Although Section 2006 (f) of the Employee Polygraph Protection Act includes an exemption for "drug security, drug theft, or drug diversion investigations," it appears that your employer would nonetheless be bound by the restrictions in Section 2007, which provides in relevant part: "In the case of an exemption described in subsection (e) or (f) of such section, the exemption shall not apply if the results of an analysis of a polygraph test chart are used, or the refusal to take a polygraph test is used, as the sole basis upon which an adverse employment action described in paragraph (1) is taken against an employee or prospective employee."

I think the best option for you (and your colleagues) is to refuse the polygraph. If your company takes any action against you for refusing the polygraph, it opens itself to a potential lawsuit that could cost it dearly. I suggest that you consult with an attorney with expertise in federal labor law. Martindale's Lawyer Locator service may be helpful in finding one near you:

http://www.martindale.com

The restrictions in Section 2007 do not "overrule" the exemption given in Section 2006 to employers who distribute controlled substances, but they govern its application. The bottom line is, you cannot be punished simply for refusing the polygraph.

I would get it in writing somehow that there is no evidence to implicate you whatsoever before you refuse the polygraph. Then, if it goes to court, you will be solidly protected according to the statutes that George mentions.

You are only protected if you can win in court.