Can you require an employee to take a lie detector test if you suspect theft in the workplace? The short answer is maybe, but you likely will be better off conducting a thorough investigation rather than relying on a polygraph test.
Q: We have an employee whose cash drawer was short $500. Can we require her to take a lie detector test?
A: You may be able to request, but not require, the employee take a lie detector test in this situation. But, you should be aware that thanks to the constraints imposed by the federal Employee Polygraph Protection Act (EPPA), the practical value of polygraph tests is severely limited by both legal restrictions and concerns about reliability and employee morale.
Employers conducting theft or other investigations into serious misconduct often are tempted to use lie detector or polygraph tests as a way to substantiate wrongdoing. They assume the tests will provide the “smoking gun” evidence they think is needed to take disciplinary action. While these tests may seem appealing, in most cases, they only expose you to extra liability and criticism without yielding much usable new evidence. So, unless you have major theft problems, you are usually better off relying instead on appropriate investigative and disciplinary procedures.
The EPPA is the federal law that governs employer use of these tests. Under the EPPA definition, “lie detectors” include not only polygraphs but also any device used to diagnose an individual’s truthfulness, such as voice stress analyzers, deceptographs, and psychological stress evaluators. Not included are written exams known as “paper and pencil” and “honesty” tests that are designed to elicit employee attitudes toward theft and other wrongdoing.
The EPPA substantially limits the use of lie detector tests. Specifically, the EPPA prohibits private employers from:
- Requiring or asking any employee or prospective employee to submit to any kind of lie detector test (except in the limited circumstances described below);
2. Using, accepting, referring to, or inquiring about the results of any lie detector test of any employee or prospective employee;
3. Discharging, disciplining, refusing to hire, or otherwise discriminating against an employee or prospective employee who refuses to take a lie detector test, or doing any of the same based on the results of a lie detector test; or
4. Discriminating against individuals for asserting their own or another person’s rights under the Act.
There are a few exceptions to the federal polygraph limitations. Federal, state, and local governments are not subject to the Act. Private employers providing certain security services also are allowed to use the tests to screen applicants who will have protective security duties. And, employers who manufacture, distribute, or dispense controlled drugs may test prospective employees who will have direct access to the drugs.
In addition, the EPPA allows another exception for private employers to request (but not require) that an employee take a polygraph test when an organization is conducting an investigation into economic loss or injury to its business. To qualify, the employer must show the following:
1. The test is part of an ongoing investigation into theft, embezzlement, industrial sabotage, or similar economic loss;
2. The employee had access to the property that is the subject of the investigation; and
3. The employer has a “reasonable suspicion” that the employee was involved in the incident.
According to the EPPA regulations, the employee’s access to the property must be meaningful and not just a possible or potential opportunity. In addition, “reasonable suspicion” must be based on factual evidence that a particular employee was involved in, or responsible for, an economic loss.
To complicate matters further, the employer also must provide the targeted employee with a written statement before the test. This notice must describe the specific economic loss or injury, the connection the employee had to the subject of the investigation, and the grounds for suspecting the employee’s involvement.
Even if you can meet the proper conditions for a polygraph test, the EPPA gives employees significant rights that further make the exam impractical, if not unusable. For example, employees may refuse to take the examination and may not be disciplined for their refusal. They may review all of the questions in advance and consult with an attorney or employee representative before each phase of the test. In addition, even if they agree to take the test, they can stop it at any time. And finally, you may not discipline or terminate the employee based solely on the results of the polygraph. You must have additional supporting evidence.
Be aware, too, that the EPPA imposes significant penalties if you fail to follow the rules. The Secretary of Labor may levy civil penalties of up to $10,000 for violations. In addition, the Secretary may bring suit in federal court to stop any illegal conduct and may obtain employment, reinstatement, back pay, and benefits for aggrieved employees and prospective employees. Employees themselves also are permitted to exercise their legal rights directly by suing employers in federal court and are eligible for the same relief plus their attorney’s fees.
More than 25 states also have passed legislation restricting or banning the use of employer polygraph exams. Most state laws are similar to the EPPA, although some have more stringent requirements. So, even if you meet the federal rules, you may yet have to comply with additional state restrictions.
As a result of these significant legal restrictions on polygraphs, most employers choose not to use them. In addition to the legal issues, the use of the tests can wreak havoc with morale since most employees question their reliability and consider them to be invasions of their privacy.
Still, there may be times when you feel a polygraph test is warranted as part of a theft or other investigation involving economic loss, such as in your situation with the missing money from the cash drawer. However, before you invoke that right, remember this: you do not need to meet criminal standards of evidence or have a “smoking gun” in order to terminate or discipline an employee you suspect of wrongdoing. If your evidence meets the EPPA’s requirements, you probably can justify your intended employment action without the test. So, before you test, make sure you carefully weigh the potential benefits (such as the possibility that you may gain additional information) against the very real potential for EPPA compliance headaches and employee morale problems. And, if you still decide to test, make sure you consult an employment law attorney who can guide you through the EPPA’s complex requirements.