The criteria for establishing what constitutes drug possession are discussed via arbitration case analysis. Sample drug possession cases are considered: cases in which discharge for drug possession was upheld by the arbitrator and cases in which the employers' discharge actions were reversed by the arbitrators. On the basis of case research and extensive arbitration experience with substance abuse cases, guidelines are proposed to enable employers to develop specific policies and procedures for dealing with future drug possession cases. 9 notes (Author abstract modified)