Legal Affairs

by Jeffrey P. Feuquay, Ph.D., Esq.

EEOC Guidelines on After-Acquired Evidence and Retaliation Under Title VII

First, the "one hand giveth while the other taketh away" disclaimer: This and future columns are intended only to provide information. Legal advice should be sought from a local attorney with regard to specific situations you may be facing. So, read this but don't bet on it. That said, let's move on.

For years employers relied on their ability to find some legitimate reason for having fired a person as a way of minimizing or eliminating damages an employee might seek in a lawsuit stemming from an adverse personnel action. The way it worked was this - the fired (demoted, transferred, etc.) employee would assert that the employer had some statusbased, discriminatory reason for the termination, e.g., race, sex or age. To answer the complaint, the employer would scour its files for every possible basis for the termination, e.g., lies on the application, embezzlement, assault, or divulgence of confidential information. The employer could then argue that it would and should have fired the employee for the legitimate reason, regardless of any discriminatory basis. Some courts were prone to cut off all damages when a legitimate reason was presented.

That strategy worked fairly well until the Supreme Court decided McKennon v. Nashville Banner Publishing Co., 115 S.Ct. 879 (1995), a case most of us have heard about. In McKennon, the Supreme Court held that afteracquired evidence may not be a complete bar to recovery for wrongful termination but may be taken into account when determining the specific remedy to which the employee is entitled. Most folks interpret (and oversimplify) that case as saying damages still accrue from the time the wrongful action was taken until the information which would have been a legitimate reason for the action is discovered. On December 14, 1995, the EEOC issued guidelines interpreting McKennon for their investigators which significantly effect its impact. Moreover, the U.S. Court of Appeals for the Tenth Circuit recently issued a decision addressing retaliation against an exemployee under Title VII, and needs to be factored into the equation as employers look for dirt. Barry v. Stevinson Chevrolet, ____ F.3d ____, 1196 WL 18779 (10th Cir. 1996). That 10th Circuit decision drew heavily on prior decisions from other circuits and, as such, will likely find its logic floating back to those circuits.

Under the EEOC McKennon guidelines, an investigator first looks at the past practices of the employer - what has the employer done to other employees for similar incidents of misconduct? If similar incidents are not found, the investigator determines the severity of the misconduct alleged against the complaining employee (is it criminal; does it compromise the integrity of the employer, e.g., divulging confidential information or trade secrets) and determines if the employer's adverse actions were reasonable in light of the severity. Generally, back pay will continue to accrue until the date of judgment, unless the employer would have taken the same or more severe action based on the misconduct alleged. In that latter instance, back pay will be cut off at the point when the misconduct was discovered and the adverse action would have been taken for that legitimate reason.

But, there is a catch. When an employer begins searching for legitimate reasons as a retaliatory measure for the employee's filing or threatening to file a complaint, equity may dictate the employer lose the protection afforded by McKennon, that is, back pay would accrue until judgment. This situation (and others) is one which can be impacted by Barry, one of a long line of cases that say that Title VII should be liberally, not technically, construed to reach its intended ends. The court noted that an exemployer is considered included within the definition of "employer" (that entity which can be held liable under Title VII), and that "adverse personnel action" should be similarly broadly interpreted. In Barry, a former employer filed criminal charges when it discovered the exemployee was considering suing for race discrimination. The employer was found to have engaged in retaliation and to have taken an adverse personnel action by the filing of charges. Note that the charges had no effect on the person&s former job-he was already gone-they effected his future employment opportunities.

The EEOC guidelines also address front pay and reinstatement, neither of which are generally considered viable alternatives when afteracquired evidence would justify the action taken. As to compensatory damages for intangibles such as emotional harm caused by the discrimination, and punitive damages, afteracquired evidence is irrelevant. But, compensatory damages for such things as money expended in search of a new job will likely fall under the standards described above for back pay, that is, afteracquired evidence can cut them short.

So, conclusions . . . When taking adverse action against either an employee who is a member of a protected group, or against a "permanent/merit" employee who is not a protected group member, do a complete investigation before taking the adverse action and use all the misconduct you can find, routinely search for misconduct regardless of group membership (don't hammer just the plaintiff), and be consistent in taking adverse actions. Consistency does not have to mean: if this misconduct occurs, this adverse action results. If handled reasonably, adverse actions can be tempered by taking into account prior misconduct, work history, etc. - all the "stuff" that determines employee performance. When taking adverse actions against an atwill employee who is not a protected group member, simply do it reasonably to avoid giving the person a cause of action, e.g., don't grab the person by the ear and drag him or her throughout the office while yelling, "Stupid and ugly and smelly, oh my!" And finally, as I tried to emphasize in my last column, be predictable. When people are surprised, they have the luxury of blaming you for your unfairness, rather than accepting your proffered reasons for taking an action. Surprises are strong motivation for lawsuits.

See you in court.

Dr. Feuquay is a member of Irish & Associates, a firm which focuses primarily on employment and constitutional law, and on family law. Dr. Feuquay and the senior partner, Jennifer Irish, are admitted to practice in the State of Oklahoma; and before the U.S. District Courts for Northern, Eastern and Western Districts of Oklahoma; and the Tenth Circuit Court of Appeals. Jennifer has been a litigator for a decade; Jeff has over 15 years' experience in public-sector personnel psychology and is on the IPMAAC Board of Directors and a member of IPMA. Both are members of the Oklahoma, American and Federal Bar Associations. Jeff may be reached at: phone: (405) 232-0851, fax: (405) 232-0858, or E-mail: 102370.2715@compuserve.com.