Labor & Employment Law Daily Wrap Up, DISCRIMINATION—SEX—N.D. Ind.: Employee fired for violating last chance agreement after positive drug test gets bias claim tossed, (Sep 30, 2025)

By Marjorie Johnson, J.D.

Though she testified that she had stopped using marijuana “gummies,” she failed to refute that the HR director honestly believed she had merely tapered off her use based on the results of her second drug test.

A quality assurance technician, who was fired ostensibly because she violated the terms of a last chance agreement (LCA) when she tested positive for illicit drug use following a second drug screening, failed to defeat summary judgment on her Title VII sex discrimination claim. Though she claimed the HR director who fired her treated less favorably than a similarly situated male engineer who was not terminated after also failing a second drug test while under a LCA, no reasonable jury could conclude she established pretext since the record did not suggest the HR director did not honestly believe, based on the results of their respective test results, that the male coworker had completely ceased using drugs, albeit with some of the substance still in his system, while the employee had merely tapered off her drug use (Foust v. Kyocera SGS Precision Tools, Inc., No. 1:23-cv-00318-CCB-SLC (N.D. Ind. Sept. 25, 2025)).

Substance abuse policy. Pursuant to the employer’s substance abuse policy, employees were subject to random alcohol and drug tests conducted and interpreted by a third-party provider. An employee who tested positive for the presence of alcohol or drugs was placed on an unpaid suspension for at least three days and subjected to a confirmation test. If the confirmation test returned a negative result, the employee was paid for the leave.

However, if the confirmation test returned a positive result and the employee had no prior violations, the employee was given the opportunity to enter into a LCA. The LCA required that the employee both abstain from the use of illegal substances and actively participate in the company’s employee assistance program (EAP). In addition, the employee would be subject to unannounced, periodic follow-up drug testing for a period of one year. An employee who failed to comply with the LCA or failed a drug test for a second time would be fired.

Positive drug tests. On December 3, 2021, the female quality assurance (QA) technician and the male process engineer tested positive for illegal substances during a random drug screening, and both were suspended without pay for three days. When their confirmation tests came back positive, they both signed LCAs and continued working pursuant to the substance abuse policy. The QA technician claimed that she stopped using marijuana “gummies” on December 8, the same day she signed the LCA.

“Tapered off”? On January 12, 2022, both employees were administered another drug screen, and both initially tested positive for illegal substances. The HR director testified that confirmation test results showed the QA technician’s results were above a cutoff threshold, which indicated she had merely tapered off use of marijuana and had not stopped using the drug altogether. Thus, the HR director determined that she failed to comply with the LCA and terminated her employment. In contrast, the male engineer’s confirmed results demonstrated that he had ceased using drugs, albeit with some of the substance still in his system. Thus, the HR director determined that he did not violate his LCA and allowed him to return to work.

Legitimate expectations. At the outset, the court rejected the employer’s contention that the QA technician could not make out her McDonnell Douglas prima facie case since she was not meeting the company’s legitimate employment expectations. Though the employer pointed to the fact that she admitted to using drugs when she failed her first test, the relevant inquiry looked to her performance at the time of termination. At that point, she presented evidence that she had complied with the LCA by engaging in the EPA and ceasing use of marijuana.

The employer also argued that the result of her second failed drug test demonstrated she had not complied with the LCA. However, this was not an undisputed question of fact since she argued that the test was unfair and discriminatory. And to support that claim, she provided evidence that her testing levels were significantly lower than the previous test and testified that she ceased using drugs on the day she signed the LCA.

Similarly situated. She also presented sufficient evidence that she and the male engineer were similarly situated. The fact that they both had positive preliminary drug tests followed by decreased levels on final analysis raised a reasonable possibility that they did engage in similar conduct, explained the court. Moreover, she presented evidence that they both “dealt with the same supervisor” and were “subject to the same standards” under the substance abuse policy and their same LCAs.

HR director’s “honest belief.” However, the QA technician’s sex discrimination claim failed at the pretext stage. Though she argued the employer treated her less favorably than the male engineer since both of their tests revealed substance levels that were “significantly decreased,” the employer presented evidence that the engineer’s second test levels were not the same as hers. In order to show pretext, she needed to provide evidence that the employer’s drug testing results were “factually baseless” and “phony,” which she failed to do.

Even accepting as true her testimony that she stopped using marijuana on the day she signed the LCA, and that the HR director’s belief was incorrect, she failed to present any evidence suggesting that the HR director did not “honestly believe” that her termination decision was necessitated by the LCA’s requirements given her test results. She has also did not present any evidence suggesting the testing analysis or the HR director’s application of the LCA were so unreasonable as to render them likely “phony” or “insufficient.”

The case is No. 1:23-cv-00318-CCB-SLC.

Judge: Brisco, C.

Attorneys: Jennifer L. Hitchcock (Close Hitchcock) for Michelle Foust. Heather L. Wilson (Frost Brown Todd) for Kyocera SGS Precision Tools, Inc.

Companies: Kyocera SGS Precision Tools, Inc.

Cases: SexDiscrimination Discrimination Discharge IndianaNews