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Heightened attention to concerns about workplace security and financial impropriety will likely generate renewed focus on the permissible extent to which employers may use polygraph and other lie detector tests. This month’s column will discuss the Employee Polygraph Protection Act of 1988 (EPPA), 29 U.S.C. �� 2001-2009 (2002), and its limits on the use of polygraphs in employment situations. OVERVIEW The EPPA took effect on Dec. 27, 1988. The U.S. Department of Labor administers and enforces the act. The Secretary of Labor is charged with distributing notice of the act’s protections, issuing rules and regulations concerning the act and enforcing the act. The act applies to any employer that is engaged in commerce and extends to all of its employees, regardless of their citizenship status. The act also extends to foreign corporations operating in the United States. Generally, the EPPA prohibits most private employers from using “lie detector” tests either for pre-employment screening or during the course of employment. The term “lie detector” refers to any “polygraph, deceptograph, voice stress analyzer, psychological stress evaluator, or other similar device … 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.” 29 U.S.C. � 2001(3) (2002). Employers generally are prohibited from requiring, requesting, suggesting or causing any employee or job applicant to take or submit to any lie detector test. Additionally, employers may not use, accept, refer to or inquire about the results of an employee’s lie detector test. Employers are also prohibited from discharging, disciplining, discriminating against or denying employment or promotion to any employee or job applicant for refusing or failing to take or submit to the test, for filing a complaint regarding the test, for participating in a proceeding under the act or on the basis of the results of the test. TESTING PERMITTED Federal, state, and local government employers (such as police departments) are not affected by the EPPA, nor are public agencies, such as school systems or correctional institutions. Lie detector tests administered by the federal government to experts, consultants or employees of federal contractors engaged in national security or national defense intelligence or counterintelligence functions also are exempt. The act also includes several exemptions which authorize polygraph testing by private employers under specified conditions, including the testing of: (1) employees who are reasonably suspected of involvement in a workplace incident that results in economic loss or injury to the employer and who had access to the property subject to the investigation; (2) job applicants for armored car, security alarm and security guard firms who protect facilities, materials or operations affecting health or safety, national security or currency; and (3) job applicants of pharmaceutical and other firms authorized to manufacture, distribute or dispense controlled substances who will have direct access to these controlled substances, as well as current employees who had access to persons or property that are subjects of an ongoing investigation. CONDITIONS The use of lie detector tests, when permitted under the act, is subject to strict standards concerning the conduct of the test, including the pre-test, testing and post-test phases of the examination. Examinees must be given a written notice explaining their rights and the limitations imposed, such as prohibited areas of questioning and restriction on the use of the test results. Moreover, prior to the examination, examinees have the right to receive reasonable written notice of the date, time and location of the test. Among other rights, an examinee may refuse to take the test, terminate the test at any time, review all questions to be asked during the test or decline to take the test if he or she suffers from a medical condition. With respect to disclosure, the examinee garners further protection in that the results of the test cannot be disclosed to anyone other than the employer or examinee without consent, or pursuant to court order, to a court, government agency, arbitrator or mediator. The act also prohibits the asking of any questions concerning the examinee’s personal beliefs, including religious beliefs or opinions, beliefs regarding racial matters, political beliefs or affiliations or matters relating to sexual preference or behavior. The examinee has the right to consult with legal counsel or an employee representative before each phase of the test, although the legal counsel or the representative may be excluded from the room where the test is administered during the actual testing phase. Finally, the examinee also has a right to know that the test is not and cannot be required as a condition of employment. APPLICATION There is relatively little case law construing the EPPA. The exemption most likely to impact a private employer and, correspondingly, the source of some case law development, is the “ongoing investigation” exemption. Under this exemption, an employer may investigate particular economic losses or injuries to its business by conducting polygraphs on employees with access to the subject matter of the investigation, if the employer has a reasonable suspicion that the employee was involved in the incident or activity under investigation. The loss can include “theft, embezzlement, misappropriation, or an … industrial espionage or sabotage.” 29 U.S.C. � 2006(d)(1) (2002). A number of cases have pointed out the need for strict employer adherence to the statutory conditions for testing for the exemption to apply. In Escalante v. Rapid Armored Corp.,702 N.Y.S.2d 755 (Sup. Ct. N.Y. County 1999), for example, an armored truck employee was terminated in connection with an investigation which the employer had undertaken into the theft of a major consignment from an armored car. The employee was terminated two days after he refused to take a lie detector test during the investigation, asking instead to consult with “someone” about the matter. The court in Escalante, after noting that “[l]iteral compliance with the provisions of [the ongoing investigation exemption] is required to take an employer out of the basic EPPA prohibition on the use of polygraphs,” id. at 757, found that the employer could not take advantage of the exemption because, in order to do so, it must first provide the employee with a statement, at least 48 hours prior to the examination, that, at a minimum, shows that the employee “had access to the property that is the subject of the investigation” and thoroughly describes “the basis of the employer’s reasonable suspicion that the employee was involved in the incident or activity under investigation.” Id. (citing 29 U.S.C. � 2006(d)(4) (2002)). Here, the employer’s statement that “[the employer] [felt] that [the employee] should be examined because [he] had direct access to the missing bag” was found not to meet the requirements of the act because it merely repeated that the employee might have had access to the stolen property, yet showed nothing of the reasonable suspicion requirement that was necessary regarding the employee. EMPLOYER’S BURDEN In Wiltshire v. Citibank, 653 N.Y.S.2d 517 (Sup. Ct. N.Y. County 1996), a New York court again addressed the necessity for strict adherence to the statutory requirements of the ongoing investigation exemption. In Wiltshire, a terminated bank employee sued under the EPPA, alleging that his employer violated the statute by asking him to take a polygraph test regarding a $1.5 million fraudulent wire transfer and discharging him after he refused to do so. In holding that the employer did not qualify for the ongoing investigation exemption, the court explained that the burden is on the employer to show that it “fulfills every one of the requirements set forth in [the act].” Id. at 521 (citation omitted). In Wiltshire, the employer was found outside the exemption because its notice to the employee to be examined failed to describe with sufficient particularity the basis of the employer’s reasonable suspicion that the employee was involved in the fraudulent transfer. In this particular instance, the court held that the employer’s statement that the employee was “present … when the wire transfer was sent” and that the employee “had access to all necessary documents and stamps [to complete its transmission]” was inadequate under the EPPA. Id. at 523-24. Albin v. Cosmetics Plus N.Y., Ltd., No. 97 Civ. 2670, 1997 WL 615494 (S.D.N.Y. Oct. 6, 1997), presents another example of the requirements of the ongoing investigation exemption. In Albin,since the employer failed to allege that reasonable suspicion existed for its termination of a fragrance buyer for supposed inventory theft and because the employer did not allege that it provided the employee with a written statement which included all the “procedural safeguards,” the court denied the employer’s motion to dismiss the employee’s EPPA claim and held that the employer did not qualify for the ongoing investigation exemption. However, at least one federal district court outside of the New York area has declined mechanistically to apply the ongoing investigation exemption’s requirements. In Long v. Mango’s Tropical Caf�, Inc., 958 F. Supp. 612 (S.D. Fla. 1997), a Miami Beach bar suspended its bartender and required her to submit to a polygraph examination after an undercover investigation revealed alleged theft and employee misconduct. In upholding the employer’s qualification for the exemption, the court observed that “the purpose of the written-notice requirement is not to test Defendant’s ability to read and mechanically follow the rules [but] to ‘afford the employee sufficient time prior to the test to obtain and consult with legal counsel or an employee representative.’” Id. at 622 (quoting 29 C.F.R. � 801.12(g)(2) (1996)). Thus, while the bar’s notice, standing alone, did not meet the “with particularity” criterion, when that notice was coupled with the investigation report the bartender received describing in detail her observed conduct, the two items proved to be enough to allow the employer to come within the ongoing investigation exemption. CONCLUSION Congress enacted the EPPA against a backdrop of concerns that employers frequently misused lie detectors and relied on inaccurate, inconclusive or unfounded lie detector results to make employment decisions. As a result, the act, to the extent it does not completely prohibit the use of lie detector tests in a particular situation, imposes a series of detailed restrictions on the conditions for testing, the permissible contents of tests and the uses to which test results may be put. Thus, an employer considering the use of lie detector technology, even in today’s tense and cautious environment, should remain cognizant of the numerous restrictions on the use of such tests under the EPPA, and under any comparable state or local laws. John P. Furfaro is a partner at the firm of Skadden, Arps, Slate, Meagher & Flom, www.skadden.com, and Maury B. Josephson is a principal in the Law Office of Maury B. Josephson. Edward L. Sample II, an associate at Skadden Arps, assisted in the preparation of this column.

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