Mardell v. Harleysville Life Ins. Co.

• Decision Date: 02 August 1994
• Docket Number: No. 93-3258,93-3258
• Citation: 31 F.3d 1221
• Parties: 65 Fair Empl.Prac.Cas. (BNA) 734, 65 Empl. Prac. Dec. P 43,200, 63 USLW 2106 Nancy MARDELL, Appellant v. HARLEYSVILLE LIFE INSURANCE COMPANY, a Pennsylvania Corporation.
• Court: U.S. Court of Appeals — Third Circuit

Page 1221

31 F.3d 1221

65 Fair Empl.Prac.Cas. (BNA) 734,

65 Empl. Prac. Dec. P 43,200, 63 USLW 2106

Nancy MARDELL, Appellant v. HARLEYSVILLE LIFE INSURANCE COMPANY, a Pennsylvania Corporation.

No. 93-3258.

United States Court of Appeals,

Third Circuit.

Argued Dec. 9, 1993.

Decided Aug. 2, 1994.

Joel S. Sansone (argued), Kelly L. Scanlon, Sansone & Associates, Pittsburgh, PA, for appellant.

Roslyn M. Litman (argued), Martha S. Helmreich, Litman Litman Harris Brown

and Watzman, P.C., Pittsburgh, PA, for appellee.

James R. Neely, Jr., Deputy Gen. Counsel, Gwendolyn Young Reams, Associate General Counsel, Lorraine C. Davis, Asst. Gen. Counsel, Barbara L. Sloan (argued), E.E.O.C., Office of Gen. Counsel, Washington, DC, for amicus curiae in support of appellant.

Before: BECKER, NYGAARD, Circuit Judges, and YOHN, District Judge. ^*

OPINION OF THE COURT

BECKER, Circuit Judge.

Nancy Mardell appeals from the grant of summary judgment for defendant Harleysville Life Insurance Company ("Harleysville") by the District Court for the Western District of Pennsylvania, 854 F.Supp. 378, in an employment discrimination suit alleging age and gender discrimination. Mardell brought several claims pursuant to Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C.A. Secs. 2000e to 2000e-17 (1981 & Supp.1994), the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.A. Secs. 621-34 (1985 & Supp.1994), and the Pennsylvania Human Relations Act, 43 PA.STAT.ANN. Secs. 951-63 (1991 & Supp.1994). The district court relied upon the rule pioneered by the Tenth Circuit Court of Appeals in Summers v. State Farm Mutual Automobile Insurance Co., 864 F.2d 700 (10th Cir.1988) to hold that Harleysville's "after-acquired evidence" of Mardell's alleged resume fraud provided a complete defense to Mardell's causes of action. "After-acquired evidence" in an employment discrimination case denotes evidence of the employee's or applicant's misconduct or dishonesty which the employer did not know about at the time it acted adversely to the employee or applicant, but which it discovered at some point prior to, or, more typically, during, subsequent legal proceedings; the employer then tries to capitalize on that evidence to diminish or preclude entirely its liability for otherwise unlawful employment discrimination.

We reject the Summers rule in favor of one circumscribing the use of after-acquired evidence to the remedies phase of an employment discrimination suit brought pursuant to Title VII or ADEA. ¹ We will therefore reverse the district court's order granting summary judgment to Harleysville, and remand the case for further proceedings consistent with this opinion.

I. FACTS AND PROCEDURAL HISTORY ²

Harleysville hired Mardell as a Branch Life Manager in February 1988 to manage insurance agents. ³ Mardell appears from the record to have been an accomplished life insurance agent. Before accepting the position with Harleysville, Mardell had been employed by Prudential Life Insurance Company ("Prudential") for eleven years. William Shelow, who was being promoted out of the position at Harleysville for which Mardell would be hired, had approached Mardell at Prudential about replacing him in his soon-to-be vacated position. Shelow was familiar with Mardell's work at Prudential and felt that she would excel as a Life Manager for Harleysville.

In December 1989, Mardell became the first Harleysville employee ever to be placed on probation. William Forloine, Mardell's direct supervisor and Harleysville's senior vice-president of marketing and sales, avowedly effected this action for poor performance, even though at the time he imposed the probation Mardell's work was improving and she had surpassed the yearly goal he had set for her. The terms of probation required Mardell to meet or exceed her quota every month at pain of dismissal, a requirement not imposed on any of her male peers or supervisors and one which set a standard that most of Harleysville's managers commonly failed to fulfill.

In February 1990, Harleysville discharged Mardell, who then was 52 years old. Four months later Harleysville hired a 40 year old male to replace her. Harleysville attributed its termination decision to Mardell's poor work performance. Specifically, Harleysville contends that during Mardell's tenure, sales declined in her region, as did the number of independent insurance agents with whom she maintained ongoing contact. The company also faulted her for improperly implementing its new marketing plan, failing to learn to use its new computer system effectively, making poor presentations, and being unable to work suitably with some co-workers and outside agents.

Mardell disputes Harleysville's asserted reasons for its decision to discharge her, contending instead that gender and/or age discrimination was the cause. Mardell combined the aforementioned circumstantial evidence of disparate treatment (having been the only person placed on probation and subjected to a quota, and having been replaced by a younger man) with direct evidence of her supervisor's comments and attitudes indicative of sex and/or age bias. She testified that Forloine had told her that as a female he had higher expectations of her; that she "wasn't one of the boys" and "couldn't be a good old boy;" that he did not think her position "was a job for a woman;" and that many of her agents would think of her "as a wife." She testified further that once he had accused her, without foundation, of missing work because she "just wanted to stay home and watch the soaps," and that she had become aware of a meeting before all the company's vice presidents and regional directors held after her termination at which he allegedly stated that he "would never have another female regional director." She added that he had frequently mentioned her age and that he had told her once that she "should be home playing with [her] grandchildren."

During discovery in the instant case, Harleysville unearthed several instances of employment application and resume misrepresentation committed by Mardell. First, Mardell represented that she had obtained a Bachelor of Science degree from the University of Pittsburgh, whereas in fact the university had never issued a diploma to her: the university's records indicate that she has yet to complete all her work in two related courses required for her degree. Mardell attributed her misrepresentation to a mistaken belief that she had earned a Bachelor of Science degree. She explained that she had belatedly completed and submitted all required work for those two courses and had been informed by her professor that he would file a grade change report, but that for some unknown reason the university's official records never credited the supposed report. Notably, Harleysville apparently did not consider the possession of a college degree a prerequisite to employment as a Branch Life Manager, and was prepared to hire the "mental equivalent" of a college graduate.

Second, Harleysville learned that Mardell had also misrepresented her professional experience on both her employment application and resume. Mardell had listed in the "employment history" section of the application form and the "professional experience" section of her resume that she had served as a "writer-interviewer" at a local hospital, as a therapist at a mental health center, and as a manager and public relations director at a hotel. Although Mardell had performed most of those tasks as she described them on those documents, in both documents she had (at a few points greatly) exaggerated some of her specific duties; misrepresented that the hospital and mental health care center positions were remunerated (in fact she took them on as unpaid field course work to earn college credit); and misstated the dates she had performed those activities.

Buoyed by its admittedly post-termination discoveries, Harleysville moved for summary judgment. It attached to its motion affidavits by Glyn Mangum, the vice-president of sales who had made the decision to hire Mardell, and Forloine. Mangum averred that he had relied on Mardell's application and resume when considering her for the Branch Life Manager position and that, had he known of her misrepresentations, he would not have hired her. Forloine averred that he had considered Mardell's alleged college degree to be a "plus" when he interviewed her for the position; that, had he known of her misrepresentations at the time of her interview, he would have "strongly recommended that she not be hired;" and that, had he at any time apprehended her misrepresentations, he would have, consistent with Harleysville's policy as declared by the employment application form Mardell had completed, "terminated her immediately." He added that, in context of what Harleysville now knows to be true about Mardell, it would not voluntarily reemploy her.

Basing its summary judgment motion on the after-acquired evidence doctrine, Harleysville assumed arguendo that it had impermissibly discriminated against Mardell, but essentially contested Mardell's standing to sue and, in the alternative, questioned whether she had realized an injury. On April 27, 1993, the district court entered its Memorandum and Order granting Harleysville's motion. In the process, it applied a variant of the Summers rationale adapted to resume fraud cases and held that, because of her fraud in gaining her employment, Mardell had suffered no legally cognizable injury even if Harleysville had willfully discriminated against her on the basis of her age and/or sex. Given that disposition, the court did not reach the question whether Mardell had made out a prima facie case of sex and/or age discrimination. This appeal followed. ⁴

II. THE RELEVANT LEGAL BACKGROUND

A. General Background

Experience with the federal employment discrimination laws has culminated in the division of disparate treatment suits into three classes:...