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Understand Polygraph Protection Act

November 23, 2010
The Employee Polygraph Protection Act ("EPPA") prevents most private employers from giving polygraph tests to employees or potential employees to screen for promotion or em- ployment, or, more common, as a basis for disciplinary action. Indeed, as many employers seek ways to identify and combat theft and dishonesty, the use of polygraph tests is often considered. The use of polygraph tests generally is prohibited, but there are certain narrow exceptions. Most relevant to Dealers is an exception allowing employers to request an employee to submit to a polygraph test as part of an ongoing investigation involving economic loss or injury to the employer's business. Such investigations include incidents of theft, embezzlement, misappropriation and acts of unlawful industrial espionage or sabotage. For an employer to administer a polygraph test, the employee must have had access to the property that is the subject of the investigation, and the employer must have a reasonable suspicion that that particular employee was involved in the incident. That prevents employers from testing all employees or employee groups solely on the basis that it suffered some loss. An employer who asks an employee to take a polygraph test as part of an ongoing investigation must strictly comply with the requirements of the EPPA regarding (1) notice of the testing and information the employee must be provided prior to examination; (2) methods of testing and the limitations/prohibitions of certain questions; (3) licensing and reporting of the examiner; and (4) use and disclosure of test results. With respect to Item 1, the employer must provide the employee with a statement that identifies the specific incident or activity being investigated, including an identification of the specific economic loss or injury to the employer's business. The statement also must assert that the employee had access to the property that is the subject of the investigation, as well as the basis for the employer's reasonable suspicion that the employee was involved in the incident being investigated. The statement must be signed by an authorized representative and be retained by the employer for at least three years. The employer also must inform the employee of the date, time, location and conditions of the test. An explanation of the testing conditions must include a description of the instruments involved, whether the testing area contains a twoway mirror or camera and whether any recording or monitoring devices will be used. Finally, the employee must be permitted to stop the test at any time. Consequences for failure to strictly comply with the EPPA can be severe. Violations of the law can result in civil penalties up to $10,000 per violation. In addition, an employer who violates the law may be liable to the employee or prospective employee for legal and equitable relief, including being required to hire, reinstate, or promote the individual and to pay lost wages and benefits. In certain limited circumstances polygraph tests may be an appropriate and effective tool to identify employee theft and misconduct. However, because the law is so restrictive, extreme caution should be exercised when Dealers seek to use polygraph tests during ongoing investigations and they are advised to consult with their attorney before doing so.