Opinion ID: 3009621
Heading Depth: 2
Heading Rank: 2

Heading: The Remedies Stage

Text: Because the district court must proceed further with this case and may well have to reach the remedies stage, for the guidance of that court on remand we will make a few comments about the remedies facet of the case. We note in this regard that the questions of how the after-acquired evidence may be used harmoniously with Title VII's and ADEA's language and goals, and of what remedies should inure to a plaintiff in an after-acquired evidence case, seem to be far more stubborn than the liability issue. First, after-acquired evidence of résumé and/or application fraud or employer misconduct on the job is relevant to at least some issues at the remedies stage (and hence is admissible at that point), even if it has surfaced after the employer's searching inquiry in the aftermath of the employer's unlawful conduct or in the course of its trial preparation.0 The 0 We observe that in a normal Title VII or ADEA case, evidence acquired before the adverse employment decision might, as a prophlactic measure, be inadmissible altogether if the plaintiff could show that the employer had a practice of thoroughly investigating the information provided in employment applications and interviews by, and of comprehensively reviewing on-the-job 42 court should, of course, be cautious lest the remedies evidence affect the liability verdict. Second, at the remedies stage, the district court must bear in mind Title VII's and ADEA's two principal objects: deterrence and compensation. See Albemarle Paper, 422 U.S. at 421, 95 S. Ct. at 2373; Griggs v. Duke Power Co., 401 U.S. 424, 429-30, 91 S. Ct. 849, 853 (1971); supra at Error! Bookmark not performance of, only or primarily only the members of a protected class with the motive to discover flaws justifying an adverse employment action, for such a practice would probably contravene Title VII and ADEA. Assuming it were so, since the filing of the lawsuit would appear to be an activity protected to the same extent as membership in another protected class, see 42 U.S.C.A. §2000e-3(a) (1981) (It shall be an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment . . . because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.); 29 U.S.C.A. § 623(d) (1985) (similar), it would seem to follow that the aforementioned defense strategy of investigating employees who file complaints with the intent to discover evidence retroactively justifying or excusing the adverse employment decision may itself violate Title VII and ADEA, and if so it might be contrary to the design of those statutes to allow the employer to benefit from (introduce) such evidence. Accordingly, an argument could be made that such evidence should be excluded from consideration as the fruits of unlawful retaliation even in the remedies stage of a Title VII or ADEA suit. That is, if it were the case that the calculated discovery of after-acquired evidence (as opposed to, for example, its inadvertent or independent discovery) amounts to retaliation under Title VII or ADEA, although it is exceedingly unlikely that any economic damages would flow therefrom, it may very well be that any evidence so stained would have to be suppressed at the remedies stage of the proceedings, except perhaps to show that reinstatement would threaten the public health, safety, or welfare, or would otherwise violate a public policy on par with the one antithetical to employment discrimination. This argument, however, was not advanced in this case until oral argument, and we shall decline to further consider it. 43 defined. n.Error! Bookmark not defined.. Congress has from Title VII's inception expected courts to fashion remedies guided by the acts' twin central goals. See Franks, 424 U.S. at 763-64, 96 S. Ct. at 1263-64. To advance these goals, a district court is under the `duty to render a decree which will so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future.' Franks, 424 U.S. at 770, 96 S. Ct. at 1267 (quoting Albemarle Paper, 422 U.S. at 418, 95 S. Ct. at 2372).0 0 The same standard applies under ADEA. As we explained in Rodriguez v. Taylor, 569 F.2d 1231 (3d Cir. 1977), cert. denied, 436 U.S. 913, 98 S. Ct. 2254 (1978): Monetary awards exacted from employers who practice unlawful discrimination serve two primary functions. First, the prospect of economic penalties more certainly deters illegal employment practice[s] than does exposure to injunctive relief or prospective equitable remedies such as reinstatement. Second, economic exactions recompense individuals for injuries inflicted by employers' discriminatory conduct. These prophylactic and compensatory purposes are the basis of most recent anti-employment discrimination legislation, including the ADEA and Title VII. Thus, the Supreme Court's mandate on the exercise of trial court's discretion in granting monetary relief in Title VII suits . . . is equally compelling in the context of ADEA actions . . . . The make whole standard of relief should be the touchstone for the district courts in fashioning both legal and equitable remedies in age discrimination cases. Victims of discrimination are entitled to be restored to the economic position they would have occupied but for the intervening unlawful conduct of employers. Id. at 1237-38 (citations omitted). 44 Third, we illustrate these points with respect to the most common remedy, backpay. The Supreme Court has laid down the general rule under Title VII that given a finding of unlawful discrimination, backpay should be denied only for reasons which, if applied generally, would not frustrate the central statutory purposes of eradicating discrimination throughout the economy and making persons whole for injuries suffered through past discrimination. Albemarle Paper, 422 U.S. at 421, 95 S. Ct. at 2373, quoted in Franks, 424 U.S. at 771, 96 S. Ct. at 1267. We have applied the same standard to ADEA. See Rodriguez, 569 F.2d at 1238 (quoting Albemarle Paper as quoted supra). But some courts cut backpay off prematurely at the moment the employer obtains the afteracquired evidence. See, e.g., Kristufek v. Hussmann Foodservice Co., 985 F.2d 364 (7th Cir. 1993); Smith, 876 F.2d at 1319 n.2 (dicta); cf. John Cuneo, 298 N.L.R.B. at 856. This formula is, however, inconsistent with the effectuation of the statutes' deterrent and compensatory purposes, and we favor the normal rule that, when otherwise appropriate, backpay should be awarded until the date of judgment. Accord Wallace, 968 F.2d at 1182; Massey, 828 F. Supp. at 323. We reach this result by considering the statutory policies at stake. Insofar as after-acquired evidence is uncovered during the legal dispute and would not have been discovered, at least for an indeterminate stretch of time, absent the employer's unlawful acts, the plaintiff would be left in a worse position because of the discrimination if the court were to make use of that evidence to limit the victim's remedies, and the 45 make-whole compensatory goal of the acts would not be reached. Confining backpay to the discovery date would also dilute the deterrent effect of Title VII and ADEA, an effect best promoted with an award of backpay, see supra (quoting Albemarle Paper). On the other end of the scale weighs the policy of allowing employers free choice (primarily encroached on by reinstatement rather than by an award of backpay), see, e.g., Ezold v. Wolf, Block, Schorr & Solis-Cohen, 983 F.2d 509, 527 (3d Cir. 1992) (citing cases), and the difficulty in ignoring such evidence insofar as it could be read as condoning the employee's misbehavior, cf. Summers, 864 F.2d at 708 (To argue . . . that this after-acquired evidence should be ignored is utterly unrealistic.). But the fact that courts will not turn a blind eye to employee fraud and misconduct is adequately demonstrated in cases where the employer in fact bases its adverse employment decision on the employee's wrongful actions, because then the evidence is fully considered at every stage of the dispute, and also perhaps in context of other remedies (like reinstatement) in after-acquired evidence cases. There are occasions, of course, when after-acquired evidence is useful in measuring backpay: if the employer can somehow insulate its illegal actions from its discovery of the disfavorable evidence, it is free to act on it (keeping in mind the prohibition against retaliation, see supra at Error! Bookmark not defined. n.Error! Bookmark not defined.) to discipline its employee, as there would be no causation. One example is where the employer would have inevitably discovered the evidence in the 46 normal progression of things (that is, assuming no litigation).0 Alternatively, the employer may happen upon the evidence completely independently of any investigation prompted by the discriminatory employment action or its aftermath, including the legal proceedings.0 Proof of either of these occurring would entitle an employer to cut off all further liability from the time the employer can establish with reasonable certainty the date of the inevitable or independent discovery, so long as the employer additionally shows that based upon that evidence it indeed would have taken the same employment action at that time. See Wallace, 968 F.2d at 1182 (ending backpay at the earlier of (i) the date of judgment, and (ii) the date the employer can show it would have discovered evidence, independently of the adverse employment decision and the ensuing litigation, which would have 0 See, e.g., Rodriguez, 431 U.S. at 403 n.9, 97 S. Ct. at 1897 n.9 (allowing the company to prove at trial that the applicant would not have been hired in any event); Sabree, 921 F.2d at 405 (reducing damages if the employer would have inevitably discovered that the plaintiff was ineligible for a transfer); Smallwood v. United Air Lines, Inc., 728 F.2d 614, 626-27 (4th Cir.) (holding that the plaintiff was not entitled to backpay because the employer would have inevitably discovered his prior misconduct and would not have hired him even had it not discriminated against him), cert. denied, 469 U.S. 832, 105 S. Ct. 120 (1984). But see Summers, 864 F.2d at 707 n.3 ([T]he probability that Summers' transgressions would have been discovered in the absence of the trial is immaterial.). 0 See Gilty, 919 F.2d at 1249, 1255-56 (holding that a discharge was not retaliatory because a new police chief independently undertook a comprehensive review of all the city's officers' credentials); cf. Welch, 23 F.3d at WL at  (Arnold, J., dissenting) (referring to the defendant's fortuitous discovery of the evidence). 47 led it to take the same adverse action with respect to the employee); Massey, 828 F. Supp. at 324 (same).0 Fourth, we must stress in terms of policy the importance of the background rule of employer free choice. The federal anti-employment discrimination laws were designed not to impinge directly upon employer free choice; that is, not to interfere unnecessarily with legitimate business operations and decisions. See Burdine, 450 U.S. at 259, 101 S. Ct. at 1096 ([Title VII] was not intended to `diminish traditional management prerogatives.' (quoting United Steelworkers v. Weber, 442 U.S. 193, 207, 99 S. Ct. 2721, 2729 (1979)); Price Waterhouse, 490 U.S. at 242, 109 S. Ct. at 1786 (stressing that an important aspect of [Title VII] is its preservation of an employer's remaining freedom of choice). For example, the federal employment discrimination laws do not alter the employment-at-will doctrine except in limited respects. See supra at 30 & n.Error! Bookmark not defined.. Their goal instead is to restore the victim of the employer's illegal conduct to the position he or she would have occupied absent the discrimination. 0 For example, if the inevitable or independent discovery would have preceded an applicant's hiring, probably no back pay would be due. See Smallwood, 728 F.2d at 626. By contrast, declaratory and injunctive relief as well as attorneys' fees, properly apportioned, might still be available. Moreover, in cases governed by the Civil Rights Act of 1991, the plaintiff might also be able to recover compensatory damages and, if the employer acted with malice or with reckless indifference to the federally protected rights of an aggrieved individual, punitive damages, see Civil Rights Act of 1991, Pub. L. No. 102-166, § 102, 105 Stat. 1072-73 (codified at 42 U.S.C.A. §1981a(a)(1), (b)(1) (Supp. 1994)), irrespective of inevitable or independent discovery. 48 Thus, where an equitable remedy, such as reinstatement, would be particularly invasive of the employer's traditional management prerogatives, the after-acquired evidence may bar that remedy. Cf. supra at Error! Bookmark not defined. n.Error! Bookmark not defined.. For the foregoing reasons, we will vacate the district court's order granting summary judgment to Harleysville, and remand the case to the district court for further proceedings consistent with this opinion. 49