DRUG-TESTING FIRM LATEST SPECIMEN OF TOUGH TIMES

Globallab Solutions of Charlotte Is Handing Out Far Fewer Test Cups
These Days, Thanks to the Hiring Drought.

As GlobalLab Solutions searched for a new office a few years ago,
when the economy was thriving and jobs were easier to find, one of
the big questions on owner Mike Sullivan's mind was whether the space
had two bathrooms.

His company's waiting room was often full. Dozens of job candidates
lined up for the plastic cups and quick instructions - don't flush
and don't wash your hands - that come with pre-employment drug tests.

"When you opened the doors at 8:30, you'd have five or 10 people
waiting," said Sullivan, who runs the nine-employee company with his
wife. "And then, a steady flow all day long."

These days, it's more like a trickle.

Surging unemployment and little new hiring means emptier waiting
rooms and lighter pockets for drug-testing companies like GlobalLab
Solutions. When hiring picks up, Sullivan and his crew will be among
the first to notice.

He says business has been in the toilet since October, and he's seen
no recent signs of an uptick.

Nationally, the unemployment rate fell last month to 9.4 percent, but
there are still a record number of people looking for work. The local
jobless rate has been higher - 12.4 percent for the Charlotte area in
June, the latest numbers available. New state and local figures are
set to come out later this month.

At its peak a couple of years ago, GlobalLab Solutions ran 50 drug
tests a day for more than 1,200 clients, from local businesses to
national chains, such as Books-A-Million. Sullivan, a silver-haired
former banker, spent his days collecting lab results, maintaining the
company's records, manning the phones to answer clients' questions
and scrambling to keep up with the rush of orders.

These days, Sullivan, 61, has shifted his focus, slashing the waste
from his business and ramping up marketing. He spends more time
chatting with the test-takers. He's learned how to perform tests and
how to detect cheaters, who have become more frequent as job-hunters
turn increasingly desperate. Some have offered bribes or smuggled in
other people's urine samples in their pockets.

The drug-testing business wasn't always Sullivan's calling. His wife,
Marilyn, who had sold drug tests for another company, started the
business 13 years ago out of their home off Providence Road, hoping
to capitalize on a new instant-read test that had just hit the market.

Sullivan, who worked in commercial financing at a bank, stayed on the
sidelines, watching as his wife made sales calls from the back patio.
The company grew quickly.

In 2004, it moved to its current space in an office park off South
Mint Street. From 2006 through 2008, the company opened offices in
Rock Hill, University City, Gastonia and southwest Charlotte, and
Sullivan left his banking job to help run the company full-time. The
instant test had become prevalent, used mostly for pre-employment
drug screening because it was cheaper than lab tests, as low as $18.
The tests involve dipping testing sticks into a urine sample, with
faint pink lines showing up minutes later if the person passes.

Once a Booming Business

In better times, pre-employment screening was a lucrative field in
Charlotte - a city long known for its booming population and thriving
economy. Of 133 Charlotte-area companies surveyed last fall by The
Employers Association, a local human resources consulting firm, 72
percent said they did pre-employment drug testing or both
pre-employment and current testing.

GlobalLab Solutions was growing so fast that Sullivan tried to curb
the growth, telling his coworkers - many of them family members,
including his son and two stepsons - to limit the company to 35
percent growth last year.

Sullivan had done strategic planning at the bank, and he thought he'd
anticipated everything that could go wrong: if the company couldn't
handle its growth, for instance, or if its biggest customer left.

The business continued to thrive through last September. But as
Charlotte reeled from the banking meltdown, companies quickly stopped
hiring. Pre-employment screenings, which accounted for 30 percent of
the company's business, evaporated.

"Oct. 1 was D-Day," Sullivan said. The company's overall revenues are
off 25 percent since then.

"Of all the things I planned," he said, "I had no plan that
employment would collapse like this."

Nationally, drug-testing companies have seen a similar drop-off,
reporting minimal hiring, even as some parts of the economy begin to
show signs of improvement, said Laura Shelton, executive director of
the Drug and Alcohol Testing Industry Association.

Pre-employment drug screening, often the biggest part of testing
companies' business, is all but dead, and companies are beginning to
cut other testing programs, such as random and post-accident tests, she said.

With his business changing, Sullivan had to make some tough choices.

He shuttered all but two of the company's offices. He laid off nine
of 18 full-time employees. He boosted Internet marketing and hired a
part-time salesman, instead of relying strictly on referrals.

As the company's waiting room emptied and job-seekers across the
region began to grasp more desperately for jobs, the number of people
trying to cheat on their tests grew, too.

Fewer Jobs, More Cheaters

One job candidate, for instance, came in with a urine sample he'd
brought from the outside and reheated. It tested at 131 degrees, far
above the typical 90 to 100 degrees, Sullivan said.

The man told the technician he was feeling a little sick that day.
She told him he'd be dead if the sample were his.

Another day, someone offered Sullivan's son $500 to give him a passing grade.

Now, Sullivan and his employees have learned to listen for the sound
of a balloon popping - one method for smuggling in samples - in the
bathroom. They've learned what fresh urine smells like, versus an
older sample. And when to ask people to wait and try again. Sullivan
himself, who previously had no medical or drug-testing background,
has learned to perform and read the tests.

Many testing companies are small, family-run businesses, though there
are some "mega companies," Sullivan said. There are about four
testing companies in the Charlotte area and 40 statewide.

Companies can perform saliva, hair and blood tests, but urine testing
is by far the most popular - the "gold standard" in drug testing,
Sullivan said. As the economy crumbled, some local companies cut
drug-testing from their budgets, opting instead for cheaper in-house
saliva tests, he said.

Others have simply frozen hiring, meaning fewer new candidates
arriving at GlobalLab Solutions.

At GlobalLab Solutions, clients include the department of social
services in Gaston and Cleveland counties, the YMCA and the
Department of Transportation. The company performs court-ordered
tests and tests for individuals - sometimes before their
pre-employment tests, to be sure they're clean, he said.

The company relies on orders from companies, averaging about $25 per
drug test, depending on the volume of the order, Sullivan said.

Waiting for the Turnaround

In his office, surrounded by photos of his family and hanging lab
coats, Sullivan says he loves the work, despite its hurdles.
GlobalLab Solutions will come out of the recession leaner and
stronger, and its steady business will return, he says.

"This is a challenge," he says. "But one thing I've learned is when
you're challenged, you grow. We're very dedicated to keeping this
business alive."