Harmon v. Cb Squared Services Inc.

624 F.Supp.2d 459

Ollie Leon HARMON III, Plaintiff, v. CB SQUARED SERVICES INCORPORATED, Defendant.

Civil Action No. 3:08-CV-799.

United States District Court, E.D. Virginia, Richmond Division.

June 2, 2009.

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James Joseph Vergara, Jr., Vergara & Associates, Hopewell, VA, Andres Rivera-Ortiz, Law Offices of Andres Rivera-Ortiz PA, Miami, FL, for Plaintiff.

Paul Lee Warren, Warren & Associates PLC, Norfolk, VA, for Defendant.

MEMORANDUM OPINION

(Granting Plaintiff's Motion for Partial Summary Judgment and Denying Defendant's Motion for Summary Judgment)

HENRY E. HUDSON, District Judge.

This case involves an alleged violation of the Employee Polygraph Protection Act ("EPPA"), 29 U.S.C. §§ 2001, et seq., by Defendant CB Squared Services Incorporated ("CB Squared"). Plaintiff Ollie Leon Harmon, a former employee of CB Squared, contends that Defendant wrongfully asked him to take a polygraph examination and unlawfully terminated him based on the test's results. The case is currently before the Court on Plaintiff Harmon's Motion for Partial Summary Judgment (Dkt. 30) on Counts I and II of his Complaint and Defendant CB Squared's Motion for Summary Judgment (Dkt. 36) on all counts. The parties have filed memoranda of law and exhibits in support of their respective positions. The Court will dispense with oral argument because the facts and legal contentions are adequately presented in the materials presently before the Court. For the reasons detailed herein, Plaintiff's Motion for Partial Summary Judgment will be granted and Defendant's Motion for Summary Judgment will be denied.

I.

Defendant CB Squared provides automotive maintenance services at several "Jiffy Lube" franchises that it owns and operates in and around the Commonwealth of Virginia. Plaintiff Harmon first entered Defendant's employ in the summer of 2007, when he was hired as a service technician at the company's Garrisonville, Virginia location. By December of 2007, Plaintiff had been promoted to a managerial position at another CB Squared facility in Virginia and soon thereafter was serving as Defendant's general "Customer Relations Manager" with responsibility for a number of Defendant's service centers throughout Virginia.

Plaintiff's career with CB Squared progressed steadily until early October of 2008, when Plaintiff informed several CB Squared executives that an individual identified only as "Chris" had offered Plaintiff a job with "STC", a competing Jiffy Lube franchisee. Concerned that STC had violated the Jiffy Lube franchise agreement, Mike Day, the President of CB Squared, contacted STC to investigate Plaintiff's allegations. After a representative of STC assured Day that no one from the company had approached Harmon, Day sought to "corroborate [Plaintiff's] claims" of misconduct by an STC employee. Accordingly, Day "asked Plaintiff if he would voluntarily submit to a polygraph test"—a request to which Plaintiff apparently agreed. Def. Br. in Supp. at 4.

On October 14, 2008, CB Squared's "Operations Manager", Jason Russ, informed Plaintiff that the polygraph test would be given in Richmond, Virginia the next day. Accompanied by Russ, Plaintiff traveled to Richmond on October 15 where the polygraph examination was administered. Other than written directions to the polygraph test site, CB Squared provided Plaintiff with no documents or other information in advance of the examination. Harmon Dec. at 2. Rather, on the day of the exam, the polygraph examiner provided Plaintiff with a two-page "Polygraph Consent Form" detailing the examination procedures and a two-page "Polygraph Standards of Practice" form explaining Plaintiff's rights under Virginia law. See Id. Ex. 1. Both of these documents were signed only by Plaintiff and the polygraph examiner, who was not a CB Squared employee. See Id.

Following the test, Day and several other CB Squared executives met with Plaintiff on October 16, 2008 and informed him that the results of his polygraph examination revealed "deception". Def. Br. in Supp. at 4. After Plaintiff refused to divulge further information regarding STC's alleged solicitation, CB Squared demoted Plaintiff and reassigned him to a new store location. CB Squared contends that Plaintiffs performance on his polygraph test had no bearing on his reassignment and represents that Plaintiff instead was reassigned due to the company's concerns regarding his "disloyalty, lack of candor, and poor judgment". Def. Br. in Supp. at 5. Dissatisfied with his demotion, Plaintiff provided CB Squared with his "two week notice" of resignation on October 16, 2009 and contends that he was terminated by CB Squared that same day. CB Squared denies terminating Plaintiff, arguing instead that it merely accepted his voluntary resignation.

Plaintiff subsequently instituted the present action, alleging three separate violations of the EPPA by CB Squared.¹ Specifically, Count I contends that Defendant violated Section 2002(1) of the EPPA by requesting and/or suggesting on October 14, 2008 that Plaintiff take a polygraph examination. See 29 U.S.C. § 2002(1). Count II further alleges that CB Squared violated Section 2002(2) of the EPPA when it used, accepted, and referred to the results of Plaintiff's polygraph test at the meeting between CB Squared executives and Harmon on October 16, 2009. See id. § 2002(2). Finally, Count III charges that Defendant CB Squared violated Section 2002(3) of the EPPA by terminating his employment on October 16, 2009 on the basis of the polygraph test's results.² See id. § 2002(3).

Contending that there are no genuine issues of material fact and that he is entitled to judgment as a matter of law on Counts I and II, Plaintiff Harmon subsequently filed his Motion for Partial Summary Judgment on May 9, 2009.³ Defendant opposes Plaintiff's Motion on several grounds, contending that an arbitration agreement signed by the parties mandates dismissal of this action; that the EPPA does not even apply in this case; and that Plaintiff waived any EPPA claim he may have by lying on his employment application. Defendant CB Squared has also filed its own Motion for Summary Judgment on all counts, relying principally on the same grounds that the company has advanced in opposition to Plaintiffs Motion. Because they raise numerous common legal and factual issues, the Court will consider the parties' motions together.

II.

The Court may grant either party's motion for summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... 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). The "party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion" and "demonstrat[ing] the absence of a genuine issue of material fact." 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 under Rule 56 "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When evaluating a motion under Rule 56, the Court must construe all "facts and inferences to be drawn from the facts ... in the light most favorable to the non-moving party." Miller v. Leathers, 913 F.2d 1085, 1087 (4th Cir.1990) (internal quotations omitted). Mindful of the applicable legal standard, the Court now considers Plaintiff Harmon's Motion for Partial Summary Judgment on Counts I and II and Defendant CB Squared's cross-Motion for Summary Judgment on all claims.

III.

A.

Defendant CB Squared first contends that Harmon's Motion for Partial Summary Judgment must be denied—and its own Motion for Summary Judgment granted—because Harmon failed to submit his EPPA claims to arbitration as required by a dispute resolution agreement that he signed upon joining CB Squared in 2007. See Def. Br. in Supp. Ex. A. This Court previously rejected this exact same argument when it denied Defendant's Rule 12(b)(6) Motion to Dismiss. See Mem. Op. of Jan. 29, 2009 at 6-7, 2009 WL 234982. The Court explained then that the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., requires a party seeking enforcement of an otherwise-valid arbitration agreement—such as the dispute resolution agreement signed by Plaintiff—to petition the Court for a stay of the proceedings and an order compelling arbitration, not outright dismissal of the action. See 9 U.S.C. §§ 3-4. Defendant has made no such petition in this case.

In support of its argument that Plaintiffs failure to comply with the terms of the arbitration agreement mandates outright dismissal of his EPPA claims, Defendant relies principally on Saari v. Smith Barney, Harris Upham & Co., 968 F.2d 877 (9th Cir.1992).⁴ In Saari, however, the Ninth Circuit held only that a general arbitration agreement was not invalidated by Section 2005(d) of the EPPA which provides that "the rights and procedures provided by [the EPPA] may not be waived by contract or otherwise...." 29 U.S.C. § 2005(d). Nowhere does Saari— or the FAA, for that matter—mention dismissal as a possible remedy for a plaintiff's failure to arbitrate his claims. Indeed, the conclusion reached by the Ninth Circuit in Saari demonstrates that Defendant's reliance on the case is misplaced: instead of dismissing the plaintiff's claim for failure to arbitrate, the Ninth Circuit in Saari concluded that "the district court erred in denying [the defendant's] motion to compel arbitration and to stay the case pending arbitration." Saari, 968 F.2d at 882.

Despite the Court's earlier admonition and explanation, Defendant has never sought to compel arbitration in this case. Nor has Defendant cited any...