1. Home
  2. laws
  3. guidance
  4. Enforcement Guidance on After-Acquired Evidence and McKennon v. Nashville Banner Publishing Co

Enforcement Guidance on After-Acquired Evidence and McKennon v. Nashville Banner Publishing Co

Number 915.002
Date 12-14-95

1.     SUBJECT.  Enforcement Guidance on after-acquired evidence 
and McKennon v. Nashville Banner Publishing Co., 115 S.Ct. 879, 
65 EPD Par. 43,368 (1995).

2.     PURPOSE.  This enforcement guidance analyzes the impact of 
the McKennon decision on EEOC charge processing (including 
federal employee complaints).  The Court held in McKennon that a 
respondent is liable for its discriminatory actions even where it 
subsequently discovers evidence that would have led to the 
adverse action on lawful and legitimate grounds.

3.     EFFECTIVE DATE.  Upon issuance.

4.     EXPIRATION DATE.  As an exception to EEOC Order 205.001, 
Appendix B, Attachment 4, § a(5), this Notice will remain in 
effect until rescinded or superseded.

5.     ORIGINATOR.  ADEA/Title VII Divisions, Office of Legal 

6.     INSTRUCTIONS.  File after Section 604 of Volume II of the 
Compliance Manual, Theories of Discrimination.


I.     Introduction

     The Supreme Court has held that an employee discharged in 
violation of the Age Discrimination in Employment Act of 1967 
(ADEA), as amended, 29 U.S.C. §621 et seq., is entitled to 
relief even if the employer subsequently discovers evidence of 
wrongdoing that would have led to the employee's termination on 
legitimate grounds. McKennon v. Nashville Banner Publishing Co., 
115 S.Ct. 879, 65 EPD Par. 43,368 (1995).1  Noting that the ADEA, 
Title VII, the EPA and the ADA reflect "a societal  
condemnation of invidious bias" and that "[t]he private litigant 
who seeks redress for his or her injuries vindicates both the 
deterrence and the compensation objectives of the [statutes]," 
the Court concluded that an employer must be held liable when it 
is found to have engaged in unlawful discrimination, despite any 
later discovered evidence of any employee misdeeds.  115 S.Ct. at 

     At the same time, the Court ruled that it was necessary to 
account for the legitimate business concerns of the employer 
"where an employer . . . establish[es] that the wrongdoing was of 
such severity that the employee in fact would have been [subject 
to adverse action] on those grounds alone if the employer had 
known of it at the time of the [adverse action]." 115 S.Ct. at 
886-87. Accordingly, the "proper boundaries of remedial relief in 
[after-acquired evidence cases] . . . will vary from case to 
case, . . . [but] as a general rule . . ., neither reinstatement 
nor front pay is an appropriate remedy in such instances."  115 
S.Ct. at 886.

     Acknowledging that the proper measure of backpay is more 
difficult, the Court asserted that "[t]he beginning point" should 
be to calculate backpay "from the date of the unlawful discharge 
to the date the new information was discovered."  115 S.Ct. 886.  
"[E]xtraordinary equitable circumstances that affect the 
legitimate interests of either party" may also be considered in 
formulating the appropriate remedy. 115 S.Ct. at 886.

II.     Background and Opinion 

     McKennon had been employed by the Nashville Banner 
Publishing Company (Banner) for nearly 30 years when she was 
terminated at the age of 62.  According to the Banner, she was 
discharged as part of a work force reduction plan that was 
implemented to reduce costs. McKennon filed an ADEA action that 
alleged that her termination was due to her age.  During a 
deposition, McKennon testified that during her employment she had 
copied and removed from the Banner's headquarters several 
confidential financial documents out of concern for [her] job 
security and for her "insurance" and "protection."  115 S.Ct. at 
883.  Thereafter, the Banner sent McKennon a letter informing her 
that the removal and copying of the records was in violation of 
her job responsibilities and "advising her (again) that she was 
terminated." Id.  The Banner also notified McKennon that had it 
known of this earlier misconduct it would have discharged her 
     For purposes of summary judgment, the Banner conceded its 
discrimination against McKennon, but argued that no relief was 
warranted because of McKennon's misconduct. The District Court 
agreed and granted the Banner's motion for summary judgment, 
holding that the earlier misconduct was grounds for her 
termination and that neither backpay nor any other remedy was 
available to McKennon under the ADEA. See 797 F. Supp. 604 (M.D. 
Tenn. 1992). The Sixth Circuit affirmed the district court's 
ruling under the same rationale. 9 F.3d 539 (1993).  The Supreme 
Court granted certiorari to resolve conflicting views among the 
Courts of Appeal. See 115 S.Ct. at 883 and cases cited therein.  

     In a unanimous decision, the Supreme Court held that "after-
acquired" evidence does not defeat an employer's liability for 
violating the ADEA.  The Court found that even if the employee's 
later discovered misconduct could be considered grounds for 
termination, the ADEA violation that actually prompted the 
dismissal cannot be ignored.  The employee's wrongdoing does not 
bar relief "'where a private suit serves important public 
purposes.'" 115 S.Ct. at 885 (citation omitted).  The remedial 
provisions of the Act were designed to compensate an employee for 
injuries caused by the illegal discrimination and to deter 
employers from engaging in such discrimination.  Litigants who 
seek redress for injuries vindicate both the deterrence and 
compensation objectives of the ADEA and the important 
congressional policy against discriminatory employment practices.  
Ignoring an employer's illegal conduct because of after-acquired 
evidence, the Court said, would not be in accord with the 
deterrent, remedial scheme of the ADEA.

     However, the Court also said that where it is clear that an 
employee would have been terminated upon discovery of wrongdoing, 
the employer's legitimate interests must be considered.  The 
"after-acquired" evidence of the employee's wrongdoing "[is] 
relevant not to punish the employee, or out of concern 'for the 
relative moral worth of the parties,'. . . but to take due 
account of the lawful prerogatives of the employer in the usual 
course of business . . . ."  115 S.Ct at 886. (citation omitted).  
"In giving effect to the ADEA, we must recognize the duality 
between the legitimate interests of the employer and the 
important claims of the employee who invokes the national 
employment policy mandated by the Act."  115 S.Ct. at 886.

     The Court then considered how after-acquired evidence of 
wrongdoing bears upon the remedy.2  It concluded that the proper 
boundaries of remedial relief must be addressed on a case-by-case 
basis.  If an employer seeks to rely upon after-acquired evidence 
of an employee's wrongdoing, it "must first establish that the 
wrongdoing was of such severity that the employee in fact would 
have been terminated on those grounds alone if the employer had 
known of it at the time of the discharge."3 115 S.Ct. at 886-87.  
Assuming that such showing is made, "as a general rule . . ., 
neither reinstatement nor front pay is an appropriate remedy 
[because it] would be both inequitable and pointless to order the 
reinstatement of someone the employer would have terminated, and 
will terminate, in any event and upon lawful grounds." 115 S.Ct. 
at 886.  

     Noting that balancing the need to compensate victims and 
deter violations of the ADEA with the employer's lawful 
prerogatives cannot be done with precision in after-acquired 
evidence cases, the Court provided general guidelines in 
assessing the appropriate award of backpay in such cases.  The 
Court flatly rejected an absolute bar on backpay, and held that 
backpay should be the "beginning point" in the formulation of a 
remedy and should run "from the date of the unlawful discharge to 
the date the new information was discovered." 115 S.Ct. at 886.  
The Court further recognized that in formulating an appropriate 
order for relief, the trial court may take "into account 
extraordinary equitable circumstances that affect the legitimate 
interests of either party." 115 S.Ct. at 886. 
III. Charge Processing Instructions 

     A. Backpay Available under the ADEA, Title VII, EPA and the 

     Even where the employer proves that it would have taken the 
same or more harsh adverse action had it known of employee 
misconduct, a Charging Party will still be entitled to relief 
under the laws enforced by the EEOC, but that relief may be 
subject to some limitations.  If an employer fails to prove that 
it would have taken a similar action on the basis of subsequently 
discovered misconduct, the Charging Party's relief may not be 
limited by the after-acquired evidence. See Ricky v. Mapco, Inc., 
50 F.3d 874, 876 (10th Cir. 1995) (employer "must demonstrate . . 
. that the misconduct . . . alleged was serious enough to justify 
discharge and that [the employer] would have discharged [the 
employee] if it had known about the [alleged misconduct]").  To 
resolve the issue, the investigator should consider whether there 
have been incidents of like misconduct by other employees.  
Specifically, the investigator should analyze whether other 
applicants were rejected or other employees were dismissed, 
reprimanded, suspended or forgiven for similar behavior.  

     If no comparable past incidents are discovered, other 
criteria may be used in ascertaining whether the misconduct would 
have prompted the employer to take the adverse action.  Such 
inquiries may include whether: 1) the misconduct is criminal in 
nature, (e.g., embezzlement, fraud, assault or theft); 2) the 
employee's behavior compromised the integrity of the employer's 
business (divulgence of trade secrets, security, or confidential 
information); or 3) the nature of the employee's misconduct was 
such that the adverse action appears reasonable and justifiable.4 

     Where an employee's misconduct is so severe that an employer  
would have taken the same or harsher adverse action even absent 
the discrimination, backpay may generally be limited to the 
period from the date of the unlawful employment action to the 
date that the misconduct was discovered.  Therefore, when 
processing charges or complaints where after-acquired evidence is 
presented by an employer, investigators should evaluate the 
severity of the misconduct and the employer's response to similar 

Example- Charging Party (CP) is a 55 year old claims adjustor for 
Respondent (R), an insurance company. CP is discharged from his 
position after being told by R that the company wishes to project 
a younger image. CP files a charge with the Commission alleging 
that he was discharged because of his age.  During the course of 
the investigation R learns that CP had on several occasions 
submitted false reimbursement claims for business trips that 
resulted in a loss of $2,600 to R. R seeks to have CP's charge 
dismissed on the basis of this newly acquired evidence.  R also 
presents evidence that two former adjustors were terminated 
during the last fiscal year for padding their expense accounts in 
the amounts of $500 and $1200, respectively. 

The Commission concludes that R violated the Act.  However, given 
that R had dismissed two other adjustors in the past year for the 
submission of fraudulent expense account reimbursements, CP's 
newly discovered past behavior would be deemed to be sufficiently 
severe to warrant discharging CP and limit the amount of backpay 
available.  The Commission would seek backpay from the date of 
CP's discharge until the date that R learned of CP's misconduct.

Example - Same facts as above except that it is revealed during 
the course of investigation that instead of submitting false 
reimbursement claims, CP forgot to reimburse $50 to the petty 
cash fund three years ago. One week after the oversight, a co-
worker brought the matter to his attention and restitution was 
made by CP. 

In this instance CP's past behavior would not rise to a level of 
severity required to limit the award of backpay, unless R can 
demonstrate that it would have terminated other employees for 
similar behavior.      
     As the examples illustrate, the primary issue is whether the 
employer would have taken the same adverse employment action 
against the Charging Party had it known of the Charging Party's 
misconduct.  The McKennon Court recognized that its guideline for 
backpay calculation marked only the beginning point in the 
analysis, as other extraordinary equitable circumstances may also 
be considered in formulating the appropriate remedy.

     Retaliation is one example of an extraordinary equitable 
circumstance that may warrant additional relief.  Evidence of 
employee wrongdoing may not cut off backpay if the evidence was 
unearthed during a retaliatory investigation, i.e., one initiated 
in response to a complaint of discrimination in an attempt to 
uncover derogatory information about the complaining party or 
discourage other charges or opposition.  In such instances, 
relief may extend beyond the date R discovered the wrongdoing to 
the date that the charge or complaint is resolved.  
Example - CP files a charge alleging that he was discriminatorily 
denied a promotion.  R launches an extensive background 
investigation of CP and learns that he falsified his application.  
Accordingly, R fires CP.  The Commission investigation reveals 
that R does terminate employees who have falsified their 
applications.  It also shows that the failure to promote was not 
discriminatory.  R contends that CP suffered no loss until the 
termination, that the termination was for legitimate reasons and 
that R is not, therefore, liable to CP.    

However, the Commission finds that R did not simply discover the 
information in the course of investigating the charge, but 
purposefully sought derogatory information about CP in 
retaliation for his challenging the failure to promote.  

     As in McKennon, reinstatement would be inappropriate because 
the employer does terminate those known to have engaged in 
similar misconduct.  However, because the evidence of wrongdoing 
was not simply unearthed during an investigation of CP's 
complaint, but was deliberately sought to retaliate against CP 
and to discourage similar charges, the Court's "starting point" 
for backpay cannot be the ending point.  Instead this is the kind 
of "extraordinary equitable circumstance" that warrants extending 
backpay to the date the complaint is resolved. 5  An employer who 
chooses to wage a retaliatory investigation must lose the 
advantage of equities that would, absent the retaliation, favor 
that employer, especially since retaliation is an independent 
violation of the federal employment discrimination laws. 6

     B. Post-McKennon  Title VII/ADA Remedies under the Civil 
Rights Act of 1991

     The availability of compensatory and punitive damages in 
after-acquired evidence cases was not before the Court in 
McKennon and not discussed in the opinion.  As noted above, 
however, the McKennon Court did indicate that the principles 
articulated in the decision are applicable to Title VII and the 
ADA as well as to the ADEA.  115 S.Ct. at 884.  Thus, the 
question is how the McKennon rationale applies to damage awards.  
Key to answering that question is recognizing that McKennon 
essentially endorsed the Commission's longstanding position that 
a respondent will be held liable for its unlawfully 
discriminatory acts whether or not the employer subsequently 
discovers that the affected employee or applicant engaged in 

          1. Compensatory Damages

     The purpose of compensatory damages is to compensate an 
individual for injuries or losses sustained as a result of 
discrimination.  Victims may suffer an injury from discrimination 
regardless of whether a legitimate reason for an adverse action 
is subsequently discovered.   

     The McKennon Court's analysis of backpay provides a 
framework for apportioning compensatory damages.  The proper 
boundaries of relief in after-acquired evidence cases will vary 
case by case. 115 S.Ct. at 886.  "The object of compensation is 
to restore the employee to the position he or she would have been 
in absent the discrimination." 115 S.Ct. at 886.  In determining 
appropriate remedial action, "the employee's wrongdoing becomes 
relevant . . . to take due account of the lawful prerogatives of 
the employer in the usual course of its business. Id.

     Accordingly, when calculating out-of-pocket losses analogous 
to backpay, i.e., those that the complaining party would incur 
regardless of whether the adverse action was taken on legal or 
discriminatory grounds, losses incurred after the date that the 
evidence of wrongdoing is discovered will typically be excluded.  
For example, pecuniary damages such as job search expenses and 
moving expenses would generally end on the date the evidence of 
misconduct is discovered, unless the employee's wrongdoing was 
uncovered during the course of a retaliatory investigation waged 
by R. 

     Nothing in McKennon suggests that compensatory damages for 
emotional harm should be time limited.  The Court limited the 
remedies of frontpay, reinstatement and backpay only to the 
extent necessary to protect the employer's legitimate interest in 
severing the  employment relationship with an unsatisfactory 
employee.   As noted above, the "after-acquired" evidence of the 
employee's wrongdoing "[is] relevant not to punish the employee, 
or out of concern 'for the relative moral worth of the parties,' 
but to take due account of the lawful prerogatives of the 
employer in the usual course of its business . . . ."  115 S.Ct 
at 886 (citation omitted).  In contrast, no legitimate business 
prerogatives are served by exonerating a proven discriminator 
from paying the full cost of the emotional damage caused by the 
discrimination.  To the extent that the complaining party's 
emotional harm or other losses were caused by discrimination and 
would not have occurred if the adverse action had occurred for 
legitimate reasons, the discriminating employer should fully 
compensate those losses.7  

Example - Charging Party was subjected to egregious racial 
harassment, including having racially derogatory cartoons put on 
her desk and being called racially derogatory names. She 
complained to management and was discharged.  CP filed a charge 
and her psychiatrist testified that solely as a result of this 
discrimination, CP suffers from traumatic stress disorder and 
severe depression and will not fully recover for several years.8  
During the course of the investigation, the respondent discovers 
that CP falsified her resume and does not meet the valid minimum 
educational requirements for the position.  These are offenses 
for which the employer routinely terminates employees.  

CP seeks compensatory damages for emotional harm and for future 
psychiatric and job search expenses.  She also seeks punitive 
damages.  CP may recover for the future effects of the emotional 
harm and future medical expenses since they were caused by 
discrimination.  Job search expenses may be recovered if they 
were incurred before the misconduct was discovered.  Damages for 
future job search expenses will normally not be allowed since CP 
would incur these expenses once the employer exercised its lawful 
prerogative to discharge CP for legitimate reasons. 
          2. Punitive Damages

     After-acquired evidence does not bar punitive damages when 
the employer's motivation for the adverse action is found to be 
discriminatory and the employer acted with malice or reckless 
indifference to the complaining party's rights.  Punitive damages 
are not affected by after-acquired evidence because the employer 
did not know of the legitimate reason for the adverse action at 
the time of the action.  It is the employer's motivation at the 
time of the discriminatory conduct that is relevant in 
determining the propriety of punitive damages.  Moreover, 
punitive damages are virtually always appropriate where 
retaliation has been established.  See Enforcement Guidance: 
Compensatory and Punitive Damages, dated July 14, 1992, at 17-18.

          3. Liquidated Damages

     The McKennon rationale similarly dictates that liquidated 
damages are awardable under the Equal Pay Act (see Wallace v. 
Dunn Construction Co., 62 F.3d 374, 380 (11th Cir. 1995) (en 
banc), and the ADEA despite the existence of any after-acquired 
evidence of employee wrongdoing.

     C. Summary

     The Court in McKennon held that after-acquired evidence of 
employee misconduct does not bar an employer's liability for 
having engaged in unlawfully discriminatory conduct.  Thus, where 
discrimination is established the respondent must provide 
appropriate relief.  Where the employer alleges alternative 
grounds for the adverse action, the investigation should focus 
not only on the allegations of discrimination but also on whether 
the employee's misconduct would warrant the adverse action taken.  
See discussion at pp. 4-6. 

       1.  Backpay, Frontpay, and Reinstatement

          *     Backpay continues until date of settlement, 
conciliation or judgment unless the employer proves that it would 
have taken the same or harsher adverse action based on the after-
acquired evidence.  If the employer makes that showing, backpay 
is generally calculated from the date of the unlawful adverse 
action to the date that the new information is discovered.  
However, unusual equitable circumstances that affect the 
legitimate interests of either party may alter the calculation in 
particular cases.  Launching a retaliatory investigation of a 
CP's background in response to a charge or complaint of 
discrimination is one such equitable circumstance.

          *     As a general rule, frontpay, reinstatement, and 
instatement are not available where there is evidence of employee 
wrongdoing that would warrant the adverse action.

       2.  Compensatory Damages

          *     Generally, out of pocket costs associated with 
job loss, that charging party would have incurred regardless of 
whether the adverse action is taken on legal or discriminatory 
grounds, are available from the date of the unlawful adverse 
action to the date that the new information is discovered.  
However, consider whether equitable circumstances exist that 
would affect the legitimate interests of either party and, hence, 
alter the calculation.  As with backpay, it is appropriate to 
extend past pecuniary damages to the date the case is resolved 
(i.e., the date of settlement, judgment, etc.) where the 
wrongdoing was discovered in the course of an investigation waged 
for the purpose of finding derogatory information about CP in 
retaliation for complaining.

          *     Damages for emotional harm are normally available 
for the harm caused by the Respondent's discriminatory actions.  
If the complaining party can show that the discriminatory conduct 
caused the emotional harm and that the resulting emotional harm 
continued after a legitimate reason for the adverse action is 
discovered, (s)he may receive compensatory damages for the 
emotional harm and medical treatment for such harm.

       3.  Punitive Damages

          *     After-acquired evidence does not bar punitive 
damages when the employer took the adverse action for 
discriminatory reasons and acted with malice or reckless 
indifference to the complaining party's rights.  Proof of 
retaliation warrants punitive damages.  
       4.     Liquidated Damages

          *     After-acquired evidence does not preclude an 
award of liquidated damages in an Equal Pay Act or ADEA case.

DATE: 12/14/95         APPROVED: Gilbert F. Casellas

1.     The principles applied by the McKennon Court are 
applicable to charges brought under Title VII of the Civil Rights 
Act of 1964, 42 U.S.C. § 2000e et seq., as amended, (see 
Wallace v. Dunn Construction Corp., 62 F.3d 374, 378 (11th Cir. 
1995)(en banc); Wehr v. Ryan's Family Steak Houses, Inc., 49 F.3d 
1150, 1153 (6th Cir. 1995); Russell v. Microdyne Corp., 65 F.3d 
1229, 1238 (4th Cir. 1995)), and the Americans with Disabilities 
Act of 1990, 42 U.S.C. § 12101 et seq., as amended. The 
McKennon Court noted that the ADEA is "part of a wider statutory 
scheme," that includes Title VII and the ADA, which "protect[s] 
employees in the workplace nationwide," and that the ADEA and 
Title VII "share common substantive features and also a common 
purpose: 'the elimination of discrimination in the workplace.'" 
S.Ct. at 884.  Further, although the adverse action challenged in 
McKennon was termination, the analysis is applicable to any 
alleged unlawful adverse action, such as refusal to hire, 
demotion or failure to promote.

2.     The Court recognized that, to limit their 
liability, employers may routinely "undertake extensive discovery 
into an employee's background or [job] performance" to find 
evidence of employee misconduct. 115 S.Ct. at 887.  The Court 
concluded, however, that courts could "deter most abuses" by 
exercising judicial authority to award attorney's fees pursuant 
to § 7(b) of the ADEA, and "in appropriate cases" to invoke 
sanctions against an employer under Rule 11 of the Federal Rules 
of Civil Procedure. 115 S.Ct. at 887.

3.     In Shattuck v. Kinetic Concepts, Inc., 49 F.3d 
1106, 1108, 66 EPD Par. 43,496 (5th Cir. 1995), a post-McKennon 
case involving discriminatory discharge and after-acquired 
evidence of resume falsification, the Fifth Circuit stated that 
"pertinent inquiry, except in refusal-to-hire cases, is whether 
the employee would have been fired upon the discovery of the 
wrongdoing, not whether he would have been hired in the first 
place."  By the same token, in a case alleging discriminatory 
refusal to hire, the pertinent inquiry is whether the employer 
would have lawfully rejected the applicant had it been aware of 
the after-discovered evidence at the time of hire.  See  
Washington v. Lake County, 969 F.2d 250, 255-56 & n.5 (7th Cir. 
1992)(where after acquired evidence is offered, "the hypothetical 
inquiry should correspond to the time of the allegedly 
discriminatory employment decision").

4.     In addition to injunctive relief and backpay, the 
ADEA provides that liquidated damages are available in instances 
where the discriminatory act can be shown to have been willful.  
The Supreme Court has held, most recently in Hazen Paper Co. v. 
Biggins, 113 S.Ct. 1701, 61 EPD Par. 42,186 (1993), that a 
willful violation occurs under the ADEA if an employer knew its 
conduct was unlawful or showed reckless disregard for whether its 
conduct was unlawful.  After-acquired evidence does not bar 
liquidated damages because it is the employer's motivation at the 
time of the discriminatory conduct that is relevant in 
determining whether liquidated damages are warranted.

5.     The Court in McKennon noted that, in 
litigation, courts can circumscribe overbroad discovery requests 
through use of attorney's fees and Rule 11 sanctions.  Those 
constraints, however, are largely inoperative prior to 
commencement of litigation.  Thus, other constraints are needed 
to deter prelitigation overzealousness. 

6.     To allow retaliation to go unremedied would 
frustrate the deterrent goals of the antidiscrimination laws and 
the crucial public enforcement role played by private litigants.  
See McKennon, 115 S.Ct. at 884-85 (private litigants further 
objectives of nondiscrimination laws by "[t]he disclosure through 
litigation of incidents or practices which violate national 
policies respecting nondiscrimination in the work force. . . The 
efficacy of its enforcement mechanisms becomes one measure of the 
success of [those laws]"). 

7.     In Russell v. Microdyne, 65 F.3d at 1241, the 
court ruled that compensatory and punitive damages were available 
despite the after acquired evidence but assumed without 
discussion that the date of discovery of the misconduct would 
limit the amount of the damages award as well as the backpay 
award.  For the reasons discussed in the text above, the 
Commission rejects the assumption that the discovery of 
wrongdoing limits punitive damages or the award for emotional 

8.     If CP's emotional suffering were not entirely 
attributable to R's discrimination, the amount of compensatory 
damages would be affected.  See  Enforcement Guidance: 
Compensatory and Punitive Damages, dated July 14, 1992.