You may already know that it is unlawful for an employer to fire an employee for refusing to take a lie detector test, but did you know that merely asking a current or prospective employee to take a lie detector test may subject your company to a $10,000 civil penalty?

The Employee Polygraph Protection Act of 1988 ("EPPA") governs the use of lie detector tests and imposes significant limitations on employers wishing to use lie detector tests in the workplace. An employer’s failure to know of, or adhere to, the EPPA’s requirements virtually guarantees a violation and creates significant exposure to liability. Therefore, knowing how and when to use lie detector tests is critical information for all employers.

Are you covered by the EPPA? Probably. The Employee Polygraph Protection Act applies to most private employers and unlike other federal laws, the EPPA’s applicability does not hinge on the number of employees you may have. Rather, the EPPA applies to "any employer engaged in or affecting commerce or in the production of goods for commerce." Accordingly, under this broad interpretation, employers are more likely to be covered by the EPPA than not.

The EPPA makes it unlawful for a covered employer to require, request, or suggest that any employee or prospective employee take or submit to a lie detector test unless there is a reasonable suspicion of specific economic loss. Employers are also prohibited from disciplining, discriminating or retaliating against an employee or prospective employee for refusing to take a test or for exercising other rights under the EPPA.

There are several limited exemptions to the EPPA’s broad-based prohibition on the use of lie detector tests. The EPPA does not apply to the "United States Government, any state or local government, or any political subdivision of a state or local government." Similarly, the EPPA contains exemptions for national defense, national security, and FBI contractors. Specific employees within the private sector are also not protected by the EPPA, including those in sensitive positions, such as armored car personnel or employees with access to controlled substances.

The EPPA does, however, contain one exemption that is available to all covered employers: the "limited exemption for ongoing investigations." This exemption has broad appeal to employers wishing to ferret out alleged employee theft. Nevertheless, employers must exercise caution prior to administering lie detector tests under this exemption because it is replete with potential pitfalls that can still create significant employer liability. For example, this exemption cannot be used to justify indiscriminate testing on all employees following theft or embezzlement, despite the fact that this is precisely why many employers wish to administer lie detector tests in the first place.

The limited exemption only applies if the test is administered in connection with an ongoing investigation involving economic loss or injury to the employer. The investigation must be of a specific incident, not a general "fact finding" mission, and cannot be conducted without sufficient supporting evidence of the employee's involvement. Supporting evidence includes evidence that the employee had access to the subject property, and that the employer has a reasonable suspicion that the target employee was involved.

If satisfied, the employer must then provide the target employee with a written statement setting forth the foregoing facts with particularity. Under the EPPA, employers must provide this notice 48 hours in advance (not counting weekends or holidays) of the date and time of the scheduled lie detector test. In addition to the initial written notice, employers must satisfy multiple notice requirements in all phases of the test, must ensure that a qualified examiner conduct the test, and must safeguard the results of the test in order to prevent impermissible disclosure.

Once the test is administered, employers are not permitted to act solely on the results of the test, but must possess additional supporting evidence prior to taking any action that may be deemed as detrimental to the employee. For example, if a lie detector test indicates that a suspected employee was involved in the theft of office supplies, the employer will not be deemed to have sufficient grounds to terminate the employee. However, after the results of the test are produced, if the employee admits to stealing the supplies, then this would be the additional supportive evidence necessary to justify adverse action.

In sum, EPPA violations can come in many different forms, from failing to post the required notice to asking current or prospective employees to waive their rights under the act. Such violations can expose covered employers to liability for civil penalties and private civil actions. Accordingly, any covered employers wishing to utilize a lie detector test must take great care to comport with the EPPA’s requirements and limitations.

Since the EPPA has significantly limited the lawful uses of lie detector tests in the workplace, employers and human resources personnel should seek the advice and counsel of an experienced attorney prior to administering lie detector tests in the workplace.