Rubin v. Tourneau, Inc.

• Decision Date: 09 July 1992
• Docket Number: No. 92 Civ. 0078 (MBM).,92 Civ. 0078 (MBM).
• Citation: 797 F. Supp. 247
• Parties: Marc S. RUBIN and Angela Viteritti, Plaintiffs, v. TOURNEAU, INC. and Jeffrey L. Gwynne and Associates, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

797 F. Supp. 247

Marc S. RUBIN and Angela Viteritti, Plaintiffs, v. TOURNEAU, INC. and Jeffrey L. Gwynne and Associates, Inc., Defendants.

No. 92 Civ. 0078 (MBM).

United States District Court, S.D. New York.

July 9, 1992.

Eugene N. Harley, Levy, Gutman, Goldberg and Kaplan, New York City, for plaintiffs Rubin and Viteritti.

Clifford J. Ingber, Anita Lubetsky, Ingber & Ingber, New York City, for defendant Jeffrey L. Gwynne and Associates, Inc.

OPINION AND ORDER

MUKASEY, District Judge.

Plaintiffs Marc S. Rubin and Angela Viteritti Sue Tourneau, Inc., their former employer, and Jeffrey L. Gwynne and Associates, Inc. ("Gwynne"), a polygraph testing service, under the Employee Polygraph Protection Act of 1988, 29 U.S.C. § 2001-2009 (1988) ("EPPA"). The case is before the Court on defendant Gwynne's motion to dismiss plaintiffs' "Third Cause of Action" as against Gwynne for lack of subject matter jurisdiction. For the reasons set forth below, defendant Gwynne's motion is denied.

I.

A court reviewing a motion to dismiss for lack of subject matter jurisdiction must assume that plaintiffs' well-pleaded allegations are true. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (1990). The facts viewed from that perspective are as follows.

In or about February 1991, defendant Tourneau, a Manhattan watch and jewelry retailer, hired defendant Gwynne to assist in an investigation into the disappearance of several watches from its inventory. In March 1991, 25 Tourneau employees including plaintiff Rubin, a buyer, and plaintiff Viteritti, a salesperson, received written requests to submit to polygraph examinations from Louis Rosen, Tourneau's Director of Administration. (Compl.Exh. A) Shortly thereafter, plaintiffs took polygraph examinations administered by defendant Gwynne.

On April 16, 1991, plaintiffs were fired by Tourneau for refusing to take a second polygraph examination. Following dismissal, plaintiff Rubin remained unemployed for approximately four months. As of the filing of the complaint on December 31, 1991, plaintiff Viteritti remained unemployed.

Plaintiffs have alleged two claims against defendant Tourneau and one claim against both defendants for violations of EPPA. Plaintiffs' Third Cause of Action, which is the subject of this motion, alleges that in the course of the polygraph examination "plaintiffs were forced to answer personal and degrading questions and suffered great embarrassment, humiliation and mental distress for which defendant Gwynne and defendant Tourneau are liable in damages." (Compl. ¶ 34)

Defendant Tourneau has cross-claimed against defendant Gwynne, alleging that Gwynne represented it would inform Tourneau as to which employees could lawfully be polygraphed and would conduct the examinations in compliance with EPPA. (Amended Ans. ¶¶ 34, 36) Tourneau seeks indemnification for any judgment entered in this suit and any fines levied by the Department of Labor.

II.

Congress passed EPPA after concluding that employees and applicants often are denied employment opportunities or fired unjustly because of the misuse of polygraph examinations and the inaccuracies inherent in current methods of lie-detection. See S.Rep. No. 284, 100th Cong., 2d Sess. (1988), reprinted in 1988 U.S.C.C.A.N. 726; H.R.Conf.Rep. No. 659, 100th Cong., 2d Sess. (1988), reprinted in 1988 U.S.C.C.A.N. 749. EPPA prohibits an employer from requiring an employee or applicant to take a lie detector test. 29 U.S.C. § 2002(1). EPPA also prohibits any adverse action against an employee or applicant who fails or refuses to submit to a polygraph examination, or who files a complaint, testifies or exercises any right granted under EPPA. 29 U.S.C. §§ 2002(3)(A), 2002(4). Exemptions are provided for: (1) federal, state and local government employers; (2) security services; (3) firms authorized to manufacture, distribute or dispense controlled substances; (4) the federal government when dealing with outside contractors engaged in national security intelligence or counter-intelligence; and (5) any employer conducting an ongoing investigation into illegally generated economic loss or injury to its business.¹ 29 U.S.C. § 2006.

EPPA provides for both public and private enforcement. Public enforcement is under the jurisdiction of the Secretary of Labor who is empowered to assess civil penalties and to sue in federal court to enjoin violations of the Act. 29 U.S.C. §§ 2005(a), 2005(b). The private enforcement mechanism — the basis of this suit — is an explicit right of action in favor of employees against "an employer who violates EPPA ... for such legal or equitable relief as may be appropriate, including, but not limited to, employment, reinstatement, promotion, and the payment of lost wages and benefits." 29 U.S.C. § 2005(c)(1) (emphasis added).

At issue is whether defendant Gwynne may be considered plaintiffs' employer under EPPA and, therefore, whether defendant Gwynne is subject to suit by plaintiffs under 29 U.S.C. § 2005(c)(1). Gwynne argues that it merely assisted an employer in conducting an investigation and is not itself an employer with respect to plaintiffs. Plaintiffs maintain that EPPA's definition of employer is sufficiently broad to include examiners such as Gwynne.

In construing a statute, a court must look first to its language and, if the language is unambiguous, "judicial inquiry is complete." Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981); see also Connecticut National Bank v. Germain, ___ U.S. ___, 112 S.Ct. 1146, 1149, 117 L.Ed.2d 391 (1992) ("courts must presume that a legislature says in a statute what it means and means in a statute what it says"); United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 109 S.Ct. 1026, 1031, 103 L.Ed.2d 290 (1989) ("the plain meaning of a statute should be conclusive"). Unfortunately, EPPA's definition of employer is ambiguous. In itself, the word employer would appear to exclude a polygraph testing service, which, although it may have assisted the person or entity for whom the examinee works in violating EPPA, is not joined with the examinee in what is commonly thought of as an employment relationship. However, for the purposes of EPPA Congress has defined employer as "including any person acting directly or indirectly in the interest of an employer in relation to an employee or prospective employee." 29 U.S.C. § 2001(2). By adopting this provision Congress gave no restrictive definition of employer but instead noted only that whatever definition courts adopt, they should include as employers those who act in the interest of an employer in relation to an employee or prospective employee. What constitutes "acting directly or indirectly in the interest of an employer in relation to an employee or prospective employee" is, on its face, unclear. Plaintiffs argue that by administering the polygraph examinations, Gwynne acted in Tourneau's interest in relation to Tourneau's employees and, as a result, is subject to suit under EPPA.

The other sections of the statute do not clarify the meaning of employer. For instance, the term examiner is used in the statute, see 29 U.S.C. § 2007(c), and although this gives rise to an inference that an "examiner" is distinct and different from an "employer," that is hardly conclusive. EPPA does not define examiner, and given the broad definition of employer, there is no reason why a person or entity could not be both an examiner and an employer.

As previously noted, EPPA includes several exemptions which permit work place polygraph testing in certain limited situations. See 29 U.S.C. § 2006. One condition for exemption from EPPA is that the tests be conducted by an examiner who "maintains a minimum of a $50,000 bond or an equivalent amount of professional liability coverage."² 29 U.S.C. § 2007(c)(1)(B). Based on this provision plaintiffs argue that if examiners are excluded from the category of employers, employees would be unable to bring actions against examiners, and the bond provision would be rendered meaningless. See Moskal v. United States, 498 U.S. 103, 111 S.Ct. 461, 466, 112 L.Ed.2d 449 (1990) ("a court should `give effect, if possible, to every clause and word of a statute'"). However, in so arguing, plaintiffs fail to take into account the existence of state remedies.³ It is possible that the purpose of such a provision was not to ensure recovery in event suit was brought under EPPA, but rather to ensure that polygraphs are conducted by reputable examiners and to protect employees who bring suit against examiners under state law.

The agency charged with administering the statute has concluded that examiners hired only to conduct polygraph tests ordinarily are not employers under EPPA. Pursuant to its duty to issue "rules and regulations as may be necessary or appropriate to carry out the Act", 29 U.S.C. § 2004(a), the Department of Labor has 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 polygraphs ordinarily would not be deemed an employer with respect to the examinees.

29 C.F.R. § 801.2(c) (emphasis in original). According to the Department, the purpose of the regulation is to "exclude from the definition of employer a polygraph examiner employed for the sole purpose of conducting a polygraph test." 56 Fed.Reg. 9048 (1991).

When an agency such as the Department of Labor is charged with administration and enforcement of a statute, review of that agency's interpretation of the statute is governed by the standard set forth in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct....