DATE ISSUED: FEBRUARY 4, 1994
CASE NO.: 93-EPP-9
IN THE MATTER OF
STATE EMPLOYEES CREDIT UNION,
Respondent.
APPEARANCES:
Cathleen M. Plaut, Esq.
On Brief for the Respondent
Stanley E. Keen, Esq.
For the Plaintiff.
BEFORE: Richard K. Malamphy
Administrative Law Judge
DECISION AND ORDER MODIFYING THE SECRETARY'S
DETERMINATION OF VIOLATIONS OF THE ACT
This matter arises from an assessment of civil
penalties filed under the Employee Polygraph Protection Act of 1988
(hereafter, the "Act), 29 U.S.C. §§ 2001-2009 (1992), and
the corresponding regulations found at 29 C.F.R. Part 801 (1991).
Subject to specifically enumerated exceptions, the Act prohibits
private employers from using lie detector tests either for
preemployment screening or during the course of employment. 29
U.S.C. §§2002, 2006. Seealso 29 C.F.R.
§801.1(a). The Act also sets procedural requirements for
exempted private employer polygraph testing. 29 U.S.C. §2007.
Seealso 29 C.F.R. §801.1(a).
Pursuant to 29 C.F.R. §801.63, plaintiff, the Secretary
of Labor (hereafter, the "Secretary"), filed an Order of Reference
(hereafter, the "complaint"), May 11, 1993, referring this matter
for a hearing before an administrative law judge. The
Administrator of the United States Department of Labor's Wage and
Hour Division, Employment Standards Administration (hereafter, the
[PAGE 2]
"Administrator") had notified respondent on July 29, 1991, of an
initial determination that respondent violated 29 U.S.C.
§2002(3)(1) and 29 U.S.C. §2002(3)(B). Pursuant to 29
U.S.C. §2005(a) and 29 C.F.R. §801.42, the Administrator
assessed respondents a civil penalty of $14,000. Respondent timely
filed exception to this determination according to 29 C.F.R.
§801.53.
1 The hearing on this matter was held on November 3, 1993, in
Charlotte, North Carolina. The record was held open until January
10, 1994, for the filing of post-hearing briefs.
ISSUES
The following issues are presented for resolution:
(1) Did respondent directly or indirectly require, request,
suggest or cause the employees, Lora Howard and Wynnona
Gause, named in the complaint to take or submit to any
lie detector test other than a polygraph test exempted
from the general prohibition of the Act and executed
according to the procedures prescribed in the Act, in
violation of 29 U.S.C. §2002(1) and 29 C.F.R.
§801.4(a)(1)? (Two violations alleged.)
(2) Did respondent unlawfully discharge, suspend or otherwise
discipline the employee, Lora Howard, named in the
complaint, without additional supporting evidence, based
on the results of a lie detector test, in violation of 29
U.S.C. §2002(3)(B) and 29 C.F.R. §801.4(a)(3)?
(3) If respondents have violated any provisions of the Act,
what would be the appropriate civil penalty?
STIPULATIONS
1. State Employees Credit Union is an employer engaged in
commerce and thus, is covered under the Act.
2. State Employees Credit Union requested, suggested or
caused its employee, Lora Howard, to take or submit to a
lie detector test.
3. State Employees Credit Union requested, suggested or
caused its employee, Wynnona Gause, to take a lie
detector test. (TR 6)[1]
[PAGE 3]
BACKGROUND
Respondent, State Employees Credit Union, incorporated under
North Carolina law, operates banking offices and automatic teller
machines (ATMs) in locations throughout the state of North
Carolina.
As an insured financial institution, the Respondent is
required by law to investigate instances of employee theft or
embezzlement. The Respondent had used polygraph testing in
conducting investigations (TR 7, 57).
Lora Howard began employment with the Respondent on April 28,
1989. She was hired as a peak-time, on call, ATM custodian and
worked anytime between 11:00 a.m. and 4:00 p.m. on Monday through
Friday (TR 16). She counted cash in the machines, refilled the
machines, and gave the ATM deposits to the tellers.
Jerry Harmon, senior vice president for the Respondent,
testified that two people were required to take money from the
vault but that after the ATM custodian signed for the money and
took possession, she was responsible for the money. When ATM
duties were to be transferred among employees, the two were to
verify the money and to exchange the keys to the machine (TR 44).
Lora Howard as the ATM custodian on Monday, June 20, 1989, and
she was to transfer the duties to Wynonna Gause on that date as Ms.
Howard would be off duty for the next three days and return to work
on June 24. However, on June 20, Ms Howard did not count the money
with Ms. Gause, but merely left the keys in a drawer at the office.
Apparently, Ms. Gause did not count the ATM money until
Wednesday, June 22, and a $300.00 shortage was noted at that time.
Both women denied participation in the shortfall.
On June 24, Mr. Harmon informed Ms. Howard of the loss, and he
mentioned a polygraph test, which she agreed to take. On Monday,
June 27, she was given a form which indicated that a polygraph test
would be administered on June 29.
The following discourse between complainant's counsel and Ms.
Howard begins at TR 20.
Q. Now I'm going to ask you some questions about what
happened immediately up to the time you took the
test. Okay? Up to the moment that you took the
[PAGE 4]
test, did anyone orally or in writing inform you of the nature and
characteristics of the polygraph instrument itself?
A. No.
Q. Okay. Did anyone describe to you what the process
of the examination would be --
A. No.
Q. Beforehand?
A. No.
Q. Okay. Did anyone provide you with any kind of
notice that you had a right to consult with
Counsel?
A. No.
Q. Did anyone provide you with any type of notice that
you had the right to consult with an employee
representative, such as a union representative?
A. No.
Q. All right. Were you given an opportunity to review
any of the questions that were asked?
A. I didn't review. He read some questions to me
before.
Q. When you say that you didn't review, do you mean
that you didn't read them yourself?
A. I didn't read them myself. I just looked over
them.
Q. All right. Now I want you to describe in your own
words what happened during the test.
A. Well, when I went in for the test, it was a very
intimidating atmosphere. The man that gave me the
polygraph test, he was smoking. He was cruel in
the way that he was speaking to me. It was like
they already thought that I had taken money and it
was an open and shut case with them. I wasn't
being given a chance. And I was crying, he
wouldn't stop. I told him, you know, that I was
[PAGE 5]
scared, and he continued. And I asked him did the machines work,
because I was so scared. He said yes, that they had put murders
away with those machines.
Q. Okay. Now when you told him that you were crying
and that you were upset, did he at any time advise
you that you had the right to terminate the test?
A. No. He just stopped the test for a moment and then
started back.
In opening remarks, Roger Honeycutt, vice president of
personnel for the respondent, stated that:
The alleged polygraph violation occurred a few
months after the date of the polygraph (law
enactment). There was little case law
available for reference, and very little
information readily available about the
technicalities of the law.
Your Honor, we submit that a reading of the
EPPA law book would lead us to believe that
the exemptions for ongoing investigations
would certainly apply to us in this case.
Before July of 1989, we used the polygraph
test only when theft or embezzlement occurred,
and then very selectively and infrequently.
We never used the polygraph test as a basis
for a first action against any employee. We
knew the test was not fool proof.
Now we'd like to respond to the Plaintiff's
charges one by one. We are agree(d) that Lora
Howard and Wynnona Gause took the polygraph
test.
We submit that the tests were voluntary and
Ms. Howard and Ms. Gause were informed in
advance what the questions would be and that
they could discontinue the test at any time.
We relied heavily upon our polygraph operator
to perform his task in compliance with the
law. He is licensed, bonded and is very
experienced . . .
[PAGE 6]
Number two: We believe that Ms. Howard and
Ms. Gause were reasonably suspected of the
disappearance of $300.00 from the ATM.
Ms. Howard was solely responsible for the ATM
contents for approximately three days. At the
end of that time, Ms. Gause assumed sole
responsibility for the next period. Upon
assuming that responsibility, she found that
$300.00 was missing. . . .
Number three: We do not believe that Ms.
Howard and Ms. Gause were given written
results of the tests. It was the belief of
the licensed operator that written results had
to be provided only upon request. Apparently
they had not asked. We certainly would not
have objected. The were irrelevant to us
anyway.
Number four: The results of the polygraph
test had no effect on whether Ms. Howard or
Ms. Gause worked again at the Credit Union.
Our only purpose for administering the
polygraph test was to determine whether either
would confess guilty. If so, we would have
prosecuted. Since neither confessed, no
action was taken.
Federal law requires that we pursue thefts,
embezzlements and other breaches of
responsibility, with the intent of recovering
losses, punishing the guilty and preventing
recurrences.
Number five: No adverse employment action was
taken on the basis of the polygraph test. We
will show that Ms. Howard was an on call as
needed employee. We had no obligation to
provide any further work for her, except as
her services were needed and desired.
On call as needed employees are classified for
us as peak time employees who work between
zero and seventeen hours per week, as needed.
[PAGE 7]
We do not have to given them any explanation as to why services
will not be needed in the future.
At the same time, a business decision was
being made to add a regular full time employee
to the staff and reduce the overall hours of
work in the office by the peak time employees.
Ms. Howard testified that on the day after the test she talked
with Mr. Harmon and with Ken Brown. She denied that she had taken
the $300.00. Ms. Howard reported that Mr. Harmon:
Went on to state that in that case, they were
going to do something different with the ATM
machines, but I was not fired and that I would
be called.
Q. When you left that meeting, you understood that you
were supposed to wait for them to call back?
A. Yes, I was supposed to wait for them to call me.
Q. And you were never called back?
A. Never called back.
Q. Now at any time after the test, did anyone ever
provide you with a written copy of any opinions or
conclusions rendered as a result of the test?
A. No.
Q. Did anyone provide you with a copy of the questions
that were asked during the test?
A. Not, to the best of my knowledge.
Q. Okay. Did anyone provide you with a copy of the
chart responses to those questions?
A. No. (TR 23-34).
Jerry Harmon testified that each branch had a specified number
of authorized full time positions. In addition, each branch was
authorized a number of peak time hours to be allotted to a pool of
peak time employees. As early as March 1989, consideration was
given to hiring another full time employee as the branch in
question was exceeding the monthly allocation of peak time hours.
[PAGE 8]
Mr. Harmon was aware of a peak time employee who was trained
as a teller and as an ATM custodian and who wished to relocate near
the branch in question. The following discourse appears at TR 43.
Q. Jerry, why did you discontinue using Lora Howard?
A. We were ready for the additional full time
position, and the fact that we have just lost
$300.00 that she was responsible for and did not
feel like she took adequate precautions to protect
that money ...
Q. Jerry, in Exhibit F, Your Honor, where Jerry Harmon
is accused of telling her, telling Lora Howard that
he would not use her any more based upon the
results of the polygraph test, is that an accurate
statement?
A. No, sir, it's not.
Q. You did not tell her that?
A. No. Do you want my specific conversation?
Q. Yes, please.
A. I remember exactly the way it was. Lora came in
and I met with her in the Charlotte branch, and her
statement to me was, "I guess I won't get to work
any more." I told Lora at that time that we had
decided to do something differently, that we would
not need her at this time, but if we did need her,
we'd call her. And that was the extent of our
conversation regarding her employment with the
Credit Union.
Q. So you had in fact made the decision not to use her
any more before the polygraph test was taken?
A. Yes.
Q. So in terms of the polygraph test, as far as you're
concerned, that had no impact on whether she would
continue to be utilized at the Credit Union?
[PAGE 9]
A. No. (TR 47-48)
On June 28, 1989, Mr. Harmon signed a request for an
additional full time teller at the Charlotte branch. However, the
request had not been approved when Mr. Harmon spoke with Ms. Howard
on June 30.
Jim Blaine, President of the respondent, testified that a peak
time worker had employment at will. Workers were informed in
advance that the jobs were not permanent and that they would be
called as needed (TR 55). (See RX A)
SUMMARY OF THE STATUTE AND REGULATIONS1. General Requirements.
The Act generally prohibits private employers from using lie
detection devices in the workplace, subject to express exceptions.
29 U.S.C. §2002.
The Act which Congress passed into law was based largely upon
the Senate version of the bill. The purpose of that bill was to
balance employer and employee interests by banning random and pre-
employment lie detector testing and by regulating exempted
polygraph testing by implementing standards and safeguards
applicable before, during and after permissible testing. S. Rep.
No. 284, 100th Cong., 1st Sess. 39, reprinted
in 1988 U.S. Code Cong. & Admin. News 726, 726. According
to the Senate committee report:
Except as provided elsewhere in the Act, an
employer is prohibited from requiring,
requesting, causing or suggesting any employee
or applicant take a lie-detector test. An
employer may not refer to the results of any
such test, nor may an employer take adverse
employment action against any employee or
applicant who refuses, fails, files a
complaint, testifies or exercises any right
granted under the Act.
Id.
Any party assessed a civil penalty by the Administrator
pursuant to §2005(a) has the right to request a hearing and
before this office. 29 C.F.R. §§801.53, 801.63.
According to 29 C.F.R. §801.67(b), "The decision of the
Administrative Law Judge shall be limited to a determination
whether the respondent has violated the Act or the regulations and
the appropriateness of the remedy or
[PAGE 10]
remedies imposed by the Secretary."
2. Prohibited Activity under the Act.
Subject to exceptions listed in 29 U.S.C. §§2006-
2007, the Act prohibits "any employer engaged in or affecting
commerce or in the production of goods for commerce" from the
following: (1) requiring, requesting or causing an employee or
prospective employee to take a lie detector test; (2) using,
accepting, referring to, or otherwise inquiring into the results of
any lie detector test given to an employee or prospective employee;
(3) discharging, disciplining, discriminating against, or denying
and employment or promotion to any employee or prospective employee
either because that person refuses or declines to take such a test
or because of the results of that test; or (4) retaliating against
any employee or prospective employee who either institutes an
action under the Act, testifies under the Act, or otherwise seeks
the protections of the act. 29 U.S.C. §2002.
3. Exemptions under the Act.
In addition to other exceptions, the Act provides employers
with a limited exemption from the general prohibition of 29 U.S.C.
§2002 for ongoing investigations. 29 U.S.C. §2006(d).
Polygraph testing is the only lie detector device permitted under
this limited exemption. Id. According to the Senate
debate, "An employer may not give a polygraph test unless there is
a sufficient evidentiary basis warranting the test." 134 Cong.
Rec. S1642 (daily ed. March 1, 1988) (statement of Sen. Hatch). To
establish this evidentiary basis, the employer must meet all four
of the following criteria.
First the test must be administered in connection with "an
ongoing investigation" regarding "economic loss or injury to the
employer's business." 29 U.S.C. §2006(d)(1). This
requirement embodies two independent critical elements. The first
element, that the test must be given in the context of an
investigation, is elaborated at 29 U.S.C. §2006(d)(4).
However, the investigation must be focused upon a specific incident
or activity; it cannot be in the context of a continuous and
sustained surveillance program. 29 C.F.R. §801.12(b). The
second element of "economic loss or injury" is defined as
activities such as theft, embezzlement, misappropriation,
industrial espionage or sabotage. 29 U.S.C. §2006(d)(1).
See also 29 C.F.R. §801.12(a). Although this
includes such indirect economic harms as check-kiting and fencing
stolen goods,
[PAGE 11]
it does not include investigations into either generalized criminal
activity or industrial accidents. 29 C.F.R. §801.12(c).
Second, the employee must have had access to the property
subject to investigation. 29 U.S.C. §2006(d)(2). As used in
the regulations, the term "access" refers to the "the opportunity
which an employee had to cause, or to aid or abet in causing, the
specific economic loss or injury under investigation." 29 C.F.R.
§801.12(e)(1). According to the regulations, this requires
more than simple contact with the property during the course of
employment. Id.
Third, the employer must have "a reasonable suspicion"
that the employee is involved in the activity or incident under
investigation. 29 U.S.C. §2006(d)(3). The regulations define
this as "an observable, articulable basis in fact which indicates
that a particular employee was involved in, or responsible for, an
economic loss." 29 C.F.R. §801.12(f)(1). Access to property,
as set forth in 29 U.S.C. §2006(d)(2), does not alone
constitute "reasonable suspicion." 29 C.F.R. §801.12(f)(1).
In using the term "reasonable suspicion," Congress intended to
adopt the standard defined by the Supreme Court in a line of cases
involving Fourth Amendment search and seizure. In certain
contexts, the government does not need probable cause to engage in
a lawful search and seizure and instead needs only to base its
actions upon a reasonable belief or reasonable suspicion.
SeeTerry v. State of Ohio, 392 U.S. 1 (1968)
(upholding right of police to engage in "stop and frisk"). This is
a far less rigorous inquiry than assessing probable cause. The
purpose of this lesser standard is to avoid excessive and
unwarranted judicial entanglement with internal decision-making,
when the privacy expectation of the party to be searched is minimal
in comparison to the needs of the party engaging in the search.
See New Jersey v. TLO, 469 U.S. 325 (1985) (upholding
right of school official to search student's purse). Given this
lesser privacy expectation, the key to balancing the interests of
the parties under "reasonable suspicion" analysis is to regulate
conduct according to the dictates of reason and common sense."
Id. at 343. This "common sense" approach has been extended
to the employment relationships where the government is the
employer. Ortega v. O'Connor, 480 U.S. 709, 724 (1987)
(upholding government employer's right to search employee's desk).
The Supreme Court has indicated that in applying the
"reasonable suspicion" standard, some quantum of individualized
suspicion usually is a prerequisite, even though this is not
[PAGE 12]
constitutionally mandated. TLO, 469 U.S. at 342, n.8.
Individualized suspicion is not required where the privacy interest
is minimal and other safeguards are available. Id.
As the Act provides additional safeguards against abuse, by
requiring that all polygraph testing conducted under the limited
exemption focus exclusively upon a particular incident of economic
loss or injury, and the employee's privacy interest in withholding
information concerning economic loss or injury to his or her
employer certainly is minimal, an employer need not have
individualized suspicion that a particular employee was involved in
the economic harm in order to have reasonable suspicion.
Given that the Act has emplaced protections against such
abuse, the "reasonable suspicion" requirement must not be narrowly
construed as it would become an ex post facto trap
for employers seeking to use polygraphing as an investigatory tool.
Under Fourth Amendment law, violations of the reasonable suspicion
standard result in the exclusion of evidence at trial. However,
under the Act, with a maximum civil penalty of $10,000 per
violation, the penalty is much more severe. See 29 U.S.C.
§2005(a). Employers, rarely trained in the niceties of Fourth
Amendment law, are entitled to broad deference in interpreting this
particular provision of the Act, provided that the reasonable
suspicion is grounded in an observable, articulable fact related to
the incident or activity under investigation.
The Act's fourth evidentiary requirement is that employer
"[execute] a statement," given to the examinee prior to the
examination. 29 U.S.C. §2006(d)(4). This statement must meet
the following conditions: (A) it must "set forth with
particularity the specific incident" being investigated; (B) it
must be signed by the employer; (c) it must be retained for three
years; and (D) it must identify the specific economic harm under
investigation, indicate that the employee had access to the
property subject to investigation, and describe the basis for
reasonable suspicion. Id. This statement that the
employer is required to execute evinces that the polygraph
examination is being conducted in the context of an ongoing
investigation as a required at 29 U.S.C. §2006(d)(1).
Implicit in this section is that the statement must be in
writing; oral notification of an impending polygraph examination
that otherwise discloses the required information has no legal
relevance under the Act. According to the regulations, formal
written notification must be given to the prospective examinee at
least 48 hours in advance, working days only. 29 C.F.R.
[PAGE 13]
§801.12(g)(2). Failure to satisfy this notice requirement
nullifies the employer's exemption under 29 U.S.C. §2006(d)
from the general prohibition of polygraph examinations under 29
U.S.C. §2002. 29 C.F.R. §801.12(h).
If an employer satisfies this four-part test and qualifies for
the limited exemption for ongoing investigations, the employer
would be allowed to conduct a polygraph examination, the only lie
detector device permitted under the Act, provided that the employer
conducts the examination in accordance with the requirements of 29
U.S.C. §2007.
4. Conducting Permissible Polygraph Examinations.
For polygraph examinations conducted under the limited
exemption at 29 U.S.C. §2006(d), an employer may take no
adverse employment action against an employee solely on the basis
of an otherwise permissible polygraph examination. 29 U.S.C.
2007(a)(1).
For purposes of this section, a refusal to take an examination
is the equivalent of a failure to pass an examination. As stated
during the Senate floor debate over the Act, "Any employee refusing
to take an examination is treated under this legislation the same
as one who did not pass the polygraph examination. An employer is
free to take any action deemed appropriate." 134 Cong. Rec. S1642
(daily ed. March 1, 1988) (statement of Sen. Hatch).
However, no adverse employment action, such as discharge,
suspension or other disciplinary action, denial of employment or
promotional opportunity, or any other workplace discrimination, may
be taken "without additional supporting evidence." 29 U.S.C.
§2007(a)(1). Any evidence satisfying the requirements of 29
U.S.C. §2006(d)(2) (requiring access to property) or 29 U.S.C.
§2006(d)(3) (requiring observable and articulable reasonable
suspicion) satisfies the requirement of additional supporting
evidence. 29 C.F.R. §801.20.
In addition, examinee rights are protected under the criteria
set forth in 29 U.S.C. §2007(b) and 29 C.F.R.
§§801.22-801.25.
5. Burden of Proof
Complaints under the Act are reviewed first to determine if
there has been a violation of the general prohibition of the
detection devices under 29 U.S.C. §2002. If this section has
been violated, the evidence is reviewed to determine if any
exemption under 29 U.S.C. §2006 applies. If the employer has
qualified for
[PAGE 14]
the limited exemption under 29 U.S.C. §2006(d), the employer
must administer the examination according to the procedures set
forth in 29 U.S.C. §2007 in order to maintain entitlement to
the protection of the limited exemption.
As neither the Act nor the regulations expressly establish
which party has the burden of proof regarding complaints under the
Act, the burden of proof for matters under the Act is assigned
according the Administrative Procedures Act (APA), 5 U.S.C.
§§551-559 (1992). According to the APA, "Except as
otherwise provided by statue, the proponent of a rule or order has
the burden of proof." 5 U.S.C. §556.
The Secretary bears the burden of proof on whether an employer
has violated the Act's general prohibition of lie detector devices
under 29 U.S.C. §2002. This is the Secretary's prima
facie case. Once the Secretary has made out a prima
facie case, the employer must show that he qualifies for
one of the exemptions set forth at 29 U.S.C. §2006. These
exemptions are in the nature of affirmative defenses. The
respondent most appropriately bears this burden as much of the
evidence necessary to provide that an exemption applies, especially
regarding the limited exemption for ongoing investigations, lies
wholly within the province of the respondent. As these exemptions
have been very narrowly tailored in order to discourage, but not
eliminate, much polygraph testing, they should be construed
accordingly.
Furthermore, the employer bears the burden of proof of showing
that he has followed the procedures for proper polygraph
administration set out at 29 U.S.C. §§2007(a)-(b),
entitling him to the protection of the exemption. Again, this
section is part of the affirmative defense against 29 U.S.C.
§2002 violations. Therefore, as mandated by the APA, the
respondent bears the burden of proof relative to these affirmative
defenses, including all elements found at 29 U.S.C.
§§2006-2007. This construction corresponds with the
assignment of burdens of proof regarding exemptions under the Fair
Labor Standards Act, 29 U.S.C. §§201-219 (1992), the
statute after which the Act's civil penalties section was
patterned. SeeIdaho Sheet Metal Works, Inc. v.
Wirtz, 383 U.S. 190, 209 (1966). SeealsoWalling v. General Indus. Co., 330 U.S. 545, 547-48 (1947).
VIOLATIONS CITED IN THE COMPLAINTUnlawful Administration of Polygraph Examinations (2
counts)
The Secretary alleges respondent unlawfully administered
[PAGE 15]
polygraph examinations on two occasions, in contravention of 29
U.S.C. §2002(1) and 29 C.F.R. §801.4(a)(1).
The Secretary has made a prima facie case that
respondent administered lie detector tests to its employees. It is
undisputed that, on two occasions, respondent required its
employees to submit to polygraph examination. Respondent must
prove entitlement to exemption under 29 U.S.C. §2006 to avoid
liability for violating the Act.
Respondent seeks the safe harbor of the limited exemption
found at 29 U.S.C. §2006(d), claiming that the polygraph tests
were administered in the course of ongoing investigations.
Respondent must establish each of the four elements in order to be
entitled to the limited exemption: (1) economic loss or injury;
(2) access to property; (3) reasonable suspicion; and, (4) an
executed statement of the investigation.
First, the Respondent sustained an economic loss as the ATM
account revealed a discrepancy of $300.00. Such a loss is often
attributable to theft, which is a permissible subject for
investigation.
Second, the parties have stipulated that all employees
required to be polygraphed had access to the property that was the
subject of the investigation, according to 29 U.S.C.
§2006(d)(2) and 29 C.F.R. §801.12(e).
Third, Respondent has shown that there was reasonable
suspicion for requesting each of the polygraph examinations. There
was a justifiable basis for testing of both employees.
Finally, the employer has executed the statement according to
the criteria of 29 U.S.C. §2006(d)(4) and 29 C.F.R.
§801.12(g). RX D and E were provided to Ms. Howard and Ms.
Gause two days before the hearing. These statements provided all
required information which included:
(1) The date and amount of the cash shortage being
investigated, satisfying both 29 U.S.C. §2006(d)(4)(A) and 29
U.S.C. §2006(d)(4)(D)(i); (2) a statement indicating that each
employee had access to the property under investigation, satisfying
29 U.S.C. §2006(d)(4)(D)(ii); and (3) a general statement
giving the basis for employer's reasonable suspicion, satisfying 29
U.S.C. §2006(d)(4)(D)(iii). These statements allege an
implicit linkage between exclusive access and reasonable suspicion.
[PAGE 16]
Respondent has successfully asserted the affirmative defense
of 29 U.S.C. §2006(d), showing entitlement to conduct a
polygraph examination as part of an ongoing investigation.
Restrictions on the Use of an Exemption
Even if an employer is entitled to administer polygraph
examinations in the course of an ongoing investigation, the
employer must conduct all examinations according to the procedures
set forth at 29 U.S.C. §2007. The parties have stipulated
that respondent has satisfied all requirements of 29 U.S.C.
§2007(b) except for the post-testing rights enunciated at 29
U.S.C. §2007(b)(4).
In order to protect the rights of the examinee, the employer
must "further interview the examinee" regarding the test results
and provide the examinee with a written copy of the test questions
and the examiner's opinion and conclusions regarding the
examination. 29 U.S.C. §2007(b)(4).
The respondent satisfied the interview requirement of 29
U.S.C. §2007(b)(4)(A) as to Ms. Howard when Mr. Harmon spoke
with her on June 30, 1989.
However, the second requirement at 29 U.S.C.
§2007(b)(4)(B) requires that the respondent provide the
examinee with a written copy of any opinion or conclusion rendered
as a result of the test, and a copy of the questions asked during
the test along with the corresponding charted responses.
The employer has acknowledged that neither Ms. Howard nor Ms.
Gause received a copy of the questions or the examiner's
conclusions. As the employer did not conduct its polygraph
examination according to the procedures required at 29 U.S.C.
§2007, the employer does not retain entitlement to the limited
exemption of 29 U.S.C. §2006(d).
Unlawful Employee Termination (one count)
Finally, the Secretary alleges unlawfully terminated employee
Howard based upon the results of her polygraph examination, in
violation of 29 U.S.C. §2002(3)(B) and 29 C.F.R.
§801.4(a)(3).
The results of Ms. Howard's test were reported to be
inconclusive. While she was not discharged by the respondent after
the test she was never called back to work. The undersigned has
noted that Mr. Harmon filed a request for a full-time teller on
[PAGE 17]
June 28, the day before Ms. Howard took the test.
Mr. Harmon gave credible testimony to the effect that a teller
was needed at the Charlotte branch as this branch exceeded its
allotment of peak time hours on a regular basis. The new full-time
position required a teller who could also work as an ATM custodian.
There is nothing on record to indicate that Ms. Howard was
qualified to be a teller.
The position of a full time teller was approved on July 3,
1989. This position was filled on July 17, 1989, by Patricia
Harrington, an employee with seniority over Ms. Howard.
I realize that Ms. Howard feels that she was dismissed because
of the results of the polygraph test. However, Mr. Harmon has
indicated that in view of the prospective hiring of a full time
teller, Ms. Howard was informed that she would be called when and
if needed.
I am persuaded that the employer made a justified business
decision to hire a full time employee which, therefore, restricted
or eliminated the working hours of Ms. Howard as a peak time
employee. Thus, the Secretary has not made out a prima
facie case that respondent unlawfully discharged an
employee based upon polygraph test results.
Penalty Assessment Against RespondentsThe Administrator originally assessed respondents a total
civil penalty of $14,000. It was calculated as follows:
(1) For violating 29 U.S.C. §2002(1), unlawful
administration of polygraph examination, respondent was assessed a
penalty of $2,000 per violation, two separate violations.
TOTAL ASSESSMENT: $4,000.
(2) For violating 29 U.S.C. §2002(3)(B), unlawful
termination of an employee based on polygraph testing, respondent
was assessed the maximum $10,000 penalty for one violation.
TOTAL ASSESSMENT: $10,000.
The respondents have been fined $2,000 for each violation of
29 U.S.C. §2002(1) due to the failure to furnish copies of the
test questions and the conclusions after the test pursuant to 29
U.S.C. §2007(b)(4)(B). As the respondent did comply with the
four part
[PAGE 18]
requirement of 29 U.S.C. §2006(d), I find it appropriate to
reduce the penalty to ,000 for each violation.
In addition, the respondent has been fined $10,000 for one
violation of 29 U.S.C. §2002(3)(B), due to respondent's
alleged unlawful termination of an employee, Ms. Howard. However,
based on the evidence of record, I have concluded that the
respondent did not commit this violation. Therefore, this
recommended penalty shall not be assessed.
For the above reasons, the civil penalty assessed the
respondent for all violations cited in the complaint shall be
$2,000.
ORDER
The civil penalty assessed against the respondent in the
Secretary's determination of violations of the Act is hereby
MODIFIED.
The respondent is hereby ORDERED to pay a civil penalty of
$2,000 for all violations of the Act cited in the complaint.
IT IS SO ORDERED
RICHARD K. MALAMPHY
Administrative Law Judge
RKM/dlh
Newport News, Virginia
DATED: February 4, 1994
[ENDNOTES]
[1] The following abbreviations are used for record citations:
R - Respondent's Exhibits; and
T - Transcript of the hearing.
