In Atchison v. Brown & Root, Inc., 82-ERA-9
(Sec'y June 10, 1983), reversed on other grounds sub nom,.
Brown & Root v. Donovan, 747 F.2d 1029 (5th Cir. 1984),
dismissed on remand (Sec'y Apr. 12, 1985), it was discovered that
Complainant had misrepresented his educational qualifications for
the job. The Secretary found that Respondent would have
discharged Complainant as soon as it discovered the
misrepresentation even if he had not engaged in protected
activity. The Secretary stated that "[f]iling a complaint
under the ERA, and even proof that the firing itself was
improperly motivated, should not insulate [Complainant] from
other, legitimate, management actions. Therefore, I do not think
it would be appropriate, under my authority to order affirmative
action to abate a violation found (29 C.F.R. 24.6(b)(2)), to
require reinstatement of an employee who repeatedly
misrepresented material facts about his background, or to order
back pay beyond the date of discovery of the misrepresen-
tation."
[Editor's note: It is not clear from either the Secretary or the
ALJ's decisions how Respondent discovered the misrepresentation,
but it was a couple months after Complainant was discharged. In
this case, Respondent apparently did not advance an "after
acquired evidence" defense for its burden of articulation,
but only in regard to the extent of damages.
On appeal, the Fifth Circuit ruled that Complainant's internal
complaints did not support an ERA employee protection complaint.
Although the Secretary dismissed Atchinson's complaint on remand,
in subsequent Fifth Circuit cases, the Secretary has declined to
acquiesce in Brown & Root.]
[N/E Digest XI F]
AFTER ACQUIRED EVIDENCE; CANNOT BE USED TO NEGATE LIABILITY,
ALTHOUGH IT IS RELEVANT TO APPROPRIATE REMEDY
In McCafferty v. Centerior
Energy, 96-ERA-6 (ARB Sept. 24, 1997), Respondent argued that one
Complainant was not qualified for a rehire position, and therefore could not have been retaliated
against, because he lied on a self-disclosure questionnaire about having been removed from a
previous job because of a positive drug test.
The ARB found, however, that Respondent did not know of the false statement at the time it
retaliated against him. The ARB cited the Supreme Court decision in McKennon v.
Nashville Banner Pub. Co., 130 L.Ed.2d 852 (1995), for the proposition that after-acquired
evidence cannot not be used to negate liability. The ARB found, however, that it must consider
how the after-acquired evidence bears on the remedy.
AFTER ACQUIRED EVIDENCE; APPROPRIATE SANCTIONS ON RESPONDENT
WHO UNDERTAKES INVESTIGATION OF COMPLAINANT
[N/E Digest XI F]
In James v. Ketchikan
Pulp Co., 94-WPC-4 (ARB June 28, 1996), Complainant
moved for reconsideration and rehearing based on evidence
obtained after the close of the record, which he contended showed
that Respondent's witnesses lied concerning Respondent's
knowledge of his protected activities, and its investigation of
Complainant. The Board found that the new evidence concerned an
issue on which Complainant had prevailed before the Secretary,
who explicitly found that Complainant was singled out for
suspension because of his protected activities.
The Board held:
Implicit in this finding is the recognition that James
discriminatorily was targeted for investigation by KPC.
Notwithstanding KPC's impermissible motive in investigating
James, however, the company uncovered evidence that
justified firing him. As the Supreme Court recognized in
McKennon v. Nashville Banner Publishing Co., 115
S.Ct. 879, 1995 U.S. LEXIS 699 at *19: "Once an
employer learns about employee wrongdoing that would lead to
a legitimate discharge, we cannot require the employer to
ignore the information, even if it is acquired during the
course of discovery in a suit against the employer and even
if the information might have gone undiscovered absent the
suit."
Here, the Secretary followed the Supreme Court's
guidance and did not require KPC to ignore the evidence it
uncovered, even though KPC's motive for conducting the
investigation was wrongful. The Supreme Court recognized in
McKennon that an award of attorney's fees and, in
appropriate cases, an additional sanction may be employed to
diminish the willingness of employers to "undertake
extensive discovery into an employee's background or
performance to resist claims." Id. at *20. In this
case, we believe that the Secretary's decision awarding
attorney's fees and costs to James is a sufficient
deterrent.
AFTER ACQUIRED EVIDENCE; DOES NOT DEFEAT COMPLAINT, BUT IS
RELEVANT TO DAMAGES
[N/E Digest XI F]
Evidence of legitimate grounds for termination of employment
of a complainant that is acquired by the employer after the
decision to terminate does not defeat a discrimination complaint.
Such evidence, however, is relevant to the issue of damages.
Timmons v. Mattingly Testing Services, 95-ERA-40
(ARB June 21, 1996), citing McKennon v. Nashville Banner
Publishing Co., 115 S.Ct. 879 (1995) and Smith and
Fitzpatrick v. Tennessee Valley Authority, 89-ERA-12, slip
op. at 2-6 (Sec'y May 17, 1995).
XI.F. After acquired evidence
[Editor's note: The theory of after acquired evidence has arisen
in several DOL enforced employee protection cases. I have not
found a case in which the Secretary has squarely ruled on the
issue. Compare Bryant v. Ebasco Services, Inc., 88-ERA-11
(Sec'y July 9, 1990) (refusal to rehire following settlement
because originally obtained job using fraudulent credentials).
The United States Supreme Court had granted certiorari on this
issue in a Title VII case, Milligan-Jensen v. Michigan
Technological Univ., 975 F.2d 302 (6th Cir. 1992),
cert. granted, 125 L. Ed. 2d 686, 113 S Ct. 2991 (U.S.
1993), cert. dismissed, 1993 U.S. LEXIS 4734, 62 U.S.L.W.
3113 (U.S. 1993). A last minute settlement resulted in dismissal
of certiorari. The Wall Street Journal, Tuesday, August
31, 1993, p.1. According to The Wall Street Journal, the Clinton
administration had taken the position that additional evidence
should not absolve an employer, but should permit a court to
lower the damage award.
In Milligan-Jensen, it was discovered in preparation for
trial that the appellee had omitted a prior DUI conviction from
her employment application for the position of campus security
officer. The District Court found that this was a material
falsification, and that had appellant known that appellee has
falsified her employment application she would have been
dismissed (falsification not the conviction being the critical
factor). The District Court reduced the award for this reason.
The Sixth Circuit reversed based on its decision in Johnson v.
Honeywell Info. Sys., Inc., 955 F.2d 409 (6th Cir. 1992), in
which it was held that in cases where resume fraud is discovered
after discharge, "summary judgment [or judgment as a matter
of law pursuant to Fed. R. Civ. P. 50] will be appropriate where
the misrepresentation or omission was material, directly related
to measuring a candidate for employment, and was relied upon by
the employer in making the hiring decision."
Johnson, 955 F.2d at 414, n2. The Sixth Circuit found it
immaterial whether the falsification or the underlying
misrepresentation would have been the reason for the termination.
The circuits are divided on this issue. Compare Johnson,
955 F.2d 409 (no relief); Summers v. State Farm Mut. Auto Ins.
Co., 864 F.2d 700 (10th Cir. 1988) (no relief); Washington
v. Lake County, 969 F.2d 250 (7th Cir. 1992); Wallace v.
Dunn Constr. Co., Inc., 968 F.2d 1174 (11th Cir. 1992).
The Sixth Circuit hinted that it may view the case differently if
it was not shown that the termination would have resulted from
the falsification.]
XI F After acquired evidence
In Bryant v. Ebasco Services, Inc., 88-ERA-31
(Sec'y Apr. 21, 1994), as part of a settlement agreement
regarding Complainant's original ERA whistleblower complaint,
there was an oral agreement to rehire complainant to a comparable
position -- at least according to Complainant. Respondent
contested the existence of such an oral agreement, but the ALJ
found that there was such an agreement based on credibility
determinations. The Secretary declined to make a finding on this
matter in view of his finding that Respondent presented
sufficient evidence of its legitimate reasons for not rehiring
Complainant so as to rule out any discriminatory motive.
The Secretary found that Complainant presented evidence on all
the elements of a prima facie case, but noted that Respondent
presented uncontroverted testimony that it sought reemployment
for Complainant by submitting his name for work on potential
future contracts, and that Respondent's clients decided which of
the offered candidates are hired. Later, Respondent discovered -
- after the negotiation of the settlement agreement and
Complainant's filing a his second ERA complaint (for violating
the terms of the settlement agreement and blacklisting) -- that
Complainant had misrepresented his educational qualifications for
the position. After that date, Complainant was not considered
for rehire.
The Secretary found that Complainant failed to show pretext,
noting that Complainant admitted that he is not qualified for
positions in a nuclear power facility. The Secretary also found
that even assuming Complainant's protected activity played a part
in the failure to rehire, under the "dual motive"
analysis, Respondent sufficiently demonstrated that it would not
have rehired Complainant even absent the protected activity.
In a footnote, the Secretary observed that in cases involving the
post-discharge discovery of resume fraud, the after-acquired
evidence doctrine has been applied by the courts to bar recovery
by complainants. See McKennon v. Nashville Banner
Publishing Co., 9 F.3d 539 (6th Cir. 1993); Summers v.
State Farm Mut. Auto Ins. Co., 864 F.2d 700 (10th Cir. 1988);
Puhy v. Delta Air Lines, Inc., 833 F. Supp. 1577 (N.D. Ga.
1993).
XI F After-acquired evidence
In McKennon v. Nashville Banner Publishing Co., 1995 U.S. LEXIS 699 (1995), the
United States Supreme Court held that an employee discharged in
violation of the Age Discrimination in
Employment Act of 1967 is not barred from all relief when, after
discharge, the employee's employer
discovers evidence of wrongdoing that would have led to the
employee's discharge on lawful and
legitimate grounds had the employer known of it.
XI F After-acquired evidence; effect on damages
award
In Smith v. Tennessee Valley Authority, 89-ERA-12
(Sec'y Mar. 17, 1995), the ALJ had
made an initial recommendation that Complainant was unlawfully
discriminated against for engaging in
activity protected under the ERA. The Secretary stayed
consideration of the recommended decision
and order pending issuance of the ALJ's supplemental recommended
decision on damages. The
Respondent then filed a motion for summary judgment before the
ALJ based on evidence discovered
during the damages inquiry. The ALJ recommended granting the
motion based on the after-acquired
evidence decisions of the Sixth Circuit, which held that no
relief may be awarded in a discrimination
complaint where the complainant engaged in misconduct that would
have precluded his or her selection
for a position, or engaged in misconduct that would have led to
his or her discharge, even where
evidence of such misconduct is not discovered until later.
While the matter was pending before the Secretary, the United
States Supreme Court issued a decision
on a case arising in the Sixth Circuit concerning after-acquired
evidence in the context of the Age
Discrimination in Employment Act, McKennon v. Nashville Banner
Publishing Co., 1995 U.S.
LEXIS 699 (Jan. 23, 1995). The Supreme Court held that
after-acquired evidence of the employee's
wrongdoing is not a complete bar to recovery by the employee.
The parties in Smith
filed a joint motion to remand for reconsideration by the ALJ.
The Secretary in the remand order highlighted that
McKennon included a ruling that after-
acquired evidence must be taken into account in determining the
appropriate remedy, and that,
generally, neither reinstatement nor front pay are appropriate in
cases of this type. There is no absolute
bar on backpay, with a beginning point in the analysis being a
calculation of backpay from the date of
unlawful discharge to the date the new information was
discovered. Finally, the Secretary noted that
McKennon indicated that a trial court is permitted to
consider extraordinary equitable
circumstances that affect the legitimate interests of either
party.