Lets look at it. You agree that two parties to a business arrangement can make a contract. They can agree on conditions of employment. For example, what to wear, etc.
But they cannot agree on other conditions. Like drug use and verification of the terms of the agreement. On those items, you seem to say that they are not allowed to come to agreement, that somehow the use of force by a third party, in this case government, will be invoked to make sure that one party does not insist on terms which the other party finds objectionable.
In a society where free association is valued, and no one is forced to make an agreement they find objectionable, neither side is forced to make the deal. Either side may decide not to be involved.
People who are libertarians do not believe in the use of force to get what they desire. The issue is one of free association minus force.
I am a libertarian, if I own a business and I don't like your haircut or your girlfriend, I should not be forced to give you a job. I should be able to hire or fire whom I want. If I don't want you to smoke or drink off the job in your own home, I should be able to fire you.
If I require you to smoke at least one cigarette in front of me, and won't, then I can fire you. I don't like like you, you are fired. It is my company, why should Government force me to pay you?
You are too old/young? I should not be forced to do anything I don't want to with my business. It is mine.
'Corse I can just shut down, and go to another country.