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After-acquired evidence — employees’ pasts can come back to bite them

August 12, 2011

Let’s say your employer fires you.  You think you’ve got a pretty good shot at proving you were discriminated against.  After all, your term letter said “we’re trying to get rid of all of the old, expensive workers like you, no offense.”  Slam dunk, right?  Hold on.  First you’d better check those closets for skeletons, or you’ll get caught in the time warp that is “after-acquired evidence.”

After-acquired evidence is a defense employers may assert against discrimination claims, when they discover after-the-fact (usually in the course of litigating) that the plaintiff falsified her resume, or committed some other wrong that, had the employer known about it, would have justified the employee’s dismissal.  The argument being that an employee who could have been legitimately discharged suffered no harm as a result of alleged discrimination.

Courts have viewed the doctrine with varying degrees of skepticism.  In 1995, the US Supreme Court took a nuanced approach to after-acquired evidence, holding that it was not an outright bar discrimination suits, but at the same time encouraging the lower courts to consider the employee’s wrongful conduct in awarding appropriate remedies.  (So, an employee might win her discrimination case but be denied things like front pay and reinstatement to the position when damages are calculated.)  California courts have generally reached the same conclusion (or non-conclusion, depending on your point of view), holding that after-acquired evidence could be used to limit remedies but not necessarily avoid liability altogether.

There is a line of California cases, however — including Salas v. Sierra Chemical Co.,  a new case just out of the court of appeal — that gives the after-acquired evidence sharper teeth.  These cases involve after-acquired evidence that cuts to the core of the employment relationship:  Whether the plaintiff was qualified for her job at all.  

In Salas, plaintiff worked as a seasonal production line worker for Sierra, a pool chemical company.  Salas was laid off and rehired many times during his four-plus year tenure.  He suffered a work-related injury, and for a time was accommodated with light duty work.  When he was offered rehire for the last time, in early 2007, the employer demanded he be “100% fine” before being permitted to return to work.  Salas sued for disability discrimination.  Just before trial, Sierra discovered (as a result of a motion filed by Salas, ironically) that the Social Security number Salas had used at his initial hire and every subsequent rehire was not his.  Sierra asserted the after-acquired evidence doctrine barred plaintiff’s discrimination claims, because had the company known he was either unauthorized to work in the US or had submitted false documentation to prove his right to work, Salas would have been immediately terminated. The trial court agreed with Sierra, and threw out Salas’s case entirely.

The court of appeal affirmed.  It held that Salas’s claims were grounded in Sierra’s failure to hire him back.  However, the court noted, Salas was not legally entitled to be hired, since he submitted false documentation concerning his right to work.

These facts, if not genuinely disputed by Salas, would entitle Sierra Chemical to judgment as a matter of law based on the complete defense of the after-acquired-evidence doctrine. . . .  Salas misrepresented a job qualification imposed by the federal government, i.e., possessing a valid Social Security number that does not belong to someone else, such that he was not lawfully qualified for the job.  Further, Salas placed Sierra Chemical in the position of submitting a perjurious I-9 form and filing inaccurate returns with the Internal Revenue Service and the Social Security Administration.  In these circumstances, Salas should have no recourse for an allegedly wrongful failure to hire.

The Salas court relied heavily upon another California appellate case, Camp v. Jeffer Mangels Butler & Marmaro.  In that case, plaintiffs sued their employer for discrimination.  During the suit it came to light that plaintiffs (a husband and wife) had been convicted of a felony before being hired, and had lied about it on their applications.  The law firm employer, a contractor for the federal Resolution Trust Corporation, was required to certify to the government that none of its employees had been convicted of a felony.  The Camp court dismissed plaintiffs’ claims based upon the after-acquired evidence, holding that “the Camps misrepresented a job qualification imposed by the federal government, such that they were not lawfully qualified for the job.”

The Salas case makes clear that after-acquired evidence can be a valid defense for employers, but only in the right case.  An employee who was not legally entitled to his or her job in the first place will have an uphill battle recovering damages for losing it.  But late-discovered violations of employer policies are likely not to carry the same kind of weight, with courts or with juries.  An employer relying on this defense can end up looking both incompetent and bullying, hardly the image you want to project to a jury.  In my experience, in fact, juries often conclude this kind of after-the-fact justification for an often questionable decision by the employer doesn’t pass the basic fairness test that guides virtually all deliberations.

Employees, you need to know about this stuff too, and recognize that any lawsuit is going to result in a fairly close (I’m trying to avoid an allusion to proctology, but as you can see without success) examination of your prior conduct on the job.  After all, a trial is really just a civilized substitute for combat of a more primitive sort — and we all know that saying about love and war.

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