'Stop, Drop and Roll'

To invoke the after-acquired evidence doctrine successfully at trial, employers must demonstrate that they were unaware of the alleged misconduct at the time of termination, and that the misconduct was of such severity to justify discharge and that the employers in fact would have discharged Plaintiffs. Stewart v. Lamar Adver. of Penn LLC., 2004 U.S. Dist. LEXIS 709, at *14, (E.D. Pa. 2004) (citing McKennon). If the employer meets this burden, the employee (even if he or she prevails on liability), will normally be deprived reinstatement or front pay, and his or her back pay award will normally be limited to the specific time (usually during discovery) when the employer learned of the disqualifying information. See Crapp v. City of Miami Beach Police Dep't, 242 F.3d 1017, 1021 (11th Cir. 2001) (citing McKennon).

Thwarting the After-Acquired Evidence Defense

Back pay and front pay/reinstatement are vital remedies of any discrimination case. The McKennon decision has endangered them. Employers have become increasingly voracious in scraping for information from the employee's past, often while with a previous employer, which could be used to support an after-acquired evidence defense. Cf. O'Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756, 762 (9th Cir. 1996) (“Working from hindsight, and given the opportunity to limit the backpay [sic] and other remedies … an employer has a strong incentive not only to discover previously undisclosed wrongdoing on the part of the plaintiff, but also to conclude that that conduct would in fact have resulted in the plaintiff's immediate discharge.”); Richmond v. UPS Serv. Parts Logistics, 2002 U.S. Dist. LEXIS 7496, (S.D. Ind. 2002) (employer permitted to subpoena plaintiff employee's records from six previous employers dating back 8 years in order to establish after-acquired evidence defense). Plaintiffs, therefore, must be equally as zealous in guarding these remedies. Below are some ideas to thwart a successful after-acquired evidence defense.

Make the Employer Plead the Defense Promptly

The after-acquired evidence defense is an affirmative defense. Jones v. Board of Trustees, 75 F. Supp. 2d 885, 887 (N.D. Ill. 1999) (citing McKennon, 513 U.S. at 362-63). Failure to plead an affirmative defense results in a waiver of that defense. Jones, 75 F. Supp. 2d at 887 (citations omitted). Thus, as a practical litigation technique, if the employer learns of the disqualifying conduct during discovery, but does not amend its answer to include this affirmative defense promptly, a plaintiff may preclude the defense from being raised at trial. See Red Deer v. Cherokee County, 183 F.R.D. 642, 655 (N.D. Iowa 199) (allowing amending of affirmative defenses to include after-acquired evidence defense where court observed, inter alia, “no indication of dilatoriness or undue delay” and “no suggestion of an intent to surprise”).

Make the Employer Prove All Elements of the Defense At Trial

If the employer cannot show by a preponderance of the evidence that the after-acquired evidence would have led to the employee's termination, it has not made out the defense. Sheehan v. Donlen Corp., 173 F.3d 1039, 1047 (7th Cir. 1999). Thus, a jury must scrutinize carefully “the employer's actual employment practices, not just the standards established in its employee manuals … [which] reflects a recognition that employers often say they will discharge employees for certain misconduct while in practice they do not.” O'Day v. McDonnell-Douglas Helicopter Corp., 79 F.3d 756, 759 (9th Cir. 1996). The Supreme Court, in a case predating McKennon, also underscored the employer's specific burden of proof in observing, “proving that the same decision would have been justified … is not the same as proving that the same decision would have been made.” Price Waterhouse v. Hopkins, 490 U.S. 228, 252 (1989) (internal quotation marks omitted).

Generate Evidence to Contest the Defense on Summary Judgment

Plaintiffs must be cognizant that if the employer timely asserts an after-acquired evidence defense, the employer can win the defense on a summary judgment motion. Should this occur, the employer, at worst, then proceeds to trial with the assurance that back pay and front pay/reinstatement will not be granted to the employee even if he or she wins. This significantly reduces the settlement value of the case. It is imperative, therefore, that the employee create a genuine issue of material fact on any of the required elements of the defense to survive a Rule 56 challenge and to preserve these remedies for trial. See, e.g., Blake-McIntosh v. Cadbury Bevs., Inc., 1999 U.S. Dist. LEXIS 16550, at *55, (D. Conn. 1999) (citations omitted) (“Where an issue of material fact exists regarding whether the plaintiff's actions were so egregious that the employer would have discharged her solely on this basis, district courts have denied summary judgment on after-acquired evidence grounds, and instead have left the issue for the jury to decide at the remedy stage if the plaintiff succeeds on proving liability.”).

Indeed, if the employee does not contest the after-acquired evidence defense, summary judgment on the issue will be granted. As an example, in the case of Coleman v. Keebler Co., 997 F. Supp. 1102, 1123 (N.D. Ind. 1998), the court held that a credible affidavit asserting that the employer would have fired the employee for the misconduct revealed by after-acquired evidence is sufficient to meet the employer's burden under McKennon. And so by virtue of one affidavit, an employer can avoid back pay or front pay/reinstatement if the employee is not careful. The Coleman case does not stand alone. See Petrovich v. LPI Serv. Corp., 1997 U.S. Dist. LEXIS 4520, (N.D. Ill. 1997) (uncontradicted affidavit supported grant of partial summary judgment limiting plaintiff's remedies); see also Wallace v. Dunn Construction Co., 62 F.3d 374 (11th Cir. 1995) (employer affidavits, supported by deposition testimony, attesting that falsified application would have resulted in termination met employer's burden under McKennon for summary judgment).

Plaintiffs can conduct discovery and elicit information creating a genuine issue of material fact. For example, if the employer learns during discovery that the employee's resume contained a misrepresentation about his or her job history and invokes the after-acquired evidence doctrine on that basis, the plaintiff could ask for a list of other employees who have been terminated on that basis — hopeful that the employer cannot identify anyone. Additionally, the plaintiff can seek a list of all employees who have been disciplined (or even not disciplined) for any incident of dishonesty. If these other employees were not fired for similar transgressions, plaintiff may have created a genuine factual dispute for trial as to whether the employer would actually have terminated the plaintiff upon learning of the misrepresentation, despite the employer's self-serving affidavits to the contrary. Cf. Weeks v. Coury, 951 F. Supp. 1264, 1275 (S.D. Tex. 1996) (finding it significant that plaintiff had proffered no evidence of similar misrepresentations by other employees that had come to the attention of the employer and which had not resulted in termination). If practical, the plaintiff might even request a list of everyone who was disciplined but not fired within the previous 5 years and then point out to the court similar levels of misconduct that did not result in termination. Cf. Sweet v. Blue Cross and Blue Shield of Utica-Watertown, Inc., 1998 U.S. Dist. LEXIS 15566, 1998 WL 695610 (N.D.N.Y. 1998) (denying summary judgment because there were factual issues concerning whether the defendant would have fired the plaintiff as a matter of settled company policy).

Finally, plaintiffs should not simply accept the employer's interpretation of its disciplinary policies, but rather hold them to their own choice of words. Such resistance paid off in the case of Hall v. USAir, Inc., where the court denied the employer's motion for summary judgment on the after-acquired evidence defense because the alleged misconduct could have been unintentional, thereby not necessarily violating USAir's rule against “deliberate” falsification of a job application. 1996 U.S. Dist. LEXIS 22613, at *12, (E.D.N.Y. 1996)

Other Strategies

Make Sure It's Really 'After-Acquired' Evidence

If the employer was aware of the information prior to the plaintiff's termination, the after-acquired evidence defense fails. Dalton v. Wal-Mart Stores, Inc., 1996 U.S. Dist. LEXIS 22786, (D.N.H. 1996)

Don't Create After-Acquired Evidence for the Defense

Caution plaintiffs about their post-termination conduct so as not to offer any new, after-acquired evidence to the defense. The Eighth Circuit recently ruled that the plaintiff's post-termination act of dishonesty while at her next employer may also support an after-acquired evidence defense. Sellers v. Mineta, 2004 U.S. App. LEXIS 3392, (8th Cir. Feb. 24, 2004). Restraint should also be exercised any post-termination proceedings, such as unemployment hearings. As noted by the Tenth Circuit, “[I]t is not difficult to envision a defendant goading a former employee into losing her temper, only to claim later that certain forms of relief should be unavailable because it would have discharged the plaintiff based on her inability to control her temper.” Medlock v. Ortho Biotech, Inc., 164 F.3d 545, 555 n.7 (10th Cir. 1999). For plaintiffs, anything but upstanding post-termination conduct puts their claims, and the hard work of their attorneys, at risk.

Be Leisurely in Filing the Lawsuit If Necessary to Preserve Back Pay

If it is fully expected that damning information will be uncovered during discovery such that a successful after-acquired evidence defense is likely, don't rush to file the lawsuit. Back pay will be available up until the precise time when the employer learns of the information. Thus, a plaintiff might wait until the tail end of statutory period before filing with the EEOC, let the charge sit there awhile, and then wait until the end of the 90-day period after the right-to-sue letter is issued before filing the complaint. These steps will subtly delay the time at which the employer learns of damning information thereby extending the back pay period.

Consider Filing a Retaliation Charge

The Third Circuit has suggested that an employer's strategy of investigating employees with the intent to discover evidence retroactively justifying or excusing the adverse employment decision may amount to unlawful retaliation. See Mardell v. Harleysville Life Ins., 31 F.3d 1221, 1226-28 (3d Cir. 1994), vacated, 514 U.S. 1034, 115 S. Ct. 1397, 131 L. Ed. 2d 286 (1995), on remand, 65 F.3d 1072 (per curiam). If the employer is overly aggressive in discovery seeking after-acquired evidence, eg, putting the employee under surveillance, file a retaliation charge.

Bifurcate and Keep the After-Acquired Evidence Out Until You Win

The Third Circuit has also counseled that bifurcation may be advisable as a vehicle to insure that after-acquired evidence not be improperly used during the liability phase. Mardell v. Harleysville Life Ins. Co., 65 F.3d 1072 (3d Cir. 1995).

Challenge the Defense If It's Based Upon Previously Undisclosed Criminal Conduct

If the employer claims the employee would have been fired for previously undisclosed criminal conviction, confirm whether it's lawful for them to do so. Firing an employee for a criminal conviction that is unrelated to the job has been found to be a violation of Title VII. See, e.g., Field v. Orkin Extermination Co., 2002 U.S. Dist. LEXIS 11828, (E.D. Pa. 2002).

Since the Supreme Court's decision in McKennon v. Nashville Banner Publ. Co. 513 U.S. 352 (1995), authorizing employers to contest back pay and front pay/reinstatement remedies if they acquire evidence during discovery that would have led to the plaintiff's termination irrespective of the disputed reason, employers have expanded the reach of their discovery efforts. The purpose: Find anything in the employee's background that the employer can argue would have led to the employee's termination anyway, thereby precluding the potentially costly remedies of back pay and front pay/reinstatement per the McKennon decision. This article posits some possible countermeasures for plaintiffs to employ in combating the “after-acquired evidence” defense.

The McKennon Holding

Under the McKennon “after-acquired evidence” doctrine, evidence of an employee's wrongdoing acquired after he or she is terminated can operate to reduce an employee's recoverable damages if he or she establishes that “the wrongdoing was of such severity that the employee in fact would have been terminated on those grounds alone if the employer had known of it at the time of discharge.” McKennon, 513 U.S. at 362-63.

To invoke the after-acquired evidence doctrine successfully at trial, employers must demonstrate that they were unaware of the alleged misconduct at the time of termination, and that the misconduct was of such severity to justify discharge and that the employers in fact would have discharged Plaintiffs. Stewart v. Lamar Adver. of Penn LLC., 2004 U.S. Dist. LEXIS 709, at *14, (E.D. Pa. 2004) (citing McKennon). If the employer meets this burden, the employee (even if he or she prevails on liability), will normally be deprived reinstatement or front pay, and his or her back pay award will normally be limited to the specific time (usually during discovery) when the employer learned of the disqualifying information. See Crapp v. City of Miami Beach Police Dep't , 242 F.3d 1017, 1021 (11th Cir. 2001) (citing McKennon ).

Thwarting the After-Acquired Evidence Defense

Back pay and front pay/reinstatement are vital remedies of any discrimination case. The McKennon decision has endangered them. Employers have become increasingly voracious in scraping for information from the employee's past, often while with a previous employer, which could be used to support an after-acquired evidence defense. Cf. O'Day v. McDonnell Douglas Helicopter Co. , 79 F.3d 756, 762 (9th Cir. 1996) (“Working from hindsight, and given the opportunity to limit the backpay [sic] and other remedies … an employer has a strong incentive not only to discover previously undisclosed wrongdoing on the part of the plaintiff, but also to conclude that that conduct would in fact have resulted in the plaintiff's immediate discharge.”); Richmond v. UPS Serv. Parts Logistics, 2002 U.S. Dist. LEXIS 7496, (S.D. Ind. 2002) (employer permitted to subpoena plaintiff employee's records from six previous employers dating back 8 years in order to establish after-acquired evidence defense). Plaintiffs, therefore, must be equally as zealous in guarding these remedies. Below are some ideas to thwart a successful after-acquired evidence defense.

Make the Employer Plead the Defense Promptly

The after-acquired evidence defense is an affirmative defense. Jones v. Board of Trustees , 75 F. Supp. 2d 885, 887 (N.D. Ill. 1999) (citing McKennon , 513 U.S. at 362-63). Failure to plead an affirmative defense results in a waiver of that defense. Jones, 75 F. Supp. 2d at 887 (citations omitted). Thus, as a practical litigation technique, if the employer learns of the disqualifying conduct during discovery, but does not amend its answer to include this affirmative defense promptly, a plaintiff may preclude the defense from being raised at trial. See Red Deer v. Cherokee County , 183 F.R.D. 642, 655 (N.D. Iowa 199) (allowing amending of affirmative defenses to include after-acquired evidence defense where court observed, inter alia, “no indication of dilatoriness or undue delay” and “no suggestion of an intent to surprise”).

Make the Employer Prove All Elements of the Defense At Trial

If the employer cannot show by a preponderance of the evidence that the after-acquired evidence would have led to the employee's termination, it has not made out the defense. Sheehan v. Donlen Corp. , 173 F.3d 1039, 1047 (7th Cir. 1999). Thus, a jury must scrutinize carefully “the employer's actual employment practices, not just the standards established in its employee manuals … [which] reflects a recognition that employers often say they will discharge employees for certain misconduct while in practice they do not.” O'Day v. McDonnell-Douglas Helicopter Corp. , 79 F.3d 756, 759 (9th Cir. 1996). The Supreme Court, in a case predating McKennon, also underscored the employer's specific burden of proof in observing, “proving that the same decision would have been justified … is not the same as proving that the same decision would have been made.” Price Waterhouse v. Hopkins , 490 U.S. 228, 252 (1989) (internal quotation marks omitted).

Generate Evidence to Contest the Defense on Summary Judgment

Plaintiffs must be cognizant that if the employer timely asserts an after-acquired evidence defense, the employer can win the defense on a summary judgment motion. Should this occur, the employer, at worst, then proceeds to trial with the assurance that back pay and front pay/reinstatement will not be granted to the employee even if he or she wins. This significantly reduces the settlement value of the case. It is imperative, therefore, that the employee create a genuine issue of material fact on any of the required elements of the defense to survive a Rule 56 challenge and to preserve these remedies for trial. See, e.g., Blake-McIntosh v. Cadbury Bevs., Inc., 1999 U.S. Dist. LEXIS 16550, at *55, (D. Conn. 1999) (citations omitted) (“Where an issue of material fact exists regarding whether the plaintiff's actions were so egregious that the employer would have discharged her solely on this basis, district courts have denied summary judgment on after-acquired evidence grounds, and instead have left the issue for the jury to decide at the remedy stage if the plaintiff succeeds on proving liability.”).

Indeed, if the employee does not contest the after-acquired evidence defense, summary judgment on the issue will be granted. As an example, in the case of Coleman v. Keebler Co. , 997 F. Supp. 1102, 1123 (N.D. Ind. 1998), the court held that a credible affidavit asserting that the employer would have fired the employee for the misconduct revealed by after-acquired evidence is sufficient to meet the employer's burden under McKennon . And so by virtue of one affidavit, an employer can avoid back pay or front pay/reinstatement if the employee is not careful. The Coleman case does not stand alone. See Petrovich v. LPI Serv. Corp., 1997 U.S. Dist. LEXIS 4520, (N.D. Ill. 1997) (uncontradicted affidavit supported grant of partial summary judgment limiting plaintiff's remedies); see also Wallace v. Dunn Construction Co. , 62 F.3d 374 (11th Cir. 1995) (employer affidavits, supported by deposition testimony, attesting that falsified application would have resulted in termination met employer's burden under McKennon for summary judgment).

Plaintiffs can conduct discovery and elicit information creating a genuine issue of material fact. For example, if the employer learns during discovery that the employee's resume contained a misrepresentation about his or her job history and invokes the after-acquired evidence doctrine on that basis, the plaintiff could ask for a list of other employees who have been terminated on that basis — hopeful that the employer cannot identify anyone. Additionally, the plaintiff can seek a list of all employees who have been disciplined (or even not disciplined) for any incident of dishonesty. If these other employees were not fired for similar transgressions, plaintiff may have created a genuine factual dispute for trial as to whether the employer would actually have terminated the plaintiff upon learning of the misrepresentation, despite the employer's self-serving affidavits to the contrary. Cf. Weeks v. Coury , 951 F. Supp. 1264, 1275 (S.D. Tex. 1996) (finding it significant that plaintiff had proffered no evidence of similar misrepresentations by other employees that had come to the attention of the employer and which had not resulted in termination). If practical, the plaintiff might even request a list of everyone who was disciplined but not fired within the previous 5 years and then point out to the court similar levels of misconduct that did not result in termination. Cf. Sweet v. Blue Cross and Blue Shield of Utica-Watertown, Inc., 1998 U.S. Dist. LEXIS 15566, 1998 WL 695610 (N.D.N.Y. 1998) (denying summary judgment because there were factual issues concerning whether the defendant would have fired the plaintiff as a matter of settled company policy).

Finally, plaintiffs should not simply accept the employer's interpretation of its disciplinary policies, but rather hold them to their own choice of words. Such resistance paid off in the case of Hall v. USAir, Inc., where the court denied the employer's motion for summary judgment on the after-acquired evidence defense because the alleged misconduct could have been unintentional, thereby not necessarily violating USAir's rule against “deliberate” falsification of a job application. 1996 U.S. Dist. LEXIS 22613, at *12, (E.D.N.Y. 1996)

Other Strategies

Make Sure It's Really 'After-Acquired' Evidence

If the employer was aware of the information prior to the plaintiff's termination, the after-acquired evidence defense fails. Dalton v. Wal-Mart Stores, Inc., 1996 U.S. Dist. LEXIS 22786, (D.N.H. 1996)

Don't Create After-Acquired Evidence for the Defense

Caution plaintiffs about their post-termination conduct so as not to offer any new, after-acquired evidence to the defense. The Eighth Circuit recently ruled that the plaintiff's post-termination act of dishonesty while at her next employer may also support an after-acquired evidence defense. Sellers v. Mineta, 2004 U.S. App. LEXIS 3392, (8th Cir. Feb. 24, 2004). Restraint should also be exercised any post-termination proceedings, such as unemployment hearings. As noted by the Tenth Circuit, “[I]t is not difficult to envision a defendant goading a former employee into losing her temper, only to claim later that certain forms of relief should be unavailable because it would have discharged the plaintiff based on her inability to control her temper.” Medlock v. Ortho Biotech, Inc. , 164 F.3d 545, 555 n.7 (10th Cir. 1999). For plaintiffs, anything but upstanding post-termination conduct puts their claims, and the hard work of their attorneys, at risk.

Be Leisurely in Filing the Lawsuit If Necessary to Preserve Back Pay

If it is fully expected that damning information will be uncovered during discovery such that a successful after-acquired evidence defense is likely, don't rush to file the lawsuit. Back pay will be available up until the precise time when the employer learns of the information. Thus, a plaintiff might wait until the tail end of statutory period before filing with the EEOC, let the charge sit there awhile, and then wait until the end of the 90-day period after the right-to-sue letter is issued before filing the complaint. These steps will subtly delay the time at which the employer learns of damning information thereby extending the back pay period.

Consider Filing a Retaliation Charge

The Third Circuit has suggested that an employer's strategy of investigating employees with the intent to discover evidence retroactively justifying or excusing the adverse employment decision may amount to unlawful retaliation. See Mardell v. Harleysville Life Ins. , 31 F.3d 1221, 1226-28 (3d Cir. 1994), vacated, 514 U.S. 1034, 115 S. Ct. 1397, 131 L. Ed. 2d 286 (1995), on remand, 65 F.3d 1072 ( per curiam ). If the employer is overly aggressive in discovery seeking after-acquired evidence, eg, putting the employee under surveillance, file a retaliation charge.

Bifurcate and Keep the After-Acquired Evidence Out Until You Win

The Third Circuit has also counseled that bifurcation may be advisable as a vehicle to insure that after-acquired evidence not be improperly used during the liability phase. Mardell v. Harleysville Life Ins. Co. , 65 F.3d 1072 (3d Cir. 1995).

Challenge the Defense If It's Based Upon Previously Undisclosed Criminal Conduct

If the employer claims the employee would have been fired for previously undisclosed criminal conviction, confirm whether it's lawful for them to do so. Firing an employee for a criminal conviction that is unrelated to the job has been found to be a violation of Title VII. See, e.g., Field v. Orkin Extermination Co., 2002 U.S. Dist. LEXIS 11828, (E.D. Pa. 2002).