In two previous articles, I discussed important rulings the Third Circuit Court of Appeals made in Erdman v. Nationwide Insurance Company regarding the Family & Medical Leave Act (FMLA). Specifically, that case rules that an employee’s time worked from home counts toward the FMLA’s 1,250 hour eligibility requirement if the employer knew or should have known the employee was working off-site, and that an employee who requests an FMLA leave is legally protected even if he never actually takes a leave. But Erdman also makes an important ruling regarding another employment law, the Americans with Disabilities Act (ADA).

The ADA is a federal law that prohibits employers from discriminating against employees on the basis of a disability. It includes a provision prohibiting employers from discriminating against individuals because they have a relationship or association with someone who has a disability. For example, it prohibits employers from discriminating against an employee who has a disabled child.

As Erdman notes, although the ADA requires employers to make reasonable accommodations to allow employees to perform the essential functions of their jobs, it does not require employers to accommodate employees who have a disabled relative. As a result, employers can refuse to provide an employee time off to care for a disabled relative without violating the ADA. Of course, doing so could violate the FMLA or a state law such as the New Jersey Family Leave Act.

However, the Third Circuit’s decision recognizes that an employer would violate the ADA if it makes an employment decision because an employee has a disabled relative, rather than because the employee needs to take time off from work. As a result, an employee whose employer denies him the right to take time off for a disabled relative can establish a claim under the ADA if he can prove that his employer would not have fired him if he had requested the same time off for another reason.

The Court further recognizes that it is unlawful for an employer to fire an employee based on the belief that the employee might miss work to care for disabled relative at some point in the future. Erdman explains that such a decision would be based on “unfounded stereotypes or assumptions about the need to care for a disabled person.” It is therefore a form of prohibited associational disability discrimination.

The decision notes other circumstances in which an employer would violate the ADA based on an unlawful assumption about an employee’s disabled relative. For example, an employer would violate the ADA if it fires or otherwise discriminates against an employee (1) because of its assumptions regarding the relative’s health care costs to the company; (2) because of its fear that the employee will contract or spread a relative’s disease; or (3) because the employee is somewhat distracted by his relative’s disability, but not so distracted that he cannot satisfactorily perform his job.

Last week, I discussed the Third Circuit’s recent decision regarding when time worked from home counts toward the Family & Medical Leave Act (FMLA)’s 1,250 hour eligibility requirement. The same case, Erdman v. Nationwide Insurance Company, also addresses whether an employee who requests but does not receive an FMLA leave is protected by the FMLA.

The FMLA has two separate provisions, one that prohibits employers from interfering with an employee’s FMLA rights, and another that prohibits employers from retaliating against employees. The FMLA’s interference with rights provisions prohibit employers from (1) interfering with, restraining, or denying the exercise of or attempt to exercise, any right provided by the FMLA; and (2) discharging or in any other manner discriminating against any individual for opposing any practice made unlawful by the FMLA. In contrast, to establish a retaliation claim under the FMLA, an employee must prove that (1) he is protected under the FMLA; (2) he suffered an adverse employment action, such as being fired, demoted, or suspended, and (3) the adverse employment action was caused by the employee’s exercise of his FMLA rights.

The Third Circuit noted that “it would be patently absurd if an employer who wished to punish an employee for taking FMLA leave could avoid liability simply by firing the employee before the leave begins.” In other words, the Court has no doubt that employees are protected by the FMLA when they request FMLA leaves, even if they never actually take an FMLA leave. The court concluded that, depending on the circumstances, firing an employee for making a valid request for FMLA leave can constitute either an interference with the employee’s FLMA rights, unlawful retaliation, or both.

This interpretation of the FMLA is important because it protects employees who suffer adverse consequences because they requested FMLA leave, even if those consequences occur before their leave begins. It also appears to protect some employees who request an FMLA leave, mistakenly believing they are entitled to one, such as employees who fall just short of the 1,250 hour eligibility requirement, or who do not meet the FMLA’s definition of a serious health condition. Hopefully, future cases will clarify just how far the Court will extend this rule.

On September 23, 2009, in Erdman v. Nationwide Insurance Company, the United States Court of Appeals for the Third Circuit discussed when an employee’s time working from home counts toward the 1,250 minimum hours required for an employee to be covered by the Family & Medical Leave Act (FMLA). The Third Circuit is the federal appellate court that includes New Jersey. The FMLA is a federal employment law that permits qualified employees to take time off from work to care for their own serious medical conditions, the serious medical conditions of members of their immediate family, for pregnancy, childbirth, adoption, or foster care, or to care for a new child.

The employee in that case, Brenda Erdman, has a daughter with Downs Syndrome. In 1998, Ms. Erdman’s employer, Nationwide Insurance Company, permitted her to work part time so she could care for her daughter. Ms. Erdman worked part time for four years, when she switched to a four day work week.

Ms. Erdman worked nearly 1,300 hours for Nationwide Insurance during the year at issue, including more than 100 hours that she worked from home. She had previously worked from home for Nationwide for many years. Nationwide consistently either paid her for working those hours, or allowed her to use the time as “comp” time.

In 2002, Ms. Erdman’s supervisor instructed her to “put in the hours that . . . you’re supposed to put in and nothing more than that.” Although Ms. Erdman asked if she was still permitted to work extra hours to accrue comp time, her supervisor did not respond.

The lower court concluded that Nationwide did not have sufficient notice that Ms. Erdman continued to work from home after her supervisor told her she could only put in the hours she was supposed to work. As a result, it dismissed her case. However, the Third Circuit disagreed.

The Third Circuit recognized that hours worked off-site can count toward the FMLA’s minimum hour requirement only if the employer “knows or has reason to believe” the employee is working those hours. As a result, the relevant question is whether a jury reasonably can conclude that Nationwide knew or should have know that Ms. Erdman continued to work from home after her supervisor’s instruction.

The Third Circuit ruled that a jury can conclude that Nationwide had sufficient notice that Ms. Erdman was continuing to work from home. Specifically, a jury can believe her supervisor’s statement merely meant that she could no longer be paid for working extra hours at home, without prohibiting her from continuing to work from home to accrue comp time. In other words, her supervisor’s comment could mean the company wanted to eliminate overtime pay, or wanted to ensure uniform salaries, without prohibiting Ms. Erdman from working at home to make up for time she missed. Accordingly, the Court reinstated Ms. Erdman’s case and sent it back to the District Court so it can proceed to a trial.

New York City’s Broad Definition of Harassment

Earlier this year, the New York Supreme Court’s Appellate Division interpreted the New York City Human Rights Law (NYC HRL) much more broadly than courts have interpreted New York State and federal employment laws prohibiting discrimination, harassment and retaliation. Under state and federal anti-discrimination laws, an employee must prove that harassment was “severe or pervasive.” That means harassment does not violate New York State or federal law unless it is sufficiently harmful or frequent that it significantly impacts the terms and conditions of employment. However, the Appellate Division ruled that harassment does not need to be severe or pervasive to violate the NYC HRL.

New York City’s Human Rights Law applies not only to employees who work in New York City, but also applies if the discrimination, harassment, or retaliation originated in New York City.

According to that case, Williams v. The New York City Housing Authority, the primary issue in harassment cases under the NYC HRL is whether the employee can prove that the employer treated him or her worse than other employees because he or she is a member of a legally protected category. The legally protected categories for employees under the New York City law are race, color, national origin, creed, age, disability, gender, gender identity, sexual orientation, marital status, partnership status, alienage, citizenship status, arrest or conviction record, and status as a victim of domestic violence, stalking or sex offense.

In applying this broad interpretation of New York City’s anti-discrimination law, the appellate court relied on the New York City Restoration Act of 2005, which amended the NYC HRL to require that it “shall be construed liberally for the accomplishment of the uniquely broad and remedial purposes thereof, regardless of whether federal or New York State civil and human rights laws . . . have been so construed.” The Court also noted that the New York City Council has directed courts that “discrimination should not play a role in decisions made by employers.”

New York City’s Broad Definition of Retaliation

The appellate court also interpreted the anti-retaliation provision of the New York City Human Rights Law very broadly. It did so because the Law was amended in 1991 to prohibit retaliation “in any manner.” As a result, the Court ruled that retaliation does not have an adverse impact on the terms and conditions of employment to be prohibited by the NYC HRL. This is in contrast to New York State and federal law, both of which require retaliation to materially impact of the terms and conditions of employment for it to be actionable. In other words, as the appellate court put it, retaliation is prohibited by the NYC HRL “regardless of the degree or quality of harm to the particular complainant” because “retaliation harms the public interest by deterring others from filing a charge” of discrimination.

However, the Court did not interpret retaliation without limitations. Rather, it ruled that retaliatory or discriminatory acts “must be reasonably likely to deter a person from engaging in protected activity” to be protected by the New York City NYC HRL.

Conclusion

Williams recognizes that the NYC Human Rights Law is an extraordinarily broad employment law. However, it is not without limits. For example, it states that it does not intend to interpret the Law as a “general civility code.” Accordingly, it recognized that employers can avoid liability for discrimination, harassment, or retaliation if they can prove the alleged conduct toward was “nothing more than what a reasonable victim of discrimination would consider “petty slights and trivial inconveniences.’”

Earlier this year, New York State Gov. David Paterson signed a law that amends the New York Human Rights Law to prohibit employers from discriminating on the basis of an individual’s status as a victim of domestic violence. As a result, it is now unlawful for employers in New York State to fire, refuse to hire, harass, or otherwise discriminate against employees with respect to the terms, conditions, or privileges of employment, because they have been the victim of an act of domestic violence, including stalking.

The sponsor of the statute in the New York State Assembly, Westchester County Assemblywoman Amy Paulin, noted that “financial security is one of the most import factors in whether a victim of domestic violence will be able to separate from an abusive partner.” Paulson also indicated that this new law “will help victims [of domestic violence] maintain their jobs without fear of unfair termination.”

In addition to now prohibiting employers from discriminating on the basis of status as a victim of domestic violence, the New York Human Rights Law also prohibits discrimination based on an individual’s age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, or marital status.

On July 15, 2009, the United States Equal Employment Opportunity Commission (EEOC) issued guidance to employees who are offered severance agreements that include releases of employment law claims after they have been laid off or otherwise fired. More specifically, the EEOC’s guidance answers questions employees might have regarding severance agreements that require them to waive their rights under employment laws such as Title VII of the Civil Rights Act (Title VII), which prohibits gender discrimination, race discrimination, national origin discrimination, and religious discrimination; the Americans with Disabilities Act (ADA), which prohibits disability discrimination; and the Age Discrimination in Employment Act (ADEA),which prohibits age discrimination. While it is focused on federal claims, the guidance is also relevant to claims under state laws, such as the New Jersey Law Against Discrimination (LAD), the New Jersey Conscientious Employee Protection Act (CEPA), the New Jersey Civil Rights Act (NJCRA), and the New York Human Rights Law (NYHRL).

A significant portion of the EEOC’s guidance discusses what is required for a waiver in a severance agreement to be valid. Specifically, waivers (1) must be knowing and voluntary, (2) must offer the employee some consideration, meaning a benefit the employee would not otherwise receive, and (3) must comply with applicable state and federal laws.

The EEOC notes that, to determine whether an employee knowingly and voluntarily waived the right to sue for employment law claims like discrimination, retaliation, or harassment, courts generally consider factors such as:

1. Whether the severance agreement is clear and specific enough that the employee understands it, considering his or her level of education and experience;

2. Whether the severance agreement was the result of fraud, duress, undue influence, or other improper conduct by the employer;

3. Whether the employee had sufficient time to read and consider the severance offer;

4. Whether the employee consulted with an attorney, or the employer encouraged the employee to consult with an attorney, before accepting the severance offer; and

5. Whether the employee had input into negotiating the terms of the severance agreement.

The EEOC guidance also discusses the special minimum requirements for a release to waive age discrimination claims under the ADEA. Those requirements come from a 1990 amendment to the ADEA, called the Older Workers Benefit Protection Act (OWBPA). The OWBPA contains seven requirements for a valid waiver of federal age discrimination claims:

1. The waiver must be written clearly, so the employee can understand it;

2. The waiver must specifically refer to claims under the ADEA;

3. The waiver must advise the employee to consult a lawyer before accepting it;

4. The waiver must give the employee at least 21 days to consider the severance offer;

5. The waiver must provide the employee at least seven days to revoke the agreement after he or she signs it;

6. The employee must not be required to waive the right to pursue any violations of his or her future rights under the ADEA, meaning that the employee cannot waive any violations of the ADEA that occure after the effective date of the waiver; and

7. The employee must receive additional consideration, typically severance pay or benefits, that he or she would not be entitled to receive otherwise.

A waiver under the ADEA is also unenforceable if the employee signs it as the result of the employer’s fraud, undue influence, or other improper conduct, or if the employee signed the release because it contains a material mistake, omission, or misstatement.

The EEOC guidance discusses additional requirements of the OWBPA that apply to mass layoffs, reductions in force, early retirement incentive plans, and other employer exit incentive programs and termination programs. For example, employers must give employees at least 45 days, rather than 21 days, to consider a waiver of the right to sue for age discrimination under the ADEA if they are terminated as part of a mass layoff or reduction in force. Employers also must provide employees who are impacted by a mass layoff or reduction in force with a list of the job titles and the ages of all individuals in their “decisional unit” who were eligible for, selected for, and not selected for, inclusion in the mass layoff or reduction in force. Depending on the circumstances, the relevant decisional unit can be the entire company, a division, a department, the employees reporting to a particular manager, or the employees in a particular job classification.

The EEOC guidelines contain a checklist of things employees should do if they are offered a severance agreement, including that they should:

1. Make sure they understand the severance agreement;

2. Check for deadlines in the agreement, and act promptly;

3. Consider having an attorney review the severance offer; and

4. Make sure they understand what they are giving up in exchange for the severance benefits.

Although not specifically discussed by the EEOC, it is often possible for an employee who has been laid off to negotiate additional severance benefits, or to otherwise improve the terms of their severance offer. You should consider meeting with an experienced employment lawyer in your area if you have been laid off or otherwise fired and are hoping to enhance your severance package, or if you need help understanding the severance agreement and the important rights you may be giving up if you sign it.

On May 22, 2009, in the case of Sassaman v. Gamache, Commissioner, Dutchess County Board of Elections, the United States Court of Appeals for the Second Circuit reinstated the sex discrimination claim of an employee who was forced to resign because another employee accused him of sexual harassment. The Second Circuit is the federal appellate court that covers several states, including New York.

The plaintiff in that case, Carl Thomas Sassaman, worked for the Dutchess County Board of Elections. In March 2005, another Board of Elections employee, Michelle Brant, accused Mr. Sassaman of harassing and stalking her. Mr. Sassaman denied harassing Ms. Brant. He also claimed that she had previously asked him if he was interested in a one-time sexual encounter with her, which he declined.

When Ms. Brant complained about the sexual harassment, the Commissioner of the Board of Election, David Gamache, suggested that Ms. Brant file a complaint with the Dutchess County Prosecutor’s office. The Prosecutor’s office subsequently found insufficient proof that Mr. Sassaman had enaged in a crime.

However, Mr. Gamache and the Board of Elections conducted virually no sexual harassment investigation of their own. Instead, they immediately suspended Mr. Sassaman without pay. A few weeks later, Mr. Gamache gave Mr. Sassaman the option to resign, or he would be fired. According to Mr. Sassaman, Mr. Gamache told him “I really don’t have any choice, Michelle [Brant] knows a lot of attorneys; I’m afraid she’ll sue me. And besides you probably did what she said you did because you’re male and nobody would believe you anyway.” Given the options, Mr. Sassaman resigned.

Mr. Sassaman then filed a discrimination lawsuit, alleging that Mr. Gamache, the Dutchess County Board of Elections, and Dutchess County discriminated against him because of his gender in violation of Title VII of the Civil Rights Acts of 1964. The United States District Court for the Southern District of New York dismissed Mr. Sassaman’s case, concluding he did not have sufficient evidence of sex discrimination to even get to a jury. However, on appeal, the Second Circuit reinstated his case.

The Second Circuit reasoned that a jury could interpret Mr. Gamache’s statement that Mr. Sassaman “probably did what [Ms. Brant] said you did because you’re male,” as evidence of gender discrimination. Specifically, a jury could reasonably interpret his statement to mean that Mr. Gamache assumed Mr. Sassaman sexually harassed Ms. Brant based on a discriminatory assumption that men are likely to engage in sexual harassment. Adverse employment decisions based on stereotypes about the behavior of men or women are discriminatory, and violate Title VII.

The Court noted that, in context, the fact that Mr. Gamache terminated Mr. Sassaman’s employment without adequately investigating Ms. Brant’s sexual harassment allegations further support his gender discrimination claim. While Mr. Gamache claims he terminated Mr. Sassaman’s employment because he was afraid Ms. Brant would sue for sexual harassment, a jury might not believe that argument.

However, the Second Circuit was careful to note that an insufficient sexual harassment investigation, on its own, is not enough to prove sex discrimination. Rather, when there is other evidence of discrimination, the lack of a proper investigation potentially can support a discrimination claim. In other words, the Court did not rule that an alleged harasser can sue for discrimination merely because the employer fired him or her without engaging in an adequate investigation. It merely recognized that, in some cases, the employer’s failure to conduct a thorough sexual harassment investigation can further support a discrimination claim.

On June 26, 2009, in Stengart v. Loving Care Agency, Inc., New Jersey’s Appellate Division ruled that confidential emails employees send to their lawyers using company computers are protected by the attorney-client privilege.

Under the attorney-client privilege, communications made in confidence between lawyers and their clients in the course of their professional relationship are privileged. The primary reason for the attorney-client privilege is to encourage clients to engage in a full and free disclosure of information with their lawyers.

In Stengart, employee Marina Stengart was still working for Loving Care Agency, Inc., when she emailed an employment lawyer about her potential discrimination case. She sent emails to her attorney, using her private Yahoo email address, from her company-issued laptop.

After Ms. Stengart left Loving Care and filed a lawsuit, the company created a forensic image of her computer’s hard drive. The lawyers representing Loving Care discovered numerous communications between Ms. Stengart and her lawyers in her computer’s Internet browsing history. When Ms. Stengart’s lawyers learned that Loving Care had copies of many of her emails to them, she asserted the attorney-client privilege and demanded that Loving Care return them to her. She also sought to disqualify Loving Care’s lawyers since they had unfair access to her privileged communications with her lawyers.

Prior to the appeal, based on the company’s electronic communications policy, the trial court ruled that Ms. Stengart did not have a reasonable expectation of privacy when she used her company laptop to communicate with her lawyers. Accordingly, it found that the emails were not protected by the attorney-client privilege.

However, the Appellate Division disagreed. It ruled that it was unclear whether the company’s electronic communications policy prohibit Ms. Stengart from using her company laptop to email her lawyers, since it expressly permitted some personal use.

More importantly, the appellate court also found that, even if Ms. Stengart had violated the company’s email policy, the attorney-client privilege outweighed her employer’s interest in enforcing its electronic communications policy. It noted that while employee handbooks can create binding employment contracts, New Jersey courts will not enforce unreasonable workplace rules and policies. More specifically, courts will only enforce employment policies if they advance the “legitimate business interests of the employer.” Accordingly, the Appellate Division rejected what it described as “the employer’s claimed right to rummage through and retain the employee’s emails to her attorney.”

The Court noted that people conduct many personal and confidential transactions via the Internet, including accessing private medical records, viewing bank account data and telephone records, filing tax returns, and emailing attorneys about confidential matters. It indicated that those individuals have a reasonable expectation that their private communications will remain private, even if they review the private information on a company computer. However, the Court made it clear that companies are entitled to monitor whether their employees are performing non-business activities that distract them from their work, and can discipline employees who engage in personal matters during working hours.

The New Jersey Law Against Discrimination (LAD) prohibits employers from discriminating against employees on the basis of age. Among other things, it prohibits employers from firing, refusing to hire or requiring an employee to retire because of their age.

However, the LAD expressly does not prohibit employers from refusing to hire or promote a person over 70 years old. As a result, someone who is not hired or promoted because they are over seventy years old does not have an age discrimination claim under the LAD.

On April 23, 2009, in Nini v. Mercer County Community College, the New Jersey Appellate Division ruled that this over-seventy exception does not apply to a company’s failure to renew an employment contract. In other words, a company violates the LAD if it decides not to renew an employment contract of an individual who is over 70 years old based on the employee’s age.

The case involves Rose Nini, who worked as an executive assistant for Mercer County Community College (MCCC) from 1979 to June 30, 2005. She worked pursuant to a series of renewable employment contracts. In June 2005, MCCC chose not to renew her contract for an additional three years term. At the time, Ms. Nini was 73 years old.

According to Ms. Nini, she had substantial evidence of age discrimination. For example, during the nearly 25 years before MCCC told her it might not renew her contract, she never received a poor performance review. Her supervisor then made it clear that he thought she should not be working at her age, that other employees her age were considering retiring, and that he thought she should retire too. Several MCCC department heads also discussed “age and incompetence,” “dead wood,” and made jokes about getting rid of the “oldest employees.” Ms. Nini also heard that MCCC’s Human Relations Director said the college needed to “get rid of the old-timers” and “bring in new blood.”

In analyzing the LAD’s exception regarding the right not to hire or promote an employee over seventy years old, the Appellate Division stated that the nonrenewal of a contract is the equivalent of a termination, rather than a refusal to hire. Previous New Jersey cases have recognized there is little or no difference between failing to extend or renew an employment contract and a decision to fire an employee. Thus, the Court ruled that the over-seventy exception does not apply to a decision not to renew an employment contract, meaning it violates the LAD if an employer chooses not to renew the contract of an employee because she is over 70 years old. Accordingly, the Court sent the case back to the lower Court so Ms. Nini could further pursue her age discrimination case.

Earlier this month, New Jersey’s Appellate Division ruled that it is improper to present a jury with evidence regarding “after-acquired evidence” until after it has determined that an employer violated New Jersey’s Conscientious Employee Protection Act (CEPA). CEPA is New Jersey’s whistleblower law.

After-acquired evidence is when a company learns during a discrimination or retaliation lawsuit that the employee did something while he worked for the company that would have been grounds for firing him. If the employer can prove it would have fired the employee based on the new evidence, the employee’s damages for lost salary and benefits are cut off from the date on which the employer learned the new information.

Even when it applies, the after-acquired evidence defense does not prevent an employee from proving a wrongful termination claim, does not impact damages for salary and benefits the employee lost before the employer discovered the wrongdoing, and does not limit damages for emotional distress damages in any way. It only cuts off damages for lost salary and benefits starting from the date on which the employer discovered the new information.

The reason why the after-acquired evidence bars some damages, but does not completely bar proving a wrongful termination claim, is to deter and punish unlawful discrimination and retaliation, while still penalizing an employee who is guilty of misconduct that would have caused him to lose his job irrespective of any discrimination or retaliation. Accordingly, it applies only if the employer can prove that the employee’s wrongdoing was so severe that it actually would have fired the employee, solely on that basis, when it learned of the wrongdoing.

On June 2, 2009, in Redvanly v. Automated Data Processing, Inc., the Appellate Division ruled that it is improper for a judge to allow a jury to hear any evidence supporting an after-acquired evidence defense until the jury has decided whether the employee was wrongfully discharged. In that case, Diane Redvanly sued her former employer, Automated Data Processing, Inc. (ADP) and her former supervisor, Richard Feeney, claiming they fired her in violation of CEPA.

In 1996, Ms. Redvanly began working for ADP in Clifton, New Jersey. In December 2002, she attended a seminar regarding the Sarbanes-Oxley Act, which requires publically traded companies to institute internal financial controls to ensure accountability. Based on what she learned at the seminar, Ms. Redvanly told Mr. Feeney that she intended to disclose the fact that ADP was over billing some of its clients.

According to Ms. Redvanly, during a meeting the next day, Mr. Feeney engaged in a “profanity-laced, verbal assault” of her, including complaining about her management style. Mr. Feeney continued to demonstrate his anger toward Ms. Redvanly for several weeks, culminating in him firing her because of her “recent behavior.” Ms. Redvanly then sued ADP and Mr. Feeney, claiming they fired her in violation of CEPA.

At the trial, the jury unanimously found that Ms. Redvanly failed to prove her CEPA claim because she did not engage in any legally protected whistleblowing activity. However, the Appellate Division found that the verdict might have been tainted by evidence ADP presented suggesting that Ms. Redvanly committed resume fraud. Specifically, on her employment application for the job with ADP, Ms. Redvanly indicated that she worked at NYNEX Mobile Communications, Inc. (NYNEX), and claimed she left NYNEX because her position was eliminated. She also claimed she never had been fired from another job. In actuality, NYNEX fired Ms. Redvanly. Ms. Redvanly sued NYNEX for national origin and gender discrimination, and eventually settled that case.

In other words, ADP asserted an after-acquired evidence defense. It claimed it would not have hired Ms. Redvanly in the first place if she had told the truth about why she was separated from her job at NYNEX, and it would have fired her if it had learned about her false statements on her resume.

The Appellate Division recognized that after-acquired evidence is relevant and admissible only with respect to the issue of damages. Accordingly, it ruled that the lower court should have separated the trial two phases. In the first phase, the jury should have determined whether ADP retaliated against Ms. Redvanly. During that phase, the jury should not have been told anything about Ms. Redvanly’s alleged resume fraud, since that information is irrelevant to whether ADP retaliated against her, and was likely to unfairly prejudice the jury against her.

If the jury found retaliation, then there should have been a second phase of the trial to determine Ms. Redvanly’s damages. During that phase, ADP should have been permitted to present evidence regarding the alleged resume fraud only if there was evidence that ADP would have not have hired her, or would have fired her, if it had known more about the circumstances of her separation from NYNEX. The Court questioned whether the after-acquired evidence defense was even viable since there was no way for the jury to know whether NYNEX fired Ms. Redvanly rightfully or wrongfully, since she and NYNEX settled that case.

By separating trials at which the after-acquired evidence doctrine applies into two phases, employees should have a fair opportunity to prove their retaliation or discrimination claims, while employers will have an opportunity to limit the economic damages if they can establish an after-acquired evidence defense. While the after-acquired evidence doctrine can often seem unfair to an employee who was fired illegally, keeping that evidence out of the case until after the jury decides whether the employer violated the law seems to be a fair compromise between the interests of employers and employees.