Opinion ID: 785160
Heading Depth: 2
Heading Rank: 2

Heading: Merits of After-Acquired Evidence Theory

Text: 7 The most relevant Supreme Court case is McKennon v. Nashville Banner Publ'g Co., 513 U.S. 352, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995). There, the plaintiff alleged that her employer terminated her in violation of the Age Discrimination in Employment Act (ADEA). The employer learned during the plaintiff's deposition that while the plaintiff was still employed with the firm, she had copied and taken home certain confidential documents in violation of her job responsibilities. See id. at 355, 115 S.Ct. 879. The McKennon Court held that after-acquired evidence of employee on-the-job misconduct, which would have resulted in that employee's discharge had the employer known of it, did not preclude recovery under the ADEA. See id. at 356, 115 S.Ct. 879. The Court rejected the proposition, however, that the employee's own misconduct is irrelevant to all the remedies otherwise available under the statute. Id. at 360-61, 115 S.Ct. 879. The Court explained that the employee's wrongdoing becomes relevant ... to take due account of the lawful prerogatives of the employer in the usual course of its business and the corresponding equities that it has arising from the employee's wrongdoing. Id. at 361, 115 S.Ct. 879. Most relevant to our discussion, the Court concluded that: 8 The proper boundaries of remedial relief in the general class of cases where, after termination, it is discovered that the employee has engaged in wrongdoing must be addressed by the judicial system in the ordinary course of further decisions, for the factual permutations and the equitable considerations they raise will vary from case to case. We do conclude that here, and as a general rule in cases of this type, neither reinstatement nor front pay is an appropriate remedy. It would be both inequitable and pointless to order the reinstatement of someone the employer would have terminated, and will terminate, in any event and upon lawful grounds. 9 Id. at 361-62, 115 S.Ct. 879. 10 Although McKennon involved the ADEA, its reasoning also applies in the Title VII context. See id. at 357, 115 S.Ct. 879 (The substantive, antidiscrimination provisions of the ADEA are modeled upon the prohibitions of Title VII.); Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 121, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985) (recognizing the similarity between Title VII and the ADEA because the substantive provisions of the ADEA were derived in haec verba from Title VII (internal marks omitted)). Only a few courts have addressed the question of whether the McKennon rationale should be extended to answer the question of whether evidence of misconduct that occurred after the employee has been terminated, but before the front pay decision is made, is relevant in fashioning equitable relief. 11 In Ryder v. Westinghouse Elec. Corp., 879 F.Supp. 534 (W.D.Pa.1995), the district court answered this question in the negative. It reasoned that the after-acquired evidence doctrine presupposes that there was an employer-employee relationship at the time the misconduct occurred and that there cannot be misconduct that the employer did not know about prior to making its adverse decision if the misconduct did not even occur until after the adverse decision was made. Id. at 537. In Sigmon v. Parker Chapin Flattau & Klimpl, 901 F.Supp. 667 (S.D.N.Y.1995), the plaintiff was terminated from her position as an associate at a law firm for allegedly discriminatory reasons after she returned from maternity leave. After her termination, the firm provided her with an office and telephone to conduct a job search. During this time, the plaintiff copied her personnel file as well as the personnel files of twenty other associates. The defendant argued that even if the plaintiff could prove discrimination, her damages should be limited due to her misappropriation, copying, and retention of the defendant's documents. The district court rejected the argument. Like the Ryder court, it concluded that McKennon was premised on the employee's misconduct occurring during her employment. Id. at 682-83. The Sigmon court then applied a bright-line rule, concluding that because the misconduct occurred outside the employment relationship, any complaint that the defendant may have had fell outside the McKennon rule. See id. (Because in this case, plaintiff's alleged misconduct occurred after her termination, McKennon does not govern.... In the instant situation, defendant and plaintiff were not in an employer-employee relationship at the time of the alleged incident. Therefore any complaint defendant has against plaintiff for her post-employment conduct falls outside of the McKennon rule....). 12 In Carr v. Woodbury County Juv. Det. Ctr., 905 F.Supp. 619 (N.D.Iowa 1995), the plaintiff was constructively discharged from her employment as a youth worker as a result of a racially and sexually hostile work environment. The plaintiff filed a motion in limine to exclude evidence of her post-employment marijuana use that the employer discovered during trial preparation. The defendant argued that Carr's post-termination marijuana use was probative of damages because (1) it showed that the County would have fired Carr because marijuana use violated County employment policies and (2) because it showed that Carr was unlikely to have remained at her position for any length of time as it was unlikely that a person with a marijuana habit could have maintained long term employment. The district court granted the motion, excluded the evidence, and declined to extend McKennon. Like the aforementioned cases, the Carr court reasoned that McKennon presupposes that the wrongdoing occurred during the existence of the employment relationship. See id. at 627-28. The court also reasoned that McKennon should not apply because the marijuana use simply had nothing to do with and did not occur during her employment and caused her former employer absolutely no detriment. Id. at 628-29. Third, the district court reasoned that the County's employment policies could not properly ... be imposed upon a person after his or her employment has terminated because [i]t would be grossly inequitable to hold [a plaintiff] to all of the burdens of County policies at a time when she is not receiving any of the benefits of County employment. Id. at 629. Finally, the district court concluded that even if McKennon applied, the County had not established that the plaintiff's post-termination conduct was so severe that it would have terminated her for it. See id. 13 The Tenth Circuit has also confronted this issue. In Medlock v. Ortho Biotech, Inc., 164 F.3d 545 (10th Cir.), cert. denied, 528 U.S. 813, 120 S.Ct. 48, 145 L.Ed.2d 42 (1999), Medlock was allegedly terminated in retaliation for his filing and pursuing a claim of race-based discrimination. At his unemployment benefits compensation hearing, Medlock verbally abused defendant's counsel. The defendant argued that the district court erred in refusing to instruct the jury that Medlock's post-termination conduct could serve to limit damages. The Tenth Circuit recognized that post-termination conduct could, in an appropriate case, limit a plaintiff's remedies. See id. at 555 (stating that it could not foreclose the possibility that in appropriate circumstances the logic of McKennon may permit certain limitations on relief based on post-termination conduct). But it concluded that Medlock was not such a case. See id. (stating that in cases in which the alleged misconduct arises as a direct result of retaliatory termination, the necessary balancing of the equities hardly mandates a McKennon -type instruction on after-occurring evidence). 14 We are of the view that the aforementioned district court cases gave too crabbed a reading to McKennon. The McKennon Court used sweeping language, instructing lower courts to treat each case on a case by case basis considering all the factual permutations and the equitable considerations they raise. McKennon, 513 U.S. at 361, 115 S.Ct. 879; see also Mardell v. Harleysville Life Ins. Co., 65 F.3d 1072, 1074 n. 4 (3d Cir.1995) (stating 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'). Thus, like the Tenth Circuit, we cannot establish a bright-line rule and foreclose the possibility that a Title VII plaintiff's post-termination conduct may, under certain circumstances, limit the remedial relief available to the plaintiff. A simple illustration will demonstrate why and how post-termination conduct may be relevant, in some circumstances, in limiting relief. Let us suppose that after the FAA had terminated her, and before the district court granted her equitable relief, Sellers had been convicted of some crime wholly unrelated to her former position with the FAA and was incarcerated such that reinstatement was now an impossibility. Simple common sense tells us that it would be inequitable to award her front pay in lieu of reinstatement where she had rendered herself actually unable to be reinstated. 15 The nature of the front pay remedy itself is what makes the answer to the above illustration so intuitive. Front pay is a disfavored remedy that may be awarded in lieu of reinstatement, but not in addition to it, where the circumstances make reinstatement impractical. See Salitros v. Chrysler Corp., 306 F.3d 562, 572 (8th Cir.2002) (stating that front pay is a disfavored remedy); Kucia v. S.E. Ark. Cmty. Action Corp., 284 F.3d 944, 949 (8th Cir.2002) (stating that reinstatement should be the norm and that front pay is an exceptional remedy); Smith v. World Ins. Co., 38 F.3d 1456, 1466 (8th Cir.1994) (Front pay is an equitable remedy, which... may be awarded in lieu of, but not in addition[] to reinstatement.). The availability of front pay as a remedy thus presupposes that reinstatement is impractical or impossible due to circumstances not attributable to the plaintiff. It would be inequitable for a plaintiff to avail herself of the disfavored and exceptional remedy of front pay where her own misconduct precludes her from availing herself of the favored and more traditional remedy of reinstatement. As such, we hold that a plaintiff's post-termination conduct is relevant in determining whether a front pay award is available, and if so, in determining the extent of the award. 16 Our conclusion that an employee's post-termination conduct can, in some circumstances, limit an employee's remedies for a wrongful discharge is not a new one. For example, we have previously concluded that a terminated employee could forfeit the remedy of reinstatement under the National Labor Relations Act where he threatened his supervisors post-discharge. See Precision Window Mfg., Inc. v. N.L.R.B., 963 F.2d 1105, 1108 (8th Cir.1992) (stating that a fired employee `does not have an unlimited right to engage in misconduct without losing his remedial rights' (quoting Precision Window Mfg., Inc., 303 N.L.R.B. No. 141 (Raudabaugh, dissenting))). We have also concluded that front pay would be unavailable where the plaintiff's own post-termination conduct prevented reinstatement. See Smith, 38 F.3d at 1466 (stating that an unreasonably rejected offer of reinstatement will bar entitlement to front pay). It requires no leap in logic to conclude that if an unreasonable rejection of an offer of reinstatement precludes a front pay award, then post-termination misconduct of a type that renders an employee actually unable to be reinstated or ineligible for reinstatement should also be one of the factual permutations which is relevant in determining whether a front pay award is appropriate. See Christine Neylon O'Brien, The Law of After Acquired Evidence in Employment Discrimination Cases: Clarification of the Employer's Burden, Remedial Guidance, and the Enigma of Post-Termination Misconduct, 65 U.M.K.C. L.Rev. 159, 174 (1996) (concluding that where post-termination misconduct is egregious, such conduct should bar reinstatement). 17 McKennon makes clear that the burden of establishing these facts rests on the employer. See McKennon, 513 U.S. at 362-63, 115 S.Ct. 879 (stating that employer must establish that the wrongdoing was of such severity that the employee in fact would have been terminated on those grounds alone). The court must look to the employer's actual employment practices and not merely the standards articulated in its employment manuals, for things are often observed in the breach but not in the keeping. See O'Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756, 759 (9th Cir.1996) (stating that inquiry must focus on actual employment practices). The government argues that it has established the relevant facts showing that Sellers is no longer eligible for reinstatement because FAA hiring practices provide that a person who has been terminated from, or forced to resign, a position is unsuitable for employment as an Air Traffic Control Specialist. The district court concluded that the FAA's assertion that Sellers was unsuitable for reinstatement because of her post-termination conduct was evidence of the acrimonious relationship between them, but there is no specific finding by the court that FAA employment regulations and policies as applied to Mrs. Sellers do in fact bar her reinstatement or employment as an Air Traffic Control Specialist. There is no finding that the FAA regularly adheres to this alleged policy or that the FAA has made an official determination that Sellers is, in fact, unsuitable for reinstatement solely because of her post-termination conduct. That the FAA chose not to offer Sellers reinstatement does not equate with finding that Sellers' conduct alone made her ineligible for reinstatement. 18 Accordingly, we vacate the district court's award of front pay and remand for further findings of fact and conclusions of law to be made on the existing record. No reopening of the evidentiary record shall occur, but the court may, of course, in its discretion call for additional briefing and argument. On remand, in order to establish that Sellers' front pay remedy should be limited by her post-termination conduct, the defendant must convince the court by a preponderance of the evidence that Sellers' post-termination conduct renders her ineligible for reinstatement under the FAA's employment regulations, policies, and actual employment practices. 1