Individuals may be surprised to learn that failed drug tests, even if they are the result of conduct occurring outside of employment, could put their unemployment benefits at risk. Given recent statutory changes and a case pending decision from the Wisconsin Supreme Court, it is important for employees to know how, if at all, positive drug tests may impact their eligibility for unemployment compensation.


Terminations resulting from positive drug tests may disqualify you from benefits. Similarly, as of June 30, 2011, if you are unable to accept an offer of work due to a failed drug test, the Unemployment Insurance Division may deem you ineligible for benefits for at least four weeks. Wis. Stat. Sec. 108.04(8).

If your unemployment is the result of a positive drug test, the Department will have to make a series of findings before disqualifying you from benefits. For instance, the Department will ask,

– Did the employer have a policy that prohibited both on-duty and off-duty use of drugs?

– Was the policy set forth in writing?

– Was the policy reasonable?

– Did the policy explain the consequences of a positive test result?

– Were you aware of the policy?

Furthermore, a positive test alone is not sufficient proof that you violated your employer’s drug-free workplace policy and that you are ineligible for unemployment benefits. The employer must provide proper documentary evidence showing that the laboratory test was accurate and valid. In the absence of expert testimony, the testing laboratory must complete the Department’s test analysis form. Without such proof, the employer will likely fail to show that the employee engaged in misconduct.


On March 6, 2012, the Wisconsin Supreme Court heard oral arguments in Michael J. Waldvogel Trucking v. Labor & Industry Review Commission, Case No. 11AP329-FT. The issue before the Court was whether an employee committed “misconduct,” as defined by Wis. Stat. Sec. 108.04(5), making him ineligible for unemployment benefits when the individual’s termination was the result of a positive drug test administered after indefinite layoff. (It should be noted that the case arose prior to the enactment of section 108.04(8)(b)1.b of the Wisconsin statutes stating, in relevant part, “an employee’s failure to accept an offer of work . . . includes the employer’s withdrawal of or failure to extend an offer of work due to a positive test result.”)

The employer argued that all misconduct that destroys an individual’s eligibility to return to a job may be deemed misconduct connected with employment, even if the misconduct occurs during an indefinite layoff.

The employee argued that under the Indefinite Layoff Rule as articulated in the case A.O. Smith Corp. v. DILHR, 88 Wis. 2d 262, 269-70 (1979), a person who is on an indefinite layoff is not considered to be in an employment relationship and therefore cannot commit misconduct connected with employment when no employment relationship exists.

The Court’s decision could expand the definition of misconduct if the Court determines that an employer’s work rules or policies still have some bearing on a laid-off employee’s conduct even when he has not received notice of recall.

For more information about unemployment benefits, see Summer Murshid’s blog post, When Times Get Tough, The Unemployed Need Benefits.

Your case will depend on the current law, specific circumstances, and available evidence. For legal advice on your unemployment case, please contact our firm.

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