After-acquired evidence is evidence discovered after an employee is fired, that shows the employee’s misconduct during their employment would have eventually led to termination. In Mckennon v. Nashville Banner Publishing Co., the Supreme Court held that after-acquired evidence can be presented by the employer to limit the amount of damages the employee receives in a lawsuit. For example, if an employer found out the employee was embezzling funds from the company, this could limit the amount of damages the employee would receive in a subsequent discrimination claim against their employer.
After-acquired evidence can also be used by an employer as a defense to a wrongful termination lawsuit, to show that the company didn’t fire the employee for discriminatory reasons. For example, if the employer finds out, after the termination, that the employee had lied about their education on their resume, an employer can use this evidence as a defense because this resume fraud would have led to termination. In Summers v. State Farm Mutual Automobile Ins. Co., the Tenth Circuit court reasoned that even though the employer may be guilty of firing the employee for discriminatory reasons, the employer still would have fired the employee once they had discovered this fraud. But the Supreme Court makes it clear in Mckennon, that employee misconduct shouldn’t completely bar an employee discrimination claim.
[Last updated in June of 2021 by the Wex Definitions Team]