Calbillo v. Cavender Oldsmobile, Inc.

• Decision Date: 25 April 2002
• Docket Number: No. 00-51129.,00-51129.
• Parties: Selestino CALBILLO, Plaintiff-Appellant, v. CAVENDER OLDSMOBILE, INC.; et al., Defendants, Allied Polygraph Services, Inc.; Polysoft Products, Inc., doing business as Allied Investigations, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

288 F.3d 721

Selestino CALBILLO, Plaintiff-Appellant, v. CAVENDER OLDSMOBILE, INC.; et al., Defendants Allied Polygraph Services, Inc.; Polysoft Products, Inc., doing business as Allied Investigations, Defendants-Appellees.

No. 00-51129.

United States Court of Appeals, Fifth Circuit.

April 25, 2002.

COPYRIGHT MATERIAL OMITTED

Robert Mark Stone (argued), Law Office of Robert M. Stone, San Antonio, TX, for Plaintiff-Appellant.

R. Laurence Macon (argued), Janie Ann Shannon, Akin, Gump, Strauss, Hauer & Feld, San Antonio, TX, for Defendants-Appellees.

Appeal from the United States District Court for the Western District of Texas.

Before BARKSDALE and STEWART, Circuit Judges, and DUPLANTIER, District Judge.^*

CARL E. STEWART, Circuit Judge:

Selestino Calbillo ("Calbillo") appeals the district court's grant of summary judgment in favor of Allied Polygraph Services, Inc. and Polysoft Products, Inc. (collectively "Allied") on Calbillo's negligence and Employee Polygraph Protection Act of 1988 (EPPA), 29 U.S.C. § 2001 et seq., claims. For the following reasons, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Calbillo was employed by Cavender Oldsmobile, Inc. ("Cavender") as a parts counter technician in January 1998. In April 1998, Rohda Smid ("Smid"), the parts manager, began noticing that quantities of Freon were missing. Edward Hollas ("Hollas"), the general manager, confronted several employees, including Calbillo, about the missing Freon. In response to Hollas's questioning, Calbillo claimed that he did not know who was stealing the Freon.

In the fall of 1998, the decision was made by Cavender management to hire Donald Trease ("Trease"), a licensed private investigator and polygraph examiner, who is the principal operator of Allied. When Hollas asked Trease "what could be done" about the missing Freon, Trease recommended that Hollas interview the employees of the parts department. Trease complied with Hollas's request that Trease interview the employees on his behalf instead. Trease came to the dealership, toured the parts department, talked to management, and interviewed all of the employees in the parts department. During Calbillo's interview, he explained that he did not have a key to the cabinet where the Freon was stored. According to Calbillo, Trease told him that the other employees had agreed to take polygraph examinations and Trease asked whether he was willing to take the test as well. Calbillo agreed to take a polygraph examination; however, immediately after the interview, some of Calbillo's co-workers told him that they refused to take a polygraph examination.

Trease gave a verbal report to Hollas regarding the information that he gathered from the employees interviewed, which included other employees' suspicions that Calbillo stole the Freon. Trease also provided Hollas with a three-page standard package about polygraph testing, which included information on the EPPA, rules and regulations pertaining to polygraph examination, and termination of employees. At Hollas's request, Trease spoke with Cavender's attorneys and discussed the EPPA, general procedures involved in a polygraph examination, and information acquired during the employee interviews. Following the employee interviews, Hollas requested that Trease administer a polygraph examination to Calbillo.

Hollas then demanded that Calbillo take a polygraph examination to prove that he was innocent of the theft as a condition of continued employment. Hollas explained that as a result of the investigation, Calbillo was chosen to take a polygraph examination based upon the way he answered Trease's questions. Hollas then gave Calbillo a piece of paper with an appointment time for the polygraph examination, and Calbillo signed it as instructed. According to Calbillo, Hollas also told him not to speak with an attorney or to bring an attorney to the examination.

Calbillo took the polygraph examination on October 6, 1998. He was read his rights relating to the polygraph examination prior to taking the examination. The examination consisted of three sets of twelve questions, with about twenty-five to thirty seconds between the individual questions and a few minutes between the sets of questions. After the first set of questions, Trease told Calbillo that he had "a deception of 99." At the end of the full examination, Trease reported the results to Calbillo and gave him a copy of the results. Calbillo claims that Trease also told him to "tell him who took the Freon" and said that he "was hiding something." Calbillo again responded that he did not know who took the Freon. Further, Trease reported the test results to Hollas. On the morning of October 7, 1998, Hollas informed Calbillo that he was terminated because he did not pass the polygraph examination.

Calbillo sued Cavender and Allied, alleging violations of the EPPA as well as state law claims of negligence and fraud, among other claims. On September 29, 2000, the district court granted Allied's motions for summary judgment and dismissed the case in its entirety.¹ This appeal followed.

DISCUSSION

I. Standard of Review

A grant of summary judgment is reviewed de novo. Geoscan, Inc. of Tx. v. Geotrace Techs., Inc., 226 F.3d 387, 390 (5th Cir.2000). Summary judgment is properly granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists if the record, taken as a whole, could lead a rational trier of fact to find for the nonmoving party. Geoscan, 226 F.3d at 390. We review the facts drawing all reasonable inferences in the light most favorable to the non-movant. Id. The non-movant cannot avoid summary judgment, however, by merely making "conclusory allegations" or "unsubstantiated assertions." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994).

II. The Employee Polygraph Protection Act

The district court entered summary judgment in favor of Allied on Calbillo's EPPA claims after concluding that Allied was not an employer subject to liability under the EPPA. Calbillo v. Cavender Oldsmobile, Inc., No. Civ.A.SA-99-CA-85-FB, 2000 WL 33348243, at *12 (Sept. 29, 2000 W.D.Tex.). The court observed that in order for Calbillo to recover under the EPPA, Allied must qualify as an "employer" as defined by the EPPA. Id. at *7. The court further adopted the view that the determination of whether a polygraph examiner is an employer under the EPPA requires consideration of whether the examiner exerted control, as a matter of economic reality, over the employer's compliance with the EPPA. Id. at *12. After reviewing Calbillo's allegations and the evidence put forth in support thereof, the court noted that most of the allegations concerned actions taken by Trease in his role as a private investigator, not as a polygraph examiner. Id. at *9-10. Placing much emphasis on Hollas's "uncontroverted" affidavit concerning Trease's role, the court concluded that, other than Calbillo's speculation to the contrary, there was no evidence that Trease, acting in his role as investigator or polygraph examiner, exerted control over Cavender's compliance with the EPPA. Id. at *11-12. The court found it compelling that "[t]he decision to polygraph, who to polygraph, and the decision to terminate" were all ultimately made by Cavender. Id.

Calbillo argues that summary judgment on his EPPA claim was inappropriate because a genuine issue of material fact exists as to whether Allied qualified as an employer under the EPPA. Calbillo's appeal thus presents an issue of first impression in this circuit: whether and under what circumstances a polygraph examiner is an "employer" within the meaning of the EPPA's definition of that term. The EPPA makes it illegal for an employer to require or request that an employee take a polygraph examination. 29 U.S.C. § 2002(1). Employers are also prohibited from discharging any employee who fails or refuses to take a polygraph examination. Id. at § 2002(3). Congress created a limited exemption that permits an employer to request an employee to submit to a polygraph examination if it "is administered in connection with an ongoing investigation involving economic loss or injury to the employer's business, such as theft." Id. at § 2006. The EPPA provides for private enforcement by creating a cause of action for employees against "an employer who violates [the EPPA] ... for such legal or equitable relief as may be appropriate." Id. at § 2005(c)(1) (emphasis added). The EPPA defines an "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee or prospective employee." Id. at § 2001(2). Pursuant to the Secretary of Labor's duty to "issue such rules and regulations as may be necessary or appropriate to carry out [the EPPA]," id. at § 2004(a), the Secretary promulgated the following regulation:

The term employer means any person acting directly or indirectly in the interest of an employer in relation to an employee or prospective employee. A polygraph examiner either employed for or whose services are otherwise retained for the sole purpose of administering polygraph tests ordinarily would not be deemed an employer with respect to the examinees.

29 C.F.R. § 801.2(c) (2001).

Although we have found no circuit court of appeals case law considering whether a polygraph examiner can qualify as an employer under the EPPA, the existing district court authority is consistent with the Western District of Texas's approach in Calbillo. All four district courts that previously addressed the issue concluded that a polygraph examiner can sometimes constitute an employer under the EPPA, and all four...