Evidence of employee misconduct acquired post-termination not a complete defense

Article by Laura Benson

Suppose that during the discovery phase of a lawsuit against you by a former employee, you uncover evidence that this former employee engaged in wrongdoing while working for you, and that this wrongdoing would have been cause for the employee’s immediate termination. It may seem as though this is the final answer to the case. But like most legal questions, the answer is more complicated.

That’s because evidence of employee wrongdoing discovered after an employee’s termination is not a defense to liability. Anti-discrimination laws like the federal Age Discrimination in Employment Act are in place to compensate employees for injuries caused by illegal discrimination, and to deter employers from engaging in unlawful discrimination. Therefore, employees still have the opportunity to prove their case, regardless of what wrongdoing they may have engaged in while employed.

But such after-acquired evidence can be considered when determining damages. Remedies in these disputes, of course, must be addressed case-by-case. Courts have recognized, however, that once an employer learns about wrongdoing that would have led to a lawful discharge, the employer is not required to ignore the information, even if it would never have been discovered absent the lawsuit. As such, back pay is generally calculated from the date of the unlawful discharge to the date the new information was discovered (assuming a finding of liability). Front pay and reinstatement would not be an option for a former employee who could be fired on the first day he or she returns, even if a court decided that a discrimination law was broken.

Should this situation arise, there are a few things to keep in mind:

1. Timing is crucial. Courts have drawn distinctions on when the evidence is discovered. For instance, one court denied a defendant’s request for denial of front pay in its motion for summary judgment because the employee wrongfully took confidential documents from her employer after she was terminated, rather than when she was still employed.
2. The misconduct must be of such severity that the employee would have been terminated solely on those grounds.
3. After-acquired evidence is always stronger when the former employee admits to the wrongdoing.