Fourth, the questions asked during a polygraph exam are limited to the particular situation. interview, the questions bear on the applicant's suitability for a sensitive job such as whether he or she has falsified employment application information, engaged in significant drug usage or thefts from previous employers. Similarly, in an internal investigation, the questions are limited to the facts of the incident being investigated. In neither case is the polygraph a "fishing expedition." Moreover, the industry does not ask questions concerning personal matters such as religious beliefs, political or union opinions, racial views and sexual preferences and activities, and would not object to statutory safeguards along these lines. Fifth, the tests are administered carefully and professionally. Before each examination, the polygrapher reviews the questions with the subject as well as any problems the subject might have in answering them. During the examination, the subject is asked the exact questions that were reviewed previously. If, during the test, there is an unusual reaction in answering a question, the test may be stopped and the examiner will attempt to clear up the matter. After the exam, an attempt is made to resolve problematic answers, including retesting if warranted. These tests are of sufficient length to ensure that decisions are not based solely on physiological responses. The SIA requests that the legislation under consideration by the Senate (Polygraph Protection Act of 1985 S. 1815) be amended to allow registered broker-dealers and other financial entities to continue the limited polygraph testing currently engaged in by the industry. Our request for an exemption has a strong public policy underpinning: the securities industry is regulated extensively by both government agencies and self-regulatory organizations which have a mandate to protect the investing public and the nation's securities market. As the object of this regulation, securities firms are held to an unusually high standard of accountability. In order to meet that standard, it is important that these firms be permitted to use all available technical means, provided they are used responsibly and fairly. Logic also dictates that this legislation be drafted to consider the needs of securities firms. A small percentage of these firms' employees have direct, physical access to billions of dollars of cash, checks and securities as well as important confidential information belonging to the investing public. These firms, as fiduciaries, can be held liable for their customers' losses resulting from the misappropriation or misuse of these assets. In this light, it would be appropriate to permit polygraph testing as both a prophylactic measure in the hiring process and as an investigatory tool. We would prefer not to see the exemption limited to particular types of pre-employment or investigatory questioning. It would be difficult for example, to attempt to enumerate particular types of property, the theft or disappearance of which might justify the use of a polygraph as part of the internal investigation, especially where the theft of disappearance might be principally significant as evidence of a breakdown in the firms' system of internal controls. As is true in other areas of human affairs, a single act of dishonesty can have a debilitating effect on an organization that is out of all proportion to the value of what has been stolen. If some limits on the exemption were deemed necessary, we believe they should be structured so as to permit testing in the following general circumstances: 1) interviewing prospective employees who will have direct access to currency, negotiable instruments, securities or confidential information; and 2) investigating the theft or disappearance of currency, negotiable instruments or securities, the misappropriation of confidential information, or other wrongful acts related to job qualifications. Of course, this testing should be consistent with the technical and professional standards outlined above. Please consider that the industry does not advocate the polygraph test as an infallible barometer of truth. Rather, we regard it as an instrument which, when properly used, can aid in hiring personnel for sensitive positions and in investigating thefts and wrongful acts. As such, comparable alternative technology does not exist. In recognition of these benefits, the House passed the Employee Polygraph Protection Act (H.R. 1524) which, while prohibiting most polygraph testing, exempted certain industries which use the polygraph for the same purposes as securities firms, including all government workers. Most significantly, the House saw fit to grant an exemption to private security services which protect among others, "currency, negotiable securities, precious commodities or instruments, or proprietary information (emphasis supplied)." Undoubtedly, it would be anomalous legislation that permits polygraph testing by those who protect currency and securities but prohibits such testing by those who possess and process the same currency and securities. In sum, the wholesale prohibition of polygraph testing ignores the special needs and circumstances of the financial services industry. Considering these factors, together with our commitment to fair polygraph testing, SIA urges you to amend the bill before you to permit continued limited polygraph testing by the industry. STATEMENT OF THE SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO, CLC ON S. 1815, POLYGRAPH PROTECTION ACT OF 1985 The Service Employees International Union has 850,000 members, about half of whom work in the private sector. SEIU locals have contracts in many industries where polygraph tests are routinely given to employees--building services, healthcare, hotels and restaurants, security firms, jewelry manufacturers and utilities, among others. Our members find these tests degrading and an invasion of privacy. At the same time, the scientific evidence finds no correlation between such testing practices and the prevalence of employee theft and other abuses. Based on this experience, we strongly support legislation to outlaw lie-detector tests from American workplaces. More than two million Americans took lie-detector tests last year, the vast majority (98 percent) in the workplace. This is up five-fold from the 400,000 tests reported in 1979. More than 30 percent of the Fortune 500 companies and at least half of the banking and retail trade firms rely heavily on job tests. The frenzy of employer testing has rapidly spread to all parts of the fast-growing service sector, which accounts for roughly three out of four jobs. Employers view polygraphs as an inexpensive way to protect against business theft when their employees handle large sums of money. Estimates of employee theft vary widely--ranging from $5-$50 billion. The U.S. Congress' Office of Technology Assessment estimates about $10 billion annually in business losses due to "internal crime" (which involves more than employee theft) in private industry. The American Management Association estimates that employee theft costs businesses $5-$10 billion a year. Whatever the dollar total, polygraph testing has been shown to be a grossly unreliable tool to controlling employee theft. Upon review of 30 field studies, the |