1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-20-1995

Mardell v Harleysville

Precedential or Non-Precedential:

Docket 93-3258

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1995

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1995 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"Mardell v Harleysville" (1995). 1995 Decisions. Paper 189.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/189
1 
2 

FOR PUBLICATION 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

_________________ 

NO. 93-3258 

_________________ 

NANCY MARDELL, 

 Appellant

v. 

HARLEYSVILLE LIFE INSURANCE COMPANY, 

a Pennsylvania Corporation 

(D.C. Civ. No. 91-01493) 

Present: BECKER, NYGAARD, Circuit Judges, and 

YOHN, District Judge.

1

(Filed July 20, 1995) 

_________________________________________ 

OPINION OF THE COURT SUR REMAND FROM THE 

UNITED STATES SUPREME COURT 

_________________________________________ 

PER CURIAM. 

 This case is before us on remand from the United States 

Supreme Court in light of its recent opinion in McKennon v. 

Nashville Banner Publishing Co., 115 S. Ct. 879 (1995). Our 

original opinion, Mardell v. Harleysville Life Insurance Co., 31 

F.3d 1221 (3d Cir. 1994), is almost entirely consistent with 

McKennon.

2 However, it does vary in one important respect: the 

 

1Honorable William H. Yohn, Jr., United States District Judge for 

the Eastern District of Pennsylvania, sitting by designation. 

2Plaintiff Nancy Mardell brought this Title VII claim alleging 

that she was discharged because of her gender and age. During 
3 

calculation of back pay. In Mardell we concluded that, to ensure 

that the plaintiff was returned to the position she would have 

been in but for the discrimination, backpay should be awarded for 

the period from the discharge until judgment unless the employer 

could “somehow insulate its illegal actions from its discovery of 

the unfavorable evidence.” Id. at 1238-40. McKennon, to the 

contrary, decided that, absent extraordinary circumstances, 

 

discovery Harleysville learned that she had misrepresented 

certain background information on her résumé and job application, 

and moved for summary judgment on the ground that the company 

would never have hired her and, in fact, would have fired her had 

it known of the misrepresentations. The district court granted 

defendant’s motion based on the “after-acquired evidence,” but we 

reversed, holding that Harleysville could not introduce the 

evidence “substantively for the purpose of defending against 

liability.” 31 F.2d at 1238. We also concluded that the afteracquired evidence may be relevant at the remedies stage of the 

proceedings. We noted that if the employer could prove that the 

plaintiff would have been fired had it known about the newlydiscovered wrongdoing, equitable relief, such as reinstatement, 

might be barred if “particularly invasive of the employer’s 

‘traditional management prerogatives.’” 31 F.3d at 1239-40. 

 McKennon too held that after-acquired evidence would 

not provide an employer a complete defense to liability on a 

plaintiff’s claim that she was discharged in violation of federal 

anti-discrimination laws. The Court reasoned (as had we) that: 

(1) barring all relief for violations of Title VII or the ADEA 

would undermine the key objectives of those statutes: deterrence 

of illegal discrimination and compensation to plaintiffs injured 

by such discrimination, 115 S. Ct. at 884-85; and (2) although an 

“essential element” in determining whether the employer violated 

federal law is “the employer’s motives in ordering the 

discharge,” id. at 885, after-acquired evidence is not relevant 

to that question since the wrongdoing revealed by the evidence 

was not discovered until after the discharge, see id. (“The 

employer could not have been motivated by knowledge it did not 

have . . . [at the time the plaintiff was discharged].”). The 

Court also ruled, as had we, that after-acquired evidence may be 

used to limit the remedies available to a plaintiff where the 

employer can “first establish that the wrongdoing was of such 

severity that the employee in fact would have been terminated on 

those grounds alone if the employer had known of it at the time 

of the discharge.” Id. at 886-87. 
4 

backpay runs only until the date that the employer discovered the 

conduct for which it would have fired the employee. Needless to 

say, we are bound by McKennon. 

 Accordingly, while we reaffirm and reinstate our 

original opinion and judgment in all other respects, we will 

vacate the portion of the opinion and judgment that deals with 

backpay. Inasmuch as our original opinion and judgment reversed 

the grant of summary judgment and McKennon in essence affirms on 

this point, the case will be remanded for trial (and such further 

discovery or pretrial proceedings as the district court shall 

deem appropriate).3 With respect to backpay, the district court 

should be guided by McKennon. In particular, if Harleysville 

proves that it would have terminated the plaintiff’s employment 

for the reason revealed by the after-acquired evidence,4 see

Shattuck v. Kinetic Concepts, Inc., 49 F.3d 1106, 1108-09 (5th 

Cir. 1995) (“would have fired” standard, rather than “would not 

have hired” standard, applies to after-acquired evidence of 

résumé fraud in discriminatory discharge case); see also Wehr v. 

 

3We decline plaintiff’s invitation to tell the district court how 

to manage the case on remand. While bifurcation may sometimes 

be advisable as a vehicle to insure that after -acquired 

evidence not be improperly used during the liability phase, in 

other cases cautionary instructions or stipulations may render it 

unnecessary. We do, however, agree with plaintiff that the 

district court would be well advised to permit further discovery 

on the résumé fraud issue, on which the defendant of course bears 

the burden of proof during the remedies phase. 

4In the absence of a record, we will not opine on plaintiff’s 

contentions as to the type or quantum of evidence (such as a 

policy or custom) that Harleysville must adduce to establish that 

it would in fact have fired her upon discovering her résumé 

fraud, preferring to leave that issue to the district court in 

the first instance. 
5 

Ryans Family Steak House, Inc., 49 F.3d 1150, 1154 n.5 (6th Cir. 

1995), backpay should run from the discharge to the time that the 

wrongdoing was discovered, although truly exceptional 

circumstances may be considered in fashioning appropriate 

relief.5

 Finally, we recognize that Harleysville maintains that 

no remand is necessary, since it contends that this court may 

properly grant summary judgment in its favor. Relying on United 

States v. Burke, 504 U.S. 229, 112 S.Ct. 1867 (1992), which held 

that recoveries for Title VII backpay awards prior to the 1991 

Civil Rights Act may not be excluded from gross income as 

“damages received . . . on account of personal injuries,” id. at 

242, 112 S. Ct. at 1874 (internal quotation marks omitted), 

Harleysville suggests that where an employee had engaged in 

résumé fraud, the resulting “employment contract” is voidable 

under the doctrine of fraud in the inducement, and therefore that 

in litigation such as this, the former employee is entitled to no

 

5We make no effort at this juncture to adumbrate the contours of 

the “extraordinary equitable circumstances” doctrine, see

McKennon, 115 S. Ct. at 886. The district court will have to 

explore that subject, if presented by an appropriate record, on 

remand. Concomitantly, we also decline Harleysville’s invitation 

to balance the equities “and address the proper boundaries of the 

equitable relief” here, or to “use this case to indicate how the 

differing equities of résumé fraud and on-the-job misconduct 

affect the remedies available to plaintiffs.” Instead, we simply 

note that the Supreme Court did not limit the general principles 

articulated in McKennon to cases involving on-the-job misconduct, 

instead using the broader term “wrongdoing” as well as listing 

both types of after-acquired evidence cases (résumé fraud cases 

and cases of on-the-job misconduct) -- without distinguishing 

between them -- when it noted the split among the circuits, see

McKennon, 115 S. Ct. at 883. See also infra. 
6 

damages whatsoever. However, the protections of Title VII and 

the ADEA are grounded not in a plaintiff’s “right” to a 

particular job but in a federal proscription of discrimination in 

employment, see Mardell, 31 F.3d at 1232-33 & nn.19-20. 

 One purpose of Title VII is “to make persons whole for 

injuries suffered on account of unlawful employment 

discrimination,” Albemarle Paper Co. v. Moody, 422 U.S. 405, 418, 

95 S. Ct. 2362, 2372 (1975) (emphasis supplied), and as this 

court explained in its initial opinion in this case, “[a] victim 

of discrimination suffers a dehumanizing injury as real as, and 

often of far more severe and lasting harm than, a blow to the 

jaw,” Mardell, 31 F.3d at 1232. Furthermore, the Supreme Court 

explained in McKennon that “an absolute rule barring any recovery 

of back pay [where there is after-acquired evidence of wrongdoing 

by the employee] would undermine the ADEA’s objective of forcing 

employers to consider and examine their motivations, and of 

penalizing them for employment decisions that spring from 

discrimination.” 115 S. Ct. at 886. We therefore reject 

defendant’s Burke argument, which contravenes the letter and the 

spirit of McKennon, Title VII, and the ADEA, and will remand this 

case to the district court for further proceedings consistent 

with the opinion.