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If the applicant was advised of the 5 panel drug screen and only specifically asked whether or not those specific drugs have been taken, then the applicant should not be liable as no misrepresentation was made. Had the applicant been made aware of the other drugs being tested for, she can make the argument that she would have disclosed it.
Also, if the applicant was advised of a 5 panel test, and that's not what was done, then there could be an issue with the use of a test that she was not made aware of.
As her mother, I have 25 yrs. experience In HR. I felt his incriminating remarks were way out of line, especially calling her a drug user. I wanted to report him. He fired the other employee on the spot for not disclosing she occasionally smoked cigarettes. It is my opinion his incriminating remarks are discriminatory to remove existing personnel and my daughter was wrongly accused and could pass a 12 Panel now. She has prescriptions that support any medications she takes. They also questioned why prior to the first test the necessity of her taking some of her prescribed Meds. I know first hand by law they can not ask much less advise her on what she takes. They attempted to hold all her medications as she was requested to bring and present them to hold...unless they were going to keep them for Lord knows what.
I think you're right that this should not be held against her since the 5 panel test would not have shown anything and because she wasn't untruthful about the medications she was asked about.
Also, there may be a basis for a defamation/intentional infliction of emotional distress lawsuit given the statements and allegations made that are unfounded.
It would likely be a good idea for her to consult a local employment attorney in her area about this incident and discuss potential claims if suit were filed.
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