Welch v. Liberty Mach. Works, Inc.

• Decision Date: 06 May 1994
• Docket Number: No. 93-2670,93-2670
• Citation: 23 F.3d 1403
• Parties: 64 Empl. Prac. Dec. P 43,063, 62 USLW 2696, 3 A.D. Cases 385, 5 NDLR P 123 Richard L. WELCH, Appellant, v. LIBERTY MACHINE WORKS, INC., a Missouri Corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1403

23 F.3d 1403

64 Empl. Prac. Dec. P 43,063, 62 USLW

2696, 3 A.D. Cases 385,

5 NDLR P 123

Richard L. WELCH, Appellant, v. LIBERTY MACHINE WORKS, INC., a Missouri Corporation, Appellee.

No. 93-2670.

United States Court of Appeals,

Eighth Circuit.

Submitted Jan. 13, 1994.

Decided May 6, 1994.

David M. Heimos, St. Louis, MO, argued, for appellant.

Henry F. Luepke, St. Louis, MO, argued (Michael A. Fisher and Henry F. Luepke, on the brief), for appellee.

Before BEAM, Circuit Judge, MORRIS SHEPPARD ARNOLD, Circuit Judge, and STROM, ^* Chief District Judge.

BEAM, Circuit Judge.

This case is one of first impression for this circuit and requires us to determine whether after-acquired evidence of an employee's misrepresentation on a job application bars recovery for discriminatory discharge. We find that it does, but that the district court improperly granted defendant's motion for summary judgment. We therefore reverse and remand to the district court.

On November 1, 1990, Liberty Machine Works, Inc. (Liberty) hired Richard L. Welch for a 90-day probationary period as a machinist. Immediately prior to being hired by Liberty, Welch worked as a machinist for a month at K & M Machine Works, Inc. (K & M). K & M fired Welch because of unsatisfactory performance. As part of its hiring process, Liberty requires applicants to complete an employment application, including an "accurate, complete full-time and part-time employment record." The application states that "any misstatement or omission of fact on this application shall be considered cause for dismissal." Unbeknownst to Liberty, Welch intentionally falsified his resume and his employment application: Welch did not inform Liberty of either his employment at K & M or that K & M fired him after only one month for unsatisfactory performance.

In early January 1991, Welch informed Liberty that he had developed a fistula requiring surgery. The surgery would have been covered under Liberty's employee benefit plan. Liberty, however, discharged Welch a week later, purportedly due to lack of work. Welch filed suit, alleging wrongful discharge in violation of ERISA and handicap discrimination in violation of the Missouri Human Rights Act. Welch contended that Liberty terminated him to avoid liability for his medical expenses. During discovery, Liberty deposed Welch and learned that Welch had intentionally omitted from his employment application and resume his work with, and subsequent firing from, K & M. Liberty then filed a motion for summary judgment, supported by an affidavit from its president, Kurt Maier. In his affidavit, Maier stated that "Liberty would never have hired Welch if he had disclosed to Liberty that his most recent employer, K & M Machinery, had just fired him after only one month because they were not satisfied with Welch's work as a machinist." In addition, Maier stated that Liberty would have terminated Welch for omitting this information from his application. Based on Maier's undisputed affidavit, the district court granted Liberty's motion for summary judgment. In so doing, the court adopted the proposition that an employee's serious misconduct bars recovery on a claim of discriminatory discharge. Welch timely appealed the district court's grant of summary judgment. On appeal, Welch argues that after-acquired evidence of employee misrepresentation should bar recovery only when the misrepresentation was material to the employee's qualifications for employment in the first instance.

We review a district court's grant of summary judgment de novo. Jones v. Coonce, 7 F.3d 1359, 1362 (8th Cir.1993). We examine the record in the light most favorable to the nonmovant, and affirm a grant of summary judgment when there is no dispute as to any genuine issue of material fact and the party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

In granting Liberty summary judgment, the district court anticipated that we would adopt the rule from Summers v. State Farm Mutual Automobile Insurance Co., 864 F.2d 700 (10th Cir.1988). In Summers, the plaintiff alleged that he was discharged because of his age and religion. Id. at 702. His employer asserted that it terminated Summers because of an unprofessional attitude with customers and co-workers. Id. at 701. The company had previously disciplined Summers for falsifying company documents and informed him that he would be fired for any future falsehoods, but his falsifications were not the basis for his subsequent termination. Id. at 702-03. However, during preparation for trial, the company learned that Summers had falsified additional documents after being disciplined. Id. at 703. The Tenth Circuit granted the company summary judgment. The court held that while after-acquired evidence of fraud cannot be cause for the termination at issue, the evidence "preclude[s] the grant of any present relief or remedy." Id. at 708.

In reaching its decision, the court relied on the mixed motive analysis of Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 285-86, 97 S.Ct. 568, 575, 50 L.Ed.2d 471 (1977): "The constitutional principle at stake is sufficiently vindicated if such an employee is placed in no worse position than if he had not engaged in the [conduct for which he allegedly was discharged]." In finding that Summers was in no worse position because the company would have fired him anyway had it known of his additional falsification, the Tenth Circuit analogized that:

The present case is akin to the hypothetical wherein a company doctor is fired because of his age, race, religion, and sex and the company, in defending a civil rights action, thereafter discovers that the discharged employee was not a "doctor." In our view, the masquerading doctor would be entitled to no relief and Summers is in no better position.

Id.

Several other circuits have followed Summers and adopted the rule that after-acquired evidence of an employee's misrepresentation bars recovery for a discriminatory discharge when the employer would not have hired, or would have fired, the employee had it known of the misconduct. See Dotson v. United States Postal Serv., 977 F.2d 976 (6th Cir.1992); Washington v. Lake County, 969 F.2d 250 (7th Cir.1992). ¹

The Eleventh Circuit rejected the Summers rule that after-acquired evidence can be a defense to a Title VII claim, but acknowledged that after-acquired evidence is relevant to the issue of relief. Wallace v. Dunn Const. Co., 968 F.2d 1174, 1181 (11th Cir.1992). Primary to the Wallace court was the concern that the Summers rule created a perverse incentive contrary to the purposes of Title VII. Wallace feared that an employer would feel no need to avoid discriminatory conduct because it could escape liability for an unlawful discharge by rummaging through an employee's background after the fact to create "legitimate" reasons for the firing. Id. at 1180.

Mindful of the concerns expressed by the Wallace court, we find that the Summers rule is the better rule. In the application fraud context, therefore, we find that after-acquired evidence of employee misrepresentation bars recovery for an unlawful discharge, if the employer establishes that it would not have hired the employee had it known of the misrepresentation. ² We do not believe that an employee should benefit from his or her misrepresentation. However, in granting Liberty summary judgment, the district court relied on Maier's affidavit. Allowing Liberty, in this instance, to...