Becky Wallace, Annette Neil v. Dunn Construction Company, Inc.

GODBOLD, Senior Circuit Judge,

dissenting:

This is a case of alleged job discrimination in which in her application for employment plaintiff had given false information on a subject matter relevant to the employing process and important to the position sought. Plaintiff would not have been hired if she had not lied on her application, thereby concealing her recent conviction on drug charges. I would straightforwardly hold that plaintiff does not have standing to maintain this suit.

This fraud-in-application case must be distinguished from that of an employee who has properly come into the status of employee and, during employment, commits misconduct that is discovered by the employer after it is sued for employment discrimination, and the misconduct is then asserted as a defense on the ground employer would have fired the employee had it known of the wrong. 1 We can decide that case when it is presented to us.

Plaintiff applied for employment with Dunn Construction Company in April 1988 as a “flagger” to flag traffic on highway construction work. Her application for employment asked whether she had been convicted of a crime, and she checked the “no” box. She was hired a few days after applying and worked until she was fired in February 1990 on stated grounds of insubordination. She then filed this suit alleging sexual harassment and retaliatory discharge under Title VII 2 and inadequate pay and retaliatory discharge under the Equal Pay Act. 3

During discovery Dunn found that 11 months before plaintiff’s employment she had pleaded guilty to possession of cocaine and marijuana, a felony under the Uniform Alabama Controlled Substance Act, and had been placed on probation. Also, in her deposition, plaintiff testified that at her employment interview she was asked whether she “did drugs” and replied “I told him, no.” Ex. 48, part A, p. 42.

It is self-evident that, for a flagperson on highway construction, freedom from drug use or possession is a qualification highly significant to the employer and the public. The summary judgment record shows without dispute that Dunn would not have hired plaintiff had it known of her conviction, and the opinion for this court holds just that. Dunn administers pre-employment drug testing and will not employ any person who tests positive. There is no evidence that Dunn has ever employed an applicant who failed the drug screen. The employment application warns the applicant against making false statements. The company handbook firmly states company policy against falsification of documents and against drug use, and it authorizes termination for either. Under the circumstances of this case plaintiff’s suit should be dismissed.

I. The issue for decision

Dunn has presented to us two legal reasons why it should not be liable to plaintiff for alleged employment discrimination. The first goes to reason for discharge— Dunn says that under its rules it would have fired plaintiff because she falsified her employment application, i.e., the act of falsification and the resulting concealment of her drug conviction, if known, would have been proper cause for termination and is to be treated as such though discovered after she was fired. The second goes to plaintiff’s standing — Dunn says that by plaintiff’s misrepresentation she obtained employment that otherwise she would not *1186 have obtained, therefore she lacks standing, or status as an employee, to maintain this suit.

In the joint motion to certify issues for appeal the parties agreed that one of the issues to be addressed was the second reason, whether plaintiffs complaint must be dismissed for lack of standing upon proof of falsification that, if discovered prior to the hiring decision, would have resulted in a decision not to hire. The opinion for this court addresses only the first, or “reason to fire” issue. It characterizes the standing issue as a mere “misguided” contention, irrelevant except as indirect proof that Dunn would have discharged plaintiff for lying on her application, and, in that context, treats it as inconsequential. The second issue is not reached because considered to be subsumed in the first. See page 1182, n. 13.

II. The significance of false job applications

The problem of false applications for employment is major in scope. Reported cases, most of them recent, demonstrate the problem. In Churchman v. Pinkerton’s, Inc., 756 F.Supp. 515 (D.Kan.1991), plaintiff, in her application for a security guard position, did not reveal her prior use of drugs or her prior hospitalization for attempted suicide with an overdose of “speed.” She did not list all of her prior residences, which frustrated the employer’s checking her prior police records. She did not reveal prior discharges for cause or her history of moving from job to job. In Mathis v. Boeing Military Airplane Co., 719 F.Supp. 991 (D.Kan.1989), plaintiff was hired as clerk-typist. Her employment application failed to reveal that she had pleaded guilty to a felony charge of defrauding a state agency and had been put on probation, had resigned from her federal government job as clerk-typist to avoid a suspension, and had been terminated for poor performance by three federal agencies.

The employer in Johnson v. Honeywell Information Systems, Inc., 955 F.2d 409 (6th Cir.1992), advertised to fill a personnel relations position, specifying a college degree as required. Plaintiff applied, representing that she had a degree when she actually had completed only four college courses. In Morgan v. City of Jasper, 959 F.2d 1542 (11th Cir.1992), recently decided by this circuit, plaintiff falsified her employment application to a city by misstating the reason she had been terminated by a prior employer, which had fired her for mishandling funds. The city employed her to work in a job where she would handle funds. She was discharged and then sued, claiming wage discrimination and retaliatory discharge. Before her discrimination case even came to trial she was convicted of stealing money from the city, sentenced to five years imprisonment, and ordered to pay restitution exceeding $13,000.

The plaintiff in Smallwood v. United Air Lines, Inc., 728 F.2d 614 (4th Cir.) cert. den., 469 U.S. 832 , 105 S.Ct. 120 , 83 L.Ed.2d 62 (1984), charged age discrimination by an airline that refused to process his application for a job as pilot. He was denied relief because he had not revealed, on his application that he had been discharged by another airline for work-related misconduct. A plaintiff who charged that he had been discharged as jailer because of his race falsely, concealed on his application that he had a conviction for criminal trespass and another conviction for assault (jail sentence suspended for two years probation). Washington v. Lake County, 762 F.Supp. 199 (N.D.Ill.1991), aff'd 969 F.2d 250 (7th Cir.1992). In Livingston v. Sorg Printing Co., Inc., 49 Fair Emp.Prac. Cases (BNA) 1417 (1989), plaintiffs resume and job application gave “material false information regarding his prior employment and experience.”

The applicant in O’Driscoll v. Hercules, Inc., 745 F.Supp. 656 (D.Utah 1990), falsified her age on several occasions, the ages of her children, the time of high school graduation, and the fact that she had not previously applied for a job with the employer. In Sweeney v. U-Haul Co. of Chicago Metroplex, 55 E.P.D. ¶ 40,598, 1991 WL 1707 (N.D.Ill.1991), plaintiffs application contained 11 misrepresentations concerning numerous reasons for discharges *1187 from prior employments and warnings of other possible discharges, plus significant gaps in her employment history.

In every one of these false application cases the plaintiff alleging discrimination— firing, hiring, wages, retaliation, race, age — was denied relief, in most cases on summary judgment.

A full survey of the caselaw on predisc-harge misconduct discovered after termination appears in M.H. Rubinstein, The Use of Pre-discharge Misconduct Discovered After An Employee’s Termination as a Defense in Employment Litigation, XXIV Suffolk University Law Review, No. 1 (1990). At p. 1, n. 2, the author refers to a survey disclosing that one in ten firms has found applicants lying on resumes, and he states that in arbitral forums the most common form of employment application falsification involves criminal records and medical histories.

The present case is a paradigm of the problem of false employment applications. An employer is entitled, in its own interest, to seek a drug-free work force. Freedom from drug use affects efficiency, job attendance, and relations of the employee with others. It embraces possible harm to fellow workers, standards of the work force, medical care, possibly public perception of the company, and a host of other interests. For some positions the interests of the public are directly implicated, as in the case of a flagperson, whose job concerns public safety and the directing of moving vehicles, security guards, jailers, persons handling public funds, and airline pilots. The employer is at risk of suits for harm to the public on respondeat superior or negligent hiring grounds and for workmen’s compensation liability to other employees and the employee herself. Dunn is subject to the Drug Free Workplace Act of 1988, 41 U.S.C. § 701 , one of whose provisions subjects it to suspension, termination or debarment from government work if sufficient number of its employees have been convicted of violations of criminal drug statutes occurring in the workplace. Section 701(b)(1)(C). Dunn is entitled to screen out applicants whose records identify them as a source for these risks.

III. Rationale for decision

Under Title VII a charge may be filed “by or on behalf of a person claiming to be aggrieved.” See § 706(b).

The courts have generally used traditional notions of “standing” in order to decide whether an individual is sufficiently “aggrieved” to challenge a particular employment practice in a court suit brought by a private plaintiff.

B.L. Schlei and Paul Grossman, Employment Discrimination Law, p. 987 (BNA 1983).

This relatively simple statutory provision has given rise to considerable litigation involving the question of whether a particular party filing a Title VII charge or acting as a plaintiff in a Title VII case has “standing” to prosecute claims of discrimination in a variety of circumstances.

Id. at 986. In these cases “standing” is analyzed in the constitutional sense of Article III. Id. at 986, n. 27.

Under some circumstances, which I need not develop here, a charging party may seek to file a charge alleging personal ag-grievement because of discrimination against a protected group of which the charging party is not a member. See discussion in Employment Discrimination Law, supra, pp. 989-90. But the case before us is the usual one: plaintiff claims to be a member of the affected group allegedly discriminated against and personally subjected to the adverse employment practice. Id. at 987. I would hold that within the meaning of Title VII and the Equal Pay Act plaintiff is not a member of the affected group allegedly discriminated against and is not an “aggrieved” person. Put differently, Congress did not intend that under the circumstances of this case a plaintiff is within the protected class. Her status does not give her standing to sue. In traditional standing language, she is not in the “impact area.” She purports to be, but the status that would place her there *1188 was fraudulently obtained and but for her fraud would have been denied.

There is a national policy against discrimination. But the existence of that policy does not of itself establish that a particular plaintiff has status or standing to sue. Nor does that national policy depend upon, or envision, implementation or vindication by a false claimant like the plaintiff.

There is no dispositive magic in the word “employee” or in having one’s name on the payroll. Congress would not have intended that standing be conferred on an employee who had circumvented the hiring process and had her name placed on the payroll by a collaborator, or, worse yet, having had her name fraudulently entered on a “padded” payroll, never reported for work but received paychecks that were split between her and her collaborator. These may be “far out” examples but not much farther out than the plaintiff who fraudulently misuses the employment process to get a job she would not otherwise have obtained and thereby creates significant risks to employer and public.

The enforcement provisions section of Title VII focuses upon the necessity for employee status.

No order of the court shall require ... the hiring, reinstatement, or promotion of an individual as an employee, or the payment to him of any back pay, if such individual was refused admission, suspended, or expelled, or was refused employment or advancement or was suspended or discharged for any reason other than discrimination on account of race, color, religion, sex, or national origin or in violation of section 2000e-3(a) of this title.

42 U.S.C. § 2000e-5(g)(2)(A) (emphasis added).

While the courts have almost unanimously denied relief in false application cases where the falsity is relevant and the employer has proved it would not have hired, they have not been either uniform or clear in reasons for decision. Frequently decisions have not distinguished fraud-in-application cases and on-the-job misconduct cases, and the ground for decision is at times no more than a eonclusory statement that plaintiff is not entitled to relief or has not been injured. In. Summers, considered at length in the opinion of my fellow judges, plaintiff was properly hired. His late-discovered on-the-job misconduct was described as relevant to his claim of injury and preclusive of relief or injury. Churchman, Mathis, and O’Driscoll were fraud-in-application cases but relied on Summers. Johnson v. Honeywell was an application fraud case brought under a state discrimination law. The court looked to Title VII by analogy and followed Summers, and it spoke-in terms of plaintiff’s not being entitled to relief. Other cases have treated plaintiff’s fraud as a failure to make out a prima facie case of discrimination under McDonnell Douglas Corp. v. Green, 411 U.S. 792 , 93 S.Ct. 1817 , 36 L.Ed.2d 668 (1973). I.e., Oak Lawn v. Human Rights Com., 133 Ill.App.3d 221 , 88 Ill.Dec. 507 , 478 N.E.2d 1115 (1st Dist.1985); Livingston v. Sorg Printing Co., Inc., supra.

The opinion for this court recognizes that in employment cases it is appropriate to make after-the-fact inquiry to determine what decisions.would have been made had all the facts been known. See Mt. Healthy City School Dist. Bd. of Education v. Doyle, 429 U.S. 274 , 97 S.Ct. 568 , 50 L.Ed.2d 471 (1977). Thus, it is correct to find — as this court does — that plaintiff’s misrepresentation was relevant to the position sought and that Dunn would not have hired plaintiff had it known the truth. The court goes on to hold, however, that Mt. Healthy does not permit after-acquired evidence to ignore the time lapse between the allegedly unlawful act by the employer and the time when the employer would have discovered the plaintiff’s falsification and drug conviction had there been no discrimination and no suit. For reasons I discuss, this analysis is not appropriate because, once the determinations permitted by Mt. Healthy have been made, the plaintiff’s lack of standing emerges and the case ends.

After the court rejects 'what it calls the “affirmative defense” rule of Summers it accepts Summers as a limitation on relief. *1189 It then develops an enormously complicated body of law concerning possible damages under Title VII and the Equal Pay Act, the various remedies possibly available to the plaintiff, and it describes the evidence that the employer must come forward with to limit its exposure. I do not attempt to address these difficult areas beyond saying that they should not be the subject of decision in this case and that Dunn cannot properly be subjected to this body of law by the suit of this plaintiff.

We should grasp the nettle, decide the false application case that is before us, and place our decision squarely on standing grounds. Such a decision would help to bring understanding and order to a confused and disorderly field. It is not enough to say plaintiff is not entitled to relief or that she has not been injured. It does not suffice to set up Summers as a straw man and knock it down. This case is not Summers. The interplay of a plaintiffs status, the intent of Congress, and the interests of plaintiff, employer, and the public are different. We can address the issue of late-discovered misconduct by a plaintiff who is rightfully a member of the workforce when that case is presented to us.

Nor can we properly decide this case by hypothetical predictions of hard-hearted employers rummaging through employment records to find trivial reasons for discharging persons with late-discovered flaws in their background, or of employers sandbagging applicants by burying or destroying knowledge of fabrications to give themselves free rein to harass and fire employees for discriminatory reasons and use the information later if needed. The reported cases we have discussed, and the instant case, do not concern trivial falsities or conspiratorial concealment. The requirements that the misrepresentation be material and job-related and that the employer would not have hired had it known the truth serve to curb employer abuse. The Sixth Circuit pointed this out in Johnson v. Honeywell.

In order to provide a defense to an employer in a wrongful discharge claim, the after-acquired evidence must establish valid and legitimate reasons for the termination of employment. As a general rule, in cases of resume fraud, summary judgment will be appropriate where the misrepresentation or omission was material, directly related to measuring a candidate for employment, and was relied upon by the employer in making the hiring decision. See Churchman v. Pinkerton’s Inc., 756 F.Supp. 515, 520 (D.Kan.1991). These requirements are necessary to prevent an employer from combing a discharged employee’s record for evidence of any and all misrepresentations, no matter how minor or trivial, in an effort to avoid legal responsibility for an otherwise impermissible discharge.

955 F.2d at 414 . To the same effect, see O’Driscoll, supra, 745 F.Supp. at 659 and Churchman, supra, 756 F.Supp. at 520 . An Illinois state court rejected the “rummaging through the file” argument on the ground that plaintiff could not take advantage of her own misdeeds and convert her spurious statements into a shield against the employer. Oak Lawn, supra, 133 Ill.App.3d at 225 , 88 Ill.Dec. at 510 , 478 N.E.2d at 1118 .

This court has not addressed the disposi-tive issue of standing. It should do so and dismiss this case.

.As discussed below, this was the situation presented in Summers v. State Farm Mut. Auto. Ins. Co., 864 F.2d 700 (10th Cir.1988).

. See 42 U.S.C. §§ 2000e-2(a)(1) and 2000e-3(a) (West 1981).

. See 29 U.S.C. § 206 (d)(1), 215(a)(2) and § 215(a)(3) (West 1965).