Investigations and Polygraph Services
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EMPLOYEE POLYGRAPH PROTECTION ACT (EPPA)
EMPLOYEE THEFT, INDUSTRIAL ESPIONAGE OR SABOTAGE
 
Section 801.12 of the Employee Polygraph Protection Act (EPPA) provides exemptions under the act for an employer that is conducting an investigation into economic loss or injury.
 
Below are excerpts from that law. Keep in mind, they are only excerpts. EPPA can be quite complicated and easily violated without proper guidance. If you are an employer even considering requesting an employee submit to a polygraph, DO NOT even say the word polygraph in that employee's presence before consulting a polygraphist that is knowledgeable of EPPA intricacies and competent in guiding you through each step. I have a complete EPPA package that I will send to you that will properly prepare you and your employee, to include all necessary forms, and, if followed, you will avoid violating federal law. My initial consul in EPPA matters is PRO BONO.
 
Section 801.12 Exemption for employers conducting investigations of economic loss or injury.
 
(a) Section 7(d) of the Act provides a limited exemption from the general prohibition on lie detector use in private employment settings for employers conducting ongoing investigations of economic loss or injury to the employer’s business. An employer may request an employee, to submit to a polygraph test, but no other type of lie detector test, ONLY IF--  
 
ALL ELEMENTS MUST BE MET
 
(1) The test is administered in connection with an ongoing investigation involving economic loss or injury to the employer’s business, SUCH AS theft, embezzlement, misappropriation or an act of unlawful industrial espionage or sabotage;
 
(2) The employee had access to the property that is the subject of the investigation;
 
(3) The employer has a reasonable suspicion that the employee was involved in the incident or activity under investigation;
 
(4) The employer provides the examinee with a statement, in a language understood by the examinee, prior to the test which fully explains with particularity the specific incident or activity being investigated and the basis for testing particular employees and which contains, at a minimum:
 
(i) An identification with particularity of the specific economic loss or injury to the business of the employer;
 
(ii) A description of the employee’s access to the property that is the subject of the investigation;
 
(iii) A description in detail of the basis of the employer’s reasonable suspicion that the employee was involved in the incident or activity under investigation; and
 
(iv) Signature of a person (other than a polygraph examiner) authorized to legally bind the employer; and
 
(5) The employer retains a copy of the statement and proof of service described in paragraph (a)(4) of this section for at least 3 years and makes it available for inspection by the Wage and Hour Division on request.
 
The ongoing investigation must be of a specific incident or activity.
 
(c) (1) (i) The terms “economic loss or injury to the employer’s business” include both direct and indirect economic loss or injury.
 
(ii) Direct loss or injury includes losses or injuries resulting from theft, embezzlement, misappropriation, industrial espionage or sabotage.
 
(iv) Indirect loss or injury also includes theft or injury to property of another for which the employer exercises fiduciary, managerial or security responsibility, or where the firm has custody of the property.
 
 “Property” refers to specifically identifiable property, but also includes such things of value as security codes and computer data, and proprietary, financial or technical information, such as trade secrets, which by its availability to competitors or others would cause economic harm to the employer.
 
REASONABLE SUSPICION
Prior to an employer requesting an employee to submit to a polygraph examination that employer MUST  have reasonable suspicion that employee was involved in the incident under investigation.
 
 “Reasonable suspicion” refers to an observable, articulable basis in fact which indicates that a particular employee was involved in, or responsible for, an economic loss. Information from a co-worker, or an employee’s behavior, demeanor, or conduct may be factors in the basis for reasonable suspicion. Likewise, inconsistencies between facts, claims, or statement that surface during an investigation can serve as a sufficient basis for reasonable suspicion, the totality of circumstances surrounding the access or opportunity (such as its unauthorized or unusual nature or the fact that access was limited to a single individual) may constitute a factor in determining whether there is a reasonable suspicion.
 

 
The employer has the burden of establishing that the specific individual or individuals to be tested are “reasonably suspected” of involvement in the specific economic loss or injury for the requirement in section 7(d)(3) to be met.
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The statement required under paragraph (a)(4) of this section must be received by the employee at least 48 hours, excluding weekend days and holidays, prior to the time of the examination.
 
***** WARNING TO EMPLOYERS *****
VIOLATING EPPA
Any employer who violates EPPA is subject to a civil penalty up to $10,000.00 for EACH violation.
 
Below is an excerpt from section 801.42 of EPPA governing violations.
 
Any employer who violates this Act shall be liable to the employee or prospective employee affected by such violation for such legal or equitable relief as may be appropriate, including, but not limited to, employment, reinstatement, promotion, and the payment of lost wages and benefits.
Section 801.42 Civil money penalties assessment.
(a) A civil money penalty in an amount not to exceed $10,000 for any violation may be assessed against any employer for:
(1) Requiring, requesting, suggesting or causing an employee or prospective employee to take a lie detector test or using, accepting, referring to or inquiring about the results of any lie detector test of any employee or prospective employee, other than as provided in the Act or this part;
(2) Taking an adverse action or discriminating in any manner against any employee or prospective employee on the basis of the employee’s or prospective employee’s refusal to take a lie detector test, other than as provided in the Act or this part;
(3) Discriminating or retaliating against an employee or prospective employee for the exercise of any rights under the Act;
(4) Disclosing information obtained during a polygraph test, except as authorized by the Act or this part;
(5) Failing to maintain the records required by the Act or this part;
(6) Resisting, opposing, impeding, intimidating, or interfering with an official of the Department of Labor during the performance of an investigation, inspection or other law enforcement function under the Act or this part; or
(7) Violating any other provision of the Act or this part.