The answer to this question is a qualified "yes." There is no federal law prohibiting drug or alcohol testing of employees. Some states have rules that address this issue. In general, a company may conduct drug and alcohol testing under certain circumstances, such as for reasonable suspicion of drug or alcohol use, after offering a job to an applicant and after an accident. A company exposes themselves to liability if they conduct drug and alcohol testing without first having communicated their written policy which spells out the procedures they will follow, and the consequences to employees for positive tests, etc.