The Mummy Returns 0001

8/14/2019 The Mummy Returns 0001

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The MummyReturns:Can You Whistle While You Work?

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By Keith Hutchinson and Thomas J . Mclrermort, Jr.

N thing stays buried these da ys.That small fib on the r esume , tha tindiscretion at the wat er cooler,the small incident with petty cash , all yearsago, but now enshrouded as major defen sesto a wrongful termination case.

What is the law of after-acquired evi-dence? What is its rationale ? Whe n should it

be applied? May it be modified to refle ct thecircumstances, and if so , how can on e pre-dict the result? These are questions current-ly bothering the courts, and we d o not pur-port to resolve them, only to illustrat e theircontext. We've framed our hypothetical as a

whistle-blow er siru.u io n to create a strongconflict in policies. but the discussion appliesto all sort s of wro ngful termination caseswhen the dir t hils been dug up and flung inthe face of tlw p laintiff. Our hypotheticalgoes throu gh t ermination and then we add

Keitt: Hu tch ins: . i \ ( II I atto rneu frorn. the stateof r'Vushiilu!rji! aff iliate ci with the firm ofSha nks & Her bert and Th omas J McDermott,Ji : is with th i ' i Ii o tSh a nk s & Herbert in SanDiego .


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two diff erent hypotheticals for t he discove ryprocess (note to juror s: one hypotheticaladded to another hypothetical does not equal

a fact , no matt er what the lawyer says .)Alice is a 67 year-old paralega l at the law-firm of Cain and A bel, LLP.She holds the dis-tinction of being the oldest non-attorneyemployee o f the firm. Bob, 26, an ambitiousassoc iate who just passe d the Bar Exam, spe-cializes in business liti gation . While ass istingBob in p roducing documents, Alice observesBob r emoving a b ox of document s from hisoffi ce to his ca r. Alice inquir es if she may beof a ssistance, to w hich Bob r espo nds: "I'monly temporarily reloca ting t hese documentsso the dark side can't get them during discov-

ery. The partners will love me!" Alice waswell awa re that the pa rticular bo x was previ-ously dete rmined to be discove rable evi-dence that another Cain & Able attorney w aspreparing to submit to t he oppos ition. Bobwarned Alice not to say anything abo ut th ebox, or he wo uld insure she wo uld "neverwork in any law of fice ag ain." Alice be lievedthat her age would be a negative facto r if shewere forced to see k employment elsewhere.Feeling trapped, s he kept qui et for the re-mainder of the day. After discussing the mat-ter with her husband, Alice decided to " blowthe whistle." She believed that she was pro-tectin g the firm and she reported Bob's ac -tion s to Carl, the senio r partner , who super-vises all li tigation matters at Cain & Abel.Bob was immediately placed on pr obat ion bythe firm. Alice was a lso p laced on probationand two days later she was terrnin ated . Alicefiled suit aga inst Cain & Abel for alleged vio-lation of the relevant state Whi stle-BlowerSta tute (Ca l. Lab. Code 1l02.5(b)). In h ercomplaint, Alice alleged she was fired inreta liation for reporting the actions of her fel-

low employe e in hiding discove rable evi-dence and b ecause o f her age.Now fo r our two hypotheticals for the dis-

coveryphase of the case.In hypo thetical one, Alice is discove red to

have lied on her emp loyment app lication .

She stated she had a B.A. in poli tical sciencewhen she d id not. In hypothetical two, exte n-sive discovery discloses t hat A lice had sys-

tematically overstated her billa ble hours byapproximat ely 20% for at least the past fouryears.

, The ... doctrine m ay

operate as acomplete

bar to a wh istle -

blower's recovery. '

-Issue-

Does a d ischarged empl oyee who sues aformer empl oyer for retaliatory discharge inviolation of a whistl e-blow er statute retain

her caus e of action wh en litig ation-r elateddiscover y yields acti vity for whi ch theemployee could hav e been lawfully termin at-ed if the emplo yer had previously discoveredthe wrongful employ ee conduct?

- ApplicableLaw-The after-a cquir ed evidence d octrine

shie lds an employe r from liabilit y or limitsrelief available when, after a terrnin ation, theemplo yer learns f or the first tim e about. empl oyee wrongdoing that would h ave led to

the discharge in any eve nt. The logi c under-lying the after-acquired evidence doctrine isthat an empl oyee should not be permi tted tocomplain ab out being wrongfull y dischargedbecause the indi vidual is in no worse a posi-tion than h e or she wo uld h ave b een if th e

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truth of his or her misconduct were known atthe outset. G as s mann I ' . E ranq e lic al Lu th -e ra n Good Samari tan S oc., ln c . , 261 Kan .

725, 728-29 (1997) (internal citation omit-ted). Employee w rongdoing in afte r-acquiredevide nce cases generally fa lls into one of twocategories: (1 ) misrepresentations on aresume or job application; or ( 2 ) post hire,on-the-job misconduct. C a mp u . J e ffer ,Man g e ls , B ut ler & Ma rmaro , 35 Ca l. Ap p .4th. 620, 632 (1995) .

As noted by the Kansas Supreme Court inG as sm ann, the U.S. Supreme Co urt es tab-lished a three-prong test in McKe nnon u.Na s h vi lle Ba n ne r P u bl is h ing Co . , 513 U.S.352 , 352-363 (1995) providing that anemploye r may escape liability under theafter-acquired evidence doct rine if it satisfiesthe following conditions: (1) the plaintiff wasguilty of some misconduct of which the em-ployer was unaware; (2) the misconductwould have justified discharge; and (3) if theemployer had known of the misconduct, theemployer would have discharged the plain-tiff. Ga s s m a nn, at 728.

The following approach es help to il lustratethe after-acquir ed evidence doctrine as itmay apply to A lice's situation.

App ro ach 1 :Comp le te B ar to R ec ov er y

. The after-acquired evidence doctrine mayoperate as a complete bar to a whistle-blow-er's recov ery. In Ca m p, su p ra, :35 Cal.App.4th at 632 , the Court affirm ed summaryjudgment for the empl oyer based on after-acquir ed eviden ce that the dischargedemployees had falsified their original emp loy-ment applications by failing to disclose felonyconvictions. The court noted that these falsi-fication went to the heart of the plaintiffs'employment relationship with the defendantand the pertin ent evidence es tablished thatthey would not have been hired had the firmknown of their previous felony convictions.

Alice's fa ilure to disclose her lack of a

degree raises the issue of whether there hasbeen any true harm to A lice. She had origi-nally secured empl oyment via decepti ve

means (il' .. ying on her resume) and herqualifications for the paralegal posit ion arenow called into q uestion. Alice's empl oye rwill argue that she would not have beenhired if it had been aware of her lack of quali-fication for the job; therefore , firing Alic efrom Cain & Abe l has not re ally hur t her.

Applying t he McKenn on tripartite test ,Alice's suit, appears to be barr ed under th eafter-acqui red evidence doc trine. Fir st, shelied on her job a pplication and the empl oyerwas unaw are at the time of thi s misr epresen-tation . Second, any reasonable empl oyer

would be ju stified in terminating the emplo y-ee once the information was discovered.Third, any reasona ble employer might firethe employee fo r dishonesty. Accordingl y, allelements o r the Mcls e rmo ri test are satisfiedand the erupl ovees suit should b e barred.

Alice's lengthy period of employment a tCa in & Abel. how ever, cuts again st the em-ployer's argument . . A lic e 's 15 years of experi-ence supports her assertion tha t, regardlessof the ruse under which she was hired, shehas performed satisfactorily for an exte ndedtime. The employer's argum ent that a partic -ular cou rse of act ion c o u ld be implemented(e .g . , termination for failure to foll ow firmprocedures) is not. the same as proving tha tthe particular course of act ion wo u ld beimplemented. McK e nnon, s u pr a , 513 U.S. at360 (internal citat ions omi tted). According ly,her supposed lack of qualifications shouldnot be an issue based on the employer'simplicit waiver by ac cepting her w ork.

In con trast, Cain & Abel's viewpoint is thatAlice should not be rewarded for dupin g anemployer. She was hired in g ood fa ith basedon her suppos ed qualificatio ns. Irrespectiveof Alice's w ork performan ce, she nevershould have been hired in the fir st place .Cain & Abel has e ffe ctively placed her in abetter position than she would h ave been ifshe had reve aled her true education al train-


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ing when she app lied for the job. Alicebre ached her implied covenan t of good faithand fair dealing, which arguabl y relieves the

empl oyer's subsequent contractua l duties.Fur ther, barring any recovery to Alice

, C ourts often

strugg le w ith fa sh ioning

a remedy when the

afte r-acquired ev idence

doc trine a pp lie s. '

doe s not app ear to v iolate any publi c policy.A reaso nabl e employer should not b e re-quired by a co urt to accep t lying on aresume/job application as "immate rial." Al-though employers should diligently verify anappli cant's credentials, busine sses would b ecrippl ed if th ey were statutorily mandated tound ertake m assive inve stigations into everycandidate's personal histo ry. Requirin g candi-dates to be honest when appl ying for a job i sless burd ensome and inherently mor e equi-table than punishing businesses who aretaken in b y deceiving appli cants.

Taking the seco nd hypo thetical, whenAlice is clearly engaged in di shonesty thataffect s directly her employer's bus iness and

also violates publi c polic y, it would se em thatund er the McKen n o n test , she woul d befired. But is she entitled to recov ery? She didthe firm and its client a great s ervice byavoidin g discovery dishonesty that couldhave l ed to severe sanctions, even a d efaul t

judgmen t again st the firm 's client. Do es notthe stri ct enfor cement of McKenn on dis-courag e whi stle-blowing and encourage

wrongd oing?

App ro ach 2:Bala nc e th e Equitie s

Rath er than comple tely barr ing theemplo yee' s claim , the court ma y choose tobalance th e equities involved in th e wron gfultermination suit. Under this approach , anemplo yee's abili ty to chall enge the empl oy-er's conduct is pr eserv ed, while th e empl oy-er's right to 'disciplin e its empl oyee is lik ewisemaintain ed. The emplo yee's claim could stillbe effecti vely barred , howev er, dependin g onthe relati ve severity o f hi s or her all eged mi s-condu ct.

For exampl e, the after-acquired evidencedoctrin e may s erve a s the bas is for an equi-table defense b ased on th e doctrine of un-clean hands . McKe nnon, s u pra , involved anage discrimin ation claim: the empl oyeradmi tted discrimin ation against the plain tiffand the plaintiff admi tted she had r emovedand copied som e of the emplo yer's do cu-ments without authori zation . The plaintiff 'sown inequitabl e condu ct (i.e . , unauthorize dcopying of the empl oye r's do cum ents ) didn o t bar the pl aintiff 's lawsuit: "We hav erejected the unclean hands defense 'where apriva te suit serv es imp ortant public ' purpos-es.' That does no t mean, however, theemplo yee's own mi scondu ct is irr elevant toall the remedi es oth erwise avail able und erthe statut e." McKennon , supra, 513 U.S. at361. "The emplo yee's wrongdoing mu st betaken into account . . .lest th e empl oye r's legit-imate conc erns b e ignored." Id.

Suppose we change the h ypoth etical yet

again. During discovery, Cain & Abel deter-min es that Ali ce has violated the firm 's pro -cedure in not tim ely cata loguing e very box of,evid ence that was designa ted for submi ssionto the opposition . Alice as serted that on sev -eral other occasions , other paralegals h ad

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eral other occas ions, ot her para lega ls hadsimilarly failed to catalogue every box, butthey were only ve rbally rep rimanded and not

placed on probation or fired. Alice be lievesthat Ca in & Abe l violated her civil right s bylook ing fo r an excus e to rid itself of "theove r-age pa ralega l that ratted out a f irmatto rney." An employee 's failure to fo llowestab lished empl oyer guidelines is much lessegregious employee m isconduct, at leastwhen compared with aff irmative decep tion.Not catal oguing ev idence acc ordin g to firmprocedure is a minor vio lation. Based on evi-dence from other employees t hat similar mis-conduct on ly resulted in verba l reprimand s,the firm 's po licies do not appea r to be uni-formly enforc ed. The issue raised pur suantto the McKe n n on test is w hether t heemp loyee wo uld have been fir ed, a bsent t hewhistle blowing, o r merely discipli ned.

More im portantly, in thi s situat ion, a ma jorpolicy issu e is involved. Spec ifically, Alice hasclaimed that she was f ired chiefly due to he rage , which implicates the re levant Anti Age-Discrimination sta tute(s). Therefore, thecourt must add ress t he ove rriding p ublicinterest in preventing age discrimination andAlice's suit must not be barred. OffsettingAlice's age discrimination claim against heralleged violation of firm policy s trikes a nappropriate equitable bal ance. Thi s balanc ingapproach empowers th e court to h ear anypolicy-relat ed consid erations without an out-right dismissal ofthe employee's c laim(s). Asreflected in the present case, the employer'salleged di scrimi nat ion ove rshadows , but doesnot negate, A lice's min or m isconduct. Ratherthan disrega rding Alice's conduct, eq uitab lybalancing the relevant harms may resu lt in alimit or e qui tab le reduction o f Alice's dam -ages . Both the employer and employe e are

held account able for th eir respective actions.- Fashioning a Remed y-

Courts often struggle with fashioning aremedy when the after-acquired ev idencedoctrine applies. Spe cifically, courts ar e justi-

fiably caut ious in det erm ining whether rein-statement of the emp loyee is the appropriateremed y. An emplo yer should not be forced to

ignore the employee 's misconduct, regardlessof the mann er in which the misconduct wasdiscove red. Concealment of an employee'spreviously undi scove red mi sconduct shouldnot inure to the employee's benefit, butshould be a ctionab le by the employer. Evenif court-ordered reinsta tement appears war -ranted , the employer could subsequently firethe specific empl oyee for cause, based on th emisconduct d iscovered duri ng discovery. Ac-cordingly, reinstatement would appear to beno more than a futile attempt to " un-r ing thebell. "

, If whistle-blowing is the

exposure of illegal

conduct .. . then all

whistle-blowing ...

[furthers] public policy. '

For example, in McKe nnon, the SupremeCourt did not consider reinstatement norfront pa y to be an app ropriate remedy, sincethe employee would be t erminat ed for themisconduct on lawful grounds (" It would be

both inequi table and poin tless to order thereinstatement of someone the empl oyerwould have terminated, and will termin ate, inany event and upon lawful grounds." 513 U.S.at 361-362.). Rat her, the Court provided thatattempt ing to restore a n empl oyee to his pre -


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discharge position is difficult:[Restoring the employee to that pr e-dis-charge pos ition] is difficult t o appl y with pre-cision where there is after-acquired evidenceof wrongdo ing that would ha ve led to te rmi-nation on legitimate grounds had the employ-er known about it. Once an employer learnsabout employee w rongdoing t hat would leadto a legitimate discharge, we cannot requirethe employer to ignore the information, evenif i t i s acquired during the cou rse of discoveryin a suit ag ainst the employer and even if theinformation might have g one undiscov eredabsent the suit . The beginning poi nt in th etrial court's formu lation of a remedy shouldbe calculation o f backpay from the date of theunlawful discharge to t he date t he new infor-mation was discove red. In determining theappropriate order for relief, the court can

consider taking into further accoun t extraor-dinary equi table circums tances t hat affect thelegitimate interests of either par ty. 5 13 U.S. at3 62 .

In Alice's case , reinstatemen t might be illadvised. Her career at Ca in & Abe l is effec-tively over and h er chances of finding simi larempl oyment are slim at bes t. Thus, dam agesappea r to be the appropriate remedy and thecourt needs to weigh the relative co nsidera-tions in determining back pay accord ing tothe McKenno n formulation above.

- Conclu sion-When an after-acquired evidence defense

is gr ounded on employee misconduct thatconsti tutes resume or job appli cat ion fraud,the employee's lack of qualificat ion for th epar ticular pos ition likely precludes the em-ployee's c laim of wrongful termination, sinc ethe employee would not have been enti tledto th e position in the first place a nd hencesuffered no real damage. Acco rdingly, whenonly a private concern is imp licated (like inG assm ann , where no federal discrim inato ry

nor public pol icy was involved), then thedoct rine of aft er-acqui red evidence mayoperate as a complete bar to recove ry in"ordinary" wrongful terminat ion cases. Incontrast , if an important publ ic policy isimplicated (like the federa l anti-age disc rirni-

nation, as in McKe nno n, or whistl e-blowing),then the afte r-acquired evidence do ctrinemay be only a partial d efense that is relevant

to address ing the plaintiff 's remedy. If theafter-acquired evidence defense is g roundedon serious employee misconduct po st-hiring,then the doct rine may be a full or parti aldefense depending upon whether strongpublic po licy issues a re present (like age dis-crimin ation, sexual harassment or whistle-blowing) .

- Th eDissent-These arguments smack of logical sophis -

try because, des pite misrepres entations at

time of hire, the emp loyee has be en hired,has been perfo rming satisfactorily and wo uldhave co ntinued to do so but for her blowingthe whist le. The emp loyee is being punishedfor whistle-blowing. If whistle-blowing is theexposure of illegal conduct, which it is, thena ll whistle blowing is in the furtherance ofpublic policy. Thi s approach would di ctatethat n o misrepresentat ion at t ime o f hiringshould be admi ssible in a whistle blowinglaws uit and reinstatem ent could be a properremedy. The "you can't un-ri ng th e bell"argum ent is valid, but what "bell" can 't be un-rung - the misrepres entat ion at time of hir-ing , or the whistle blowing itself. If theemplo yee had been perfo rmin g sati sfacto rily,then sh e would have been kept on and themisrepresentatio n would not have co me in toplay, so t hat "bell" would not have been run g.If the empl oyer is honest, then rin ging thewhistle-blowing bell should not a ffect theemployee's future. AB oppose d to misrepre-sentat ions at the time of hiring, wrongfulmisconduct on the job, which, if disclosed,.would have b roug ht discipline or discharge,

must be facto red into the ultimate result of alitigation. Why is it different? Because d is-honesty on the job mu st be punished andstopped , whereas d ishonesty on a resumepresumab ly has been ove rcome by sa tisfacto -ry job perform ance .

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