After-Acquired Evidence in Defending Employment Discrimination Claims

ONE EVOLVING element in the employer's to claims of employment-related discrimination is the potential effect of after-acquired evidence of the employee's wrongdoing. As employers and counsel have realized the potential impact of digging up a little dirt with regard to a disgruntled former employee who has asserted a claim of improper treatment against the employer, courts are grappling with questions of how such evidence might be used by the employer and its impact upon the employee's claims. In the past six years, various courts have taken widely differing views with regard to these questions, without the benefit of guidance from the U.S. Supreme Court.(1) Employers and counsel have begun not only to challenge the courts with new theories as to the meaning and effect of after-acquired evidence, but also to develop creative and sometimes intrusive methods of doing so. The effect of after-acquired evidence in this context typically comes into play when, during the course of investigating an employee's claims of employment-related discrimination, the employer learns that the employee falsified the employment application or violated a company rule or policy during employment, unbeknownst to the employer until long after the fact. The employer then asserts that it would have fired or never hired the employee had it only known of the misconduct. If the employee secured the job under false pretenses, the employer argues, or concealed transgressions committed during employment, how can the claim to have suffered any injury by reason of the alleged discriminatory acts of the employer? How has the after-acquired evidence doctrine developed and how will it play out.? SURVEY OF CASE LAW A. Rule Announced In 1988 the 10th Circuit decided what has become the most frequently cited on the impact of after-acquired evidence in this context. In Summers v. State Farm Mutual Automobile Insurance Co.,(2) frequently referred to as the seminal case in this area,(3) the court considered a suit brought by an employee against his employer under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act (ADEA). The employee alleged that he was terminated because of age and religious discrimination. During his employment as an insurance claims representative, he had been reprimanded and placed on probation for falsifying a number of insurance claims. Although he returned to work, he was fired approximately six months later. The employer admitted that the employee was not fired because of the falsifications but rather because of his poor attitude and inability to get along with co-workers and customers. Four years later, while the employer was preparing for trial, it discovered an additional 150 falsifications of insurance claims. In considering whether the discovery of the additional falsifications should have any effect on the appropriate remedy available to the employee, the court first determined that it did not consider the defense raised by the employer based on after-acquired evidence of the employee's misconduct as a negation of the employee's prima facie under the criteria of McDonnell Douglas Corp. v. Green.(4) The court noted that it was not concerned with the reasons for discharge given by the employer, but rather with the significance of the employer's discovery of additional falsifications some four years after the discharge. In fact, the court assumed that the employer was motivated by the employee's age and religion in firing him. It held that the after-acquired evidence did not relate to the employer's reason for firing the employee but rather to the employee's claim of injury. The court relied primarily on the reasoning of an earlier Supreme Court case, Mt. Healthy City School District Board of Education v. Doyle.(5) A teacher was not rehired because he had informed a local disk jockey about a possible dress code for teachers, which the disk jockey announced on the air, and because the teacher made certain obscene gestures. …