Opinion ID: 2980118
Heading Depth: 3
Heading Rank: 2

Heading: Limitations-on-remedies instruction

Text: Jones argues that the district court erred in instructing the jury regarding limiting damages based on his accepting other employment without seeking Nissan’s permission. Jones argues that the jury instructions based upon McKennon v. Nashville Banner Publ’g Co., 513 U.S. 352 (1995), are prejudicial and should be excluded from any new trial on damages. In McKennon, the Supreme Court established the “after-acquired evidence” defense, which allows a defendant employer to show that an employee would have been terminated anyway had the employer known of wrongful conduct by the employee plaintiff. 513 U.S. at 362. If the defense applies, it generally bars the employee from obtaining front pay and reinstatement, and limits backpay. See Thurman v. Yellow Freight Sys., Inc., 90 F.3d 1160, 1168 (6th Cir. 1996). In the instant case, the district court instructed the jury: As a general rule, back pay damages, if any, apply from the time Plaintiff suffered an adverse action until the date of your verdict. However, in this case . . . Defendant contends that regardless of any claimed disability or perception of disability, it would have made the decision to terminate Plaintiff on January 25, 2008, because of conduct the Defendant discovered after it placed Plaintiff on leave. Specifically -- specifically, Defendant claims that when it became aware of the Plaintiff working for another employer in violation of the Defendant’s rule prohibiting unauthorized work while on leave without permission, Defendant would have made the decision to terminate Plaintiff's employment at that point in time. order did not matter, only Nissan’s understanding of the order. But, in this context, Jones was entitled to have the jury instructed that the order did not, in fact, require that Nissan impose medical restrictions. In the absence of such an instruction the jury was permitted to believe, based on Nissan’s in-house attorney’s testimony, that the order actually required that the medical restrictions be imposed. The meaning of the order was not a question of fact. Although Nissan’s honest belief might have been had there been adequate evidence to create a genuine issue, surely the true legal significance of the order would be relevant to this issue, especially where Nissan’s main actor and witness on this issue was a lawyer. 29 No. 09-5786 Jones v. Nissan North America, Inc. If Defendant proves by a preponderance of the evidence that it would have made the same decision and would have terminated Plaintiff on January 25, 2008, because it discovered Plaintiff was working while on leave, you must limit an award of back pay from the time Plaintiff was placed on leave until January 25, 2008. Next, front pay damages under ADA and TDA. Damages also may be awarded on the ADA and the TDA for what is called front pay. An[] award of front pay compensates Plaintiff for the loss of future wages and employment benefits that have been caused by the Defendant’s discriminatory conduct. The purpose of front pay is to restore Plaintiff to the position he would have been in absent the discrimination. Therefore, if you find the Defendant would have terminated Plaintiff on January 25, 2008, after it discovered Plaintiff was working while on leave in violation of company policy, you may not award front pay damages. If, however, you decide that Defendant has not proven that it would have terminated Plaintiff on January 25, 2008, then you should consider the issue of front pay. (Trial Tr. 661-62.) Jones contends that McKennon does not apply in this case because his alleged wrongdoing occurred after Nissan’s adverse action, and only occurred because of it. He stresses that Nissan’s own improper conduct was the necessary precursor to his being forced to find other employment. Nissan counters that McKennon states that it applies even where the employer does not find out about the wrongdoing until (as here) engaging in discovery in a subsequent action by the plaintiff employee for discrimination. Nissan’s argument does not address the main issue here. It is clear under McKennon that the plaintiff employee is not excused by the fact that the defendant employer did not find out about the employee’s wrongdoing until well after the fact. What is not clear is if McKennon applies to an employee’s wrongdoing that did not occur until after some sort of adverse action was already 30 No. 09-5786 Jones v. Nissan North America, Inc. taken by the employer against the plaintiff employee. Although it appears to be an issue of first impression in this circuit, several courts have addressed, and sharply divided on, whether McKennon’s rule applies to post-termination wrongdoing. See McKenna v. City of Philadelphia, 636 F. Supp. 2d 446, 459 & n.4 (E.D. Pa. 2009) (collecting cases). Two circuit courts have concluded that post-employment misconduct could be the basis for applying McKennon’s afteracquired evidence defense. See Sellers v. Mineta, 358 F.3d 1058, 1064 (8th Cir. 2004) (“an employee’s post-termination conduct can, in some circumstances, limit an employee’s remedies for a wrongful discharge”); Medlock v. Ortho Biotech, Inc., 164 F.3d 545, 555 (10th Cir.), cert. denied, 528 U.S. 813 (1999) (acknowledging “the possibility that in appropriate circumstances the logic of McKennon may permit certain limitations on relief based on post-termination conduct” but affirming district court’s refusal to give McKennon instruction where alleged misconduct arose “as a direct result of retaliatory termination”); see also McKenna, 636 F. Supp. 2d at 461 (McKennon’s holding “that a plaintiff’s pre-termination misconduct must be considered in evaluating equitable damages” should be extended to post-termination conduct); Cohen v. Gulfstream Training Acad., Inc., 2008 WL 961472 at  (S.D. Fla. 2008) (unpublished) (noting that the post-termination conduct “directly flows from the conduct that occurred pre-termination”). Other courts have concluded that, because McKennon was premised on an employee-employer relationship, any misconduct occurring outside that relationship falls outside of the reach of the rule. See, e.g., Sigmon v. Parker Chapin Flattau & Klimpl, 901 F. Supp. 667, 682-83 (S.D.N.Y. 1995); Ryder v. Westinghouse Elec. Corp., 879 F. Supp. 534, 537-38 (W.D. Pa. 1995); Carr v. Woodbury Cnty. Juv. Det. Ctr., 905 F. Supp. 619, 627-28 (N.D. Iowa 1995). 31 No. 09-5786 Jones v. Nissan North America, Inc. Complicating matters somewhat, Jones’s wrongful conduct does not fit neatly into the posttermination category. Although his violation of Nissan’s procedures did occur after Nissan’s wrongful discrimination against him, Jones was on medical leave and still an employee at the time. Accordingly, the logic of the cases refusing to apply the McKennon rule because of a lack of employment relationship do not apply. However, cases like Medlock and McKenna which allow that the McKennon rule might be applicable, but counsel against applying it to limit recovery where the misconduct can be attributable to the defendant’s prior illegal action are relevant. See Medlock, 164 F.3d at 555 (affirming refusal to give McKennon instruction where alleged misconduct arose “as a direct result of retaliatory discrimination”);16 McKenna, 636 F. Supp. 2d at 462 (“a plaintiff’s post-termination wrongdoing must not be attributable to the defendant’s conduct”).17 Jones testified that he applied for other jobs without permission because he did not receive a paycheck while on medical leave from Nissan, and he needed to support his family. He also 16 In Medlock, the plaintiff “touched and cursed at Defendant’s counsel” at his unemployment compensation benefits hearing. In determining that the “necessary balancing of equities” cut against a McKennon instruction, the court noted, “It is not difficult to envision a defendant goading a former employee into losing her temper, only to claim later that certain forms of relief should be unavailable because it would have discharged the plaintiff based on her inability to control her temper.” 164 F.3d at 555. 17 The McKenna court found that the plaintiff’s use of marijuana and his resulting conviction were sufficiently causally related to the defendant city’s discrimination that it would be inequitable to restrict the plaintiff’s back pay as a result of the conviction. As the court put it, “[h]ad [the plaintiff] not been wrongfully terminated, he would have continued to have been employed by the Philadelphia police department and would have had the insurance and the salary to treat his depression.” The plaintiff had argued that he had never used marijuana until after his firing, and attributed it to the exacerbation of his depression, which he had had to stop treating because he had no medical insurance after being fired. See McKenna, 636 F. Supp. 2d at 463. 32 No. 09-5786 Jones v. Nissan North America, Inc. testified that he did not seek prior authorization from Nissan because he already knew what Nissan’s answer would be.18 The level of causation in this case is comparable to Medlock, and less attenuated than in McKenna. Were it not for Nissan’s wrongful imposition of medical restrictions rendering Jones medically unfit for any position at Nissan, Jones would not have been in the position of seeking employment without Nissan’s permission, in violation of its rules. Without Nissan’s wrongful conduct, Jones would not have violated any rule. We therefore conclude that it was error to give the McKennon instruction limiting damages.19