Amicus Curiae Brief — McKennon v. Nashville Banner Publishing Co.

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: No. 93-1543

OFFICE OF THE CLERK

In the Supreme Court of the United States

OCTOBER TERM, 1994

CHRISTINE MCKENNON, PETITIONER

Vv.

NASHVILLE BANNER PUBLISHING COMPANY

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES AND

THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

AS AMICI CURIAE

Drew S. Days, Ill

Solicitor General 2

JAMES R. NEELY, JR. DEVAL L. PATRICK

Deputy General Counsel Assistant Attorney General

GWENDOLYN YOUNG REAMS PAUL BENDER

Associate General Counsel Deputy Solicitor General

CAROLYN L. WHEELER KENT L. JONES

Assistant General Counsel Assistant to the Solicitor

Dor! K. BERNSTEIN General

Attorney DENNIS J. DIMSEY

Equal Employment MARK L. Gross

Opportunity Commission Attorneys

Washington, D.C. 20507 Department of Justice

Washington, D.C. 20530

(202) 514-2217

QUESTION PRESENTED

Whether an employee who is discharged in violation of

the Age Discrimination in Employment Act is barred from

obtaining any remedy if, solely as a result of the unlawful

discharge and the litigation challenging it, the employer

discovers a lawful basis for dismissal.

(I)

TABLE OF CONTENTS

Page

Interest of the United States and the Equal Employment

Opportunity Commission as amici curiae ..........

EEL IE

eek ec e cn kee eteccese

wna Ne =

Argument:

The ADEA authorizes federal courts to award

backpay and other appropriate relief when an em-

ployee is discharged because of age ............. 6

The denial of all relief for a discriminatory

discharge is not appropriate under the ADEA ... 10

The appropriate remedies under the ADEA for a

discriminatory discharge followed by the dis-

covery of evidence that would have led to a lawful

discharge include limited backpay, injunctive and

declaratory relief, attorneys’ fees, and liquidated

ss oe ks os dink deus up's pee bee 23

Neen TT nn een ew eticéucecece 27

TABLE OF AUTHORITIES

Cases:

ABF Freight System, Inc. v. NLRB, 1148S. Ct. 835

ss Lan 64 os bab 0g'4'e's 0.04.0 90°00 22

Albemarle Paper Co. v. Moody, 422 U.S. 405

Ee dak 666 ci-coees 10, 11, 17, 19, 21-22, 25

Arizona Governing Committee v. Norris, 463 U.S.

nd Se eases 12

Benson v. Quanex, 58 Fair Empl. Prac. Cas. (BNA)

I 6 So once cc sceeseens 17

Bonger v. American Water Works, 789 F. Supp.

SS 17, 19

Calloway v. Partners Nat. Health Plans, 986 F.2d

EE 16

IV | Vv

C aeoit Continued: Page Cases — Continued: | Page

C pore ap gam Inc., 756 F. Supp. 515 Mt. Healthy City School District Board of Educ.

Pelee egy) ic he iSite Aa beg hi cay frost M v. Doyle, 429 U.S. 274 (1977)... . 26.00.00 14, 15, 21

arby v. Pasadena Police Dep't, 939 F.2d 311 NLRB vy. Transportation Management Corp., 462

os ova Se vinvannsenibecrdaves 25 ee I aa ak dans heb ceakeascoee: 25

DeVoe v. Medi-Dyn, Inc., 782 F. Supp. 546 (D. O’Day v. McDonnell Douglas Helicopter Co., 784

Kan. SE hré-4 oes 6245 dau nua ekdebtadee és 17 F. Supp. 1466 (D. Ariz. 1992), appeal pending,

Director, OWCP v. Greenwich Collieries, No. tk ee 17, 19

PN GE UD enh osc vnesccdcchewaces 25 O'Driscoll v. Hercules, Inc., 745 F. Supp. 656 (D.

EEOC v. Goodyear Aerospace Corp., 813 F.2d Utah 1990), 12 F.3d 176 (10th Cir. 1994) ...... 7,17, 19

I eee 23 Oscar Mayer & Co. v. Evans, 441 U.S. 750 (1979).. 10-11

EEOC vy. Harris Cernin, Inc., 10 F.3d 1286 (7th Perma Life Mufflers, Inc. vy. International Parts |

Sy FRR era a, erp ey ir tary center 23 Corp., 392 U.S. 134 (1968) ...........5- 250s. 15

EEOC vy. Recruit~U.S.A., Inc., 939 F.2d 746 Price Waterhouse v. Hopkins, 490 U.S. 228

SI ER oS one teg cok ee 16 CIGGRD i.e vegetgecsdcvicccenesesens 9, 15, 21, 23, 24

Franks v. Bowman Transportation Co., 424 U.S. Punahele v. United Air Lines, Inc., 756 F. Supp.

i RE Te re See D 10, 11, 12, 20 656 (D. Utah 1990) ..... 6.6... e eee eee eee es 17

Johnson v. Honeywell Information Systems, Inc., Reed v. Amax Coal Co., 971 F.2d 1295 (7th Cir.

955 F.2d 409 (6th Cir. 1992) ............... 3, 4, 18-19 BOO bccn nen sooebed.ese conn censure oeesaheres 19

Kristufek v. Hussmann Foodservice Co., 985 F.2d Smallwood v. United Air Lines, Inc., 728 F.2d

PG Es COUN s ho vicsececantesoasaes 7, 9, 16, 25 614 (4th Cir.); cert. denied, 469 U.S. 832

Landgraf v. USI Film Products, 114 S. Ct. 1483 (1984) babaebnnnéesen dette ee eeeee eres esses 9, 20

Se ea erp iee tom eee nb ee PN Oe 13 Smith ped General Scanning, Inc., 876 F.2d 1315

Lorillard v. Pons, 434 U.S. 575 (1978) ...... 8, 11, 13, 16 s sinnuiees — Fa en ‘Me il A - hi bile 1 na a

, ummers v. State Farm Mutual Automobile Ins.

gc Sembee Cow, 84 F24 70 (ty Ci 98). 3,13, 14,15, 16,2

Louisiana v. United States, 380 U.S. 145 (1965) .. . 10 ~— aes SE OS. SOE, See 8

Mathis v. Boeing Military Airplane Co., 719 F. United States * N.L. ‘bechestvien, ie | 479 F.2d

Supp. 991 (D. Kan. 1989) ..................-. 17 354 (8th Cir. 1973) ....... 200. Ne 1

Milligan-Jensen v. Michigan Technological Univ., United States v. Burr, 25 F. Cas. 30 (C.C. Va.

975 F.2d 302 (6th Cir. 1992), cert. granted, 113 1807) (No. 14,629d) FRE agape ree tes anne 1]

S. Ct. 2991, cert. dismissed, 114 S. Ct. 22 Wallace v. Dunn Construction Co., 968 F.2d 1174

(1993) PS Pe OTC ET ee Eo) A eS 4,7, 15 (11th Cir. 1992) ......... 7, 9, 15, 16, 17, 19, 20, 24, 25

Mitchell Bros. Film Group yv. Cinema Adult Washington v. Lake County, 969 F.2d 250 (7th

Theater, 604 F.2d 852 (Sth Cir. 1979)... 2.02... 15-16 SD ss cb dek DESKRSA UAE ee eeNTe ha ek en 7, 18, 19

Constitution, statutes, and rule: Page

es es I ine coup heed wa vncnd Sader 14

Age Discrimination in Employment Act, 29 U.S.C.

EET Teer Ee TP Cee eee A l

ED hsv cacvectcscvecee ds 2, 5, 7, 22

ED ws io) sc sve bcecescosbeudn 5

EE os 6G s oe weeetcevesenxans 5,8, 13, 23

Americans with Disabilities Act, 42 U.S.C. 12101 ef

PA CONES PS ory PEE eT Tet Pree ee POT TE Te 7

Civil Rights Act of 1964, Tit. VII, 42 U.S.C.

ER AE SP Re a SE a passim

Ge Wo aies SEED occ ccc Se wwedctces 8

eR Ree OS rr 8

42 U.S.C. 2000e-5(g)(2)(B) (Supp. 1992) ..... 21

Civil Rights Act of 1991, Pub. L. No. 102-166,

Dee Se OP ob ahevidewad sk dcevedesse 21

Equal Pay Act, 29 U.S.C. 206(d) ............... 7

Fair Labor Standards Act of 1938, 29 U.S.C. 201,

aa ate es 6 ies hn tbo SE OhOS Cewubeeess

ED 6 i oon 04460 h web oe bees ces 8

ks ee Laub Vnse pentaned 8

National Labor Relations Act, 29 U.S.C. 160(c) .. 7

Miscellaneous:

118 Cong. Rec. (1972):

eee eee ie eeeenen ta ye cad 12

An Ch Rube eh cevak debe winsiees 12, 22, 25

EEOC: Revised Enforcement Guide on Recent

Developments in Disparate Treatment Theory, 8

Fair Empl. Prac. Man. 405:6915 (July 7, 1992) .. 25, 26

Robert J. Gregory, The Use ofAfter-Acquired

Evidence in Employment Discrimination Cases:

Should the Guilty Employer Go Free? 9 The

Re CEE Ge GU ook x oon wet sock vecdax 16

Vil

Miscellaneous — Continued:

H.R. 1746, 92d Cong., Ist Sess. (1971) ..........

H.R. Rep. No. 805, 90th Cong., Ist Sess. (1967) ..

H.R. Rep. No. 40(1), 102d Cong., Ist Sess. 1991

(1991 U.S:C.C.A.N. $86) ........cceeeeeee,

B. Schlei & P. Grossman, Employment Discrimina-

tion Law (2d ed. Five-Year Cum. Supp.) .......

S. Rep. No. 723, 90th Cong., Ist Sess. (1967) .....

W. Waldo & R. Mahar, Lost Cause and Found

Defense: Using Evidence Discovered after an

Employee's Discharge to Bar Discrimination

Claims, 9 Labor Lawyer 31 (1993) ............

R. White & R. Brussack, The Proper Role of After-

Acquired Evidence in Employment Discrimina-

tion Litigation, 35 B.C. L. Rev. 49 (1993) ......

Zemelman, The After-Acquired Evidence Defense

to Employment Discrimination Claims: The Pri-

vatization of Title VII and the Contours of

Social Responsibility, 46 Stan. L. Rev. 175

ESP pane eer era Ee fem tere Te

20, 26

In the Supreme Court of the United States

OCTOBER TERM, 1994

Np. 93-1543

CHRISTINE MCKENNON, PETITIONER

Vv,

NASHVILLE BANNER PUBLISHING COMPANY

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES AND

THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

AS AMICI CURIAE

INTEREST OF THE UNITED STATES AND

THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

AS AMICI CURIAE

This case concerns the proper interpretation of the Age

Discrimination in Employment Act of 1967, as amended,

29 U.S.C. 621 et seq. The decision in this case is also likely

to affect litigation under analogous provisions of Title VII

of the Civil Rights Act of 1964, 42 U.S.C. 2000e ef seq.

The Attorney General and the Equal Employment Oppor-

tunity Commission share substantial responsibilities for

enforcement of these equal employment opportunity laws.

The Court’s decision in this case will affect those responsi-

bilities.

(1)

STATEMENT

t. Petitioner Christine McKennon began working for

the Nashville Banner Publishing Company (Banner) in

1951. She was discharged by that company on October 31,

1990, after more than 39 years of service. She was 62 years

old at that time. Pet. App. 10a-1la. During her tenure at

the Banner, petitioner held several secretarial positions.

“{O}ver the years the company consistently evaluated her

work performance as excellent.” /d. at 2a. At the time she

was terminated, petitioner was secretary to the Banner’s

comptroller. The company claimed that it fired petitioner

because it needed to reduce the size of its work force. /d.

at 10a-1 la.

In May, 1991, petitioner commenced this suit, alleging

that her discharge was in violation of the Age Discrimina-

tion in Employment Act (ADEA), which makes it unlaw-

ful for an employer (29 U.S.C. 623(a)(1)):

to discharge any individual or otherwise discriminate

against any individual with respect to his compensa-

tion, terms, conditions, or privileges of employment,

because of such individual’s age.

Petitioner alleged that she and one other secretary —the

two oldest secretaries at the Banner—were terminated

while five younger secretaries with ‘less seniority were re-

tained. Compl. ¢ 14. Petitioner sought a variety of legal

and equitable remedies, including backpay, liquidated

damages and attorneys’ fees. Compl. q 8.

2. During a deposition made in the course of this liti-

gation, petitioner testified that, during her last year of em-

ployment at the Banner, she had copied several confiden-

tial documents to which she had access in her capacity as

the comptroller’s secretary. Pet. App. Ila. She did this

because she feared that her employer was preparing to

discharge her because of her age. Pet. App. 8a, 12a. She

took copies of the documents home with her in order to

discuss them with her husband. She testified that she did

so “for her ‘insurance’ and ‘protection,’ ‘in an attempt to

learn information’ regarding my job security concerns.”

Id. at 12a; see Compl. 4 9.

On December 21, 1991, two days after these disclosures

at her deposition, and fourteen months after her dis-

charge, the publisher of the Banner sent petitioner a letter

“terminating” her employment. Pet. App. 12a. In this let-

ter, and also in an affidavit filed in connection with a mo-

tion for summary ‘judgment thereafter filed by respon-

dent, the publisher stated that petitioner’s removal and

disclosure of these confidential documents was a breach of

her job responsibilities and that “the Banner would have

discharged Mrs. McKennon when she took and copied the

records if it had then known that she had done so.” Id. at

2a-¥a. Other officers of the Banner filed similar affidavits.

Id. at 3a n.3.

3. The district court granted respondent’s motion for

summary judgment. Pet. App. 10a-18a. In doing so, the

court relied on the “after-acquired-evidence” defense ar-

ticulated by the Sixth and the Tenth Circuits in some cases

arising under the ADEA and under Title VII of the Civil

Rights Act of 1964. Pet. App. 13a, citing Summers v.

State Farm Mutual Automobile Ins. Co., 864 F.2d 700

(10th Cir. 1988), and Johnson v. Honeywell Information

Systems, Inc., 955 F.2d 409 (6th Cir. 1992).

The district court concluded that it was undisputed in

the record that petitioner’s actions in copying and disclos-

ing respondent’s confidential documents violated her

“duty of confidentiality” and “established just cause for

firing Mrs. McKennon” (Pet. App. 16a). The court ac-

cepted the affidavit of respondent’s publisher that he

“would have terminated her immediately had he learned of

her misconduct at any time prior to her discharge from the

Banner on October 31, 1990” (ibid.). For these reasons the

court held that petitioner was not entitled to “any relief or

remedy” under the ADEA. /d. at 14a, quoting Johnson v.

Honeywell Information Systems, Inc., 955 F.2d at 415.

The court concluded that the “after-acquired evidence”

“serves as a complete defense to a wrongful discharge ac-

tion” under the ADEA. Pet. App. 16a.

4. The court of appeals affirmed (Pet. App. la-9a). It

agreed that this case is governed by the circuit’s “after-

acquired evidence” doctrine. The court noted that it had

first adopted this doctrine in a case arising under state law

(Johnson v. Honeywell Information Systems, Inc., supra)

and had subsequently applied the doctrine as a complete

defense in a case involving a claim of sex discrimination

under Title VII (Milligan-Jensen v. Michigan Technologi-

cal Univ., 975 F.2d 302 (6th Cir. 1992), cert. granted, 113

S. Ct. 2991, cert. dismissed, 114 S. Ct. 22 (1993)). The

court stated that, “in Johnson and Milligan-Jensen, we

have firmly endorsed the principle that after-acquired evi-

dence is a complete bar to any recovery by the former em-

ployee where the employer can show it would have fired

the employee on the basis of the evidence” (Pet. App. 6a).

The court concluded that the uncontroverted facts estab-

lished that “Mrs. McKennon was guilty of conduct which,

if known by the Banner, would have caused her discharge”

(id. at 3a). The court held that this evidence constituted a

complete defense to petitioner’s cause of action under the

ADEA for the employer’s unlawful discharge of her on ac-

count.of her age. /d. at 3a-9a. The court of appeals re-

jected petitioner’s argument that the doctrine should not

be applied when the asserted misconduct occurred as part

of the employee’s effort to protect herself against a dis-

criminatory termination. The court held that issue to be

“irrelevant” because “[t]he sole issue in after-acquired evi-

dence cases is whether the employer would have fired the

* * * employee on the basis of the misconduct had it

known of the misconduct” (id. at 9a).!

SUMMARY OF ARGUMENT

In view of the disposition of this case below on motion

for summary judgment, it must be assumed that respond-

ent unlawfully fired petitioner because of her age. This

discharge violated the Age Discrimination in Employment

Act, which makes it “unlawful for an employer * * * to

discharge any individual * * * because of such individual’s

age” (29 U.S.C. 623(a)(1)).

When an unlawful discriminatory discharge in violation

of the ADEA has occurred, the statute authorizes the

court to grant “such legal or equitable relief as may be ap-

propriate to effectuate the purposes of [the ADEA], in- .

cluding without limitation judgments compelling employ-

ment, reinstatement or promotion” or backpay. 29 U.S.C.

626(b). The court of appeals’ conclusion, that all relief

must be withheld if there is evidence establishing that the

employee would have been discharged for a reason un-

known to the employer at the time the unlawful discharge

‘The court of appeals noted that 29 U.S.C. 623(d) makes it

unlawful for an employer to discriminate against an employee who

“has opposed any practice made unlawful by this section” (ibid.), but

stated that “[clopying and removing confidential documents is clearly

not protected conduct” under this statute. Pet. App. 8a n.7.

The petition does not appear to contend that the provisions of 29

U.S.C. 623(d) justify petitioner’s conduct on the facts of this case. In-

stead, we understand the petition to address the legal question whether

after-acquired evidence that would have constituted a lawful “basis

for dismissal” bars an employee “from obtaining any remedy” under

the ADEA for a discharge that was in fact unlawful. See Pet. i. Ac-

cordingly, we do not address in this brief the question whether a

discharge motivated solely by petitioner’s copying of these confi-

dential documents represented unlawful retaliation under 29 U.S.C.

623(d).

occurred, is inconsistent with the language and purpose of

this important remedial provision.

In order to grant appropriate relief for a discriminatory

discharge a court should, insofar as possible, design a

remedy that will reinforce the strong federal policy of dis-

couraging employment discrimination. A court should

also endeavor to insure that an employee who has been the

victim of discrimination is not left in a substantially worse

position as a result of that discrimination. For these

reasons, “after-acquired evidence” of employee miscon-

duct should, in no event, constitute a complete bar to

relief for unlawful discrimination. Where an employer can

satisfy the substantial burden of showing that it would ac-

tually have discharged the employee on the basis of the

after-acquired evidence had it not committed its prior

discriminatory discharge, it may, however, be appropriate

not to order reinstatement and to limit the backpay award

so that backpay is not awarded for any period after the

lawful discharge would have occurred.

This case should therefore be remanded for the district

court to determine whether petitioner’s discharge was in

fact unlawful and, if so, what legal and equitable relief is

appropriate. In addition to backpay and possible rein-

statement, liquidated damages, declaratory relief, injunc-

tive relief and attorney’s fees are all appropriate remedies

under the ADEA even in the presence of after-acquired

evidence of employee misconduct.

ARGUMENT

1. THE ADEA AUTHORIZES FEDERAL COURTS TO

AWARD BACKPAY AND OTHER APPROPRIATE RE-

LIEF WHEN AN EMPLOYEE IS DISCHARGED BE-

CAUSE OF AGE

In view of the court of appeals’ affirmance of the

district court’s grant of summary judgment for respondent

in this case, it must be assumed that respondent fired peti-

tioner because of her age.” Pet. App. 3a. Such a discrimi-

natory discharge plainly violated the Age Discrimination

in Employment Act, which makes it “unlawful for an em-

ployer * * * to discharge any individual * * * because of

such individual’s age” (29 U.S.C. 623(a)(i)).

The court of appeals nonetheless held that the employer

was absolved of liability under the ADEA for the discrimi-

natory discharge because, more than one year after that

discharge occurred, the employer learned of employee

misconduct that had nothing to do with the discharge. In

reaching that conclusion, the court relied (Pet. App. 6a)

on its conclusion in Milligan-Jensen v. Michigan Techno-

logical Univ. that such “after-acquired evidence” makes it

“irrelevant whether or not [the employee] was discrimi-

nated against” (975 F.2d at 305). In the court’s view (Pet.

App. 6a), such “after-acquired evidence” constitutes a

complete defense to liability for a discriminatory discharge

under the ADEA and also under the non-discrimination

requirements of Title VII of the Civil Rights Act of 1964.°

2 The court of appeals noted that there is “substantial deposition

testimony of Mrs. McKennon that she was indeed discharged because

of age” (Pet. App. 3a n.2). While respondent disputed this claim

(ibid.), respondent also acknowledged that the claim of discrimination

must be assumed to be true for purposes of respondent’s motion for

summary judgment. /d. at 3a.

> Variants of the after-acquired evidence doctrine invoked by the

courts of appeals have been applied to age, race, religion and gender

discrimination claims under the ADEA and Titie VII. See Pet. App. 6a;

O'Driscoll v. Hercules Inc., 12 F.3d 176, 177 (10th Cir. 1994); Kristufek

y. Hussmann Foodservice Co., 985 F.2d 364, 365 (7th Cir. 1993);

Milligan-Jensen v. Michigan Technological Univ., 975 F.2d 302 (6th

Cir. 1992), cert. granted, 113 S. Ct. 2991, cert. dismissed, 114 S. Ct. 22

(1993); Washington v. Lake County, 969 F.2d 250, 251 (7th Cir. 1992);

Wallace v. Dunn Construction Co., 968 F.2d 1174, 1176 (ith Cir.

1992). The doctrine is also potentially applicable to other federal laws

that prohibit discrimination against employees (e.8., National Labor

Relations Act, 29 U.S.C. 160(c); Americans with Disabilities Act, 42

U.S.C. 12101; Equal Pay Act, 29 U.S.C. 206(d).

ee —

The decision of the court of appeals departs from both

the language and the policy of the ADEA and Title VII.

With respect to remedies, the ADEA incorporates by ref-

erence the remedial provisions of the Fair Labor Stand-

ards Act (FLSA). 29 U.S.C. 626(b). When an unlawful

discharge has occurred, the ADEA thus authorizes

reinstatement, backpay, injunctive and declaratory relief

and attorneys’ fees. Ibid.; 29 U.S.C. 216(b), 217. See also

Lorillard v. Pons, 434 U.S. 575, 584 (1978). The ADEA

also authorizes an additional award of liquidated

damages, in an amount equal to the backpay award, “in

cases of willful violations” of that Act. 29 U.S.C. 626(b).

The ADEA further specifies that courts have jurisdiction

to “grant such legal or equitable relief as may be ap-

propriate to effectuate the purposes of [the Act], including

without limitation judgments compelling employment,

reinstatement or promotion” (ibid.).

The substantive prohibition of age discrimination in the

ADEA is modelled upon the substantive provisions of

Title VII of the Civil Rights Act of 1964, which prohibit

discrimination in employment based on race, color, sex,

national origin, or religion. 42 U.S.C. 2000e ef seq.

Lorillard v. Pons, 434 U.S. at 584; Trans World Airlines,

Inc. v. Thurston, 469 U.S. 111, 121 (1985). Under Title

VII, as under the ADEA and the FLSA, unlawful discrim-

ination in employment is to be remedied by reinstatement,

backpay, injunctive, declaratory and other relief. As

under the ADEA, Title VII authorizes federal courts to

“order such affirmative action as may be appropriate,

which may include, but is not limited to, reinstatement or

hiring of employees, with or without back pay * * *, or

any other equitable relief as the court deems appropriate.”

42 U.S.C. 2000e-5(g)(1). Title VII contains only one limi-

tation on such relief: “[nJo order of the court shall require

* * * reinstatement, * * * or * * * backpay” if the em-

ployee was “discharged for any reason other than discrimi-

nation.” 42 U.S.C. 2000e-5(g)(2)(A).

When an employee is discharged because of discrimina-

tion based on age, race, sex, color, national origin, or

religion, the discharge is unlawful and appropriate relief

must be fashioned. Although reinstatement and backpay

are not to be ordered if the employee was discharged for a

reason other than discrimination, after-acquired informa-

tion —information that was not known to the employer at

the time of its unlawful discrimination —obviously cannot

establish that a person was discharged for such a reason.

See Price Waterhouse v. Hopkins, 490 U.S. 228, 252 (1989)

(“An employer may not * * * prevail * * * by offering a

legitimate and sufficient reason for its decision if that

reason did not motivate it at the time of the decision.”)

(plurality opinion) (emphasis added); see also id. at 260-261

(White, J., concurring); id., at 261 (O’Connor, J., concur-

ring); Kristufek v. Hussmann Foodservice Co., 985 F.2d

364, 369 (7th Cir. 1993) (the unlawful character of a

“discriminatory firing must be decided solely with respect to

the known circumstances leading to the discharge” and “is

not changed by some after discovered alternate reason for

discharge which might otherwise have been used, but was

not”); Wallace v. Dunn Construction Co., 968 F.2d 1174,

1178 (11th Cir. 1992). Cf. Smallwood v. United Air Lines,

Inc., 728 F.2d 614, 624 (4th Cir.) (evidence of applicant’s

misconduct that would have been discovered during hiring

process if the applicant had not been unlawfully rejected

was relevant only to determination of proper remedy under

ADEA), cert. denied, 469 U.S. 832 (1984). “After-

acquired evidence” thus does not negate the fact that the

employer in this case violated the ADEA by discharging

petitioner because of her age, nor does it remove the statu-

tory responsibility of the district court to award “appro-

priate” relief to plaintiff—including backpay and rein-

statement, if appropriate—for the employer’s unlawful

behavior. M

Although the ADEA and Title VII authorize federal

courts to exercise discretion in determining relief under

those statutes, that discretion must be exercised in a man-

ner that results in “the most complete achievement” of

remedial objectives “that is attainable under the facts and

circumstances of the specific case.” Franks v. Bowman

Transportation Co., 424 U.S. 747, 770-771 (1976). Federal

courts have “not merely the power but the duty to render a

decree which will so far as possible eliminate the discrimi-

natory effects of the past as well as bar like discrimination

in the future.” /d. at 770; Albemarle Paper Co. v. Moody,

422 U.S. 405, 418 (1975); Louisiana v. United States, 380

U.S. 145, 154 (1965). This is not to say that courts are pre-

cluded, despite the discovery of after-acquired evidence,

from imposing any limits upon the nature and scope of

relief for a discharge based on an unlawful employment

practice. The issue that this case presents is what relief re-

mains appropriate under the ADEA and Title VII when,

after an employee is unlawfully discharged, evidence of

employee misconduct is subsequently discovered.

ll. THE DENIAL OF ALL RELIEF FOR A DISCRIMINA-

TORY DISCHARGE IS NOT APPROPRIATE UNDER

THE ADEA

1. The ADEA was enacted to eliminate the practice of

discrimination against older workers in employment. See,

e.g., H.R. Rep. No. 805, 90th Cong., Ist Sess. (1967); S.

Rep. No. 723, 90th Cong., Ist Sess. (1967). In enacting the

ADEA, Congress relied significantly on the prohibitions

of Title VII, enacted three years earlier. “[T]he ADEA and

Title VII share a common purpose, the elimination of dis-

crimination in the workplace.” Oscar Mayer & Co. v.

Evans, 441 U.S. 750, 756 (1979). See also Lorillard v.

Pons, 434 U.S. 575, 584 (1978). The fashioning of appro-

priate remedies for violation of these statutes “invokes the

sound equitable discretion of the district courts” (Franks

v. Bowman Transportation Co., 424 U.S. at 770). Appli-

cation of that discretion in a particular case involves, not

the court’s “inclination, but ... its judgment; and its

judgment is to be guided by sound legal principles.” /bid.,

quoting Albemarle Paper Co. v. Moody, 422 U.S. at 416,

quoting United States v. Burr, 25 F. Cas. 30, 35 (C.C. Va.

1807) (No. 14,629d) (Marshall, C.J.). In particular, the

remedy selected must “be measured against the purposes

which inform” the statute. A/bemarle Paper Co. v.

Moody, 422 U.S. at 417.

A “primary objective” of Title VII and the ADEA is a

“prophylactic one.” Albemarle Paper Co. v. Moody, 422

U.S. at 417. The remedial measures were included in the

statutes to serve as a “spur or catalyst” to cause “employers

and unions to self-examine and self-evaluate their employ-

ment practices and to endeavor to eliminate, so far as

possible, the last vestiges” of discrimination. /d. at

417-418, quoting United States v. N.L. Industries, Inc.,

479 F.2d 354, 379 (8th Cir. 1973). The statutes are also

designed “to make persons whole for injuries suffered on

account of unlawful employment discrimination,”

Albemarle Paper Co. v. Moody, 422 U.S. at 418. An

award of backpay to an employee who has been fired

because of discrimination is presumptively an appropriate

remedy, for it “has an obvious connection” with these two

statutory purposes. /d. at 417, 418. The Court has

therefore held (id. at 421):

[G]iven a finding of unlawful discrimination, backpay

should be denied only for reasons which, if applied

generally, would not frustrate the ‘central statutory

purposes of eradicating discrimination throughout the

economy and making persons whole for injuries suf-

fered through past discrimination.‘

This conclusion flows, not only from the text and object of

Title VII and the ADEA, but also from their legislative

histories, which provide “emphatic confirmation” (Franks

v. Bowman Transportation Co., 424 U.S. at 764) that Con-

gress intended courts to “exercis[e] their equitable powers to

fashion the most complete relief possible” for employment

discrimination (Section-by-Section analysis of H.R. 1746,

accompanying the Equal Employment Opportunity Act of

1972, Conf. Rep., 118 Cong. Rec. 7166, 7168 (1972)).

4 In Albemarle Paper Co. v. Moody, the Court noted that the

discretion to deny relief for a Title VII violation is limited and that a

district court must “carefully articulate its reasons” for declining to

award backpay in a particular case. 422 U.S. at 421 n.14. Following

Albemarle, and prior to the recent development of the “after-acquired

evidence” defense, district courts rarely exercised their discretion to

deny relief under Title VII. See B. Schlei and P. Grossman, Employ-

ment Discrimination Law at 526-527 (2d ed., Five-Year Cum. Supp.).

In Los Angeles Dep't of Water & Power v. Manhart, which involved

application to pension plans of Title VII's prohibition of sex

discrimination, the Court held that retroactive relief in the form of

refunds to female contributors to the plan was not required. 435 U.S.

702, 721-723 (1978). The Court based that determination on three fac-

tors —that the conclusion that differential pension contributions based

on sex violated Title VII was in significant doubt before the litigation

began, that there was no indication that these plans would be modified

following Manhart only under the threat of backpay awards, and that

ordering retroactive monetary relief could have a “devastating” effect

on the solvency of pension plans. /bid. Similarly, in Arizona Govern-

ing Committee v. Norris, 463 U.S. 1073 (1983), the Court denied

retroactive monetary relief under circumstances, similar to these in

Manhart, in which Title VII had not previously been applied to the

challenged pension practice and where retroactive application could

have serious financial effects on the plans and on the expectations of

individuals who had contributed to them over the years. See id. at

1105-1106 (Powell, J., dissenting in part and concurring in part).

The circumstances in Norris and Manhart are the only instances in

which this Court has excused an employer who violated Title VII from

The remedies provided by the ADEA reflect, even more

clearly than those available under Title VII, the statute’s

prophylactic objectives. Backpay is a mandatory remedy

under the ADEA. Lorillard v. Pons, 434 U.S. at 584 n.13.

Moreover, unlike Title VII, which did not make punitive

damages available until that statute was amended in 1991

(Landgraf v. USI Film Products, 114 S. Ct. 1483,

1490-1492 (1994)), the ADEA has, from its first enact-

ment, authorized an award of “liquidated” damages —in

an additional amount equal to the backpay award —for

“willful violations” of that Act. 29 U.S.C. 626(b).

2. In the present case, the court of appeals concluded

that, even when the discharge of an employee is an act of

unlawful age discrimination, judgment must nevertheless

be entered for the employer (and a// relief for the unlawful

discharge denied) whenever the employer subsequently

learns of misconduct that would have led to the discharge

of the employee, had the employer known of the mis-

conduct. This holding incorrectly prevents the federal

judiciary from exercising its statutory responsibility to

award backpay and other appropriate relief in cases in

which unlawful discrimination has occurred.

The “after-acquired evidence” doctrine was first formu-

lated by the Tenth Circuit in Summers v. State Farm

Mutual Automobile Ins. Co., 864 F.2d 700 (1988). The

Summers court allowed an employer charged with a dis-

criminatory firing to defend on the basis of information

which, if known by the employer at the time of discharge,

would have justified discharge and would have in fact led

to discharge.’ /d. at 708. The court acknowledged that

the responsibility of restoring economic losses that an act of proven

discrimination caused its victim. The circumstances that justified the

unusual denial of relief in Norris and Manhart are not present here.

‘ Summers was a field claim representative for State Farm In-

surance Company. He sued his employer, claiming that he had been

“such after-acquired evidence cannot be said to have been

a ‘cause’” of the employee’s discharge. /bid. The court

nevertheless granted summary judgment for the employer,

on the ground that “after-acquired evidence” “preclude[s]

the grant of any present relief or remedy” because the

employee has not been injured by the discrimination.®

discharged unlawfully on the basis of his age and religion. 864 F.2d at

701-702. Summers had a history of falsifying.claim forms, for which

he had received repeated warnings and a period of probation. /bid.

The stated reason for his termination was his generally unsatisfactory

job performance. /d. at 708. During trial preparation, State Farm dis-

covered more than 150 previously unknown false claim records, in-

cluding 18 occurrences after Summers had-returned to work from pro-

bationary status. /d. at 703. This “after-acquired evidence” of em-

ployee misconduct was relied on by the district court in granting sum-

mary judgment for State Farm. /d. at 703, 708.

® The court erred in Summers in relying (864 F.2d at 704-705) on

Mt. Healthy City School District Board of Educ. v. Doyle, 429 U.S.

274 (1977), for the proposition that the employer should prevail when-

ever “after-acquired evidence” establishes that the employer would

have reached the same decision for valid, lawful reasons. In M1.

Healthy, the Board of Education fired the plaintiff from his job as a

teacher for a series of incidents of which the Board disapproved, in-

cluding arguments with other teachers (one culminating in his being

slapped by another teacher), an argument with cafeteria workers, and

arguments and obscene gestures directed at students. The Board also

disapproved of plaintiffs calling a radio program and discussing a

Board-required dress code. Plaintiff contended that his call to the

radio show was protected by the First Amendment, and could not

legally be the basis of a decision to fire him. This Court vacated a

lower court decision reinstating plaintiff with backpay, holding that if

the other incidents, independent of the radio incident, supported the

decision to fire him, he was not entitled to relief (id. at 287). Unlike

the situation in Summers and the present case, this Court’s focus in

Mt. Healthy was on the reasons that motivated the Board at the time it

made its decision not to rehire the plaintiff, not on a hypothetical deci-

sion that could or would have been made. See ibid. See also Wallace v.

Ibid. See also Milligan-Jensen v. Michigan Technological

Univ., 975 F.2d at 304-305 (“if the plaintiff would not

have been hired, or would have been fired, if the employer

had known of the falsification, the plaintiff suffered no

legal damages by being fired * * * [and] it becomes irrele-

vant whether or not she was discriminated against”).

Although courts applying the after-acquired evidence

doctrine often purport to assume liability and to address

only the availability of relief (see Summers, 864 F.2d at

708), in practice those courts that treat the doctrine as a

complete defense entirely negate liability by denying the

possibility of any relief.” Under the doctrine, the employer’s

Dunn Constr. Co., 968 F.2d at 1179 (“Mt. Healthy and related prin-

ciples actually subvert, rather than support, the [Summers] rule.”).

This—Court. subsequently emphasized in Price Waterhouse v.

Hopkins, 490 U.S. 228 (1989), that an employer must show that legiti-

mate reasons actually motivated it af the time it made the employment

decision under review in order to escape a finding of unlawful dis-

crimination. “{P]roving ‘that the same decision would have been justi-

fied . . . is not the same as proving that the same decision would have

been made.’ An employer may not * * * prevail in a mixed motives

case by offering a legitimate and sufficient reason Yor its decision if

that reason did not motivate it at the time of the decision.” Id. at 252

(emphasis added and citations omitted).

? An alternative rationale for the “after-acquired evidence” defense

incorrectly seeks to apply the equitable doctrine of clean hands to

charges of unlawful employment discrimination. In Perma Life Muf-

flers, Inc. v. International Parts Corp., 392 U.S. 134 (1968), the Court

permitted an antitrust action to proceed despite the fact that plaintiffs

had participated in the illegal practice, noting that “[wJe have often in-

dicated the inappropriateness of invoking broad common-law barriers

to relief where a private suit serves important public purposes.” Id. at

138. Other courts have similarly noted that “equitable doctrines

should not have been applied where their application will defeat the

purpose of a statute.” Mitchell Bros. Film Group v. Cinema Adult

discrimination is thus said'to be “irrelevant” (Pet. App. 6a)

because the victim is said to be “entitled to no relief” (Sum-

mers v. State Farm Mutual Automobile Ins. Co., 864 F.2d

at 708). Even assuming that after-acquired evidence would

in some cases have provided a reason for a discharge had

no discrimination taken place, treating such evidence as a

complete defense to the award of relief for employment

discrimination that actually occurred ignores and

obstructs the strong public policy goals of the ADEA and

Title VII. Allowing “after-acquired evidence” completely

Theater, 604 F.2d 852, 862 (Sth Cir. 1979). See also Calloway v. Part-

ners Nat. Health Plans, 986 F.2d 446, 450-452 (11th Cir. 1993) (refus-

ing to apply the “clean hands” doctrine to bar relief in fair employ-

ment litigation); EEOC v. Recruit U.S.A., Inc., 939 F.2d 746, 753-755

(9th Cir. 1991) (same). Application of the clean hands doctrine to bar

all relief for discrimination where an employer discovers evidence of

employee misconduct would substantially frustrate the deterrent and

remedial objectives of Title VII. See Wallace v. Dunn Construction

Co., 968 F.2d at-1181 n.10; Robert J. Gregory, The Use of After-

Acquired Evidence in Employment Discrimination Cases: Should the

Guilty Employer Go Free? 9 The Labor Lawyer 43, 64-66 (1993).

Moreover, under the ADEA backpay is a required, legal remedy

(Lorillard v. Pons, 434 U.S. at 523) which an “equitable” doctrine of

“clean hands” cannot negate.

* The Seventh Circuit has explained the analytical flaw in treating

“after-acquired evidence” as a defense to liability for unlawful dis-

crimination. See Kristufek v. Hussmann Foodservice, 985 F.2d 364,

369 (1993) (“A discriminatory firing must be decided solely with

respect to the known circumstances leading to the discharge. * * * The

deterring statutory penalty is for retaliatory firing, the character of

which is not changed by some after discovered alternate reason for

discharge which might otherwise have been used, but was not.”);

Smith v. General Scanning, Inc., 876 F.2d 1315 (1989) (district court’s

narrow focus on after-acquired evidence that employee falsely claimed

on his resume to have requisite college degree “distracted from the real

issue in this case[,} the lawfulness of Smith’s termination”; after-

discovered resume fraud was “irrelevant” to the central question

“twjhether GSI discriminated against Smith”).

to absolve an employer from liability under Title VII or

the ADEA directly conflicts with the statutory goal of re- —

quiring employers “to self-examine and to self-evaluate

their employment practices” and to identify and end

discriminatory practices (Albemarle Paper Co. v. Moody,

422 U.S. at 418). As the Eleventh Circuit stated in Wallace

v. Dunn Construction Co., 968 F.2d 1174 (1992),

employers can be expected to regard the after-acquired

evidence defense as an invitation (id. at 1180):

to establish ludicrously low thresholds for “legiti-

mate” termination and to devote fewer resources to

preventing discrimination because Summers gives

them the option to escape all liability by rummaging

through an unlawfully-discharged employee’s back-

ground for flaws and then manufacturing a “legiti-

mate” reason for the discharge that fits the flaws in

the employee’s background.

Assertion of the after-acquired evidence defense on a mo-

tion for summary judgment —before an adjudi.«tion of

the claimed discrimination can take.place — also enables an

employer wholly to avoid public exposure of its dis-

criminatory practices.? In addition to removing an im-

® The recent proliferation of district court decisions adjudicating

summary judgment motions predicated on the after-acquired evi-

dence defense suggests how wide-ranging this application of the doc-

trine can become. See, e.g., Bonger v. American Water Works, 789 F.

Supp. 1102, 1107 (D. Colo. 1992); O’Day v. McDonnell Douglas Heli-

copter Co., 784 F. Supp. 1466 (D. Ariz. 1992), appeal pending, No.

92-15625 (9th Cir.); DeVoe v. Medi-Dyn, Inc., 782 F. Supp. 546 (D.

Kan. 1992); Benson v. Quanex, 58 Fair Empl. Prac. Cas. (BNA) 743

(E.D. Mich. 1992); Churchman vy. Pinkerton’s Inc., 756 F. Supp. 515

(D. Kan. 1991); Punahele v. United Air Lines, Inc., 756 F. Supp. 487

(D. Colo. 1991); O'Driscoll v. Hercules, Inc., 745 F. Supp. 656 (D.

Utah 1990), aff'd, 12 F.3d 176 (10th Cir. 1994); Mathis v. Boeing

Military Airplane Co., 719 F. Supp. 991 (D. Kan. 1989); see also

portant incentive to obey the law, the defense as thus ap-

plied frustrates the statutory objective of focussing public

awareness on unlawful employment practices. /d. at

1180-1181.'°

Seizing upon this opportunity to evade exposure, ad-

judication, and responsibility for illegally discriminatory

practices, employers now routinely embark upon exten-

sive, post-discharge investigations designed to uncover

some theoretically valid post hoc justification for termi-

nating an employee who has brought a claim of unlawful

discrimination, instead of conducting the self-examination

and correction of unlawful practices that Title VII and the

ADEA are designed to require. See W. Waldo & R.

Mahar, Lost Cause and Found Defense: Using Evidence

Discovered after an Employee’s Discharge to Bar Discrim-

ination Claims, 9 Labor Lawyer 31, 32 n.1, 41 (1993) (sug-

gesting that the search by employers for after-acquired

evidence is now the “[mJost important” first step upon

learning of a discrimination complaint). The large number

of recent cases in which employers have offered “after-

acquired evidence” in order to attempt to avoid liability

for allegedly discriminatory actions indicates the destruc-

tive impact the doctrine can have on antidiscrimination

goals.'!

Washington v. Lake County, 969 F.2d at 254 n.3 (citing unpublished

cases).

Employment Discrimination Claims; The Privatization of Title VII

and the Contours of Social Responsibility, 46 Stan. L. Rev. 175, 202

(1993) (by ignoring the fact that the discharge was unlawful, the courts

that apply the after-acquired evidence defense “fail to expose and

punish discrimination when it actually motivated the employer”).

'! The potential for abuse of the after-acquired evidence defense,

particularly at the summary judgment stage, has been acknowledged

even by those circuits that have recognized the defense. See Johnson

Reliance on after-acquired evidence to deny relief to vic-

tims of unlawful employment discrimination also

frustrates the goal of the federal nondiscrimination

statutes to make “persons whole for injuries suffered on

account of unlawful employment discrimination”

(Albemarle Paper Co. v. Moody, 422 U.S. at 417-418). If

all relief for a discriminatory discharge is precluded by

after-acquired evidence, many employees will be left in a

substantially worse position than if discrimination had

never occurred. As the Eleventh Circuit pointed out in

Wallace v. Dunn Construction Co., reliance on after-

acquired evidence to deprive an employee of all relief ig-

nores the fact that the employee “would have remained

employed for at least some period of time after he was ac-

tually discharged” (968 F.2d at 1179-1180). The after-

acquired evidence defense conflicts with the make-whole

objective of Title VII and the ADEA because it “ignores

the lapse of time between the [discriminatory] employment

decision and the discovery of a legitimate motive for that

decision.” Jd. at 1179.

v. Honeywell Information Systems, Inc., 955 F.2d 409, 414 (6th Cir.

1992) (noting the need “to prevent an employer from combing a dis-

charged employee’s record for evidence of any and all misrepresenta-

tions, no matter how minor or trivial, in an effort to avoid legal

responsibility for an otherwise impermissible discharge”); Reed v.

Amax Coal Co., 971 F.2d 1295, 1298 (7th Cir. 1992) (noting need “to

prevent employers from avoiding Title VII liability by pointing to

minor rule violations which may technically subject the employee to

dismissal but would not, in fact, result in discharge”).

Despite such admonitions, district courts have granted summary

judgment based upon “after-acquired evidence” supported by no more

than the self-serving affidavit of a company official or. supervisor

stating that the employer would have fired the employee had it been

aware of the hypothetical basis for dismissal. See, e.g., Washington v.

Lake County, 969 F.2d at 256-257; Bonger v. American Water Works,

789 F. Supp. at 1107; O'Day v. McDonnell-Douglas, 784 F. Supp. at

1469: O'Driscoll v. Hercules, 745 F. Supp. at 659.

) 3. In determining the appropriate relief for an unlawful

discharge, federal courts are to seek “the most complete

achievement of the objectives of Title VII” (Franks v. Bow-

man Transportation Co., 424 U.S. at 770-771) or the —

ADEA. When an employee is discriminatorily (and there-

fore unlawfully) discharged, the fact that valid reasons for

a termination are thereafter discovered may in some cases

be a proper basis for limiting the backpay period. It may

also in some circumstances be a reason for rejecting rein-

statement as a remedy. Such “after-acquired evidence” does

not, however, ordinarily justify the complete and auto-

matic denial of backpay and reinstatement.'? Denying all

backpay almost inevitably places the employee who has suf-

fered discrimination in a worse economic position because

of the discriminatory discharge and, at the same time, allows

12 See, e.g., R. White & R. Brussack, The Proper Role of After-

Acquired Evidence in Employment Discrimination Litigation, 35

B.C .L. Rev. 49, 55 (1993). This case does not present the situation

discussed in Wallace v. Dunn Construction Co., in which an auployer

prematurely ends a hiring process for a discriminatory reason but —

demonstrates that, had the hiring process continued, the employer

would have discovered evidence that would have led it to refuse to hire

the individual for nondiscriminatory reasons. See 968 F.2d at 1178

n.B. In that situation, the court noted that, although Title VII was

violated, backpay or reinstatement would not be granted because the

applicant would not in fact have been hired had the hiring process

continued properly (/bid.). In that factual situation, an employer may

thus be able to establish that no loss of employment or wages actually

resulted from the discrimination. See, e.g., Smallwood v. United Air

Lines, Inc., 728 F.2d 614 (4th Cir.), cert. denied, 469 U.S. 832 (1984).

Declaratory and injunctive relief against the discriminatory practice

may, of course, still be available in appropriate cases of that type. The

present case also does not involve the situation, discussed in Summers

where an employee obtains a position by misrepresenting an essential

job qualification. 864 F.2d at 708 (hypothesizing a false representa-

tion on job application that the applicant is a doctor).

the employer to profit from its illegal conduct.'* A proper-

ly tailored backpay remedy is thus almost always appro-

priate relief for the discriminatory discharge of an em-

ployee qualified for the position she held.'* See Albemarle

13. Cf. Mt. Healthy City School District Board of Educ. v. Doyle,

429 U.S. 274, 285-286 (1977) (an employee should be “placed in no

worse a position than if he had not engaged in the {constitutionally

protected] conduct”). |

\4 A recent amendment to Title VII in the Civil Rights Act of 1991,

Pub. L. No. 102-166, § 107, 105 Stat. 1075, codifies the principle that

evidence of a lawful basis for an employer's discriminatory conduct is

relevant only to the determination of appropriate relief for unlawful

discrimination, not to the existence of liability. Section 107 of the 1991

Act reverses decisions holding that an employer who acts with a mix-

ture of discriminatory and nondiscriminatory motives “may avoid a

finding of liability” under Title VII (Price Waterhouse v. Hopkins,

490 U.S. at 258 (plurality opinion)). Under Section 107, when both

proper and improper motivations exist for an employment decision,

and each separately supports the decision, the court must find a viola-

tion of Title VII. 42 U.S.C. 2000e-5(g)(2)(B) (Supp. IV 1992). In that

situation (where the nondiscriminatory motive was actually a reason

for the employment decision), the court may order declaratory or in-

junctive relief to prevent future similar violations, and attorneys’ fees,

but may not order “admission, reinstatement, hiring, promotion, or

[backpay]” (ibid.).

To establish liability under the amended statute, a plaintiff “must

demonstrate the discrimination was a ‘contributing’ factor in the

employment decision.” 1991 U.S.C.C.A.N. 586 (House Report No.

102-40(1)). Congress enacted the amendment to “clarify that proof

that an employer would have made the same employment decision in

the absence of discriminatory reasons is relevant to determine not the

liability for discriminatory employment practices, but only the ap-

propriate remedy.” Ibid.

In cases arising after the effective date of the 1991 amendments, the

“after-acquired evidence” defense will, if not invalidated, place an

employer who was motivated solely by discriminatory factors, but

who later learns of a lawful basis for its action, in a far better position

than one who harbored both lawful and unlawful motives at the time

Paper Co. v. Moody, 422 U.S. at 421, quoting 118 Cong.

Rec. 7168 (1972) (“[P]Jersons aggrieved by the conse-

quences and effects of the unlawful employment practice

[should] be, so far as possible, restored to a position where

they would have been were it not for the unlawful discrim-

ination.”) Similarly, the statutory remedies of declaratory

relief, injunctive relief prohibiting future discrimination,

liquidated damages (for “willful violations”) and at-

torneys’ fees would also remain appropriate remedies for a

discriminatory discharge (29 U.S.C. 623(a)(1)).'5

of the adverse employment decision. While the wholly discriminatory

employer would be able to avoid a determination of liability and any

relief by asserting a defense premised on “afjer-acquired evidence,”

the employer with mixed motives will be héld liable for its discrimina-

tory conduct and may be subject to declaratory or injunctive relief,

fees, and costs.

'* This Court has recently addressed the issue of post-employment

misconduct in a related context. In ABF Freight System, Inc. v.

NLRB, 1148. Ct. 835 (1994), the National Labor Relations Board

(NLRB) ordered an employee reinstated to his job, with backpay,

after the Board found that his termination was affected by anti-union

bias. This order was entered even though the employee was found to

have lied both to his employer and to the Board. The Court upheld the

order of reinstatement and backpay and rejected the employer’s claim

that the employee’s perjury should automatically disqualify him from

both. /d. at 840. The Court noted that Congress had vested the Board

with discretion to shape relief that “best effectuate[s] the policies of

the Act” (id. at 839). The Court concluded that it could not “fault the

Board’s conclusions that [the employee’s dishonesty] was ultimately ir-

relevant to whether antiunion animus actually motivated his discharge

and that ordering effective relief in a case of this character promotes a

vital public interest.” /d. at 840.

FOR A DISCRIMINATORY DISCHARGE FOLLOWED

BY THE DISCOVERY OF EVIDENCE THAT WOULD

HAVE LED TO A LAWFUL DISCHARGE INCLUDE

LIMITED BACKPAY, INJUNCTIVE AND DECLARA-

TORY RELIEF, ATTORNEYS’ FEES, AND LIQUIDATED

DAMAGES

1. When a discharge of a qualified employee is fol-

lowed by the discovery of after-acquired evidence of em-

ployee misconduct that would have led toa lawful dis-

charge, a limited remedy for the unlawful discharge is ap-

propriate. Consistent with the analysis prescribed in Price

Waterhouse v. Hopkins, 490 U.S. at 252, the district court

in this case should first have determined whether respond-

ent acted unlawfully in discharging respondent because of

her age. If such unlawful discrimination occurred, de- |

claratory relief and attorneys’ fees should always be award-

ed under 29 U.S.C. 626(b). The court may also grant in-

junctive relief to enjoin further discriminatory practices

unless the employer demonstrates that the discrimination

is unlikely to recur. See EEOC v. Harris Cernin, Inc., 10

F.3d 1286, 1292 (7th Cir. 1993); EEOC v. Goodyear Aero-

space Corp., 813 F.2d 1539, 1544 (9th Cir. 1987). If, how-

ever, the district court then finds, on the basis of con-

vincing evidence offered by the employer and subject to

cross-examination and rebuttal, that the employer, had it

not previously discriminated against the employee by

discharging her, would have fired her for the misconduct it

discovered, the court would then act within its discretion

in denying reinstatement or front pay. When an employer

thus clearly demonstrates that it would have discharged

the employee wholly apart from its discriminatory animus

against her, a requirement of reinstatement or front pay

“would go beyond making [the employee] whole and

would unduly trammel [the employer’s] freedom to law-

fully discharge employees.” Wallace v. Dunn Construction

Co., 968 F.2d at 1182. See also Price Waterhouse v.

Hopkins, 490 U.S. at 239.

The burden placed upon the employer in such cases to

show that it would have acted lawfully despite its prior dis-

crimination should be a substantial one. The employer

must show, in the manner of an affirmative defense, that it

would have terminated the employee, not merely that

grounds existed upon which it lawfully could have done so.

In the ordinary employment situation, employees may com-

monly engage in misconduct, such as lateness, on-the-job

errors, or other lapses, that may theoretically be a justifica-

tion for discharge but that have ordinarily been responded

to by the employer with lesser sanctions, or none at all.

After-acquired evidence of such “misconduct” cannot con-

stitute the required demonstration that the employer would

have terminated the employee absent discriminatory

animus. In order to make such a demonstration an employ-

er should ordinarily be required to show that other em-

ployees, who had not been the objects of discrimination,

had been terminated for similar reasons. Nor should an em-

ployer be able to,escape liability for backpay by relying

upon evidence of misconduct that the employer did not dis-

cover in the ordinary course of business, but that was un-

earthed during a search of the employee’s record or back-

ground that was inspired by, and designed as a response to,

the employee’s discrimination allegations. Finally, the

evidence that a lawful discharge would have occurred must

be evaluated in light of the proof that a discriminatory

discharge did, in fact, take place, and that evidence must be

sufficiently clear and convincing to overcome the inference

of bias created by that proof.'®

firmative defense is appropriate in light of the fact that any uncer-

tainty as to whether the employee would have been fired in the absence

of discrimination is uncertainty brought about by the employer’s dis-

dunes ss. ).

PT ae eee ee ee Se ee

ee CeCe a a

ee eee —

Where an employer succeeds in meeting its burden of

demonstrating that a lawful discharge would have occurred

had the prior discriminatory termination not taken place, a

limited backpay remedy nonetheless remains appropriate.

Awarding backpay to the time when the employee would

lawfully have been discharged restores her “to a position

where [she] would have been were it not for the unlawful

discrimination” (Albemarle Paper Co. v. Moody, 422 U.S.

at 421, quoting 118 Cong. Rec. 7168 (1972)).'? Terminating

backpay on the date that after-acquired evidence would

have resulted in such a discharge strikes an appropriate

balance between the right of the employee to be free from

discrimination under Title VII and the right of the

employer to discharge an employee for valid, legitimate

reasons. See Kristufek v. Hussmann Foodservice Co., 985

F.2d 364 (7th Cir. 1993).'* The Equal Employment Oppor-

criminatory actions. As the Court noted in an analogous situation

under the National Labor Relations Act, “[t}he employer is a wrong-

doer; he has acted out of a motive that is declared illegitimate by the

statute. It is fair that he bear the risk that the influence of legal and il-

legal motives cannot be separated, because he knowingly created the

risk and because the risk was created not by innocent activity but by

his own wrongdoing.” NLRB v. Transportation Management Corp.,

462 U.S. 393, 403 (1993). See also Director, OWC Pv. Greenwich Col-

leries, No. 93-744 (June 20, 1994), slip op. 11 (reaffirming that the

employer bears the burden of persuasion as to affirmative defenses

under the National Labor Relations Act).

'? The Eleventh Circuit has suggested, in this context, that the em-

ployee’s “backpay period should not terminate prematurely unless [the

employer] proves that it would have discovered the after-acquired evi-

dence prior to what would otherwise be the end of the backpay period

in the absence of the allegedly “unlawful acts and this litigation.”

Wallace v. Dunn Construction Co., 968 F.2d at 1182.

'§ Awarding an unlawfully discharged employee backpay to the

date on which the employer would have terminated the employee had

no discrimination occurred does not nullify any state-law remedy the

tunity Commission (EEOC) has also determined that

limited backpay, injunctive and declaratory relief, at-

torneys’ fees, and compensatory damages, if applicable,

should be awarded in these circumstances. See EEOC:

Revised Enforcement Guide on Recent Developments in

Disparate Treatment Theory, 8 Fair Empl. Prac. Man.

405:6915, 6927 (July 7, 1992). See also R. White & R.

Brussack, supra, at 80-86.

2. In determining whether after-acquired evidence

would, in fact, have resulted in a discharge absent any prior

discrimination, courts should hesitate to accept unsubstan-

tiated, self-serving and conclusory employer affidavits. See

note 11, supra. Only in the clearest cases should this

remedial issue be addressed in a summary judgment con-

text. The courts below concluded in the present case that

the self-serving affidavits of respondent’s officers were suf-

ficient to establish, asa matter of undisputed fact, that the

discharge of petitioner based on after-acquired evidence

was not pretextual. The correctness of those decisions is

questionable. This case must, in all events, be remanded for

further proceedings at which the remedial issue will be open

for reconsideration on a fuller record.

If, on remand, the court finds that petitioner’s initial

discharge in October, 1990, was discriminatory but that she

thereafter would have been lawfully discharged based on

after-acquired evidence, the court would then have discre-

tion to deny reinstatement and terminate backpay as of the

date the discharge would have occurred absent discrimina-

tion. In this situation, declaratory relief, an injunction

against future discriminatory practices, liquidated damages

employer may have if it was injured by an employee’s false repre-

sentations or other improper conduct. While state laws that conflict

with Title VII are preempted, those that do not impede the prohibi-

tions of the statute are unaffected. See, e.g., Darby v. Pasadena

Police Dep't, 939 F.2d 311, 314 (Sth Cir. 1991).

(if the initial discharge represented willful discrimination)

and attorneys’ fees would also constitute appropriate

remedies under the ADEA for the employer’s unlawful

discrimination.

CONCLUSION

The judgment of the court of appeals should be reversed.

Respectfully submitted.

JAMES R. NEELY, JR-

Deputy General Counsel

GWENDOLYN YOUNG REAMS

Associate General Counsel

CAROLYN L. WHEELER

Assistant General Counsel

Dort K. BERNSTEIN

Attorney

Equal Employment

Opportunity Commission

JuLy 1994

Drew S. Days, Ill

Solicitor General

DEVAL L. PATRICK

Assistant Attorney General

PAUL BENDER

Deputy Solicitor General

KENT L. JONES

Assistant to the Solicitor

General

DENNIS J. DIMSEY

MARK L. GROSS

Attorneys

US. GOVERNMENT PRINTING OFFICE 1994-301 157/86176

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