When faced with possible theft of company property, employers (and often the employees with access to the missing property) want to use a polygraph test as part of the employer’s investigation. Seems logical – an employee who passes the test could be ruled out as a suspect. Not so fast.

The federal Employee Polygraph Protection Act of 1988 (the Act) prohibits most private employers from using any lie detector tests either for pre-employment screening or during the course of employment. Under the Act, the term lie detector means a polygraph, deceptograph, voice stress analyzer, psychological stress evaluator, or any other similar device (whether mechanical or electrical) that is used, or the results of which are used, for the purpose of rendering a diagnostic opinion regarding the honesty or dishonesty of an individual.

Unless otherwise exempt, the Act prohibits covered employers from:

(a) requiring, requesting, suggesting or causing, directly or indirectly, any employee or prospective employee to take or submit to a lie detector test;

(b) using, accepting or inquiring about the results of a lie detector test of any employee or prospective employee; and

(c) discharging, disciplining, discriminating against or denying employment or promotion of any employee or prospective employee, or threatening to take such adverse action, due to their refusal or failure to take such a test, their test results, or their filing of a complaint, testifying in any proceeding, or exercising any rights afforded by the Act.

The Act recognizes several exemptions from its coverage. For example, the United States Government, any state or local government, and any political subdivision of a state or local government acting in the capacity of an employer are not subject to the Act.

Another notable, though limited, exemption is available to private employers investigating economic loss or injury to their business. Such an employer may request an employee to submit to a polygraph test if—

(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 employee with a statement, in a language understood by the employee, prior to the test that fully explains with particularity the specific incident or activity being investigated and the basis for testing particular employees; and

(5) the employer retains a copy of the statement and proof of service for at least three years.

For this exemption to apply, the employer’s “ongoing investigation” must be of a specific incident or activity. The Act does not permit random testing. For example, an employer may not request its employees to submit to a polygraph test in an effort to determine whether any thefts have occurred. Similarly, an employer may not administer a polygraph test solely because inventory has been frequently missing over time.

To satisfy the “reasonable suspicion” requirement, the employer must have an observable basis in fact that can be articulated and indicates that a particular employee was involved in, or responsible for, an economic loss. An employee’s access or potential access to the item(s) in question, standing alone, is not sufficient to meet this requirement. Reasonable suspicion may be derived from such factors as information from a coworker, the employee’s behavior or demeanor, or inconsistencies in the facts or statements that arise during the investigation.

Because of the narrow nature of this “ongoing investigation” exemption to the Act, employers should consult with legal counsel prior to initiating a polygraph with an employee.

If an employer can satisfy all of the conditions of this exemption, the employer may administer a polygraph test only, not any of the other types of lie detector tests recognized by the Act. For a better understanding of what a polygraph test is and its accuracy, read “Four Common Questions About Polygraphs” written by guest columnist Jeffery Poth, Esq. included in this issue.

Lastly, if an employee commits a theft known by the employer to be a felony, the employer is obligated under Ohio law to report the felony to law enforcement authorities. Read the article below entitled “Has One of Your Employees Committed a Felony?” for further discussion of this reporting obligation.

An employer does not violate the Act if law enforcement authorities decide, during the normal course of their investigation, to administer a polygraph test to an employee. While the employer may passively cooperate with the authorities, the employer must not participate in the testing of an employee suspected of wrongdoing, such as by administering the polygraph test or reimbursing the authorities for a test they conduct on the employee.