DATE: May 1, 1995
CASE NO. 91-EPP-4
IN THE MATTER OF
RAPID ROBERT'S, INC., and
ROBERT E. WILSON, JR.,
RESPONDENTS.
BEFORE: THE SECRETARY OF LABOR
DECISION AND ORDER
This matter is before me on the request of the Respondents
and the Administrator of the Wage and Hour Division, Department
of Labor. Both parties are seeking to modify or vacate the
Decision and Order (D. and O.) of the Administrative Law Judge
(ALJ) in this case which arises under the Employee Polygraph
Protection Act (EPPA or Act), 29 U.S.C. §§ 2001-2009
(1988), and the implementing regulations at 29 C.F.R. Part 801
(1994). The ALJ's decision is affirmed, with modifications to
his analysis as set out below.
BACKGROUND
The EPPA prohibits most private employers from using lie
detector tests either for pre-employment screening or during the
course of employment. Polygraph tests are permitted under
limited circumstances subject to certain restrictions. [1]
Section 7(d) of the Act, 29 U.S.C. § 2006(d), provides
a limited exemption from the general prohibition against lie
detector use in private employment settings, for employers
conducting ongoing investigations of economic loss to the
employer's business. An employer, pursuant to an ongoing
investigation, may request an employee to submit to a polygraph
test, provided there is strict adherence to the conditions set
forth at Sections 8 and 10 of the Act, 29 U.S.C. §§
2007 and 2009, and the regulations at 29 C.F.R. §§
801.12, 801.20, 801.22-.26, and 801.35. [2] Both the Act and
the regulations provide
[PAGE 2]
that an exemption shall not apply unless all of the employee
safeguards, as set forth in the Act at § 2007(b) and in the
regulations at §§ 801.22-.25, are met. 29 U.S.C.
§ 2007(b); 29 C.F.R. § 801.22(a).
The ALJ's findings of fact and the various stipulations by
the parties establish that Rapid Robert's, Inc. is a company
incorporated under Missouri law, doing business through a chain
of convenience stores in southwestern Missouri and northwestern
Arkansas. As such, Rapid Robert's is engaged in or affecting
commerce as defined by the Act, and thereby subject to coverage
under the Act. D. and O. at 3. Respondent, Robert E. Wilson,
Jr., is the president, sole officer and 100% shareholder of the
corporation. Id.
Prior to the enactment of the EPPA, Rapid Robert's routinely
used polygraph testing to detect employee theft, which averaged
about 1% of total sales a month. Subsequent to the enactment of
the EPPA and the cessation of such testing, inventory losses were
calculated to be four to five times the previous loss rate.
Id. Wilson testified that the rise in inventory losses
became so severe as to cause him concern about the economic
viability of the company. Transcript (Tr.) at 224. Wilson
stated that he had discussions with Al Fitzpatrick, his General
Manager for the operation of the stores, to determine what steps
they could undertake to stem the inventory losses. Id. at
225. Wilson further testified that in 1990, he had a
conversation with John Harvil, a polygraph examiner who
previously conducted polygraph tests for Rapid Robert's before
the passage of the EPPA. Wilson and Harvil discussed the
company's inventory losses and Harvil indicated that polygraph
testing could possibly be reinitiated. Id. at 227.
Wilson subsequently contacted Fitzpatrick, instructing him to
speak to Harvil with regard to the possibility of renewing the
polygraph testing. Id. at 227, 230-31.
In March, May and June, 1990, eleven Rapid Robert's
employees underwent polygraph tests as part of investigations
concerning significantly higher than usual inventory losses in
two stores. Four employees were subjected to the testing process
twice. The Administrator investigated the circumstances of the
tests and determined that Rapid Robert's violated the EPPA.
Civil money penalties in the sum of $74,000 were levied after the
Administrator's determination that Respondents violated the Act,
in the following manner: 15 unlawful administrations of the
tests; six instances of employees unlawfully threatened with
adverse employment actions if they refused to take the tests;
three employees unlawfully suspended from their jobs because of
their initial refusal to take the tests; and one employee
unlawfully terminated because of an unfavorable test result. Two
violations were subsequently withdrawn and the total penalty was
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reduced to $71,000.
The ALJ determined that although Rapid Robert's had
sufficient legal justification to conduct the tests, the company
failed to provide the examinees with adequate written notices
that satisfied the requirements of the Act at § 2006(d)(4)
and the regulations at § 801.12(g). The ALJ found the
notices deficient because they failed to identify the specific
incident under investigation and the grounds for suspicion of
each employee. Also, the notices were not provided to the
employees at least 48 hours prior to the initiation of the test.
D. and O. at 20-21. The Respondents' failure to satisfy the
employee safeguard provisions governing an exemption from the
prohibition against lie detector tests was the basis for the
ALJ's determination that the Respondents were liable for civil
money penalties for violating the Act at § 2002(1) and the
regulations at § 801.4(a)(1). Id.
The ALJ reviewed the amounts of the civil money penalties
and determined that certain factors in this case, pursuant to 29
C.F.R. § 801.42(b), favored the mitigation of the
Administrator's assessments. He specifically considered the
company's size, its good faith efforts to comply with the Act,
the relative seriousness of the violations and his finding of
fact that the only employee termination was for legitimate
business reasons and not as a result of the polygraph test.
Id. at 27-28. The ALJ reduced the assessed civil money
penalties to $26,000. Appendix, Id. at 29-30.
DISCUSSION
The ALJ correctly affirmed the Administrator's determination
that Rapid Robert's failed to meet the statutory and regulatory
requirements necessary to claim an exemption to the general
prohibition against the use of lie detector tests. The case
record, including testimony and the exhibits admitted into
evidence at the hearing, support a finding that the Respondents
failed to meet the requirements of 29 U.S.C. § 2006(d)(4),
which governs the adequacy of the written notices to be provided
to tested employees. Joint Exhibit 1 (a-o). Therefore, the
Respondents are liable for civil money penalties pertaining to
these violations.
The Administrator takes exception to the ALJ's finding that
the Respondents evidenced reasonable suspicions with regard to
the tested employees. 29 U.S.C. § 2006(d)(3). The ALJ's
discussion regarding the breadth to be afforded an employer in
formulating a determination of "reasonable suspicion", D. and O.
at 14, goes beyond the statutory language at § 2006(d)(3),
and overreaches the guidance found in the regulations,
specifically at § 801.12(b) and (f). Employers are not
entitled, as found by the ALJ, to "broad deference" in deciding
what constitutes a
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reasonable suspicion. D. and O. at 14.
The reasonable suspicion test is part of an exemption to the
Act's general prohibition against the use of lie detector tests.
Therefore, it "must be narrowly construed to fulfill the purposes
of the Act". In the Matter of State Employees Credit Union,
Case No. 93-EPP-9, Sec. Dec., March 31, 1995, slip op. at 8.
The application of the reasonable suspicion test "calls not for
deference to employers, but calls upon the common sense of the
fact finder." Id. Although I might draw different
conclusions regarding the reasonableness of the employer's
suspicions of the tested employees, I note that since the ALJ
found the Respondents liable for violating the Act on other
grounds, his misapplication of this test is not critical to the
proper outcome of the case. In addition, the ALJ's findings of
fact may be modified or vacated only where I determine them to be
clearly erroneous. 29 C.F.R. § 801.68(b).
Counsel for Respondents misapprehends the gravamen of the
Act by arguing that the Administrator has the burden of proof to
show that the company did not meet the requisite conditions for
exemption. The Act prohibits the use of lie detector tests by
most private employers, 29 U.S.C. § 2002, therefore the
Administrator need only show that employees were subject to lie
detector tests to evidence a violation of the Act. An employer
who would avail himself of an exemption to the general
prohibition must do so in the nature of an affirmative defense.
It is the employer's burden to show that he is an eligible
exemptee, as per § 2006, and that every requirement set
forth in § 2007 is met. To shift the burden of proof to the
Administrator, as the Respondents argue, to prove that the
employer was not exempt, or to prove that the employer failed to
satisfy each requirement concerning the rights of examinees,
would require the Administrator to be privy to information known
only to the employer.
Respondents' exception to the ALJ's decision to hold
Robert E. Wilson, Jr. personally liable is not persuasive.
Wilson is the president, sole officer and 100% shareholder of the
corporation. Further, Wilson was instrumental in Fitzpatrick's
contact with Harvil regarding reinstituting the polygraph tests.
Tr. at 227. Wilson's involvement in the company's reintroduction
of polygraph testing was not passive. The inclusion of Wilson,
individually, based on his position as employer, was proper
pursuant to the broad definition of that term. § 2001(2).
Respondents' reliance on Collet v. American National
Stores, Inc., 708 S.W. 2d 273 (Mo. App. 1986) is inapposite.
Wilson's personal inclusion as a Respondent was predicated on his
actions as president and owner of the company. Therefore, he is
not shielded as merely a stockholder who has no other involvement
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with the operation of the company, even if the day-to-day
operational responsibility devolved to Fitzpatrick. D. and O. at
17-18.
The ALJ's finding that employee Barrington was discharged
because of his violation of the company's check acceptance policy
and not as a pretext for polygraph related reasons, is not
clearly erroneous. Therefore, I accept that factual finding.
See 29 C.F.R. § 801.68(b).
The regulations at § 801.67(d) authorize the ALJ to
"modify in whole or in part, the determination of the Secretary,"
and pursuant to the regulation, the ALJ has provided reasons for
modifying the civil money penalties assessed by the Deputy
Regional Administrator. The ALJ's consideration of the factors
at 29 C.F.R. § 801.42(b) is reasonable and I am persuaded
that his penalty assessments should be affirmed. SeeIn the Matter of Scrivener Oil Company, et al., Case No.
91-EPP-6, Sec. Dec. and Order, Apr. 13, 1995, slip op. at 6;
State Employees Credit Union, at 6.
ORDER
For the foregoing reasons, the Decision and Order of the ALJ
IS AFFIRMED with the analysis modified as set out above, and the
requests of the Respondents and the Administrator are denied.
SO ORDERED.
_________________________
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1] A polygraph utilizes a series of devices which measure and
record changes in an examinee's blood pressure, alterations in
respiratory patterns and changes in the electrical conductivity
of the skin through perspiration. Although a polygraph can
measure physiological changes which are indicative of stress, it
cannot determine the causes of the stress. See S. Rep.
No. 284, 100th Cong., 2d Sess. 41 (1988), reprinted in
1988 U.S.C.C.A.N. 726, 729.
[2] A further discussion concerning the exemption for employers
conducting investigations of economic loss or injury can be found
at 29 C.F.R. § 801.12.
