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Missing Money? Employee Polygraph Doesn't Violate EPPA

By Robyn Hagan Cain on August 23, 2011 4:02 PM

What should a bank do when $58,000 goes missing?

Hook employees up to a polygraph machine and demand answers.

In February 2007, the new manager of the Piedmont Commons Washington Mutual (WaMu) bank branch conducted a cash audit and discovered a shortage of approximately $58,000. The entire amount was missing from two teller cash dispenser machines that Plaintiff David Cummings, a former branch manager, had access to during his tenure at the branch.

After reviewing surveillance images, fraud investigators determined that Cummings and his employees repeatedly violated WaMu’s Dual Control Policy (DCP), which requires two persons to be present when cash is handled or certain secure areas are accessed. Former employees at the branch insisted that evading the DCP was a regular practice under Cummings’s watch.

The investigators asked Cummings to take a polygraph test regarding the investigation. Cummings refused, and was subsequently fired for violating the DCP. Cummings sued WaMu, asserting that WaMu unlawfully asked him to submit to an employee polygraph test. The Eleventh Circuit Court of Appeals sided with WaMu.

Generally, the Employee Polygraph Protection Act (EPPA) prohibits an employer from requiring, requesting, suggesting, or causing an employee to take or submit to a lie detector test. An employer can request that an employee take a polygraph test if the following four conditions are met:

  1. The test is administered in connection with an ongoing investigation involving economic loss or injury to the employer’s business.
  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 examinee a statement describing with particularity the employee’s alleged misconduct, the basis of the employer’s reasonable suspicion, and the employer’s economic loss. The statement must be signed by the employer or the employer’s agent, and kept on file for at least three years.

Here, the Eleventh Circuit Court of Appeals found that WaMu’s investigation met the four conditions. The bank was investigating Cummings as part of the $58,000 cash shortage, Cummings had access to the cash, and WaMu had a reasonable suspicion that Cummings was involved in the cash shortage. (Cummings did not dispute the fourth condition.)

The EPPA was designed to prevent random fishing expeditions, not targeted investigations like this one. If an employer-mandated polygraph question comes up in your practice, try comparing the circumstances in your case to the facts in this one to determine whether an employee polygraph test is appropriate.

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