Company Spies Battle Drugs on the Job : Workplace: Employers defend the use of undercover agents as a means to improve productivity and safety. Critics call the tactic an invasion of privacy.

Workers at the General Motors factory in Van Nuys paid little attention when a new attendant was hired last year to service vending machines scattered throughout the plant.

But union officials now say the attendant was keeping a closer watch on his fellow workers than on the machines.

Last month, a year after the attendant was hired, 18 assembly line and other workers were suspended from their jobs amid allegations of narcotics trafficking and theft. Officials of the United Auto Workers union said last week that the affable young vending machine attendant was actually a private detective hired by GM to ferret out drug dealers and thieves.

A GM spokesman refused to comment on the Van Nuys plant crackdown. But he did confirm that the auto maker uses private undercover agents to curtail drug dealing and other misconduct when alternative methods fail.

GM is not alone. In the San Fernando Valley and elsewhere in the nation, employers confronting drugs in the workplace are turning increasingly to undercover investigators, who were once used mainly to catch thieves, say security experts and labor attorneys. The spies, who sometimes work with police, occasionally use tiny hidden cameras and other electronic devices concealed in ceilings and walls to help them catch drug users and dealers.

Businesses defend the practice as a legal means of reducing absenteeism and improving productivity and safety.

But many critics say it is an invasion of workers’ privacy and should be regulated or outlawed.

“It raises the specter of Big Brother and fosters an incredible snitch mentality,” said Lauren Siegel, an attorney with the American Civil Liberties Union. “It’s getting to the point where it’s not ‘Just Say No,’ but ‘Just Say Who,’ because workers think that if they get caught and name someone else, just maybe they’ll save their own jobs.”

Most employers will not speak publicly about conducting undercover investigations to expose wayward employees. But The Los Angeles Times, St. Joseph Medical Center in Burbank, Allied Signal Aerospace in North Hollywood and Sylmar, Universal Studios and the city of Pasadena all acknowledge using the practice.

In Pasadena, the city paid a private detective agency about $50,000 last year to conduct an undercover investigation after one employee complained that he had a substance-abuse problem and indicated that other maintenance yard workers did too, said Deputy City Manager Edward Aghjayan. In April, 20 people were fired and 11 were suspended for using drugs on the job or stealing personal or city property.

“The city is interested in whatever legal means are available to stop drug usage and dealing in the workplace, especially when public safety is involved, such as workers driving city trucks,” Aghjayan said.

A strong incentive for the use of undercover operatives has been the Drug-Free Workplace Act of 1988, which requires firms with substantial federal contracts to clean house or lose contracts, said one executive at a national corporation that employs thousands of workers at its Valley plant.

“Our customer is the government, and we do what we have to do,” said the executive, who spoke on the condition that the company not be identified. “It begins with who we hire, and it ends with us keeping an eye on what they do with themselves once they’re on the job.”

Michael R. Feinberg, an attorney for UAW Local 645, which represents 17 of the 18 suspended GM workers, said the practice affects the entire work force, not just the accused.

“It breeds incredible mistrust among workers and often pits one person’s word as to what happened against another’s,” he said.

Feinberg said GM is seeking to fire the employees, 17 of whom are fighting the charges. Their cases will be heard by arbitrators in the coming months, he said.

Union officials also are worried about the technique. David Sickler, western regional director for the AFL-CIO, which represents 2.5 million workers in California, Nevada and Hawaii, said it is a throwback to the days when companies hired detectives to spy on labor organizers.

“If the practice becomes acceptable, no one’s job security or dignity is safe,” Sickler warned.

The drug problem in the workplace is slowly shrinking, but it is still serious enough to alarm employers, some of whom turn to undercover investigators in desperation, said Michael Walsh, director of applied research at the National Institute on Drug Abuse, a government research agency in Rockville, Md.

Walsh said government surveys indicate that about 15% of the 100 million or so American workers regularly use marijuana or other drugs, resulting in at least a $33-billion annual loss of productivity.

But Walsh criticized companies that use private undercover investigators to ferret out drug users and then simply fire the employees. “The more responsible way of dealing with it is to get them help instead of turning them back into society and hoping someone else will take care of the problem,” he said.

In the entertainment industry, at least one major studio uses undercover private investigators to look for evidence of drug abuse by its employees. During a civil trial in San Fernando Superior Court last month, a witness said Universal Studios had hired her to find out if drugs were responsible for cost overruns and production delays on the set of the TV show “Airwolf.”

“We’re like a small city with 10,000 people,” said a Universal Studios executive who requested that his name not be used. “When there is a suspicion of illegal activities, we’ll put someone undercover as a grip” or other worker.

Walt Disney Studios, on the other hand, “doesn’t believe in spying on employees,” said President Rich Frank, adding that if the company decided to hire undercover investigators, it would notify workers that it was changing its policy. But he said current policy dictates that anyone found using drugs or alcohol at work be immediately fired.

Most employers who use spies conduct their investigations without notifying police and do not prosecute employees after they are fired, said Stephen P. Pepe, director of the labor and employment law department at the law firm of O’Melveny & Myers in Los Angeles. For instance, employees suspended by GM were not turned over to police, union officials said.

Going it alone affords companies several advantages, including secrecy, according to private investigators and labor attorneys.

“It’s not something most companies want to publicize because it could hurt their image if people were arrested for drugs,” said Russell Mancini, manager of investigations in Southern California for Pinkerton Security and Investigation Services. The company now has private investigators in 11 Los Angeles-area companies, including some in the San Fernando Valley, he said.

Employers have more leeway than police in some respects when they conduct investigations independently, Pepe said. For instance, they are not bound by certain laws governing police agencies, such as the need to produce evidence proving employees are guilty beyond a reasonable doubt, as they would if the cases were brought to court.

In most states, including California, companies are permitted to fire employees for any or no reason, as long as the reason does not violate other laws, such as civil rights statutes, Pepe said. If employees end up filing lawsuits charging wrongful dismissal, their cases are heard in civil court, where employers do not have to produce as much evidence as they would if the employee were tried in a criminal court.

Most employees who are confronted with evidence collected by an undercover operative confess, sometimes because they are intimidated, labor attorneys and security experts said. Glenn E. Rothner, a Los Angeles labor attorney, said companies often present flimsy evidence and use coercive techniques to get employees to admit wrongdoing.

Employers sometimes use tiny hidden cameras with lenses the diameter of lead pencils to catch employees in the act of stealing or using or selling drugs because photographs are one way to avoid “a swearing contest over what really happened,” Pepe said. However, employers must respect privacy rights to some extent, he said.

“We don’t put them in the bathroom, and let me tell you, a lot of dope is done on the tops of toilet paper holders,” said Eddy McClain, president of Krout & Schneider, a private security firm with offices in Los Angeles.

However, cameras may be placed in cafeterias and hallways, where expectations of privacy are lower, Pepe said.

But there are limits to how far companies may go. Federal law prohibits businesses from snooping to discover union activities or the identities of workers with AIDS. But critics contend that undercover investigators routinely disobey the law.

In addition, undercover private investigators may not purchase drugs from employees in an effort to amass evidence, unless they are authorized to do so by police and turn the drugs over immediately, said Deputy Chief Glenn A. Levant, head of special investigations for the Los Angeles Police Department.

Levant said the department is helping a significant number of companies throughout the city conduct undercover drug investigations. The department frowns on independent investigations, he said.

“They’re a last resort,” he said. “I don’t condone them at all.”

Levant conceded that he does not have the manpower to aid all the companies that approach him, but said private investigators might implicate innocent people to justify their fees.

Jeffrey Otstot, an assembly line worker at GM who is accused of offering to sell the vending-machine attendant a set of car speakers belonging to the company, claims that he is an innocent victim of the attendant’s zeal, a point he intends to prove at an upcoming arbitration hearing.

A frequent soda drinker, Otstot, 29, of Canyon Country, often ran into the vending machine attendant. “He was a young kid, probably older than he looked, and he followed me around like a puppy, always asking about dope, dope, dope,” Otstot said. “One day, he asked me if I’d sell him some speakers and I said, ‘If you want to risk your job--take ‘em, they’re over there, I’m not going to get involved.’

“The next thing I knew, the security guard comes and pulls me off the line, and I’m in a four-hour interrogation and they’re saying I approached him and offered to sell him the speakers, and they want me to sign a statement admitting it,” Otstot said. “Talk about being branded a criminal, it’s utter humiliation.”

Some companies are not comfortable conducting investigations without the help of the authorities. For instance, The Times immediately contacted the Orange County Sheriff’s Department last year with information that drugs allegedly were being sold at the newspaper’s Costa Mesa plant, Times spokesman Jim Boswell said.

The newspaper learned of the alleged drug use from a production room employee who had been enrolled in a drug rehabilitation program and was afraid to return to the workplace, where he said narcotics were readily available, Boswell said.

The employee volunteered to work with police as an undercover investigator, and after a five-month investigation, 20 production room employees were arrested, dismissed from their jobs and charged in February with selling cocaine, marijuana and methamphetamine to fellow employees, Boswell said. The evidence against the employees includes tape-recordings, witness statements and photographs, he said. The cases are pending.

Experts disagree on whether undercover investigations are effective in deterring drug use and sales.

Private investigators, whose livelihood depends on the practice, say they are effective, primarily because they inspire fear among remaining workers. Among GM workers in Van Nuys, the suspensions are a hot topic, and one rumor circulating has it that 200 people, not 17, were suspended.

But Rothner, the L.A. labor attorney, said the operations are not worth the price exacted in terms of the level of fear and distrust they engender.

And regardless of the merits of the technique, employers who use it acknowledge that they pay a price in a temporary loss of employee morale. In Pasadena, the city followed up its undercover investigation by paying a consultant about $22,000 to conduct a weeklong workshop on improving the workplace.

Among the employee suggestions that the city has implemented since the workshop are a more equitable distribution of overtime assignments and improved training, said David Plumb, general manager of the Water and Power Department.

Plumb said drugs in the workplace might be a sign that there are other problems that need to be taken care of as well.

Reflecting on the investigation, Plumb said, “I’m not saying the workers did drugs because of the way things were at work, but the workshop . . . was probably something we should have done a long time ago.”

Times staff writers Psyche Pascual and Bob Baker contributed to this story.