Wallace v. Dunn Const. Co., Inc., 91-7406

• Decision Date: 17 August 1992
• Docket Number: No. 91-7406,91-7406
• Citation: 968 F.2d 1174
• Parties: 59 Fair Empl.Prac.Cas. (BNA) 997, 30 Wage & Hour Cas. (BNA) 1766, 59 Empl. Prac. Dec. P 41,698, 61 USLW 2120, 122 Lab.Cas. P 35,692 Becky WALLACE, Plaintiff, Annette Neil, Plaintiff-Appellee, v. DUNN CONSTRUCTION COMPANY, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1174

968 F.2d 1174

59 Fair Empl.Prac.Cas. (BNA) 997,

30 Wage & Hour Cas. (BNA) 1766,

59 Empl. Prac. Dec. P 41,698, 61 USLW 2120,

122 Lab.Cas. P 35,692

Becky WALLACE, Plaintiff Annette Neil, Plaintiff-Appellee, v. DUNN CONSTRUCTION COMPANY, INC., Defendant-Appellant.

No. 91-7406.

United States Court of Appeals Eleventh Circuit.

Aug. 17, 1992.

Peyton Lacy, Thomas F. Campbell, Lange, Simpson, Robinson & Somerville, Birmingham, Ala., for defendant-appellant.

Marvin L. Stewart, Jr., Najjar Denaburg, P.C., Birmingham, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before KRAVITCH, Circuit Judge, GODBOLD and JOHNSON ^*, Senior Circuit Judges.

JOHNSON, Senior Circuit Judge:

Defendant Dunn Construction Company ("Dunn") appeals the district court's denial of its motion for partial summary judgment in this employment discrimination case. We reverse.

I. STATEMENT OF THE CASE

In May 1990, plaintiff Joyce Annette Neil filed a complaint against Dunn, her former employer, that alleged the following four causes of action under federal law: (1) an inadequate compensation claim under the Equal Pay Act (EPA), see 29 U.S.C.A. §§ 206(d)(1), 215(a)(2) (West 1978), (2) a retaliatory discharge claim under the EPA, see 29 U.S.C.A. § 215(a)(3) (West 1965); EEOC v. White and Son Enterprises, 881 F.2d 1006, 1010-12 (11th Cir.1989), ¹ (3) a hostile work environment sexual harassment claim under Title VII, see 42 U.S.C.A. § 2000e-2(a)(1) (West 1981) Meritor Savings Bank v. Vinson, 477 U.S. 57, 63-69, 106 S.Ct. 2399, 2403-06, 91 L.Ed.2d 49 (1986), and (4) a retaliatory discharge claim under Title VII alleging that her numerous objections to sexual harassment caused her termination, see 42 U.S.C.A. § 2000e-3(a) (West 1981). Neil also alleged two tort claims under Alabama law--one for invasion of privacy and one for assault and battery.

As a result of litigating this case, Dunn became aware, when Neil admitted as much in a deposition, that Neil had pled guilty to the Alabama crime of possession of cocaine and marijuana prior to filing her application for employment with Dunn. This after-acquired evidence established that Neil lied in her application for employment with Dunn. ² Soon after discovering this evidence, Dunn filed a motion for partial summary judgment, the grounds for which included the contention that the after-acquired evidence of Neil's narcotics convictions and application fraud served as a legitimate cause for terminating Neil's employment irrespective of any alleged unlawful motives. ³ In its order denying this motion, the district court rejected Dunn's after-acquired evidence theory as a matter of law.

Subsequently, Neil and Dunn jointly filed a motion to certify, for an interlocutory appeal, the order denying Dunn's motion for partial summary judgment. See 28 U.S.C.A. § 1292(b) (West Supp.1991). The district court granted the motion, and Dunn filed a timely petition for permission to appeal to this Court. ⁴ A panel of this Court granted the petition for permission to appeal, and Dunn thereafter filed a timely notice of appeal.

II. ISSUE

The principal issue presented in this appeal is one of law concerning the effect of the after-acquired evidence of Neil's drug conviction and application fraud on Neil's claims. ⁵

III. STANDARD OF REVIEW

We review summary judgment orders de novo. Akins v. Snow, 922 F.2d 1558, 1560 (11th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 2915, 115 L.Ed.2d 1079 (1991). Summary judgment is mandated if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In order for a genuine issue of material fact to exist after full discovery, the evidence regarding the material fact must be "significantly probative." Hudson v. Southern Ductile Casting Corp., 849 F.2d 1372, 1376 (11th Cir.1988). ⁶

IV. ANALYSIS

Initially, we note that the principal issue on appeal may be reduced to whether the after-acquired evidence in this case mandates summary judgment on the federal claims. If the federal claims are due to be dismissed, then the state law claims would likely be dismissed for lack of pendent jurisdiction. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350, 108 S.Ct. 614, 619, 98 L.Ed.2d 720 (1988). If the federal claims are viable, then the state law claims survive because Dunn has cited no authority indicating that the Alabama law claims are due to be dismissed in whole or in part on independent state law grounds because of the after-acquired evidence, and we are aware of no such authority.

The proper role of after-acquired evidence under federal employment discrimination statutes raises an issue of first impression in this Circuit and has been explicitly addressed at length by only one other Circuit, the Tenth, in Summers v. State Farm Mutual Automobile Insur. Co., 864 F.2d 700 (10th Cir.1988). See also Johnson v. Honeywell Information Sys., Inc., 955 F.2d 409, 415 (6th Cir.1992) (summarily adopting Summers rule in alternative holding in case brought under state employment discrimination provision construed in same manner as Title VII). Dunn contends that the Summers approach is correct. We disagree.

A. The Summers Proposition

In Summers, the plaintiff alleged that he was discharged because of his age and his religion. 864 F.2d at 702. His employer asserted that the reason for Summers' termination was a bad attitude and a poor rapport with co-workers and customers. Id. at 702-03. Even though his employer knew at the time of the discharge that Summers had falsified records on several occasions, the employer conceded that falsification of records was not the reason for Summers' discharge. Id. During preparation for trial almost four years after the termination of Summers, however, the employer discovered 150 additional falsifications attributable to Summers. Id. at 703. The Tenth Circuit panel held that such after-acquired evidence mandated summary judgment for the employer. Id. at 709.

The Summers Court acknowledged that the after-acquired evidence was theoretically irrelevant to whether the employer was liable vel non to Summers for the discharge because the existence of liability depends on the actual motivation for the discharge, rather than a post hoc hypothetical motivation based on knowledge acquired subsequent to the discharge decision. Id. at 704-05. Nevertheless, the Summers panel ultimately held that the after-acquired evidence barred the existence of liability as a practical matter and thus provided the employer with the equivalent of an affirmative defense. The Court held that the after-acquired evidence was "relevant to Summers' claim of 'injury,' and does itself preclude the grant of any present relief or remedy to Summers." Id. at 708. The Court punctuated its holding with an analogy:

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. Thus, the Summers case fashioned a rule that an employer may avoid all liability for a discharge based solely on unlawful motives by proving that it would have discharged the plaintiff absent any unlawful motives if it had possessed full knowledge of the circumstances existing at the time of the discharge. ⁷

In its analysis, the Summers Court relied primarily on Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977). See Summers, 864 F.2d at 705-06. ⁸ After careful consideration, we agree with the Summers Court that Mt. Healthy provides important and persuasive guidance concerning after-acquired evidence; however, we take issue with the Tenth Circuit's interpretation of Mt. Healthy and find that Mt. Healthy and related principles actually subvert, rather than support, the Tenth Circuit's rule.

B. The Mt. Healthy Principle

The plaintiff in Mt. Healthy, a teacher, claimed that his employer failed to rehire him in retaliation for exercising his First Amendment rights. Mt. Healthy, 429 U.S. at 276, 97 S.Ct. at 570. At the time of the decision not to rehire, the employer stated that there were two reasons for the discharge--the plaintiff's protected speech and the plaintiff's use of obscene gestures toward students. Id. at 283 n. 1, 97 S.Ct. at 574 n. 1. The Supreme Court held that, if the plaintiff had met his burden of showing that his exercise of his First Amendment rights was a " 'substantial factor' " in the refusal-to-rehire decision, then the school board could avoid liability only if it satisfied the burden of proving "that it would have reached the same decision ... even in the absence of the protected conduct." Id. at 287, 97 S.Ct. at 576 (emphasis added). The Court reasoned that in the absence of such an affirmative defense the law would

require reinstatement in cases where a dramatic and perhaps abrasive incident is inevitably on the minds of those responsible for the decision to rehire, and does indeed play a part in that decision--even if the same decision would have been reached had the incident not occurred. The constitutional principle at stake is sufficiently vindicated if such an employee is placed in no worse a position than if he had not engaged in the conduct.

Id. at 285-86, 97 S.Ct. at 575 (emphasis added).

The Summers rule constitutes an unwarranted extension of Mt. Healthy in that the Summers rule ignores the lapse of time between the employment decision and the discovery of a legitimate motive for that decision. Whereas the Mt. Healthy rule excuses all liability based on what actually would have happened absent the unlawful motive, the Summers rule goes one step further: it excuses all liability based on...