Gary Lee Watson v. Drummond Company, Inc.

Citations: 436 F.3d 1310; 152 Lab. Cas. (CCH) 10,607Docket: 04-15726

Court: Court of Appeals for the Eleventh Circuit; January 20, 2006; Federal Appellate Court

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In a consolidated appeal case before the Eleventh Circuit Court, former and current employees of Drummond Company, Inc., along with members of the United Mine Workers of America, challenge the summary judgment granted to the Company and the Union regarding alleged violations of the Employee Polygraph Protection Act (EPPA). The plaintiffs were discharged in 2002 for theft-related accusations, primarily based on statements from a cooperating employee, Terry Clark, who faced his own legal issues. Following an investigation, the Company terminated twenty-five employees, including eighteen union members, adhering to a four-step discharge procedure outlined in the union agreement. This procedure involves suspensions, discussions with union representatives, and potentially arbitration if disputes remain unresolved. Although the Union negotiated for the reinstatement of some employees, the plaintiffs were not reinstated, despite the Union's proposal to allow them to take polygraph tests for potential reinstatement. The district court's judgment affirming the dismissal of their claims was upheld.

Terry Clark was offered the opportunity to take a polygraph test, and if he failed regarding any plaintiff, that plaintiff would be reinstated with back pay and an apology. On April 4, 2002, during Step 3 meetings, plaintiffs Watson, Gaines, Owens, and Tucker were informed they could be reinstated by taking the polygraph or opt for arbitration; all chose arbitration. Clark's polygraph test on April 26 indicated his statements against the plaintiffs were truthful. All plaintiffs except Tucker proceeded with arbitration; Tucker's case was dropped by the Union due to strong evidence against him and his lack of communication. The arbitrations occurred in June and July 2002, relying on Clark's testimony and that of a Company investigator, alongside polygraph testimony for all but Johnson. The arbitrators upheld dismissals for all except Johnson, who was reinstated without back pay after claiming he hadn’t been offered a polygraph test, which he declined when offered during cross-examination.

The legal review focuses on claims under the Employee Polygraph Protection Act (EPPA), analyzing whether the Company engaged in prohibited activities under 29 U.S.C. 2002, if any conduct was exempt under 29 U.S.C. 2006(d), and whether the Union can be classified as an 'employer' under the EPPA. The Company, as an employer involved in interstate commerce, is bound by the EPPA. Plaintiffs argue the Company violated sections prohibiting lie detector tests and punitive measures for refusal to take them. Specifically, for Watson, Gaines, Owens, and Tucker, the Company’s actions did not violate 29 U.S.C. 2002(1) since they were not required to take the tests. However, the mere suggestion of a polygraph test constitutes a violation, regardless of whether the tests were ultimately taken or adverse action resulted.

No request or suggestion for a polygraph test was made by the Company; instead, it was proposed by the plaintiffs' agent, the Union. The plaintiffs acknowledged that the Union suggested the tests as a means for them to demonstrate their innocence to regain employment. It was established that favorable results would lead to automatic reinstatement, while unfavorable results would require arbitration of each case. The Company did not influence the Union's suggestion, indicating that the Union, rather than the employer, requested the polygraph tests under the relevant statute. There is no dispute regarding the Union's agency status, as it acted in the interest of its members.

The case regarding the polygraph offer to plaintiff Johnson is less clear, and due to inadequate briefing, it will not be addressed. The plaintiffs' claims concerning the Company's conduct falling under 29 U.S.C. 2002(3)(A) will also not be addressed, shifting focus instead to the Company's defense based on the 'ongoing investigation' exemption.

The Employee Polygraph Protection Act (EPPA) allows for lie detector tests if justified by specific exemptions, including an ongoing investigation involving economic loss. The requirements for this exemption include: 1) the test must relate to an ongoing investigation of economic loss, 2) the employee had access to the property involved, 3) there is reasonable suspicion of the employee's involvement, and 4) a statement describing the alleged misconduct must be provided to the examinee before the test. In this case, the Company had reasonable suspicion based on eyewitness testimony. Requirements (2) and (3) were satisfied, and requirement (4) was not applicable since the plaintiffs declined to take the tests, thus they were never classified as 'examinees', negating the need for the Company to issue a misconduct statement.

The critical issue is whether the Company's investigation was 'ongoing' when each plaintiff was asked to take a polygraph exam. The statute lacks a clear definition of 'ongoing investigation,' but its interpretation should include instances related to polygraph exams. Evidence shows that the Company's decisions regarding accused employees remained open during grievance proceedings, as it accepted new information and offered reinstatement. The established four-step procedure for determining employee culpability meant that neither the employee's culpability nor employment status was finalized until the last step was completed. This situation was exemplified by the Union's refusal to allow the Company's investigator to question the plaintiffs, indicating reliance on established procedures. Consequently, the Company's investigation and employment status determinations were not concluded until the procedures were fully observed. 

Regarding whether the Union qualifies as an 'employer' under the Employee Polygraph Protection Act (EPPA), the plaintiffs argue that the Union's proposal for polygraph tests redefined its status. However, the EPPA defines an 'employer' as a person acting in relation to an employee or prospective employee, and the question of a union's status as an employer is unprecedented in this Circuit. Citing del Canto v. I.T.T. Sheraton Corp., the status depends on the control level the union exerts over the employer, assessed through the economic realities of their relationship. This economic reality test has been used to determine if a polygraph examiner can be classified as an 'employer' under the EPPA and has been applied in similar contexts in this Circuit for other employee protection statutes.

In Wascura v. Carver, the 11th Circuit Court applied the Welch test to determine the definition of 'employer' under the Family and Medical Leave Act (FMLA), aligning it with definitions under the Fair Labor Standards Act (FLSA) and the Equal Pay Act (EPPA). The court found that the economic reality test was appropriate due to the similarities in the definitions. The evidence presented indicated that the Union did not exert sufficient control over the Company to be classified as an 'employer.' Instead, the Union acted in the interests of its members, the plaintiffs, by requesting their reinstatement, which the Company denied, and proposing polygraph exams to help the plaintiffs clear their names. The Union's actions were not aimed at benefiting the Company, leading to the conclusion that it could not be regarded as an 'employer' under the EPPA. Consequently, the plaintiffs' suit against the Union was dismissed, and the district court's judgment was affirmed.