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

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

No. 93-1543

CHRISTINE MCKENNON,

- Petitioner,

NASHVILLE BANNER PUBLISHING Co.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

MOTION OF THE CHAMBER OF COMMERCE

OF THE UNITED STATES OF AMERICA

FOR LEAVE TO FILE BRIEF

AS AMICUS CURIAE IN SUPPORT OF RESPONDENT

Pursuant to Rules 37.1 and 37.2 of the Rules of this

Court, the Chamber of Commerce of the United States

of America (the “Chamber”) respectfully moves this

Court for leave to file the accompanying brief as amicus

curiae in support of Respondent in this case, the Nash-

ville Banner Publishing Co. The written consent of Re-

spondent for the submission of this brief has been filed

with the Clerk of Court. Because counsel for Petitioner

has not responded to correspondence and telephone calls

seeking Petitioner’s consent, the Chamber assumes that

such consent is refused.

In support of this motion, the Chamber shows the

following:

1. The Chamber is the largest federation of business

companies and associations in the world. With substan-

tial membership in each of the fifty states, the Chamber

represents approximately 220,000 businesses and organ-

izations and serves as the principal voice of the American

business community. An important function of the Cham-

ber is to represent the interests of its members in im-

portant matters before this Court, the lower courts, the

United States Congress, the Executive Branch, and inde-

pendent regulatory agencies of the federal government.

Accordingly, the Chamber has sought to advance those

interests by filing briefs in more than 300 cases of impor-

tance to the business community. Those cases include

Landgraf v. USI Film Products, 114 §. Ct. 1483 (1994),

ABF Freight Systems, Inc. v. NLRB, 114 §S. Ct. 835

(1994), St. Mary’s Honor Center v. Hicks, 113 S. Ct.

2742 (1993), Hazen Paper Co. v. Biggins, 113 S. Ct.

1701 (1993), Wards Cove Packing Co. v. Atonio, 490

U.S. 642 (1989),. and Trans World Airlines, Inc. v.

Thurston, 469 U.S. 111 (1985).

2. Substantially all Chamber members, or their con-

stituents, are employers subject to various equal employ-

ment opportunity laws, including the Age Discrimination

in Employment Act of 1967, as amended, 29 U.S.C.

§§ 621 to 634 (Supp. [TV 1992) (“ADEA”), Title VII

of the Civil Rights Act of 1964, as amended, 42 U.S.C.

$$ 2000e to 2000e-17 (1988 & Supp. IV 1992) (“Title

VII"), and the Civil Rights Act of 1991, Pub. L. No.

102-166, 105 Stat. 1071 (the “1991 Civil Rights Act”).

The Chamber has an interest in, and a familiarity with,

the issues and policy concerns presented to the Court in

this appeal, which transcend the interests of the parties

to this case.

3. The issue before the Court—whether concealed

employee misconduct which would have resulted in dis-

charge bars an employment discrimination claim—is of

direct and immediate interest to the Chamber and its

members, who wish to maintain important workplace

standards of conduct. Allowing plaintiffs to recover not-

withstanding employer proof of a prior dischargeable of-

fense insulates employees who file suit from the normal

consequences of their acts, and effectively sets aside nor-

mal workplace rules of conduct. Employees clever

enough to conceal their wrongdoing reap a substantial

and unjustified benefit when a court posits a continuing

legal duty between them and an employer who could and

would lawfully have ended the relationship.

4. These concerns are particularly acute when the en-

tire employment relationship is founded on employee

fraud. Recent studies conservatively estimate that 30%

of job applicants materially misrepresent their credentials

and qualifications for employment.* The rise in negligent

hiring and retention claims, and, in many industries, a

web of government regulations, require employers care-

fully to select qualified employees. Where an employer

can prove that it would not have hired an employee

based on either the substance of the misrepresentation or

the misrepresentation itself, or that it would have fired the

employee once the misrepresentation is discovered, the

employee should not further benefit from the employment

relationship by receiving damages for successfully con-

cealing the fraud.**

*See generally Arthur A. Sloan, Countering Resume Fraud

Within and Beyond Banking: No Excuse for Not Doing More,

Lab. L.J., May 1993, 303, 303 (citing studies); Cheryl Krause

Zemelman, The After-Acquired Evidence Defense to Employment

Discrimination Claims: The Privatization of Title Vil and the

Contours of Social Responsibility, 46 Stan. L. Rev. 175, 176 n.5

(1993) (citing studies); see also Wallace v. Dunn Constr. Co.,

968 F.2d 1174, 1186 (11th Cir. 1992) (Godbold, J., dissenting)

(“[t]he problem of false applications for employment is major in

scope”) (citing authorities).

** See, e.g., Jordan v. Johnson Controls, Inc., No. 05-93-00132-

CV, 1994 WL 65650 at *4 (Tex. Ct. App. 1994) (ignoring after-

acquired evidence would serve as an incentive “to deceive and mis-

lead the prospective employer in every possible way” in order to

gain employment).

5. The so-called “after-acquired evidence doctrine”

seeks to harmonize these concerns with the central goal of

federal laws prohibiting employment discrimination: es-

tablishing objective employment policies which are uni-

formly administered, thus ensuring equal treatment for all.

Denying recovery to employees who have engaged in

serious misconduct will provide a powerful incentive for

employers to establish objective rules and to ensure their

uniform administration, for without such actions an em-

ployer will be unable to prove the basic elements of such

a defense. Recognizing this defense also will provide a

powerful incentive to combat employee fraud and mis-

conduct. The result will be more objective workplaces,

less employee fraud, and less expenditure of scarce judi-

cial resources on lawsuits that are unlikely to alter the

ultimate legal relationship between the parties.

WHEREFORE, for the reasons stated, the Chamber

respectfully requests that the Court grant it leave to file

the accompanying brief as amicus curiae.

Respectfully submitted,

Of Counsel: ZACHARY D. FASMAN *

STEPHEN A. BOKAT CHARLES A. SHANOR

ROBIN S. CONRAD KELLY J. KOELKER

NATIONAL CHAMBER PAUL, HASTINGS, JANOFSKY

LITIGATION CENTER, INC. & WALKER

1615 H Street, N.W. Tenth Floor

Washington, D.C. 20062 1299 Pennsylvania Avenue, N.W.

(202) 463-5337 Washington, D.C. 20004

(202) 508-9500

Attorneys for Amicus Curiae

Chamber of Commerce of the

United States of America

September 8, 1994 * Counsel of Record

QUESTION PRESENTED

May an employee who has committed but concealed

serious misconduct sue an employer for age discrimina-

tion, despite employer proof that it would have discharged

the employee had it known of the misconduct?

(i)

TABLE OF CONTENTS

ILI SUF MOTO ATT OAT LO

I.

Il.

ITI.

AFTER-ACQUIRED EVIDENCE MAY BAR

LIABILITY IN APPROPRIATE CASES........

A. After-Acquired Evidence May Render It Im-

possible for Plaintiff to Prove a Claim __.....

B. After-Acquired Evidence May Preclude Lia-

bility in Appropriate Cases Under Normally

Applicable Legal and Equitable Defenses. .....

AFTER-ACQUIRED EVIDENCE OF SERI-

OUS MISCONDUCT LIMITS RECOVERY TO

DECLARATORY RELIEF AND ATTORNEYS’

SUE edicisicenhiedistnadedeceinidesesielvnihiameshiithamastaeledieuednabastiny

EMPLOYERS RELYING UPON PREVIOUSLY

CONCEALED EMPLOYEE MISCONDUCT

MUST ESTABLISH THAT SUCH MISCON-

DUCT WOULD HAVE WARRANTED TER-

IIIT ipsvhscscestesicd Mnsdiseincandstbitapieidbecsiieasinaittasnbion

CONCLUSION ..

(iii)

20

iv

TABLE OF AUTHORITIES

CASES

ABF Freight Systems, Inc. v. NLRB, 114 S. Ct.

835 (1994) ......... Ae SO A ENR STO NE Eek RR

Agbor v. Mountain Fuel Supply Co., 810 F. Supp.

SE Gt, NI CII di crn cistscoaenndpadeabeessnmeeatucoenini

Albemarle Paper Co. v. Moody, 422 US. 405

Anderson v. Liberty Lobby, Ine., 477 U.S. 242

IFES PS Ee 9S Set ee

Anderson v. Savage Laboratories, Inc., 675 F.2d

1221 (11th Cir. 1982) - ial

Astoria Federal Savings & ‘Loan Association + v.

Solimino, 111 S. Ct. 2166 (1991) —......00000--...

Baab v. AMR Services Corp., 811 F. Supp. 1246

i I i aeiatineeeni

Bazzi v. Western & Southern Life Insurance Co.,

808 F. Supp. 1306 (E.D. Mich. 1992), reversed

on other grounds, 25 F.3d 1047 (table), 1994

U.S. App. LEXIS 14 (full text) (6th Cir. 1994) ..

Benson v. Quanex Corp., 58 Fair Empl. Prac. Cas.

(BNA) 748 (E.D. Mich. 1992) ............................

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

i I a sachintenanemaneinan

Bray v. Forest Pharmaceuticals, Inc., 812 F. Supp.

RR EE TE

Burke v. United States, 112 S. Ct. 1867 (1992) _....

Calloway v. Partners National Health Plans, 986

A £ Bet Ge | eee

Carpenter v. Ford Motor Co., 761 F. Supp. 62 (N.D.

OO aaa telah

Carroll v. City of Chicago, No. 87C 8995, 1990 WL

SEC eee

Celotex Corp. v. Catrett, 477 U.S. 317 ( 1986) ata

Chauffeurs, Teamsters & Helpers Local 391 v.

Terry, 494 U.S. 558 (1990)... ,

Churchman v. Pinkerton’s, Inc., 156 F. Supp. ‘BIS

(D. Kan. 1991) .......... ONES URE Aes Rete Some er ace RTO

City of Los Angeles Department of Water & Power

v. Manhart, 435 U.S. 702 (1978) ...................-.....-.

Page

12

26

15

v

TABLE OF AUTHORITIES—Continued

Cleveland Newspaper Guild, Local 1 v. Plain Dealer

Publishing Co., 839 F.2d 1147 (6th Cir.), cert.

denied, 488 U.S. 899 (1988) .. -

College Point Boat Corp. v. United States, 267

U.S. 12 (1925) .

Conlin v. Mission Foods Corp., “850° F. ‘Supp. 856

LR IADR Oa AN RL aa

DeVoe v. Medi-Dyn, Inc., 782 F. Supp. 546 (D.

Kan. 1992)

Dotson v. United ‘States Postal Service, 977 F.2d

976 (6th Cir.), cert. denied, 113 S. Ct. 2638

ERSTE SEE SI Sa err nal a

EEOC v. Farmer Bros., 65 Fair Empl. Prac. Cas.

(BNA) 857 (9th Cir. 1994) .. me

EEOC v., Prudential Federal Sevinge & Lem ‘Asso-

ciation, 763 F.2d 1166 (10th Cir.), cert. denied,

474 U.S. 946 (1985) 0000. spieilephineadtaninamiodinteiing

East Texas Motor Freight System v. Rodriguez,

431 U.S. 395 (1977) .

Fair Employment Council 1 v. . BMC Mkto.., 65. Fair

Empl. Prac. Cas. (BNA) 612 (D.C. Cir. 1994).

Fariss v. Lynchburg Foundry, 769 F.2d 958 (4th

REE RSE NERD at

Farrar v. Hobby, 113 S. Ct. 566 (1992)

First Commodity Traders, Inc. v. Heinold Com-

modities, Inc., 591 F. Supp. 812 (N.D. Ill. 1984),

aff'd, 766 F.2d 1007 (7th Cir. 1985) 0

_Flesner v. Technical Communications Corp., 575

8 5 BB 5 Renee aE

Fogarty v. Fantasy, 114 S. Ct. 1023 (1994)...

Franks v. Bowman Transportation Co., 495 F.2d

398 (5th Cir. 1974), reversed, 424 U.S. 747

RRR a Coosa SNL Se Na

Gilmer v. Interstate/Johnson Lane Corp., 111

I

Hargett v. Delta Automotive, Inc., 765 F. Supp.

=

Holt v. Winpisinger, 811 F.2d 15382 (D.C. Cir.

SUEY. Gicestnsadeitiness:Leithebendiceneancncabeapdnaseiiaatingiaiabiagdiiaiimiasaiimis

Page

11

vi

TABLE OF AUTHORITIES—Continued

Page

Irwin v. Department of Veterans Affairs, 498 U.S.

RFE he IRE SEE Rear ey nen BA ans Oe ean 11

John Cuneo, Inc., 298 NLRB 2s ees 16

Johnson v. Honeywell Information Systems, Inc.,

965 F.3d 408 (@th Cir. 1992) ................................: 5,7

Kristufek v. Hussman Foodservice Co., Toastmas-

ter Division, 985 F.2d 364 (7th Cir. 1993) .. 6

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

ahaa 9,10

Langnes v. Green, 282 U.S. 531 (1981) ................... 15

Leahey v. Federal Express Corp., 685 F. Supp. 127

I On dninonapennl 18

Lorillard v. Pons, 434 U.S. 575 (1978) .................. 10

Malone v. Signal Processing Technologies, Inc.,

826 F. Supp. 370 (D. Colo. 1998) ....:.................... 27

Mardell v. Harleysville Life Insurance Co., No. 93-

3258, 1994 WL 396512 (3d Cir. 1994) ................. 6

Matsushita Electric Industrial Co. v. Zenith Radio .

a ae GP Se 8. a eee 7

Marfield v. Sinclair, International, 766 F.2d 788

(3d Cir. 1985), cert. denied, 474 U.S. 1057

SES EE REA RE sae vce ets. ee a es MRC 10

McKennon v. Nashville Banner Publishing Co., 9

F.3d 539 (6th Cir. 1993), cert. granted, 114

FU cI sass seninnacan 5, 25

Milliqan-Jensen v. Michigan Technology Univer-

sity, 975 F.2d 302 (6th Cir. 1992), cert. dis-

GIO, TIS Tis Tres Be CD cnnncesncecesnececccciccssssscxee 5

Murnane v. American Airlines, Ine., 667 F.2d 98

(D.C. Cir. 1981), cert. denied, 456 U.S. 915

RARER CIGARS eS el RIDA ls ce OE 4,5,7

O'Day »v. McDonnell Douglas Helicopter Co., 784

FP. Supp. 1466 (D. Aris. 1992) ...............:.:,....:...-. 26

Price Waterhouse v. Hopkins, 490 U.S. 228

EERE ESRB Ce aN 7 a SPR nr a eT 21, 22, 23

Punahele v. United Air Lines, Inc., 756 F. Supp.

487 (D. Colo. 1991) ............... Sioa Dee 27

Redd ». Fisher Controls, 814 F. Sunn. 547 (W, D.

= se oe a COO 26

vii

TABLE OF AUTHORITIES—Continued

Page

Reed v. AMAX Com Co., 971 F.2d 1295 (7th Cir.

I teiniceatnadone OS Lea EN I PT AON NA ae TS 6, 25

Rich v. Westland Printers, 62 Fair Empl. Prac.

Cas. (BNA) 379 (D. Md. 1998) ....000. oo 6

Robitzek v. Reliance Intercontinental Corp., 167

I We OD catitersecticinstiensneiseanhinsesnsananeenien 19

Rupley v. Rorer Pharmaceutical Corp., No. 90 C

5597, 1992 WL 37121 (N.D. Ill. 1992) .........0....... 28

Schuessler v. Benchmark Marketing & Consulting,

500 N.W.2d 529 (Neb. 1998) ...00000.. oo. 19

Smallwood v. United Air Lines, Inc., 728 F.2d 614

(4th Cir.), cert. denied, 469 U.S. 832 (1984) .. 4,5,7

Smith v. General Scanning, Inc., 876 F.2d 1315

(7th Cir. 1989) .... a LTE RS Le ttt Ee 6

St. Mary’s Honor Center v. Hicks, 113 S. Ct. 2742

(1998) ..... AIT Se Pe NON en TS a oe Ee 8

Summers v. State Farm Mutual Automobile In-

surance Co., 864 F.2d 700 (10th Cir. 1988) 4, 5, 8, 28,

26, 27

Sure-Tan, Inc. v. NLRB, 467 U.S. 888 (1984) 20

Teras Department of Community Affairs v. Bur-

dine, 450 U.S. 248 (1981) 2.000.000. 7,35

Tuohey v. Clark Oil & Refining Corp., No. 92 C

8358, 1994 WL 280084 (W.D. Tll. 1994) 27

Wallace v. Dunn Construction Co., 968 F.2d 1174

SRD TEN TI la seksts cc ccbsusiecsineap oneannenioth Ss ele 4, 6, 7, 20. 25

Washington v. Lake County, 969 F.2d 250 (7th

TER mae OS SSNS 6

Welch v. Liberty Machine Works, Inc., 23 F.3d_

1403 (8th Cir. 1994) ae eee aaa Se 5, 27

Women Employed v. Rinella & Rinella, 468 F. Supp.

See WP i i 13

Woods v. Dunlop Tire Corn., 972 F.2d 36 (2d Cir.

1992), cert. denied, 113 S. Ct. 977 (1998) _...... 11, 18

Woods v. Ficker, 768 F. Supp. 793 (N.D. Ala.

1991), aff'd without opinion, 972 F.2d 1350 (11th

Es I ca rg ee oh ios Ee ee Tee 13

Zines v. Trans World Airlines, Ine... 455 U.S. 385

(1982). A Si: ER Rae NA ORCL ER CD 11

viii

TABLE OF AUTHORITIES—Continued

STATUTES Page

The Age Discrimination in Employment Act of

1967, as amended, 29 U.S.C. §§ 621 to 634 (Supp.

RENIN ISIE TS NE RI BO Srey Pe passim

Title VII of the Civil Rights Act of 1964, as

amended, 42 U.S.C. §§ 2000e to 2000e-17 (1988

Se I cabennbamnniiae passim

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

105 Stat. 1071 .............. a ee i al passim

Section 1981 of the Civil Rights Act of 1866, as

amended, 42 U.S.C. § 1981 (Supp. IV 1992) ....... 19

Title I of the Americans with Disabilities Act, Pub.

L. No. 101-336, 104 Stat. 327 (1990), codified

as amended at 42 U.S.C. §§ 12101 to 12117

I leciapeellnnennes 24

LEGISLATIVE MATERIALS

H.R. Rep. No. 102-40, 102d Cong., 2d Sess., pt. I

(Report of the House Education and Labor Com-

mittee on H.R. 1), reprinted in 1991 U.S.C.C.A.N.

RRNA EER oe She as as a TL 21

H.R. Rep. No. 102-40, 1024 Cong., 2d Sess., pt. II

(Report of the House Judiciary Committee on

H.R. 1), reprinted in 1991 U.S.C.C.A.N. 694...... 21

H.R. Conf. Rep. No. 950, 95th Cong., 2d Sess.,

reprinted in 1978 U.S.C.C.A.N. 528 .0 000... 10

137 Cong. Rec. $15,464 (daily ed. Oct. 30, 1991). 21

137 Cong. Rec. $15,476 (daily ed. Oct. 30, 1991)... 21

137 Cong. Rec. H9529 (daily ed. Nov. 7, 1991)....... 22

137 Cong. Rec. H9539 (daily ed. Nov. 7, 1991) ...... 22

137 Cong. Rec. H9543 (daily ed. Nov. 7, 1991) .... 22

137 Cong. Rec. H9547 (daily ed. Nov. 7, 1991)..... 22

137 Cong. Rec. H9558 (daily ed. Nov. 7, 1991) ...... 22

SECONDARY AUTHORITIES

Arthur Linton Corbin, Corbin on Contracts

EERE RAI Ra sae aioe nes Cope Perea sense ene ane 17,18

Dan B. Dobbs, Handbook on the Law of Remedies

STII iccheisianiedicsiesecisiendihegundiduaistaibhcennpucaniiminghastabacnidessiial 10, 12, 17

ix

TABLE OF AUTHORITIES—Continued

Page

John J. Donohue III & Peter Siegelman, The

Changing Nature of Employment Discrimina- ;

tion Litigation, 43 Stan. L. Rev. 983, 989 (1991) .. 9

Jennifer Miyoko Follette, Comment, Complete Jus-

tice: Upholding the Principles of Title VII

Through Appropriate Treatment of After-

Acquired Evidence, 68 Wash. L. Rev. 651

PRIA SRST ERT REL Sarai Ora ee Oe OM ee 9

Samuel A. Mills, Note, Toward an Equitable After-

Acquired Evidence Rule, 94 Colum. L. Rev. 1525

REIT: NEAR OED CNS TET EA LT CN ENR 23

William M. Muth, Jr., Note, The After-Acquired

Evidence Doctrine in Title VII Cases and the

Challenge Presented by Wallace v. Dunn Con-

struction Co., 968 F.2d 1174 (11th Cir. 1992),

Pe Se Ck | eRe eee 16

Restatement (Second) of Agency (1958) ................. 18.

Restatement (Second) Contract (1981) .................. 17

Douglas L. Williams & Julia A. Davis, Skeletons in

the Closet: “After Acquired Evidence” As a De-

fense to Discrimination Claims, C874 ALI-ABA

a i 7,11, 23

Samuel Williston, A Treatise on the Law of Con-

tracts (3d ed. 1962) 0... CIP ICL TTR 17,18

MISCELLANEOUS

Daily Lab. Rep. (BNA), No. 9, at AA-1 (Jan. 1,

REE REE RRS SO TEESE ee oe nas Dee 9

Policy Guidance on Recent Developments in Dis-

parate Treatment Theory, N-915.063, 3 EEOC

Compliance Manual (BNA) N:2119, N:2133

Rr IT Wik) IND atiaretencet ee 28

Policy Guidance on Recent Developments in Dis-

parate Treatment Theory, EEOC Compliance

Manual (CCH) 2095 at 2099-40 (July 14,

1992)....... ipl indsntenhe halve Buhadipinauiactisa sides lea taataiedaad deat 23, 24

INTEREST OF THE AMICUS CURIAE

The interest of the amicus curiae is fully set forth in

the accompanying motion for leave to file this brief.

STATEMENT OF FACTS

Petitioner Christine McKennon, formerly a confidential

secretary to the Comptroller of Respondent Nashville

Banner Publishing Co. (the “Banner”), was one of nine

employees laid off during a reduction in force in October

1990. She filed suit claiming that her layoff violated the

Age Discrimination in Employment Act (“ADEA”) and

Tennessee state law. During her deposition, held on

December 18, 1991, Petitioner admitted that she knew

that she was forbidden to copy or disclose confiden-

tial and proprietary business information to which she

had access in the course of her work, and that “if [she]

showed these documents to anybody, [she] would have

been terminated.” (J.A.’ at 154a; see also J.A. at 117a-

118a, 132a-133a, 150a.) Nonetheless, Petitioner copied

and removed from Respondent’s premises the Fiscal Pe-

riod Payroll Ledger (containing salaries and related finan-

cial information), the Banner’s profit and loss statement,

and several confidential documents from a manager’s per-

conne! fle. J.A. 141a-154a.)

Based upon these admissions, Respondent filed a mo-

tion for summary judgment, supported by several uncon-

tradicted affidavits as well as sworn deposition testimony,

establishing that had Respondent been aware of Petition-

er’s actions, she would have been immediately terminated.

The District Court granted the motion, finding that Peti-

tioner’s misconduct provided “adequate and just cause for

her dismissal as a matter of law, even though her mis-

conduct was unknown to the Banner at the time of her

discharge.” (See Appendix to the Petition for a Writ of

Certiorari at 17a.) The Sixth Circuit affirmed. (See id.

at la-9a.)

1 References to the Joint Appendix are abbreviated in this brief

as “J.A.”

2

SUMMARY OF ARGUMENT

After-acquired evidence of serious employee miscon-

duct may take many forms. Such evidence may directly

reinforce an employer’s stated reason for termination or

prevent a plaintiff from establishing a central element of

her claim; it also may concern issues that otherwise would

not be relevant to the case, such as proof that the entire

employment relationship was founded on fraud. For this

reason, the sweeping claims of Petitioner and her amici—

that after-acquired evidence never can play a role at the

liability stage, and that such evidence always must play

a certain specified role at the remedial phase—are not

useful in addressing the questions posed by after-acquired

evidence of serious employee misconduct in employment

litigation.

Rather than recognizing the variety of issues that can

be raised by after-acquired evidence of employee miscon-

duct, Petitioner and her amici inveigh against a so-calied

per se rule allegedly adopted by the Sixth and Tenth

Circuits. It is a far cry, however, from arguing that

after-acquired evidence should not always bar relief to

claiming that such evidence never can affect liability.

Petitioner and her amici (save the United States, see

Brief for the United States at 20 n.12) make precisely

such an illogical and unwarranted leap, defending this

result on policy grounds. Yet, virtually all of the policy

concerns that supposedly justify their proposal—for ex-

ample, that allowing after-acquired evidence to affect. lia-

bility will dissuade potential plaintiffs from suit, or will

inveigle the courts in collateral disputes—are completely

undercut by their admission that after-acquired evidence

should have a substantial role in employment discrimina-

tion litigation, albeit at the remedial phase.

This case, therefore, does not concern the viability vel

non of after-acquired evidence in employment discrimina-

tion litigation; it concerns the use to which such evidence

may be put. At the risk of oversimplification, we suggest

that three important questions should be addressed by the

Court, and answered in the following fashion.

3

Se . . .

Under what circumstances should after-acquired evi-

dence of serious misconduct bar an employment

discrimination claim?

After-acquired evidence of serious employee misconduct

relating to an issue otherwise relevant to the case—for

example, evidence first discovered at deposition that pre-

cludes a plaintiff's showing of pretext, or establishes that

the plaintiff was not qualified for the position in question

—is competent to negate liability under standard sum-

mary judgment principles. After-acquired evidence of

serious employee misconduct not otherwise relevant to the

case should bar a claim where it deprives the plaintiff of

the clean hands necessary to pursue equitable relief, indi-

cates that the employment relationship was based upon

fraud, or otherwise falls within a legal or equitable de-

fense available in the federal courts. Nothing in the lan-

guage or legislative history of the ADEA-—er-Title VII

indicates that Congress intended to restrict the range of

otherwise available defenses in employment discrimination

litigation. The availability of normal legal and equitable

defenses generally will result in a barrier to liability where

an employer can prove that the plaintiff engaged in seri-

ous misconduct or fraud which, absent concealment,

would have precluded initial hire or would have resulted

in termination.

* What effect should after-acquired evidence have on

remedies in employment discrimination litigation?

Assuming that after-acquired evidence does not tetally

bar liability in a given case, it necessarily must bar any

substantive relief to a plaintiff who has committed but

concealed serious misconduct. Awarding reinstatement,

back pay, or damages to a person shown to have obtained

or retained her job through fraud provides an unwar-

ranted judicial windfall to a plaintiff who either never

should have been hired or should have been discharged.

Moreover, awarding any relief beyond a declaratory judg-

ment and attorneys’ fees would treat such an employee

more favorably than an employee who has engaged in no

deception or concealment, an anomalous result at odds

4

with the intent of Congress as enunciated in the 1991

Civil Rights Act.

* What predicate must an eimployer establish to rely

upon after-acquired evidence as a defense to liability

or imposition of a substantive remedy?

After-acquired evidence sufficient to bar liability or

limit relief (depending upon its character in any given

case) must be material and, significantly, of the sort that

would have resulted in a refusal to hire, or a decision to

discharge, the plaintiff. Such proof may rest upon written

employer rules, employer testimony, or affidavit evidence

regarding werkplace policies or the past treatment of the

same or similar offenses.

ARGUMENT

I. AFTER-ACQUIRED EVIDENCE MAY BAR LIA-

BILITY IN APPROPRIATE CASES.

The proposition that after-acquired evidence of serious

employee misconduct never can affect liability in an em-

ployment discrimination case is demonstrably untrue. In-

deed, the United States itself identifies two circumstances

in which liability should be affected by after-acquired

evidence:

* Where a plaintiff's hiring claim is undercut by post-

refusal evidence that the plaintiff is not qualified

for the job (see Wallace v. Dunn Constr. Co., 968

F.2d 1174, 1178 n.8 (11th Cir. 1992); Small-

wood v. United Air Lines, Inc., 728 F.2d 614

(4th Cir.), cert. denied, 469 U.S. 832 (1984);

Murnane v. American Airlines, Inc., 667 F.2d 98,

102 (D.C. Cir. 1981), cert denied, 456 U.S. 915

(1982)); and

* Where a plaintiff obtains a job by misrepresenting

an essential job qualification such as a medical

degree (see Summers v. State Farm Mut. Auto-

mobile Ins. Co., 864 F.2d 700, 708 (10th Cir.

1988) ).

See Brief of United States at 20 n.12.

5

These examples merely confirm a commonplace—that

some concealed employee offenses must bar an employ-

ment discrimination claim. An applicant dishonestly

claiming to be a physician has no legal claim against an

employer who refuses to hire him as a doctor or termi-

nates him because he lacks the medical knowledge neces-

sary to treat patients. This is not the “innocent victim”

of a “lawless employer,” as Petitioner and her amici

repeatedly state; this is an individual engaged in serious

and unjustifiable fraud who has no legal claim for mis-

treatment.”

The split in the circuits between the courts that con-

sider after-acquired evidence a bar to liability * and those

2 Petitioner and her amici consistently refer to plaintiffs as

“innocent victims” of “lawless employers,” based upon the proposi-

tion that, for purposes of a summary judgment motion, the claims

of the party opposing the motion must be taken as true. Neither

this procedural doctrine nor Petitioner’s loaded language should

preclude the Court from clearly assessing the contending parties

in a normal after-acquired evidence dispute: an employer which

is alleged to have discriminated against the plaintiff, and an em-

ployee who indisputably has committed serious misconduct or

fraud.

% The S.xth, Eighth, and Tenth Circuits have held that after-

acquired evidence can preclude all recovery and bar employment

discrimination claims in their entirety. McKennon v. Nashville

Banner Publishing Co., 9 F.3d 539 (6th Cir. 1993); Milligan-

Jensen v. Michigan Tech. Univ., 975 F 2d 302 (6th Cir. 1992), cert.

dismissed, 114 S. Ct. 22 (1993); Johnson v. Honeywell Info. Sys.,

Inc., 955 F.2d 409 (6th Cir. 1992); Dotson v. United States Postal

Serv., 977 F.2d 976 (6th Cir.), cert. denied, 113 S. Ct. 263 (1992) ;

Welch v. Liberty Mach. Works, Inc., 23 F.3d 1403 (8th Cir. 1994) :

Summers, 864 F.2d at 700 (10th Cir. 1988).

The Fourth Circuit also has held that when an employer dis-

covers information on the grounds on which it would have refused

to hire an applicant, and can show that the information would

have been revealed in the normal course of the application process,

the plaintiff is entitled to no relief on a failure to hire claim.

Smallwood, 728 F.2d at 623-24; see also Murnane, 667 F.2d at 102

(D.C. Cir. 1981) (regardiess of whether the employer discrimina-

torily failed to consider applicants, it can prove at trial that plain-

tiffs were not injured because they were not qualified and would

6

that view such evidence as a limitation on relief‘ is

based, in our view, upon inadequate analysis of the under-

lying doctrine itself. We suggest that the common-sense

results discussed above can be justified on several separate

and independent legal bases, any of which is sufficient in

and of itself to bar liability in appropriate cases.

A. After-Acquired Evidence May Render It Impossible

for Plaintiff to Prove A Claim.

Summary judgment is appropriate in employment dis-

crimination cases, as in all other cases, when there are

not have been hired). In Rich v. Westland Printers, 62 Fair Emp’.

Prac. Cas. (BNA) 379, 383: (D. Md. 1993), the court concluded that

the Fourth Circuit would hold that summary judgment should be

granted “when after-acquired evidence of fraud nullifies any reme-

dies, thereby rendering any determination of liability moot”) (citing

cases).

* The Seventh Circuit has recently recognized the after-acquired

evidence defense as barring relief after the point at which the

information is discovered. Kristufek v. Hussman Foodservice Co.,

Toastmaster Div., 985 F.2d 364 (7th Cir. 1993); cf. Smith v.

General Scanning, Inc., 876 F.2d 1315, 1319 n.2 (7th Cir. 1989)

(noting in dictum that after-acquired evidence of employee fraud

could cut off back pay and reinstatement). In an earlier decision,

however, the Seventh Circuit had indicated that after-acquired

evidence of a dischargeable offense bars statutory discrimination

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

cf. Reed v. AMAX Coal Co., 971 F.2d 1295, 1298 (7th Cir. 1992)

(noting that proof that the employer would have fired the employee

is the appropriate inquiry to determine whether relief should be

barred ).

The Third and Eleventh Circuits have held that the after-acquired

evidence defense is relevant only to damages, barring prospective

relief but allowing back pay until the date of judgment unless the

employer can prove that it would have discovered the evidence

earlier in the absence of litigation. Mardell v. Harleysville Life

Ins. Co., No. 93-3258, 1994 WL 396512 (3d Cir. 1994); Wallace,

968 F.2d at 1174 (11th Cir. 1992). .

See also EEOC v. Farmer Bros., 65 Fair Empl. Prac. Cas. (BNA)

857, 864-65 (9th Cir. 1994) (discussing the after-acquired evidence

doctrine in dictum; observing that the doctrine should not operate

as an “absolute rule” regarding appropriate relief in resume fraud

cases and that “common sense and a reasonably developed sense of

equity” should guide the inquiry).

7

no genuine issues of material fact.” When all of the evi-

dence (including after-acquired evidence) indicates that

a plaintiff cannot prove essential elements of her claim,

there is no reason to continue the litigation. The clearest

case for this result is that posited in Wallace, 968 F.2d

at 1178 n.8, and applied in Smallwood and Murnane,

see supra, note 3, where the plaintiff's hiring claim is

undercut by after-acquired proof that she lacked a re-

quired college degree or otherwise was not qualified for

the position in question. In such circumstances, the plain-

tiff would be unable to establish the essential requirement

that she was qualified, see Texas Department of Com-

munity Affairs v. Burdine, 450 U.S. 248, 253-54 (1981),

and no point would be served by further litigation.’ Like-

wise in discharge cases, a plaintiff's lack of qualifications

may defeat a prima facie case and bar the claim if the

employer proves that it would not have hired the plaintiff

in the first place. E.g., Johnson, 955 F.2d at 414 (mis-

representations regarding college degrees on which em-

ployer relied at hiring barred state wrongful discharge

claim); Dotson, 977 F.2d at 978 (granting summary

judgment on discriminatory discharge claims where plain-

tiff concealed misconduct on basis of which he was not

qualified for job and would not have been hired).

Similarly, under Burdine, the plaintiff bears the burden

of proving that the nondiscriminatory reason articulated

by the employer was a pretext for intentional discrimi-

5 Celoter Corp. v. Catrett, 477 U.S. 317, 327 (1986) ; Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986); Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).

® Under existing law, summary judgment is appropriate in cases

in which the plaintiff cannot establish qualification or another

essential element of her claim. See generally Douglas L. Williams

& Julia A. Davis, Skeletons in the Closet: “After Acquired Evi-

dence” As a Defense to Discrimination Claims, C874 ALI-ABA

369, 375 (1993) [hereinafter “Williams & Davis”]. “The Supreme

Court [has] recognized that a plaintiff with a negligible likelihood

of personal recovery should not consume federal judicial resources,

even if ‘true’ discrimination occurred.” Jd. at 377-78 (citing Fast

Tex. Motor Freight v. Rodriguez, 431 U.S. 395, 403 n.9 (1977)).

8

nation. St. Mary’s Honor Ctr. v. Hicks, 113 S. Ct. 2742,

2746-47, 2749 (1993). After-acquired evidence may

reinforce the employer’s articulated reason so substan-

tially that no judge or jury could find for the plaintiff,

thus justifying summary judgment for the employer. For

example, in Summers v. State Farm Mutual Automobile

Insurance Co., 864 F.2d 700 (10th Cir. 1988), the plain-

tiff was terminated after serving a disciplinary probation

for falsifying insurance claim forms. Following his termi-

nation, State Farm discovered more than 150 additional

instances of falsification unknown at the time of his

discharge, many of which occurred following Summers’s

probationary period. Nothing in law or in logic required

continuation of this litigation where the evidence (some

after-acquired) plainly established that the employee could

not prove pretext.’

These cases are merely illustrative of situations that

may arise again and again. In each situation (and numer-

ous others that can be imagined), evidence of employee

misconduct discovered after the fact is directly relevant

to an issue otherwise in the litigation. Where this is so,

normal summary judgment principles may warrant judg-

ment for the employer.

Petitioner and several of her amici, however, apparently

would conclude that this case and like cases must be tried

to their full conclusion because after-acquired evidence is

relevant only to remedy, and never can affect liability.

This conclusion makes no sense unless this Court is pre-

pared to hold that after-acquired evidence is inadmissible

at the liability phase of a case, a result that even Peti-

tioner does not suggest. Assuming that evidence of con-

cealed employee misconduct may be admitted if relevant,

after-acquired evidence plainly can affect liability and, in

7Cf. Anderson v. Savage Laboratories, Inc., 675 F.2d 1221,

1224-25 (11th Cir. 1982) (no proof that plaintiff’s falsification cf

work records was a pretext for age discrimination where plaintiif

conceded his misconduct and admitted that the employer uniform'y

discharged employees guilty of similar falsifications regardless of

age).

9

appropriate cases, can warrant summary judgment for an

employer.”

B. After-Acquired Evidence May Preclude Liability In

Appropriate Cases Under Normally Applicable

Legal and Equitable Defenses.

The more significant and interesting question in this

case is whether after-acquired evidence of employee mis-

conduct not otherwise relevant to issues pending in the

case may bar liability. Recognizing a so-called “after-

acquired evidence defense” in such circumstances is appro-

priate but, in most cases, facts establishing such a defense

based on serious employee misconduct or fraud will bar

liability under ene of several traditional legal or equitable

defenses.”

As this Court has long recognized, Title VII and the

ADEA essentially provide for equitable rather than legal

relief for successful litigants. Landgraf v. USI Film

Prods., 114 S. Ct. 1483, 1490 (1994) (back pay under

* Petitioner’s argument runs directly contrary to this Court’s

approval of summary judgment, see supra, note 5, and to effective

workload management by the federal courts. In 1970, 336 federal

employment civil rights cases were filed in the federal courts. This

number had risen to 7,613 by 1989, almost all of which were indi-

vidual complaints. See John J. Donohue III & Peter Siegelman,

The Changing Nature of Employment Discrimination Litigation,

483 Stan. L. Rev. 983, 989 (1991) [hereinafter “Donohue & Siegel-

man”’}. See also id. at 984 (discussing the concomitant shift from

hiring to firing claims and the decline in the number of class

actions filed). Meanwhile, the number of employment discrimina-

tion charges filed with the EEOC rose to a record high of nearly

88,000 in fiscal year 1993, about half of which alleged discrimina-

tory discharge. Daily Lab. Rep. (BNA), No. 9, at AA-1 (Jan. 1,

1994).

“See generally Jennifer Miyoko Follette, (Comment, Complete

Justice: Upholding the Principles of Title VII Through Appropriate

Treatment of After-Acquired Evidence, 68 Wash. L. Rev. 651,

660-62 (1993) [hereinafter “Follette”’] (noting that “the majority

approach implicitly applies the unclean hands doctrine .. . to

balance the equities and consider whether plaintiff's own conduct

should bar or reduce an award.”’).

10

Title VII is an equitable remedy); Chauffeurs, Teamsters

& Helpers Local No. 391 v. Terry, 494 U.S. 558, 571

(1990) (“[T]his Court has labeled back pay awarded

under Title VII .. . as equitable.”); see also Lorillard v.

Pons, 434 U.S. 575, 583 (1978) (“the prohibitions of

the ADEA were derived in haec verba from Title VII”)

(footnote omitted); 42 U.S.C. § 2000e-5(g)(1) (Supp.

IV 1992) (courts in Title VII cases may order such

“equitable relief as the court deems appropriate”); cf.

29 U.S.C. $ 626(b) (1988) (in ADEA cases, courts

can grant “such legal or equitable relief as may be

appropriate” ).

The three principle components of relief under Title

VII are injunctive, declaratory, and restitutionary, each

of which has its roots in courts of equity and is decided

by a judge rather than a jury.’” Dan B. Dobbs, Hand-

book on the Law of Remedies § 2.1 at 25-26, 28 (1973)

{hereinafter “Dobbs”]. Under the ADEA, similarly, the

preferred remedies are reinstatement and back pay. E.g.,

Maxfield v. Sinclair, Int'l, 766 F.2d 788, 796 (3d Cir.

1985), cert. denied, 474 U.S. 1057 (1986); EEOC v.

Prudential Fed. Sav. & Loan Ass'n, 763 F.2d 1166, 1171-

72 (10th Cir.). cert. denied, 474 U.S. 946 (1985); see

also Brief of the United States at 11-12. Liquidated dam-

ages under the ADEA are a form of compensatory, rather

than punitive, relief. E.g., Fariss v. Lynchburg Foundry,

769 F.2d 958, 967 (4th Cir. 1985) (citing H.R. Conf.

Rep. No. 950, 95th Cong., 2d Sess. 14, reprinted in

1978 U.S.C.C.A.N. 528, 535).

In light of the equitable nature of an action to remedy

allegedly discriminatory employment practices, this Court

and lower courts have recognized that equitable principles

may be asserted in employment discrimination litigation.

1 This discussion is based on the law in effect at the time this

case was decided. As set forth infra, Part II, the analysis is un-

changed by the 1991 Civil Rights Act, which allows capped com-

pensatory and punitive damages under Title VII, but not the

ADEA. The 1991 Civil Rights Act is not retroactively applicable

to this case. Landgra/s, 1148. Ct. at 1508.

11

E.g., Zipes v. Trans World Airlines, Inc., 455 U.S. 385,

393 (1982) (the statutory charge-filing requirement is

not jurisdictional in nature, but a requirement that “is

subject to waiver, estoppel, and equitable tolling”)."

Lower courts routinely consider defendants’ claims that

the equitable doctrine of laches bars otherwise sustainable

and meritorious employment discrimination claims. E.g.,

Cleveland Newspaper Guild, Local 1 v. Plain Deale:

Publishing Co., 839 F.2d 1147, 1153 (6th Cir.) (“{T]he

doctrine of laches, like other equitable considerations,

should be applicable to a Title VII proceeding in practice

as well as-theory.”), cert. denied, 488 U.S. 899 (1988).

Nothing in the text or legislative history of the ADEA

or Title VII suggests that Congress intended to bar liti-

gants from asserting affirmative equitable defenses based

on after-acquired evidence.’” For example, nothing in

'! While Zipes involved equitable doctrines being used to assist

plaintiffs, there is absolutely no justification why equitable doc-

trines may not also assist defendants. As the old adage goes:

“What’s sauce for the goose is sauce for the gander.”. See Fogarty

v. Fantasy, 114 S. Ct. 1023, 1033-35 (1994) (Thomas, J., concur-

ring) (in deciding appropirate standard for award of attorneys’

fees to prevailing parties in copyright infringement actions, Court

properly interpreted statutory language as making fees award for

either party a matter within the trial court’s discretion, and should

have taken the same “even-handed” approach in establishing the

standard for award of attorneys’ fees under similar fees provision

in Title VII); Irwin v. Dep't of Veterans Affairs, 498 U.S. 89,

95-96 (1990) (“the same rebuttable presumption of equitable tolling

applicable to suits against private defendants should also apply to

suits against the United States”).

12 See Astoria Federal Sav. & Loan Ass’n v. Solimino, 111 S. Ct.

2166, 2169-70 (1991) (“[W]here a common-law principle is well

established ... the courts may take it as given that Congress has

legislated with an expectation that the principle will apply except

‘when a statutory purpose to the contrary is evident.’”) (citations

omitted) ; cf. Woods v. Dunlop Tire Corp., 972 F.2d 36, 39 (2d Cir.

1992) (“the language and policy of Title VII do not undercut the

applicability of res judicata, and we see no reason militating against

application of well-settled claim preclusion principles”), cert. de-

nied, 113 S. Ct. 977 (1993). The same equitable defenses are avail-

able under the 1991 Civil Rights Act. See infra, Part I]; Williams

12

either statute states or even implies that the equitable

defense of unclean hands is inapplicable in an employment

discrimination case. Under the unclean hands doctrine,

a plaintiff is barred from receiving any form of equitable

relief to which he or she otherwise would be entitled, if

the plaintiff comes before the court having committed “any

sort of conduct that equity considers unethical, even if

that conduct is perfectly legal.” Dobbs § 2.4 at 46. See

also ABF Freight Sys., Inc. v. NLRB, 114 S. Ct. 835,

842 (1994) (Scalia and O’Connor, JJ., concurring)

(“[t]he ‘unclean hands’ doctrine ‘closes the door of a

court of equity to one tainted with inequitableness or

bad faith relative to the matter in which he seeks relief,

no matter how improper may have been the behavior of

the defendant”) (quoting Precision Instrument Mfg. Co.

v. Automotive Maintenance Machinery Co., 342 U.S.

806, 816 (1945))."™

& Davis, supra, note 6, at 375-77 (explaining that the 1991 Civil

Rights Act “does not exclude [a] standing argument’’).

83In ABF Freight Systems, this Court reviewed only the very

narrow question of whether to sustain the NLRB’s determination

that a union employee’s post-firing lie under oath to an eadminis-

trative law judge (during unfair labor practice proceedings stem-

ming from his discharge) did not cause him to forfeit the remedies

of reinstatement and back pay. 114 S. Ct. at 839 & n.8. Although

both the msiority and concurring opinions expressed concern re-

garding the employee’s perjury and the Board’s treatment of it,

id. at 839-41, the Court upheld the Board’s ruling based on “Con-

gress’ decision to delegate to the Board the primary -responsibility

for making remedial decisions that best effectuate the policies of

the [National Labor Relations] Act.” Jd. at 839. Thus, for a

number of reasons, ABF. Freight Systems does not resolve the

instant dispute. First and foremost, no congressional delegation

of policy-making and quasi-judicia! decisionmaking authority is at

issue here, and the judicial deference accorded to the NLRB in ABF

Freight Systems has no applicability. Second, as this Court tacitly

explained by avoiding discussion in ABF of the after-acquired

evidence cases, the after-acquired evidence doctrine simply does not

square with the facts in ABF. Unlike Petitioner and the other

plaintiffs in the after-acquired evidence cases, the union employee

committed his damning misconduct—lying under oath—after rather

than during or before his employment. See id. at 837. Moreover,

ABF did not assertedly base its discharge decision on the apparent

13

Accordingly, an unclean hands defense has been ac-

cepted as a bar to liability in a variety of employment

discrimination cases. For example, in Women Employed

v. Rinella & Rinella, 468 F. Supp. 1123 (N.D. Ill. 1979),

the court denied equitable relief to a female secretary

bringing claims of sexual harassment because the plaintiff

had harassed her employer following her discharge. Sim-

ilarly, when a plaintiff asserts in Title VII litigation a

position that is plainly at odds with his earlier conduct,

his unclean hands will bar the claim. Woods v. Ficker,

768 F. Supp. 793, 802 (N.D. Ala. 1991) (describing a

“bad case” of unclean hands which, if not fatal, “operates

as an estoppel”), aff'd without opinion, 972 F.2d 1350

(11th Cir. 1992)." |

falsehood, but on the pretextual grounds that the employee had

violated a new tardiness rule. Jd. at 838 & n.5. Thus, the Court

was not presented with the issue confronting it today.

4 See also Holt v. Winpisinger, 811 F.2d 1532, 1542 (D.C. Cir.

1987) (considering but rejecting defendant’s unclean hands defense

to an employee’s claim for pension benefits brought under ERISA

where the employee had obtained employment in violation of “loosely

observed” policies and where such violation was “easily discover-

able” and resulted in no unfairness to the employer) ; ‘Carpenter v.

Ford Motor Co., 761 F. Supp. 62, 66 (N.D. Til. 1991) (unclean hands

defense may be asserted to Title VII claim, but defendant failed to

plead with particularity the circumstances of the plaintiff’s alleg-

edly defrauding the employer regarding the reason for taking a

medical leave of absence); Hargett v. Delta Automotive, Inc., 765

F. Supp. 1487, 1489, 1492-93 (N.D. Ala. 1991) (equitable defenses

are available to employers in Title VII actions, but the plaintiff’s

hands were only “smudged,” and not unclean, where she had be-

come pregnant by a customer, shared that information with her

employer, and thereby caused the loss of the customer). Cf. Callo-

way v. Partners Nat'l Health Plans, 986 F.2d 446, 451 (11th Cir.

1993) (where employer defended plaintiff's claims that she was

paid less because of her race on after-acquired evidence that the

plaintiff had lied about having a college degree when she was hired,

an unclean hands defense would fail because neither the plaintiff's

predecessor nor successor was required to have a college degree

and the employer did not prove it was injured by hiring the

plaintiff).

14

Petitioner and her amici argue that an “after-acquired

evidence defense” cannot be justified on unclean hands

principles. We disagree. In many situations, after-

acquired evidence reveals such profound employee mis-

conduct as to give rise to an unclean hands defense that

should bar liability under traditional equitable principles.

For example, consider an employee’ working for a drug

company which manufactures narcotics who is fired for

poor performance. After the employee files a Title VII

suit challenging his discharge, a police investigation re-

veals that the employee was stealing large quantities of

drugs and selling them while at work. By violating strict

workplace policies on theft and drug abuse (to say noth-

ing of a wide variety of federal and state laws), the em-

ployee’s offense should be considered so substantial as to

preclude relief under standard equitable principles. Noth-

ing in the ADEA or Title VII establishes that this in-

dividual, who would have no other claims against the

employer under the unclean hands doctrine, should be

entitled to pursue a claim for back pay, reinstatement,

or mental anguish under the civil rights laws.

Petitioner and her amici argue to the contrary, on

grounds that equitable doctrines should not be allowed to

defeat the “purposes” cf a civil rights statute. We strongly

disagree that recognition of a standard equitable doctrine

such as unclean hands would defeat the purposes of the

ADEA or Title VII. Even more important, we believe

that this formulation obscures the question, because it as-

sumes that strong policy considerations are in direct con-

flict with application of normal equitable defenses; only

then would it be appropriate to conclude that Congress

intended to suspend principles otherwise applicable to

federal and state court litigation.

Petitioner and her amici cannot demonstrate any such

conflict. Indeed, many of the allegedly inappropriate re-

sults claimed by Petitioner and her amici will occur under

their proposed wooden reading of the ADEA and Title

VII. If after-acquired evidence of serious employee mis-

conduct is recognized in the remedial phase of an employ-

15

ment discrimination case, as Petitioner proposes, prospec-

tive plaintiffs presumably will be inhibited by analysis of

their past histories and litigation over “collateral disputes”

will proliferate.

Neither will the twin goals of making plaintiffs whole

or providing an incentive for employer compliance be

frustrated by recognizing such a standard equitable de-

fense. This Court previously acknowledged that denial of

back pay on equitable grounds in a particular dispute

does not frustrate the broader goals of eradicating dis-

crimination and making persons whole for injuries caused

by discrimination. Albemarle Paper Co. v. Moody, 422

U.S. 405, 421 (1975). As this Court cautioned, appel-

late courts should bear in mind “that the trial court will

often have the keener appreciation of those facts and

circumstances peculiar to particular cases.” /d. at 421-

22. In Albemarle, the court indicated that the equitable

defense of laches may bar part or all of a back pay claim,

nothing that “[t]o deny back pay because a particular

cause has been prosecuted in an eccentric fashion, prejudi-

cial to the other party, does not offend the broad purposes

of Title VII.” Jd. at 424."

15 See also City of Los Angeles Dep’t of Water & Power v. Man-

hort, 435 U.S. 702, 722-23 (1978) (approving denial of back pay

remedy where plaintiffs had proved sex-based actuarial practices

but where an award of back pay would have had drastic effects on

pension funds); East Tex. Motor Freight Sys. v. Rodriguez, 431

U.S. 395,403 n.9 (1977) (an employer may prove that an employee

who lacked essential qualifications would not have been hired, and

therefore did not suffer any injury under Title VII); Franks v.

Bowman Transp. Co., 495 F.2d 398, 406 (5th Cir. 1974) (“In the

proper case, laches might be applied to bar a claim entirely, or it

might bar only part of the remedy sought, such as the back pay

award or a portion of it.”); reversed on other grounds, 424 U.S.

747, 764 (1976) (federal courts have power under Title VII “to

fashion such relief as the particular circumstances of a case may

require to effect restitution”) ; Langnes v. Green, 282 U.S. 531, 541

(1931) (trial courts have discretion to identify a “just result”

under the particular facts of each case) (cited in Albemarle, 422

U.S. at 424); ef. Gilmer v. Interstate/Johnson Lane Corp., 111 S. Ct.

1647, 1653 (1991) (no inconsistency between social goal of eradicat-

16

Moreover, it is absolutely fanciful to believe that rec-

ognition of a standard equitable cefense will materially

inhibit employer efforts to comply with the civil rights

laws. Petitioner’s apparent contention is that the very

possibility of discovering some wrongful act in a partic-

ular plaintiff's background will convince employers to

abandon all efforts at compliance. Depending upon the

chance of occasionally discovering a deceitful plaintiff is

hardly an alternative to full-fledged compliance with the

laws, especially in light of the significantly enhanced dam-

age remedies provided under the 1991 Civil Rights Act.

Denying relief to a particular plaintiff in highly individual-

ized circumstances does not conflict with the congres-

sional goal of fostering equal opportunity for all.

Indeed, recognition that after-acquired evidence of seri-

ous employee misconduct can have a significant impact in

employment litigation should foster the goals of the law.

As we suggest infra, in Part III, employers seeking to

depend upon after-acquired evidence of serious employee

misconduct must be prepared to prove that the conduct

would have resulted in termination had it been discovered.

In order to do so, evidence of uniform rules applied in an

even-handed manner will be critical. This very fact will

impel employers to develop and maintain objective polli-

cies and to ensure their uniform administration.”

ing age discrimination and enforcement of individual agreements

to arbitrate age claims); John Cuneo, Inc., 298 NLRB 856 (1990)

(unclean hands may preclude usual remedy of reinstatement).

16 The proposition that employers will establish discharge stand-

ards in order to trap unwary employees cou'd only be posited by

individuals who have never been employers. Employers invest huge

sums in hiring and training a qualified workforce: in companies

with substantial labor costs, employee productivity may be the

single most significant factor in a company’s success. Compnies

desirous of maintaining a highly qualified workforce are hardly

likely to manipulate employment standards so as to trap unwary

employees in “innocuous misconduct,” as opposed to establishing

legitimate standards based upon the needs of the business. See

generally William M. Muth, Jr., Note, The After-Acquired Evidence

Doctrine in Title VII Cases and the Challenge Presented by Wallace

v. Dunn Construction Co., 968 F.2d 1174 (11th Cir. 1992), 72

17

Unclean hands is only one of many possible equitable

and legal defenses in which after-acquired evidence of

unrelated employee misconduct may be determinative.

For example, it is hornbook law that in order to form a

valid contract, there must be a “meeting of the minds.”

6 Arthur Linton Corbin, Corbin on Contracts § 536 at

33-34 (1960) [hereinafter “Corbin”]. When a contractual

relationship is induced by fraud, there is no such meet-

ing of the minds and the employment contract is void-

able. See generally Restatement (Second) of Contracts

§ 164(1) (1981); 1 Corbin § 6 (1963); Dobbs § 9.1 at

593-94. Likewise, conduct during contract performance

which would have justified terminating the contract con-

stitutes a defense to a breach of contract claim, whether

or not the conduct was known when the alleged breach

occurred. College Point Boat Corp. v. United States, 267

U.S. 12, 15 (1925) (“A party to a contract who is sued

for its breach may ordinarily defend on the ground that

there existed, at the time, a legal excuse for nonperform-

ance by him, although he was then ignorant of the fact.”’)

(footnote omitted)."" Agency principles reinforce this

contract law maxim. “If a principal has cause for the

Neb. L. Rev. 330, 347 (1993) [hereinafter “Muth”] (“The Wallace

court’s concerns over the employer setting an abnormally low

standard for termination is [sic] not justified. ...[A]n employer

would have to systematically hire and fire several employees for

very minor infractions in order to establish the low standard. It

seems highly illogical: that an employer would engage in such a

practice in hone of getting away with discrimination in the fu-

ture.”) ; see alsu id. at 346-47 (criticizing Wallace’s reasoning that

the after-acquired evidence doctrine encourages employers to “rum-

mage” through personnel files to discover a reason for termination

and to “sandbag” employees at termination with knowledge of

dischargeable conduct).

7 See also 6 Samuel Williston, A Treatise on the Law of Con-

tracts §839 at 141 (3d ed. 1962) [hereinafter “Williston”] (a

defendant “should be excused from liability if the plaintiff has

failed in a material particular to perform his contract although the

defendant at the time when he refused to perform or to continue

performance was ignorant of the plaintiff’s prior breach of obli-

gation”).

18

discharge of 2n agent and discharges him, the fact that

the principal is not at the time aware that he has cause

for discharge is immaterial.” Restatement (Second) of

Agency § 409(1) cmt. e (1958). :

Under this contractual rule, therefore, it makes no dif-

ference whether the independent grounds for terminating

an at-will employee’s contract—ih< employee’s fraud or

misconduct—is discovered before or after the employment

contract is terminated. “[A]n employee cannot prevail in

an action for wrongful discharge where the employee

committed acts which were cause for termination, whether

or not the employer knew of those acts at the time of

discharge . . . .” Benson v. Quanex Corp., 58 Fair Empl.

Prac. Cas. (BNA) 743, 746 (E.D. Mich 1992) (noting

that federal and state courts have recognized this prin-

ciple in beach of contract cases for “more than 100

years”). Accordingly, state and federal courts have re-

peatedly ruled that state law breach of contract or tort

claims arising out of termination of employment are

barred by after-acquired evidence of employee fraud or

ntisconduct.”

18 See also 5 Williston § 744 at 531 (3d ed. 1961) (“[i]f when

fa servant] was discharged there existed an uncondoned justifica-

tion therefor, regardless of whether it was then known to [the

master] or whether the reason assigned for such.discharge was

sufficient, [the master is not] precluded by the first or any notice

of discharge from proving an existing ground not therein referred

to” (citation omitted)): 3A Corbin § 762 at 526 (1960) (“[I]n

the relation of master and servant, if the servant has given suffi-

cient cause for discharge the master is privileged to discharge him.

The fact that the master omits to mention this cause, either be-

cause he does not know it or because he prefers to state some other

reason, does not deprive him of his privilege.”’).

19 E.g., Bazzi v. Western & S. Life Ins. Co., 808 F. Supp. 1306

(E.D. Mich. 1992) (breach of contract claim barred due to fraud

in the inducement), reversed on other grounds, 25 F.3d 1047

(table), 1994 U.S. App. LEXIS 14,410 (full text) (6th Cir. 1994) ;

Leahey-v. Federal Express Corp., 685 F. Supp. 127 (E.D. Va. 1988)

(after-acquired evidence of employee's sexual and racial slurs can

bar at-will employee’s wrongful discharge claim); First Com-

modity Traders, Inc. v. Heinold Commodities, Inc., 591 F. Supp. 812,

19

The fundamentally contractual employer-employee re-

lationship undergirds the ADEA and Title VII.” These

Statutes implicitly assume that the employment relation-

ship was legitimately obtained and continued in order for

plaintiffs to benefit from their protection. Where this is

not the case—for example, where the plaintiff has mis-

represented an essential qualification, see supra, Part I.A.,

and Brief of the United States at 20 n.12—no valid em-

ployment relationship ever was established. This is true

even where the employee’s fraud was not discovered until

litigation began.

A similar analysis would allow after-acquired evidence

of employee misconduct not otherwise relevant to the

litigation to form the basis for a claim of fraud, mis-

representation, or equitable estoppel as well. Indeed,

820 (N.D. Ill, 1984) (under Illinois law, “the party terminating a

contract may assert any grounds justifying termination, whether

or not it announced those grounds at the time of termination”),

aff'd, 766 F.2d 1007 (7th Cir. 1985); Schuessler v. Benchmark

Mktg. & Consulting, 500 N.W.2d 529 (Neb. 1993) (barring breach

of contract claims where evidence of misconduct warranting termi-

nation was discovered after the employee’s discharge); Flesner .

Technical Communications Corp., 575 N.E.2d 1107 (Mass. 1991)

(accepting after-acquired evidence of resume fraud as a complete

defense to wrongful discharge, misrepresentation, breach of pri-

vacy, and state civil rights act claims, but remanding for determi-

nation whether plaintiff made material misrepresentations) ; Robit-

zek v. Reliance Intercontinental Corp., 167 N.E.2d 74 (N.Y. 1960)

(affirming summary judgment for employer on breach of contract

claims where employer presented after-acquired evidence that em-

ployee falsely claimed to have bachelor’s and master’s degrees and

employer relied on these misrepresentations in entering into em-

ployment contract).

* See Burke v. United States, 112 S. Ct. 1867, 1878 (1992) (“ ‘the

rights guaranteed by Title VII are implied terms of every employ-

ment contract’”) (Souter, J., concurring) (quoting Charles A.

Shanor and Samuel A. Marcossan, Battleground for a Divided

Court: Employment Discrimination in the Supreme Caurt, 1988-89,

6 Lab. Law. 145, 174 n.118 (1990)). A closely related civil rights

statute, 42 U.S.C. §1981 (Supp. IV 1992), explicitly premises em-

ployment discrimination claims on contract law principles by en-

suring that the right to “make and enforce contracts” is not

abridged due to race.

20

in some situations such evidence will deprive a plaintiff

of standing to sue. See Wallace, 968 F.2d at 1185

(Godbold, J., dissenting); cf. Sure-Tan, Inc. v. NLRB,

467 U.S. 883, 913 (1984) (Powell and Rehnquist, JJ.,

dissenting) (disagreeing with majority’s view that it was

within the discretion of the NLRB to define “employee”

under the NLRA to include undocumented aliens and

to extend remedies to such persons; “It is unlikely that

Congress intended the term “employee” to include—for

purposes of being accorded the benefits of that protective

statute—persons wanted by the United States for the

violation of our criminal laws.”); Fair Employment

Council v. BMC Mktg., 65 Fair Empl. Prac. Cas. (BNA)

512, 513-16 (D.C. Cir. 1994) (individual “testers” lack

standing to pursue Title VII and § 1981 damages claims

because they lack a cognizable injury: injunctive relicf

also unavailable because defendant had “no duty to con-

tinue to consider” the testers once their fictitious credential

were made known).

The essential point in all of these cases is not that an

after-acquired evidence defense must be justified by one

or another of these doctrines, but that after-acquired evi-

dence of employee misconduct in appropriate circum-

stances may generate a valid defense under one or more

of these existing doctrines. No arguments made by Peti-

tioner or her amici should be allowed to obscure this

fundamental principle.

Il. AFTER-ACQUIRED EVIDENCE OF SERIOUS MIS-

CONDUCT LIMITS RECOVERY TO DECLARATORY

RELIEF AND ATTORNEYS’ FEES.

In cases where the after-acquired evidence may not bar

liability in toto—for example, where the evidence does

not preclude the plaintiff from proving an essential ele-

ment of her claim, or warrant entry of summary judg-

ment for the employer on the basis of a recognized de-

fense—the evidence nonetheless may be sufficient to affect

the plaintiff's remedy. In such cases, assuming the plain-

tiff proves her case on the merits and the employer estab-

lishes fraud or misconduct through after-acquired evi-

21

dence, her recovery should be limited to declaratory relief

and attorneys’ fees.

Limiting recovery to declaratory relief and attorneys’

fees would be consistent with Section 107 of the Civil

Rights Act of 1991,*' which addresses a closely analogous

situation, an employment action taken on the basis of

both a lawful and an unlawful motive. In such cases,

Congress decreed that if the plaintiff proves that reliance

upon an unlawful motive was a motivating factor of her

treatment, and the employer proves that she would have

been treated in the same fashion regardless of the unlaw-

ful motive, the plaintiff's recovery is limited to declaratory

relief plus attorneys’ fees. 42 U.S.C. §$§ 2000e-2(m),

2000e-5(2)(2)(B) (Supp. 1V 1992). Notably, Congress

rejected H.R. 1, the House version of the 1991 Civil

Rights Act which (in Section 103) had called for com-

pensatory and punitive damages in mixed-motive cases,”

in favor of S. 1745, the Senate version of the bill, which

(in Section 107) called for much more limited relief in

these cases.

“1 Section 107 was a congressional response to this Court’s deci-

sion in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), which

dealt with proof issues in mixed-motive cases, not remedies issues

in such cases.

22 See generally H.R. Rep. No. 102-40, 102d Cong., 2d Sess., pt. I

(Report of the House Education and Labor Committee on H.R. 1),

at 45-48, 157-58, reprinted in 1991 U.S.C.C.A.N. at 583-86, 686-87;

pt. II (Report of the House Judiciary Committee on H.R. 1), at

16-19, reprinted in 1991 U.S.C.C.A.N. at 709-12. Nine members

of the House Judiciary Committee included their dissenting views

in the Committee Report, advocating an alternative proposal which

would have limited relief in mixed-motive cases to “cease and

desist” orders, attorneys’ fees, and costs. Id. at 65-66, reprinted in

1991 U.S.C.C.A.N. at 751-52.

*3 No Senate Report was issued in connection with S. 1745. For

Senate floor debate regarding Section 107 of this legislation, see

137 Cong. Rec. 815,464 (daily ed. Oct. 30, 1991) (statement of

Sen. Dodd); id. at 815,476 (statement of Sen. Dole, presenting

the Bush Administration’s views on Section 107). When the House

considered S. 1745 after it had been approved by the Senate, the

limited relief in mixed-motive cases was specifically hailed as an

22

Contrary to the arguments of Petitioner and her amici,

the plaintiff in an after-acquired evidence case is not en-

titled to greater relief than a plaintiff in a mixed-motive

case. In both cases, discriminatory motive is presumed.

The sole difference between the two plaintiffs is that, in

the after-acquired evidence case, the plaintiff was success-

ful in concealing her misdeeds, while in the mixed-motive

case the employee’s misconduct was discovered. Allowing

the plaintiff in an after-acquired evidence case a greater

recovery, as Petitioner and her amici propose, rewards

fraud and concealment. Nowhere in the text or legislative

history of the ADEA, Title VII, or indeed, any federal

civil rights law is there. any indication that Congress

sought to reward employees who successfully hide their

misconduct, as compared with employees whose miscon-

duct is discovered while employed.

Limiting recovery in this fashion also comports with

the fundamental principle that an employee who gains or

retains her job through deceit has no legal claim to con-

tinue employment and thus is not in fact injured by the

employer’s conduct. These considerations motivated Con-

gress in Section 107. See also Price Waterhouse, 490

U.S. at 265 (O'Connor, J., concurring) (“Congress

clearly conditioned legal liability on a determination that

the consideration of an illegitimate factor caused a tan-

gible employment injury of some kind”).** Although Con-

gress in Section 107 modified the Court’s holding in

Price Waterhouse that a mixed-motive defense may negate

liability to a rule that such a defense may severely restrict

appropriate component of the compromise bill. See, e.g., 137 Cong.

Rec. H9543 (daily ed. Nov. 7, 1991) (comments of Rep. Hyde) ;

id. at H9547 (legislative history prepared by Rep. Hyde); id. at

9550 (comments of Rep. Hyde). See also id. at H9529 (interpre-

tive memorandum prepared by Rep. Edwards) ; id. at H9539 (com-

_ ments of Rep. Clay); id. at H9553 (comments of Rep. LaFalce).

24Cf. Farrar v. Hobby, 113 S. Ct. 566, 575 (1992) (in § 1983

action, where plaintiff fails to prove an essential element of his

claim for relief—here, an “actual compensable injury”—‘“the only

reasonable [attorneys’] fee is usually no fee at all”) (citation

omitted) .

on:

23

relief, Congress approved of the logic that plaintiffs should

not be compensated in such “no harm, no foul” situations.

Both Price Waterhouse and Section 107 thus struck an

appropriate balance between civil rights laws and em-

ployer rights. See id. at 242 (plurality opinion) noting

that the “other important aspect” of Title VII is its “pres-

ervation of an employer’s remaining freedom of choice”);

29 U.S.C. § 623(f£)(3) (no ADEA violation if decision

is based on “good cause”).

Borrowing this principle from the Civil Rights Act of

1991—which admittedly does not apply to this case—

avoids the convoluted and unrealistic relief inquiry sug-

gested by Petitioner and her amici. With all due respect

for the expertise of the EEOC,” an inquiry into when an

employer would have discovered the plaintiff's misconduct

is precisely the type of hypothetical collateral dispute

that wastes judicial resources while accomplishing noth-

ing.” Indeed, Petitioner and her amici implicitly concede

*> Notably, before the enactment of the 1991 Civil Rights Act—

i.e., under the law in effect at the time this controversy arose—

the EEOC had endorsed the Summers approach and issued a policy

guidance stating that if an employer proves a dischargeable offense

through after-acquired evidence, the “employer would not be re-

quired to reinstate the charging party or to provide back pay.”

Policy Guidance on Recent Developments in Disparate Treatment

Theory, N-915.063, 3 EEOC Compliance Manual (BNA) N:2119,

N :2133 n.17 (March 7, 1991) (citing Summers).

26 See generally Samuel A. Mills, Note, Toward an Equitable

After-Acquired Evidence Rule, 94 Colum. L. Rev. 1525, 1547-48

(1994) [hereinafter “Mills”] (criticizing the Wallace court’s ap-

proach—-extending the back pay period until judgment, unless the

employer can prove it would have discovered the information in

the absence of litigation—as potentially providing a windfall to

the employee while at the same time failing to achieve its stated

“make-whole” objective) ; Williams & Davis, supra, note 6, at 375

(“it is equally speculative to assume that the skeleton would have

remained in the closet”). For this reason, a proposal to limit

affirmative relief to the time before the employee wrongdoing

actually was discovered (see EEOC Compliance Manual (CCH)

2095 at 2099-40 (July 14, 1992)) should also be rejected. Although

such a proposal has the benefit of certainty (that is, the employee

24

as much, by acknowledging that in many cases an

employer will be unable to prove that the wrongdoing

would have been discovered at any specific time. There

could be no clearer example of rewarding the unscrupu-

lous employee than reserving complete relief for those

whose deceit is so manifest that not only did the employer

fail to discover it while the plaintiff was employed, but is

forced to concede that the plaintiff covered her tracks so

skillfully that her wrongdoing never would have been

discovered!

Limiting relief in this fashion further avoids the even

more fanciful inquiries proposed by the EEOC under the

1991 Civil Rights Act (and Title I of the Americans

with Disabilities Act, Pub. L. No. 101-336, 104 Stat.

327 (1990), codified as amended at 42 U.S.C. §§ 12101

to 12117 (Supp. IV 1992) (“ADA”)). EEOC takes

the position that a plaintiff cannot recover “the portion

of compensatory damages . . . that would cover losses

arising after” the date on which the misconduct is dis-

covered. Policy Guidance on Recent Developments in

Disparate Treatment Theory, EEOC Compliance Manual

(CCH) € 2095 at 2099-40 to 2099-41 (July 14, 1992).

Are Title VII (and ADA) cases going to become con-

tests in which psychiatrists will attempt to parse a plain-

tiff’s mental anguish by time; for example, that 70% of

plaintiff's mental anguish was suffered prior to her depo-

sition? Can a plaintiff recover for the mental anguish

suffered during her deposition, when she finally reveals

her misdeeds? Or are we to presume that the plaintiff's

now-clear conscience is of sufficient benefit to overbear

her embarrassment at finally being caught?

Down this road lies madness. There is no indication

that a Congress which limited similarly situated plaintiffs

to declaratory relief plus attorneys’ fees ever contem-

wrongdoing by definition would have been discovered on a date

certain in order to be asserted in the litigation), such a rule still

would benefit those who conceal their misdeeds until they are dis-

covered in litigation. It also would create incentives to delay,

obfuscate, and avoid the discovery process.

Rene

25

plated inquiries of this sort in after-acquired evidence

cases (or indeed in any cases). Where an employer can

prove that a plaintiff would have been discharged for

previously undiscovered offenses, the plaintiff's recovery

as a matter of law should be limited to declaratory relief

plus attorneys’ fees.

Ill. EMPLOYERS RELYING UPON PREVIOUSLY CON-

CEALED EMPLOYEE MISCONDUCT MUST ESTAB-

LISH THAT SUCH MISCONDUCT WOULD HAVE

WARRANTED TERMINATION.

Although the circumstances under which after-acquired

evidence will provide a defense to an allegedly discrim-

inatory discharge will vary based upon the nature of the

evidence and the defense asserted, at a minimum an

employer seeking to rely upon a prior concealed offense

must prove that it would have terminated the employee

on the basis of the previously concealed information. E.g.,

McKennon v. Nashville Banner Publishing Co., 9 F.3d

539, 542 (6th Cir. 1993), cert. granted, 114 S. Ct. 2099

(1994); Reed v. AMAX Coal Co., 971 F.2d 1295, 1298

(7th Cir. 1992).

This requirement—which may be considered one of

materiality—ensures that the after-acquired evidence |

would establish a legitimate, nondiscriminatory, and non-

pretextual reason for the employment decision under

Texas Department of Community Affairs v. Burdine, 450

U.S. 248, 254 (1981). As Judge Godbold explained

in his dissenting opinion in Wallace v. Dunn Construction

Co., “[t]he reported cases . . . do not concern trivial

falsities or conspiratorial concealment.” 968 F.2d 1174,

1189 (11th Cir. 1992). Indeed, courts critical of the “after-

acquired evidence defense” have not identified an instance

in the history of the doctrine when the after-acquired evi-

dence did not provide a legitimate reason for the employ-

ment decision. To the contrary, after-acquired evidence

has, for instance, barred the claims of a plaintiff who:

misstated his citizenship status and was not legally author-

26

ized to work; copied 3000 pages of confidential person-

nel records to which he had access as human resources

director and gave them to his attorney;* failed to dis-

close a substance abuse problem in violation of DEA

regulations governing his employer, a pharmaceutical

company, for whom he manufactured controlled sub-

stances; “ omitted information regarding discharge from a

prior employer due to insubordination on an application

for a police officer job; lied about prior residences, prior

employment, prior drug use, and prior mental health prob-

lems in applying for a security position; ” snuck into his

supervisor’s office, copied confidential management files,

and showed them to a co-worker;* and falsified more

than 150 insurance records.“ Under many employers’

policies, the. lie itself, rather than the underlying informa-

tion it clothed, may be grounds for terminating the em-

ployment contract.”

27 Agbor v. Mountain Fuel Supply Co., 810 F. Supp. 1247 (D.

Utah 1993). |

28 Bonger v. American Water Works, 789 F. Supp. 1102 (D.

Colo. 1992).

29 Bray v. Forest Pharmaceuticals, Inc., 812 F. Supp. 115 (S.D.

Ohio.1993).

30 Carroll v. City of Chicago, No. 87C 8995, 1990 WL 37631

(N.D. Ill. 1990).

31 Churchman v. Pinkerton’s, Inc., 756 F. Supp. 515 (D. Kan.

1991).

82 Q’Day v. McDonnell Douglas Helicopter Co., 784 F. Supp. 1466

(D. Ariz. 1992).

33 Summers, 864 F.2d at 700.

34 See, e.g., Baab v. AMR Servs. Corp., 811 F. Supp. 1246 (N.D.

Ohio 1993)-(undisclosed prior injury not sufficient to bar claim

where plaintiff was not discharged after a similar injury occurred,

but the falsification itself was grounds for discharge where there

was no proof that any other employee’s lie had gone unpunished) ;

Redd v. Fisher Controls, 814 F. Supp. 547 (W.D. Tex. 1992) (grant-

ing summary judgment on Title VII and ADEA claims where em-

ployee lied on his application regarding a prior felony conviction

and, under the employer’s policy, honesty per se was a requirement

of employment) ; Bonger, 789 F. Supp. at 1102 (human resources

27

Moreover, to the extent that an employer relies upon

such evidence at the summary judgment stage, it must

establish its right to judgment under normally applicable

principles. Although Petitioner and her amici repeatedly

criticize the “self-serving” affidavits relied upon below,

the lower courts regularly and routinely reject summary

judgment motions based upon after-acquired evidence

where such evidence does not warrant judgment for the

employer. In Malone v. Signal Processing Technologies

Inc., 826 F. Supp. 370, 375-76 (D. Colo. 1993), for.

instance, a district court bound by the Tenth Circuit’s

decision in Summers nonetheless refused to grant sum-

mary judgment where the employee did not admit to the

alleged misconduct and she presented some evidence that

the employer knew of the misconduct and would have

rethired her anyway. Earlier, the same court denied an

employer's motion for summary judgment based on after-

acquired evidence of resume fraud where the plaintiff

presented a factual issue as to whether the employer had

asked for the plaintiff's prior tardiness record and as to

whether a pardoned felony conviction would have been

grounds for refusal to hire. Punahele v. United Air Lines,

Inc., 756 F. Supp. 487 (D. Colo. 1991). Likewise, in

Tuohey v. Clark Oil & Refining Corp., No. 92 C 8358,

1994 WL 280084 (W.D. Ill. 1994), the court refused

to grant summary judgment where the employer’s affidavit

attesting to the fact that it would have fired the employee

for omitting a prior felony conviction was rebutted by

affidavits showing that the employer knew of the convic-

tion and did not fire the plaintiff.

In each of these illustrative cases, and many others.”

the plaintiff presented a triable issue regarding the after-

director’s dishonesty regarding college degree was in itself grounds

for discharge).

% E.g., Welch v. Liberty Mach. Works, 23 F.3d 1403. 1405-06

(8th Cir. 1994) (recognizing after-acquired evidence of ‘employee

misrepresentations as barring wrongful discharge claim, but deny-

ing summary judgment where a single employer affidavit did not

carry the employee’s burden of establishing an existing discharge

28

acquired evidence. Where this is so, under normal sum-

mary judgment rules, the case in question should go to

trial. .

Here, in contrast, Petitioner admitted that she copied

and removed from the office sensitive personnel documents

to which she had access only by virtue of her position

as a confidential secretary to the Banner’s comptroller.

(J.A. at 117a-118a, 132a-133a, 150a.) She further ad-

mitted that maintaining the confidentiality of company

records was an essential aspect of her job duties which,

if abrogated, would lead to her discharge. (J:A. 154a.)

Under the after-acquired evidence doctrine, therefore, the

courts below correctly determined that a trial would serve

no purpose and therefore granted summary judgment in

favor of the Banner.

policy that is “more than mere contract or employment application

boilerplate”) ; Conlin v. Mission Foods Corp., 850 F. Supp. 856

(N.D. Cal. 1994) (rejecting the employer’s after-acquired evidence

defense where the employer failed to carry his burden of proving

that the employee had fraudulently misrepresented his prior work

experience) ; DeVoe v. Medi-Dyn, Inc., 782 F. Supp. 546 (D. Kan.

1992) (refusing summary judgment on grounds of after-acquired

evidence that employee had failed to disclose credit and child

custody problems that impeded relocation where employee showed

she was not in fact terminated after her employer became aware of

her legal problems); Rupley v. Rorer Pharmaceutical Corp., No. 90

C 5597, 1992 WL 3714) (N.D. Ill. 1992) (after-acquired evidence

that employee claimimg age discrimination had second job that

sometimes interfered with his primary employment not sufficient

grounds for summary judgment where court found genuine issue

of material fact as to whether it was company policy to terminate

employees based on outside employment and as to extent to which

outside employment would be tolerated).

29

CONCLUSION

For the foregoing reasons, the amicus curiae respect-

fully urges this Court to affirm the Sixth Circuit’s decision.

Respectfully submitted,

Of Counsel: ZACHARY D. FASMAN *

STEPHEN A. BOKAT CHARLES A. SHANOR

ROBIN S. CONRAD | KELLY J. KOELKER

NATIONAL CHAMBER PAUL, HASTINGS, JANOFSKY

LITIGATION CENTER, INC. & WALKER

1615 H Street, N.W. Tenth Floor

Washington, D.C. 20062 1299 Pennsylvania Avenue, N.W.

(202) 463-5337 Washington, D.C. 20004

(202) 508-9500

Attorneys for Amicus Curiae

Chamber of Commerce of the

United States of America

September 8, 1994 * Counsel of Record