The situation is not terribly uncommon. You terminate an employee for failing to meet performance standards, and the employee sues the company for discrimination or wrongful discharge, claiming that the reason given by the company was truly a pretext for an otherwise unlawful motive.
To bring this situation into 2010, suppose your CFO is roaming the Internet one night after your former employee’s lawsuit was filed, and discovers evidence that that employee had engaged in some form of misconduct that clearly would have resulted in his termination regardless of his poor performance. Can you rely on that evidence as a basis for the termination of your former employee even after he is already gone and the lawsuit has started?
Depending on your jurisdiction and the facts in your particular situation, you may be able to use the “after-acquired evidence” doctrine as a defense to your former employee’s claims. The defense was first created by the United States Supreme Court in 1995 to limit or altogether preclude an employee from obtaining remedies due to a claimed unlawful termination if the employer later acquired evidence of wrongdoing that would have led to the termination of the employee anyway.
This summer, courts have continued to apply the “after-acquired evidence” defense to benefit employers. For example, on July 16, 2010, a federal court in North Carolina applied the defense when an employer learned during discovery in a lawsuit that an employee may have violated expense reimbursement policies. The court in Rinaldi v. CCX, Inc. ruled that the following elements must be established for the defense: (1) the employee was guilty of some misconduct about which the employer was unaware, (2) the misconduct constituted an act of dishonesty, gross neglect of the employee’s obligations, or an illegal act, and (3) the employer would have discharged the employee for cause if it had known about the misconduct.
On August 17th, a federal court in California in the case of First v. Kia of El Cajon permitted an employer to serve subpoenas on a former employee’s former employers on the ground that “[f]ormer employment records are relevant to the after-acquired evidence defense available in Title VII employment discrimination cases.” And on that same day, a federal court in Texas in the case of Garza v. Mary Kay, Inc. allowed the employer to proceed to a jury on its defense that evidence that the employee “collected and removed confidential documents” while previously employed, but about which the employer learned after termination, could be relied upon after the fact to justify the termination. The jury was, however, entitled to also determine the employee’s response to that defense that the employer “had never before terminated an employee for the same behavior.”
Employer Take Away: What should you as an employer take away from this development? We have already suggested to you in prior posts that social media can be a valuable tool when defending a lawsuit brought by a former employee. One significant way is to look for evidence through social media that would support an otherwise legitimate reason for terminating the employee, even if that reason was not known and articulated at the time of termination.
For example, perhaps a LinkedIn profile demonstrates that the individual did not work for an entity identified on an application for employment with your company, or did not have the experience represented on your application. Perhaps other posts by the individual boast about, or demonstrate the existence of, theft of trade secrets or competition during the prior employment with your company, or otherwise reflect that the individual violated a policy of your company while employed. Or maybe evidence found through social media can belie the reason given to you for the employee’s separation from a prior employer.
The ability to raise and rely upon the “after-acquired evidence” defense may presuppose the existence of a policy (or statement on the application itself) that clearly identifies your company’s right to terminate for the after-acquired reason. You should also determine whether you can demonstrate to the Court that others in the past had in fact been terminated on similar grounds. Just another reason why it is important for you to maintain policies that say what you want them to say, and that are enforced effectively and consistently.