Opinion ID: 1341372
Heading Depth: 1
Heading Rank: 4

Heading: Application to Certified Questions

Text: Analysis of the cases cited above reveals a clear distinction between those allowing after-acquired evidence on the issue of liability and those that have not. The cases that have allowed use of after-acquired evidence to bar recovery by the employee have involved causes of action, such as breaches of contract, which implicate purely private concerns. See, e.g., Crawford Rehabilitation Servs., Inc., 938 P.2d 540 (breach of implied contract and promissory estoppel); Gassmann, 261 Kan. 725, 933 P.2d 743 (breach of employment contract). On the other hand, cases disallowing use of after-acquired evidence on the issue of liability have implicated major public policy concerns, such as prevention of discrimination or preservation of workers' compensation rights. See, e.g., Trico Technologies Corp., 949 S.W.2d 308 (retaliatory discharge under workers' compensation act); Walters, 537 N.W.2d 708 (retaliatory discharge/discrimination actions); Horn, 216 Mich.App. 58, 548 N.W.2d 660 (sexual harassment, constructive discharge, and retaliation); Thompson, 187 Ariz. 121, 927 P.2d 781 (wrongful termination for filing workers' compensation claim); Barlow, 198 W.Va. 118, 479 S.E.2d 628 (employment discrimination). The court in Crawford Rehabilitation Services observed that the employee's breach of implied contract and promissory estoppel claims did not implicate the McKennon-type publicpolicy interests of elimination of discrimination in the workplace. See Crawford Rehabilitation Servs., 938 P.2d at 549. Similarly, the New Jersey Supreme Court has stated that The policy concerns that are at stake in applying the after-acquired evidence defense to an unlawful discharge based on invidious discrimination differ from those that are implicated in private-employment-contract actions.... Nicosia v. Wakefern Food Corp., 136 N.J. 401, 643 A.2d 554, 563 (1994); see also Schuessler v. Benchmark Marketing & Consulting, 243 Neb. 425, 500 N.W.2d 529, 541 (1993) (Breach of a contract does not give rise to the same concerns or demand the same protections as does an action based on discrimination.). We find this distinction persuasive. McKennon disallowed the use of after-acquired evidence on the issue of liability in order to serve the public policy reasons underlying ADEA and Title VII, which include deterrence of discrimination and compensation for injuries caused by prohibited discrimination. We adopted the same approach in Baber in an action involving the Whistleblower's Act. Baber, 327 S.C. 31, 488 S.E.2d 314. An action brought under the Whistleblower's Act is a suit against a public employer by a public employee claiming to have been subject to adverse personnel action in retaliation for having exposed governmental wrongdoing. The Act is remedial and seeks to foster good government for the benefit of the people of South Carolina by affording protection to governmental employees, the most obvious and important sources of information on the conduct of government. See Spencer v. Barnwell County Hosp., 314 S.C. 405, 444 S.E.2d 538 (Ct.App.1994). Clearly, a whistleblower's action implicates major public policy concerns. Such public policy concerns, however, are not so prominently present in employee-employer contract disputes, which simply involve the rights of private parties in relation to one another. Accordingly, we conclude that the rationales underlying McKennon and Baber are inapplicable in employment contract cases. As such, there should not be an absolute bar to the use of after-acquired evidence on the issue of liability in employee handbook breach of contract actions. Although we find that after-acquired evidence should be admissible on the issue of liability, we recognize the potential dangers of allowing employers unrestricted use of such evidence. If free reign were given, then in defending breach of employment contract actions, less-than-principled employers (or their attorneys) may be tempted to rummage the file in order to discover any and all evidence that would permit them to escape liability. For example, an employer that has been inclined to overlook his employees' peccadillos (e.g. occasional tardiness), might suddenly claim, in response to a breach of contract action, that the employee would have been fired had the employer been aware of the tardiness. Thus, we conclude that although after-acquired evidence should be allowed on the issue of liability, certain limitations must be put into place so as to prevent abuse by employers. This can be achieved by restricting use of after-acquired evidence in two ways. First, the employer must prove that the wrongdoing was significant, that it 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. See Baber, 327 S.C. at 43, 488 S.E.2d at 320 (quoting McKennon). Thus, evidence of employee wrongdoing that would not have resulted in termination would not be admissible. Second, this proof must be established, not by a preponderance of the evidence, but by clear and convincing evidence. We believe that these two limitations will serve to exclude doubtful or insignificant evidence of employee wrongdoing, while allowing evidence of very severe wrongdoing that should properly be considered.