsel listed expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this document.