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WUI: The Small Business Problem of Impaired Employees

30. June 2014 09:00

Woman holding flask at a desk

According to a recent article on, 10 percent of small businesses had employees show up to work under the influence of a controlled substance in the last year. The most common drugs of choice? Alcohol, marijuana, and – perhaps the most pervasive and dangerous of them all – prescription opiates.

About 75 percent of surveyed small-business owners agreed that employees who work under the influence pose a threat to their businesses. And it’s likely that your employee handbook already prohibits the use and abuse of controlled substances at work.

So what do you do if you suspect an employee is Don Drapering it up at work? Or if you’re pretty sure your new worker is hitting the ganja every morning in her car before clocking in? Immediate termination may not be the answer. Here’s what you need to know.

The Business Risks Associated with Impaired Employees

Employees who work under the influence of controlled substances pose a variety of threats to your business. Generally speaking, your business can be found liable for the actions of an impaired employee.

Let’s say you own a small fleet of mobile coffee trucks. One of your employees is under the influence of prescription painkillers when he runs the truck into a fuel pump at a gas station. Your business could most definitely be sued for the resulting damages.

According to the article, opiate addiction can cause…

According to “Painkillers Fuel Growth in Drug Addiction,” an article in the Harvard Mental Health Letter, 18 percent of users who abuse painkillers get them from a prescribing physician. Sometimes, a typical work injury can become the catalyst for a painkiller dependency. Meanwhile, your Workers’ Compensation Insurance is footing the bill.

To mitigate these risks, you might consider dismissing the employee. But as we’ve learned in “The Small Business Guide to Avoiding Discrimination Charges when Firing Employees,” firing employees can prompt a whole new set of risks: employment discrimination charges.

Case Study: Can a Small-Business Owner Fire an Alcoholic Who’s Fallen off the Wagon?

Let’s say one of your employees, who disclosed that she’s an alcoholic and regularly attends meetings, has fallen off the wagon after ten years of sobriety. Over the weekend, the employee overdosed on alcohol and painkillers and ended up in the hospital. She checked herself into a rehabilitation program and will miss two weeks of work.

You are glad this employee is receiving the treatment she needs, but her job is essential. You need to find a replacement right away. Another scary detail? She frequently drives clients around, and you don’t want to risk her driving impaired on company time.

But before you fire her, consider that alcoholism is a protected disability under the Americans with Disabilities Act (ADA). This law prohibits employers from firing employees based on their disabilities as long as they…

In other words, firing the employee now could prompt a discrimination charge and lead to a wrongful termination lawsuit. While a trial may or may not rule that the employee’s rights were violated, the lawsuit itself will still cost your business several thousand dollars in legal fees. You may even be advised to settle the claim out of court.

If you don’t have Employment Practices Liability Insurance to help you pay your legal bills, these employment discrimination claims could severely drain your finances. That’s why it’s best to carry the proper insurance and take steps to avoid discrimination claims altogether.

For more about general discrimination risk management, check out “How Small-Business Owners Can Prevent Employee Discrimination Lawsuits.”

Tips on How to Handle an Employee Who You Suspect Is Impaired at Work

We aren’t saying that small-business owners can’t terminate employees who work while under the influence of drugs or alcohol. We’re just suggesting that you carefully navigate the situation in order to reduce the risk of being sued for discriminatory employment practices. The Small Business Chronicle’s tips can help you handle such a situation:

For more information on avoiding EEO lawsuits, check out “Employment Discrimination Lawsuits: Case Studies.”

This post is part of an ongoing series on Employment Practices Liability Insurance, the high cost of employment discrimination lawsuits, and EEOC laws. Stay tuned for more on what can go wrong when hiring (and firing) employees.

know your business risks


EPLI | Errors & Omissions | Errors and Omissions Insurance | Risk Management | Small Business | Small Business Risk Management | Tips for All Small Businesses

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