Hous. Area Safety Council, Inc. v. Mendez

671 S.W.3d 580

HOUSTON AREA SAFETY COUNCIL, INC. and Psychemedics Corporation, Petitioners,

v.Guillermo M. MENDEZ, Respondent

No. 21-0496

Supreme Court of Texas.

Argued October 25, 2022

OPINION DELIVERED: June 23, 2023

John S. Serpe, Michael Lewis, Christopher D. Knudsen, for Petitioner Houston Area Safety Council, Inc.

Robert E. Goodman Jr., Dallas, for Respondent.

Charles Hollis, D. Faye Caldwell, Houston, for Petitioner Psychemedics Corporation.

Chief Justice Hecht delivered the opinion of the Court, in which Justice Blacklock, Justice Busby, Justice Bland, Justice Huddle, and Justice Young joined.

We are asked as a matter of first impression whether a third-party entity hired by an employer to collect and test an employee's biological samples for drugs owes the employee a common-law duty to perform its services with reasonable care. Applying established principles, we conclude that the common law does not recognize such a duty. Accordingly, we reverse the court of appeals’ judgment¹ and render judgment for Petitioners.

I

Guillermo Mendez, a pipefitter employed by Turnaround Welding Services, was assigned to work the Valero Ardmore Refinery. Following Valero policy for all on-site workers, Turnaround directed Mendez to report to the Houston Area Safety Council to provide hair and urine samples for drug and alcohol screenings. The Safety Council collected the samples from Mendez and delivered them to Psychemedics for laboratory testing. Psychemedics reported that Mendez's hair sample tested positive for cocaine and a cocaine metabolite.² Mendez had taken numerous drug tests over the more than 25 years he worked as a pipefitter and had never had a positive result. Mendez denies that he has ever used cocaine.

Valero required Mendez to provide a second sample to a different collection entity, DISA Global Solutions, which also sent the sample to Psychemedics for testing. The second sample tested negative for cocaine, as did a third that Mendez had tested by a different laboratory at his own expense. Mendez was required to complete a substance-abuse course, and when he did, DISA approved him to return to work. Nevertheless, Turnaround refused to reassign him to the Valero facility or to any other jobsite. After collecting unemployment benefits for a time, he found work with a different employer.

Mendez sued Turnaround in federal court and settled those claims. He then filed this suit against the Safety Council and Psychemedics, alleging that they negligently collected, transported, tested, and reported the results of his first hair sample, causing him to lose his job with Turnaround. The Safety Council and Psychemedics filed traditional and no-evidence summary-judgment motions, asserting that they did not owe Mendez a legal duty of care and that there is no evidence of breach, causation, or damages. The trial court granted the traditional summary-judgment motions, agreeing with the Safety Council and Psychemedics that they did not owe Mendez a legal duty.

The court of appeals reversed, holding that "when an individual is required, as a condition of employment, to submit to drug testing, the law recognizes a duty to use reasonable care in collecting and processing biological samples between third-party collection and testing agencies and the employees they test."³ We granted the Safety Council's and Psychemedics’ petitions for review.

II

The existence of a legal duty, which is "a prerequisite to all tort liability",⁴ is the "threshold inquiry in a negligence case".⁵ Whether a legal duty exists under particular facts, and if so, the scope and elements of that duty, present questions of law that courts must decide.⁶ To determine whether a particular defendant owes a negligence duty to a particular claimant, courts look first to whether we have previously held that a duty does or does not exist under the same or similar circumstances.⁷ If, for example, a "special relationship" exists between the parties that we have previously held gives rise to a legal duty, that duty exists in the case presented as a matter of law, and "the duty analysis ends there."⁸ But "[w]hen a duty has not been recognized in particular circumstances, the question is whether one should be."⁹

To determine whether a duty exists, we consider several interrelated factors we set out more than 30 years ago in Greater Houston Transportation Co. v. Phillips , often referred to as the Phillips factors.¹⁰ In undertaking this analysis, we weigh "the risk, foreseeability, and likelihood of injury ... against the social utility of the actor's conduct, the magnitude of the burden of guarding against the injury, and the consequences of placing the burden on the defendant."¹¹ We also consider "whether one party would generally have superior knowledge of the risk or a right to control the actor who caused the harm."¹² We have said that some of these factors, like risk and foreseeability, "may turn on facts that cannot be determined as a matter of law and must instead be resolved by the factfinder", but these cases are unusual.¹³ More often, "the material facts are either undisputed or can be viewed in the light required by the procedural posture of the case."¹⁴ This is because "the factual situation presented must be evaluated in the broader context of similarly situated actors."¹⁵ Thus, "[t]he question is whether a duty should be imposed in a defined class of cases, not whether the facts of the case at hand show a breach."¹⁶

III

A

The Safety Council and Psychemedics argue that we need not consider the Phillips factors to determine whether they owed Mendez a legal duty because we have already twice refused to recognize such a duty in the drug-testing context in Mission Petroleum Carriers, Inc. v. Solomon¹⁷ and SmithKline Beecham Corp. v. Doe.¹⁸ We disagree. Although those cases involved negligence claims arising from circumstances involving drug-testing activities—and although we held in both cases that no duty existed—we have not addressed in any case the specific duty Mendez argues exists here.

In SmithKline , we considered whether an independent drug-testing laboratory similar to Psychemedics, which was hired by an employer to test prospective employees’ biological samples, "owe[d] a person tested a duty to tell that person or the employer that ingestion of certain substances will cause a positive test result."¹⁹ The claimant, who lost her job after testing positive for opiates, did not complain that the laboratory improperly performed the test or reported an incorrect result but instead complained that it "should have informed her and her prospective employer that eating poppy seeds could cause a positive test result."²⁰

After concluding that no court had previously recognized such a duty,²¹ we considered the Phillips factors and concluded they did not support recognizing the duty the claimant proposed.²² Although we acknowledged that the claimant's job loss was, at least to some degree, a likely and foreseeable result of the laboratory's failure to warn her not to ingest poppy seeds before taking the test, we found that other considerations outweighed those concerns. Specifically, we concluded that the proposed duty could not be "readily defined" and was "unworkable"; that it would require the laboratory to fulfill responsibilities that, under its contractual agreement, belonged to the claimant's employer; and that it would "impinge[ ] on the liability of other professionals for services rendered."²³ Importantly, we concluded our duty analysis in SmithKline by "emphasiz[ing] that we have not considered whether a drug testing laboratory ... has a duty to use reasonable care in performing tests and reporting the results."²⁴

Several years after our decision in SmithKline , we came closer to addressing today's issue in Mission Petroleum. But Mission Petroleum did not involve an independent laboratory that tested employees’ samples for an employer (like Psychemedics or SmithKline) or an independent entity that collected and transported employees’ samples for an employer (like the Safety Council). Instead, the claimant in Mission Petroleum asserted a negligence claim against the employer—which itself collected the employee's urine sample—alleging that it failed to use reasonable care in doing so, resulting in a false-positive test result.²⁵ The issue we addressed in Mission Petroleum was "whether an employer owes a duty to an at-will employee to use reasonable care when collecting an employee's urine sample for drug testing pursuant to [Department of Transportation (DOT)] regulations."²⁶ We began our analysis in Mission Petroleum by noting that we had declined in SmithKline "to address any duty the employer may owe to an employee and expressly reserved the question whether a laboratory may be liable for performing drug tests negligently."²⁷ And we emphasized that the question of whether a third-party entity that collects employees’ samples owes a duty of care to the employees was "not before [the] Court."²⁸ Instead, Mission Petroleum required us to decide "whether an employer owes a duty of care when the employer itself collects the employees’ urine samples."²⁹

In holding that the employer did not owe such a duty, we acknowledged that an employer's negligence in such circumstances creates a risk of harm and a likelihood of injury, but we concluded that the DOT regulations substantially reduced the risk and likelihood of harm to tested employees by "impos[ing] stringent rules" for the process, "levy[ing] civil penalties for violation[s]", and providing "a safe harbor for employees whose test results are tainted by unacceptable breaches of collection procedures."³⁰ We also considered how creating such a common-law duty on the part of an employer could undermine Texas’ fundamental employment-at-will doctrine, since the employee's claim "concern[ed] the process by which [his employer] chose to terminate him".³¹

Balancing the risk and likelihood of harm against the social...