A Brief Analysis of After-acquired Evidence in Employment Cases: a Proposed Model for Alaska (and Points South)

• Publication year: 2000

§ 17 Alaska L. Rev. 271. A BRIEF ANALYSIS OF AFTER-ACQUIRED EVIDENCE IN EMPLOYMENT CASES: A PROPOSED MODEL FOR ALASKA (AND POINTS SOUTH)

Alaska Law Review
Volume 17
Cited: 17 Alaska L. Rev. 271

A BRIEF ANALYSIS OF AFTER-ACQUIRED EVIDENCE IN EMPLOYMENT CASES: A PROPOSED MODEL FOR ALASKA (AND POINTS SOUTH)

GREGORY S. FISHER ^[*]

I. INTRODUCTION

II. AFTER-ACQUIRED EVIDENCE

A. Definition and Governing Principles

B. After-Acquired Evidence in Employment Discrimination Claims under Federal Law

C. After-Acquired Evidence in Wrongful Termination Claims

D. General Principles of Alaska Employment Law

E. Alaska Law Regarding After-Acquired Evidence

III. PROBLEMS WITH EXISTING ANALYSES

IV. RECOMMENDED APPROACH

A. Defining After-Acquired Evidence

B. After-Acquired Evidence Should Bar Suit

C. Evidentiary and Procedural Issues

V. CONCLUSION

FOOTNOTES

This Article examines the role of after-acquired evidence in employment cases, and in which instances such evidence, found after an employer has already disciplined the employee, may bar suit or preclude some form of relief. The Article begins by defining and explaining the governing principles of after-acquired evidence, and continues by contextualizing and applying these principles in both employment discrimination and wrongful termination cases. This Article progresses by finding fault with the present treatment of after-acquired evidence, and continues by presenting its own comprehensive approach for how such evidence should be treated in employment law cases in Alaska. The author concludes by suggesting that the Alaska judicial system should attempt to develop a uniform method to deal appropriately with after-acquired evidence in employment cases. [*pg 272]

I. INTRODUCTION

What effect should after-acquired evidence have in employment litigation? No clear rules have emerged in Alaska. In cases alleging employment discrimination claims under federal law, it is now well established that after-acquired evidence limits damages but does not bar suit. ^[1] However, in cases not implicating unlawful discriminatory motive, state courts have not articulated consistent principles. The developing weight of authority holds that after-acquired evidence bars suit in ordinary wrongful termination cases, ^[2] but contrary authority does exist. ^[3] In addition, corollary questions remain unanswered. For example, courts do not agree on the applicable burden of proof. Some courts hold that employers may establish the existence of after-acquired evidence by a preponderance of the evidence. ^[4] Other courts require proof by clear and convincing evidence. ^[5] Still other courts are silent on the issue. ^[6] Courts also differ on whether an employer's decision to impose discipline based on after-acquired evidence should be governed by an objective "reasonable employer" standard or whether employ- [*pg 273] ers may rely upon their subjective discretion to interpret and apply their own work rules in imposing discipline. ^[7]

The Alaska Supreme Court has not addressed these issues. However, in Brogdon v. City of Klawock, ^[8] the court offered dicta suggesting that it may adopt a restrictive approach to the use of after-acquired evidence. ^[9] This stance would make it difficult for employers to invoke such evidence as a defense in employment litigation. ^[10] The court expressed concerns that employers might use after-acquired evidence to justify pretextual disciplinary decisions and stated its view that "[a]fter-the-fact justifications should be viewed with skepticism." ^[11] The court suggested, without holding, that it might be appropriate to require employers to establish the existence of after-acquired evidence by a heightened burden of proof, which would in effect be a clear and convincing standard, and it might restrict the use of after-acquired evidence only to instances where all reasonable employers would have imposed discipline in the first instance. ^[12] Three years have now elapsed since Brogdon, but the Alaska Supreme Court has not had the opportunity to revisit this issue during this time.

This Article examines after-acquired evidence in the context of Alaska law. ^[13] Part I and Part II briefly review the history of after-acquired evidence and outline its relevant principles in light of applicable case law and general policy concerns. Part III discusses problems with current analyses. This Article contends that courts have done little to define after-acquired evidence adequately and develop principles to apply it properly. As a result, courts often in- [*pg 274] appropriately apply after-acquired evidence in employment cases. In the specific context of Alaska law, for example, this Article argues that the Brogdon court's dicta conflicts with existing legal principles, represents questionable policy, and needlessly fosters confusion in an already complicated area of law. Part IV of this Article offers a proposed model for analyzing and applying after-acquired evidence in Alaska.

This Article recommends that the Alaska Supreme Court decline to embrace the sweeping principles suggested by Brogdon when the court is next presented with the issue of after-acquired evidence. Instead, the court should analyze after-acquired evidence using existing contract and equity principles. In cases alleging ordinary wrongful termination claims under state law, this Article suggests that Alaska adopt the majority rule that after-acquired evidence bars suit. Where employees allege employment discrimination claims under state law, this Article concludes that a test patterned after the approach taken in federal discrimination cases should be used with a slight modification. In such cases, after-acquired evidence should limit available damages to a period between the date of wrongful discipline and the date when the employee committed the misconduct. In all cases, an employer should be required to establish by a preponderance of evidence that it reasonably believed the alleged misconduct was committed and that it would have imposed discipline had it discovered the misconduct at an earlier time. ^[14] By applying existing principles, Alaska courts will be able to develop a consistent and coherent body of law that protects the rights and interests of all concerned.

II. AFTER-ACQUIRED EVIDENCE

A. Definition and Governing Principles

After-acquired evidence is evidence independent of employee misconduct that the employer discovers after it has already disciplined the employee on different grounds. ^[15] For example, if an em- [*pg 275] ployer has sanctioned a worker for stealing company property and then subsequently discovered that the employee had lied on her employment application, evidence of the falsified employment application would constitute after-acquired evidence and would be independent grounds justifying discipline.

The after-acquired evidence doctrine finds its source in the common law of contract and equity. ^[16] Under general contract principles, breach of a contract is not actionable if a legal basis existed for excusing performance, even if the breaching party was unaware of that legal excuse. ^[17] In equity, the doctrine of unclean hands may bar a party from relief if that party has engaged in fraudulent, deceitful, or unfair conduct. ^[18] Implicit in the application of after-acquired evidence is the premise that an employee who has committed wrongdoing that would have led to her discipline if the employer discovered the misconduct cannot complain if the employer imposes discipline for some other reason. ^[19]

After-acquired evidence generally falls into two broad categories. ^[20] First, after-acquired evidence often arises when an employer discovers that an employee has made fraudulent misrepresentations in a job application or résumé submitted to the employer. ^[21] Second, after-acquired evidence sometimes involves pre-discipline misconduct that the employer did not discover until after the employee filed suit. ^[22] An additional category, post-discipline misconduct, logically fits within the concept of after-acquired evidence but has not found favor with the few courts that have addressed it. ^[23] It is possible to further classify after-acquired evidence by reference to whether the alleged misconduct is related to a violation of ordi- [*pg 276] nary work rules or pre-litigation activity. ^[24] A number of after-acquired evidence cases involve pre-litigation efforts by employees to gather evidence against their employers. ^[25] Other cases involve more typical violations of work rules that the employer did not discover until after suit was filed. ^[26]

In many cases, after-acquired evidence has little significance. Once an employer makes an adverse employment decision, the fact that a disciplined employee also engaged in other misconduct is not usually important. However, after-acquired evidence can become significant if the disciplined employee challenges the employer's decision. If the after-acquired evidence constitutes misconduct for which the employer would have also disciplined the employee, the after-acquired evidence may affect liability and damages.

[*pg 277]

B. After-Acquired Evidence in Employment Discrimination Claims under Federal Law

Prior to the United States Supreme Court's 1995 decision in McKennon v. Nashville Banner Publishing Co., ^[27] federal courts adopted two dominant views as to the use of...