After-acquired Evidence Admissible to Bolster Employer's Termination Reasoning: Second Circuit | Practical Law

After-acquired Evidence Admissible to Bolster Employer's Termination Reasoning: Second Circuit | Practical Law

In Weber v. Tada, the US Court of Appeals for the Second Circuit, in a summary order, affirmed a district court's grant of summary judgment for an employer on an employee's race discrimination claims. The Second Circuit found that the district court did not err in allowing the employer's use of evidence of an employee's misconduct during his employment, discovered after the employee's termination, to confirm the nondiscriminatory reason for his termination.

After-acquired Evidence Admissible to Bolster Employer's Termination Reasoning: Second Circuit

by Practical Law Labor & Employment
Published on 29 Oct 2014 • USA (National/Federal)
In Weber v. Tada, the US Court of Appeals for the Second Circuit, in a summary order, affirmed a district court's grant of summary judgment for an employer on an employee's race discrimination claims. The Second Circuit found that the district court did not err in allowing the employer's use of evidence of an employee's misconduct during his employment, discovered after the employee's termination, to confirm the nondiscriminatory reason for his termination.
On October 9, 2014, in Weber v. Tada, the US Court of Appeals for the Second Circuit, in a summary order, affirmed a district court's grant of summary judgment for an employer on an employee's 42 U.S.C. § 1981 race discrimination claim. The Second Circuit found that the district court did not err in allowing the employer's use of evidence of an employee's misconduct during his employment, discovered after the employee's termination, to confirm the nondiscriminatory reason for his termination. (No. 13-4891-CV L, (2d Cir. Oct. 9, 2014).)

Background

John J. Weber worked as an executive vice president for Fujifilm Medical Systems USA (FMSU) for more than 20 years before the company terminated his employment claiming that he had mismanaged the company's finances. Weber claimed that his employment was terminated because he was a Caucasian American, rather than Japanese and brought a suit alleging that FMSU violated 42 U.S.C. § 1981 based on Weber's race and national origin. Weber also brought claims for tortious interference with contract and tortious interference with business expectancy.
The district court granted summary judgment to the defendants on Weber's race discrimination claim. The defendants attempted to present to the district court evidence of further alleged misconduct by Weber during his employment, discovered by the employer after Weber's termination. This alleged misconduct included payments to an employee after her departure from FMSU and irregularities with a financing agreement between FMSU, a bank and a consultant. The district court allowed the evidence to be admitted for two purposes:
  • To show that the defendants' non-discriminatory reason for terminating Weber's employment, financial mismanagement, was true.
  • As a defense to show that Weber breached the contract first.
Weber appealed the district court's decision to the Second Circuit.

Outcome

The Second Circuit affirmed the district court's grant of summary judgment for the defendants on Weber's discrimination claims because:
  • Weber presented no evidence that established a genuine issue of material fact regarding whether he was terminated because of his race.
  • No rational juror could infer discriminatory termination from Weber's evidence that the defendants hired two Japanese individuals, neither of whom replaced him.
Importantly, the Second Circuit noted that it found no basis to reverse the district court's evidentiary rulings. Specifically, the Second Circuit concluded that the defendants were not estopped from arguing that the after-acquired evidence of Weber's alleged misconduct confirmed their suspicions about his mismanagement of FMSU's finances.

Practical Implications

The after-acquired evidence defense is typically available primarily for the purpose of determining an employee's potential damages. This decision by the Second Circuit could lead to widespread expansion of courts' approval of employers' use of after-acquired evidence to enhance their defenses against discriminatory termination claims by showing that their allegedly discriminatory employment action was made for legitimate reasons.