what will you do? One of your employees isn't producing. Or misses a lot of work. Or is accident prone. Maybe you have good reason to suspect drug or alcohol abuse - and maybe you suspect it doesn't stop with just one worker. It might be costing you in ways you don't even know about. Costing you in botched assignments and legal fees, higher insurance premiums and lower morale. You've got decisions to make.

Is your first loyalty going to be to your company, your customers, or your employees? Are you going to take a hard line? If you do, where will you draw it?

What about your employees' rights? Is what they do on their own time their business -- even if it affects yours? How will they react to a drug program, and how will you deal with that? Education? Rehabilitation? Mandatory testing? At what cost?

It's a tough problem. And many companies, especially smaller ones, are reluctant to do anything about it, fearing the expense, adverse reactions, or crippling effect on their work force if they catch too many employees who are drug abusers.

But the work force may be crippling itself. From the corner office to the loading dock, drug and alcohol abuse is epidemic in today's workplace. Even workers themselves are calling for action in overwhelming numbers.

Whether you do nothing -- as some would recommend -- or take action, there will be risks, costs, and ethical dilemmas.

Here are the stories of three companies that have chosen to deal with the problem head-on -- approaching it with different attitudes, creating different policies, and getting different results.

Tom Warner's epiphany struck in February 1985, when a seminar speaker said that some 20% of the nation's population was abusing drugs. "Bingo, that's when the light bulb went off in my head," he says. "That meant 20% of my work force was probably on drugs."

Warner runs The Warner Corp., a $16-million plumbing, heating, and air-conditioning repair company with 220 employees and 15 locations in the Washington, D.C., area. As he pondered what he'd heard, he wondered if drugs weren't behind some of the odd behavior around the company -- why, for instance, several people were especially accident prone or why others just seemed to drift, with no ambition.

What bothered him in particular was the cost-effectiveness of his vocational program, a two-year training course at the Warner Technical Institute. If all 20 students in a typical class graduate, the company's cost is $4,000 each. But over time Warner had seen the dropout rate climb to 75%, raising the cost to $16,000 per student.

"I couldn't figure out what was wrong," he says. "But in 1985, when we started screening the apprentices for drugs, we discovered that most of them -- more than half, in fact -- were doing things like marijuana and PCP. I was astounded."

And he was disturbed. If drugs were that pervasive among apprentices, what about his full-timers? What was the company's exposure to lawsuits and damages, not to mention bad customer relations? His plumbers and technicians often worked in houses when nobody was home. An addict with an expensive cocaine habit could steal customers blind. A stoned plumber operating a blowtorch could burn down a building. A drug abuser driving a company vehicle on the area's busy roads ran a high risk of having an accident.

With all that in mind, Warner quickly initiated a company-wide drug-testing program. All employees, including managers, were required to sign consent forms indicating they understood the new policy and agreed to urinalysis.

Testing was required of all new hires, as well as anyone involved in an accident, an injury, or a property-damage incident. Several years later Warner mandated further tests at the time of a transfer or promotion and when "questionable actions" raised suspicion. Any employees who tested positive for drugs would be discharged immediately. They could be rehired after a year, however, if they were straight and agreed to ongoing random testing.

"We don't go after people helter-skelter," Warner says. "When something questionable happens, that triggers the test to see if drugs were a factor. We don't distinguish between light and heavy use. If you do drugs, you've got to leave."

At the same time, Warner offered a comprehensive drug-abuse treatment option. The $7,000, 28-day residential program -- to be paid for by the company -- was on a par with the best in the field. Employees desiring rehabilitation were free to take advantage of it if they signed up. If, however, a worker was caught first, it was too late. But over the two years Warner offered the program, not a single person accepted it. Looking back, he figures that his drug-using workers harbored concerns about confidentiality, possible job loss, or legal action. Or maybe they just didn't want to stop. "From my experience over five years," he says, "I do not think a drug user will voluntarily quit."

He relates the story of a fellow contractor who hired a plumber. The new man was dispatched on a job with a fully stocked service van. He then went out and sold thousands of dollars' worth of tools and equipment in order to buy crack. "As we discussed this, I told the contractor that a $30 test could have saved thousands," Warner says. "He said he couldn't do that because good plumbers are too scarce -- he didn't want to risk turning them off. I've talked to people who don't test because they're afraid they'll lose half their work force."

Not that Warner didn't face the same problem. When his drug testing began in earnest, half of his new hires failed. At one company location in 1986, 14 new plumbers in a row flunked the drug test. But no matter how shorthanded Warner was, he never lowered his standards or winked at a problem. In 1987, in a tight labor market, he fired several veteran plumbers, even when he lacked replacements. "You can't make exceptions," he says. "Consistency is key."

So is confidentiality. At Warner, a drug test is a simple procedure. The employee or potential hire enters a bathroom alone and emerges with a urine specimen. The testing lab picks up the sample within 24 hours. For new hires, the lab technicians run a basic $30 screening test that looks for such drugs as marijuana, cocaine, PCP, opiates, amphetamines, and barbiturates. For veteran employees suspected of using drugs, they run a more complex test that costs $75. In either case, if the first test is positive, a second one is done to verify the finding. Results are reported within 48 hours.

If the second test is positive, the lab calls Warner's payroll clerk, who contacts the individual's manager. "The manager tells the person he can no longer work for us," Warner says. "And that's the end of it. You don't bargain or debate their abilities. The manager is not allowed to say anything to anybody about why the person was discharged."

In a program that relies on testing, nothing is more important than having a reputable lab. Warner's lab, Metpath, does more than just test. It helped the company set up testing procedures and conducted a training class for all branch managers. It also supplies all the testing paraphernalia and stores samples for six months, in case a test's accuracy should face a legal challenge.

In five years, Warner says, only one employee has objected to the test on principle. He finally submitted to one to save his job -- and he tested clean. Though Warner admits the program has provoked other dissent, most employees have had no objections. "We all realize why it's being done," says John Rice, a plumber who's been at Warner for 32 years. "At first you had a lot of complaints because you had a lot of drug addicts here. As they got weeded out, you got rid of the complaints."

Tom Warner would like to agree that drugs have vanished from his company, but he knows better. Last year 14 employees tested positive, mostly for marijuana and cocaine, after urinalyses that followed accidents and injuries. "I'm not sure you can ever stamp it out completely," Warner says. "It's so pervasive in society."

Even so, the results of his five-year effort are stunning. From 1982 to 1985, for example, the company averaged 111 workers' compensation claims a year in a work force of 178. From 1986 through 1989, with the program in place, claims dropped an average of 40% per year. For the company's fiscal year that ended last June, the total came in at 35. "Because of the lower claims, we're saving at least $150,000 a year right now, and next year we'll be saving even more, considering the long-term trends we're reversing," Warner says.

Vehicular-accident rates have plunged as well. From an average of 76 a year before the program, when the Warner truck fleet numbered 146, accidents have fallen to 35, with 174 trucks on the road. Warner's auto-insurance premiums have dropped by more than $50,000, even with more trucks.

That's not all. The apprentice program now enjoys a 75% graduation rate, which is saving the company about $165,000 a year by Warner's estimate. With a waiting list of plumbers and mechanics who want to join the company -- because of the apprentice program -- Warner is saving $20,000 a year on classified ads.

Together those annual reductions total at least $385,000, from a drug program that costs about $12,000 a year to administer. As added benefits, Warner lists high morale, punctuality, and customers who are better satisfied because of quality work and reliability.

Despite its success, some employee-assistance professionals criticize approaches like Warner's as draconian. They say that drug abuse, like alcoholism, is a disease. And the way to handle it is through rehabilitation, not by firing people. All employers like Warner are doing, they contend, is pushing dopers onto someone else's payroll.

But Warner counters that if all companies tested, drug users would have no refuge. He makes short shrift of the notion that drug addiction is an illness that he, as the employer, should pay for. "I don't want to spend money fixing someone else's problem when I didn't get the guy hooked on drugs," he says. "In my view, if an employee has a drug problem, he caused it. My job is to meet my payroll and satisfy my customers. If I have to pay for treatment, I ultimately have to charge my clients for it.

"The bottom line is that we have a policy that's firm but fair," he adds. "And my company is a better company because of it."

The Company The Warner Corp., Washington, D.C.; a 50-year-old plumbing, heating, and air-conditioning repair company with revenues of $16 million and 220 employees

The Program Instituted in 1985; based on regular drug testing through urinalysis. A positive test calls for mandatory discharge.

The Cost An estimated $12,000 per year

The Return An estimated $385,000 per year, resulting from decreases in workers' compensation claims, vehicular accidents, auto-insurance premiums, absenteeism, and training costs for new employees

* * * * *

Conspicuously absent from Tom Warner's approach is education, the centerpiece of the drug-fighting effort at Sawyer Gas Co. A $12-million, Jacksonville-based outfit, Sawyer Gas provides propane gas, appliances, and heating and air-conditioning services from its seven locations throughout northeastern Florida.

Its program has evolved over a decade, beginning the day in 1980 when company president Charles Sawyer got word that one of his 3,000-gallon propane trucks was lying upside down in a ditch. When he arrived, the driver was in a rescue van. Stepping inside, Sawyer suspected instantly that his driver was high. The man admitted he had been smoking marijuana.

"If we had one who was doing it, we probably had others," Sawyer recalls thinking. "So we had a town meeting, so to speak, of all the employees and asked what we should do about it. Our own people suggested that we start testing."

Immediately, the company decided to screen applicants for drugs. Sawyer turned to an outside polygraph specialist, who quizzed prospects about whether they had used drugs. Some 60% of them flunked. As word spread that Sawyer Gas tested for drugs, the number of job seekers plummeted. Sawyer lost no sleep over that -- at least the ones getting through were clean. He broadened the testing program to include the entire company, including the president. Polygraph tests were mandated on an annual basis and after any accident or injury occurred.

But testing alone, Sawyer knew, didn't attack the root of the problem. Education, he reckoned, was the answer. He wanted to deal not just with today's workers but also with their children. That, after all, was the future work force.

So in 1987 Sawyer and his wife, Joanne, looked around for materials they could use to teach their employees about the dangers of drugs. Together, over time, they distilled and fashioned all the information into a comprehensive drug-education program. They called it Knowledge Is Power.

"It's a very unintimidating, very positive type of education," Sawyer explains. "It never says don't do drugs because it harms your company. Instead, it's a program to teach our people the signs of drug use, the paraphernalia used, what to watch for in both their fellow employees and their families."

The Sawyers kicked off the program in October 1988, assembling the entire company -- 160 strong -- at a local Marriott hotel. They had charts and videos and pictures of narcotics, as well as tips on drug detection. The local sheriff made a presentation of his own. Crack had infiltrated Jacksonville, he informed the group, and the drug was quite popular among the area's teenagers.

"That knocked me off my chair," recalls office manager Pat DeWitt. "I was sitting there thinking about my kids" -- two daughters who were teenagers at the time. "I figured that they must be around drugs all the time."

Sawyer's program is run by his seven branch managers. Once a year they hold drug-education classes for the troops in their charge. Every new employee must take the class in the first three months on the job. The three sessions, with three short videos and workbook exercises, last about one hour each. The instruction is done on company time, and participation is mandatory. "It's all directed at employees and their environment," says general manager J. N. "Sandy" Kicliter. "We stress in the handouts that they share the information with their families."

Two years into the program Sawyer is confident that his managers and supervisors are proficient at detecting drug abusers. They have learned to watch for danger signals -- slipshod work habits, paperwork errors, dilated pupils.

"The way to get to most people about drugs is in the workplace," Sawyer says. "I think every business in the country has a responsibility to have a drug-free work force. Because when you reach those parents, you're reaching their kids. Every time you educate an employee, you're educating 3 to 10 other people."

In Jacksonville, at least, that philosophy is catching on. Last fall Sawyer, a member of the executive board of the Jacksonville Chamber of Commerce, solicited $6,000 from each of 22 local companies. Those companies became the sponsors of an upgraded version of Sawyer's Knowledge Is Power program called Put Drugs out of Business. Each of the sponsors was supplied with kits for its own programs, and Sawyer bought a Put Drugs out of Business T-shirt for each of his employees. The program has been adopted by more than 600 companies. The cost is $100 to chamber members and $295 to non-members. Any profit goes to the chamber. The Jacksonville chamber owns the program and is making it available nationally.

When Congress outlawed polygraph testing of employees in 1988, Sawyer switched to urinalysis. He screens all applicants. Additionally, all employees and managers are automatically tested once a year and after any accident, no matter how minor. Supervisors, moreover, can request a urinalysis for anyone anytime they are suspicious. Refusal to submit to one is considered a positive test and grounds for discharge. No one gets a second chance.

"We make a flat statement -- if you do drugs, go somewhere else," says Kicliter. "We are not a rehabilitative employer. We might, however, consider the reapplication of a good employee who's gone through rehabilitation and can demonstrate that he's been clean for at least a year."

Since 1980 about 15 employees have tested positive. Sawyer hasn't had to fire a single one. "They have quit immediately," he says. "They don't even want to talk to you about it." In the past year only one employee has tested positive, a marijuana case that surfaced after an accident. Sawyer will bet heavy odds, he says, that his crew is now drug free or close to it. And his employees are the program's biggest backers, he says.

But as at Warner, there has been an undercurrent of indignation. "Some of the younger guys resent it," says Hollis Williams, a 34-year-old pipe fitter. "They think their personal life should be their own business. But if you have nothing to hide, it's no problem. If you are going to have any kind of decent job these days, you're going to have to go through drug testing here or someplace else. To tell you the truth, I'm all for it. We have guys driving propane trucks and looking for gas leaks -- that's sensitive work."

In quantifying results, Sawyer says that the company's accident rate has declined dramatically in both numbers and severity since 1986, when the program began. Workers' comp claims have declined, saving the company approximately $75,000 annually in insurance costs. And absenteeism has declined by 64% over the same period.

"This program costs me peanuts," says Sawyer. "Last year I spent $1,500 on drug testing. The only other cost is the time the employees spend in class. It's not an expense as much as an investment. And it's the most positive thing our company has ever done."

The Company Sawyer Gas Co., Jacksonville, Fla.; a 30-year-old propane supplier with revenues of $12 million and 160 employees

The Program Instituted in 1980; based on an ongoing drug-education program aimed not only at the company but also at the community.It is supplemented by systematic, companywide drug testing by urinalysis.

The Cost $1,500 per year on testing, plus $1,200 per year in time employees spend in classes

The Return An estimated $75,000 per year in insurance premiums, plus dramatic decreases in accidents and absenteeism

* * * * *

While Tom Warner tests for drugs and Charles Sawyer tests and educates, Oregon Steel Mills Inc. (OSM) does all that and more. Its philosophy is that drug abuse is a disease best dealt with through rehabilitation. OSM is a minimill in Portland, Ore., that makes steel plate and line pipe and had 1990 sales of $153 million. Despite the company's size, its program has served as a model for smaller enterprises throughout Oregon.

In 1980 millwright Chuck Croghan became alarmed by the erratic behavior of a few of the plant's crane operators, who were handling 55-ton loads. "This stuff was swinging right over our heads," Croghan says. "We depended on those people to follow directions closely, but they were just real flighty and didn't observe procedures. They weren't drunks -- we could have told that. We figured they had to be on drugs, and we were afraid they'd kill somebody."

When he found out about the strange behavior, Jack Longbine, the employee-resources director, acted on it immediately. But the company was unionized, and edicts coming down from on high usually did not sit well. "A strictly management-directed program would have been suicide because it would have created an adversarial feeling," says Longbine. "I felt the way to emphasize that it was everyone's problem, not just management's or employees', was to involve everyone from day one." So Longbine got permission from OSM's executive board to form a 12-member employee-assistance committee, with union-elected workers holding most of the positions.

Longbine thinks that is the single most important factor in the program's success. "It was an unusual approach to take," he says. "This committee is like Congress. The employee representatives set policy on drugs and alcohol. Management can veto any of their ideas but cannot implement anything that they do not recommend. That was quite a bit of power to give them, but it sent a message that we were doing something together to solve the problem."

In its first action, the committee recommended that drug addiction be recognized as an illness. It wanted to hold people accountable for their actions but also give them a chance to correct them through treatment. No employee, except under certain circumstances, such as theft, should be fired without getting a chance at rehabilitation. Confidentiality should be of utmost importance. The committee also urged a major drug-education program, requiring every employee to receive at least two hours of training. Those ideas formed the foundation of company policy.

Initial resistance came from old-timers who didn't like the idea of giving someone a second chance. But that was nothing compared with the flack that Longbine took when he insisted that managers get a second chance, too. As he recalls, "We had officers saying, 'Look, when you make someone a manager, you've placed a special trust. If they go out and get involved in drugs, they've violated that trust. That's worse than the guy on the floor doing it.' "

But Longbine stuck to his guns. "I told them they'd be ignoring the fact that drug addiction is a disease," he says, "that people are affected based on their biochemistry." Even so, it wasn't until he brought in a physician who was a recovering drug abuser to speak to upper management that Longbine's views prevailed.

OSM has tested only three categories of people -- all new hires, anyone who comes under "probable suspicion," and anyone already on probation. The second-chance policy definitely has strings attached. Workers whose urinalyses test positive for drugs are offered one of three options: immediate discharge, the opportunity to fight the findings through a conflict-management board, or the opportunity to sign a last-chance work agreement, which places them on two-year probation and subjects them to random testing. They are sent to a counselor, who selects a mandatory treatment program. It may be residential, during which employees receive full pay just as they would for any other illness, or it may be outpatient treatment after work. The third part of the contract calls for maintaining good work performance. Failure to meet any one of those requirements is grounds for dismissal.

The company has deliberately chosen the term probable suspicion because it allows more latitude than probable cause. The job of determining whether there is probable suspicion falls to supervisors, each of whom has taken at least six hours of training from local drug-abuse experts. The task centers on watching out for the kinds of things drug usage might cause -- short-term memory loss, rapid mood swings, slurred speech, motor-coordination problems. "Basically, it's to the point where you'd wonder if the person is fit to work," says Longbine. "If a supervisor makes that determination, his obligation stops right there. He's not to make any accusations. I pick it up from there."

In 1983 OSM analyzed the results of the program's first three years. At that point 42 people -- out of a work force of about 900 over the three-year period -- had entered into work-performance contracts and undergone treatment, mostly for marijuana and alcohol abuse. Only 3 of them were no longer on the payroll. The other 39 were still there and doing much better. A few of them, in fact, had even been promoted to management positions, and there have been more promotions from within their ranks since then. As harder drugs have hit the Portland area, the success rate has dropped. Among cocaine abusers, for instance, it's between 40% and 50%. The company has yet to rehabilitate anyone addicted to heroin, Longbine says.

Five years ago, in a move aimed at blocking drugs from the workplace, the committee recommended the limited use of dogs trained to sniff out drugs to scout the grounds, although they were not allowed to approach workers. In a dozen visits the dogs have detected drugs three times, finding small amounts of marijuana and hashish. In the past four trips they have found nothing. When OSM conducted a worker survey last summer, 85% of the employees favored having the dogs, although it was clear that resentment of them ran high, at least in some quarters. Wrote one person, "It's not good to have a lock cut off your locker for a quick K-9 thrill on a pair of your dirty socks." Also apparent was some resentment of the program in general: "Sounds like McCarthyism all over," one worker wrote. Another urged, "Don't get involved in our lives away from here. It's none of your business."

Most of the comments Longbine compiled, however, supported the company's actions. Quite a few people even thought the program was too lax. The one idea that did generate fierce resistance in a 1985 survey was random drug testing for everyone. Ninety-five percent opposed it then. Several commented that they would quit if the company started doing that. Oregon, Longbine observes, is a state where people take their freedom very seriously.

As any company would, OSM has tried to perform a cost-benefit analysis of the program, but Longbine admits that because of the need to protect confidentiality, "it's turning out to be harder than we thought." He does know that less than 10% of applicants are now failing the urinalysis, perhaps because many potential employees, when informed about the test, decide to withdraw their applications. He also knows some of the costs. The two hours of drug training runs the company about $48 per employee in lost production time -- a total of $31,200 in lost production for 650 employees last year.

On the benefit side, OSM's accident rate has declined by at least 60% since 1980. In the first three years of the program, the absentee rate went from 14 days to 1.5 days per year for employees who had received treatment through the program.

Then there's productivity. The company uses 1980 as a base year. Since then productivity has increased by more than 140%. "The program is certainly part of that, but it's hard to quantify in hard numbers," Longbine says. "There are many factors." One, certainly, is that OSM, no longer unionized, is largely employee owned, with part of the equity traded on the New York Stock Exchange. That fosters a more dedicated work force.

Regardless of those uncertainties, in Longbine's opinion, there is no question that the program is paying off. "We have a lot fewer problems now because we are so much more open about it," he says. "People are more willing to admit things and seek some help. But I'll tell you, I think every company in this country still has drug problems, and any company that says it doesn't is just fooling itself. And the more companies fool themselves, the more problems they will get."

The Company Oregon Steel Mills Inc., Portland, Ore.; a 62-year-old steel mill with revenues of $153 million and 650 employees

The Program Instituted in 1980; formulated and overseen by an employee committee; based on holding people accountable for their actions and treating addiction as an illness. There is some testing aimed at rehabilitation. It is supplemented by an ongoing education program. Employee dismissal is a final option.

The Cost $31,200 per year in production lost to class time plus unquantified testing costs. Medical-rehabilitation costs, handled through a health maintenance organization, are also unquantified. Insurance premiums have skyrocketed, increasing every year.

The Return Sharp decreases in accidents and absenteeism; productivity increases of more than 140%