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Judicial decisions.

Discrimination. According to a decision by the Ninth Circuit Court of Appeals, an employee seeking damages from an employer for discriminatory firing has a limited chance for compensation if that employee committed acts for which he or she would have been terminated.

In June 1990, Dennis O'Day was denied a promotion at a McDonnell Douglas Helicopter Company plant in Mesa, Arizona. A month later, O'Day was laid off as part of an overall reduction in force. O'Day, who was forty-six and had worked for the company for fourteen years, suspected he had been laid off because of his age. O'Day sued McDonnell Douglas for age discrimination and breach of promotion.

The evening after he was denied the promotion, O'Day returned to the plant and searched his supervisor's office. O'Day claims he was looking for his personnel file - to which he was denied access - but discovered other documents, including his supervisor's promotion recommendations and a handwritten list ranking employees in the order they would be laid off. These items were clearly confidential. The file containing the documents was kept in a closed drawer and was marked "personal/sensitive." O'Day photocopied the documents and later showed them to another employee whose name was on the list of persons to be laid off.

McDonnell Douglas did not learn of O'Day's misconduct until the age discrimination proceedings began. After it learned of the incident, McDonnell Douglas fired O'Day, who as a laid-off employee might still have been called back to work, and requested summary judgment on the grounds that O'Day's actions negated any liability owned by the company.

O'Day argued that his conduct was protected under the Age Discrimination in Employment Act (ADEA), which contains an "opposition clause" allowing employees to gather evidence while investigating unlawful employment practices. O'Day claims that the company regularly destroyed documents as a matter of policy. In fact, the original copy of the handwritten layoff list was destroyed prior to litigation. McDonnell Douglas produced an altered, typed list for the court.

The district court granted summary judgment to McDonnell Douglas stating that, because of his own wrongdoing, O'Day was barred from pursuing a discrimination claim based on the after-acquired evidence of his wrongdoing. O'Day appealed.

The Ninth Circuit Court of Appeals considered whether O'Day's misconduct absolved McDonnell Douglas of any liability for discrimination and whether such acts are protected under the ADEA.

The court found that, based on testimony of company human resource personnel and documentation in the employee handbook, O'Day would have been fired immediately had the company known of his actions. However, the court also ruled that McDonnell Douglas would be forced to defend against the alleged discrimination charges. If the court hearing this new case follows the Supreme Court's allocation of damages, the after-acquire evidence will prohibit O'Day from full compensation even if McDonnell Douglas is found guilty of discrimination. The ninth circuit court remanded the matter of the age discrimination to a lower court.

The appellate court also found that O'Day's misconduct is not covered under the ADEA. The opposition clause in the ADEA, said the court, protects reasonable attempts to air an employer's discriminatory practices.

In reference to the decision, the judges stated: "In balancing an employer's interest in maintaining a harmonious and efficient workplace with the protections of the antidiscrimination laws, we are loath to provide employees an incentive to rifle through confidential files looking for evidence that might come in handy in later litigation."

Attorneys for O'Day filed a petition for reheating. The ninth circuit has not announced whether it will reheat the case. Attorneys have not announced plans to appeal.

According to Tibor Nagy, Jr., an attorney with Snell & Wilmer of Tucson, Arizona, the case is similar to McKennon v. Nashville Banner, U.S. Supreme Court, 1995, in which the Court ruled that an employee suing for discriminatory firing could not receive full damages because she engaged in wrongful conduct before her firing that would have ended in termination (see March 1995 "Legal Reporter.")

The McKennon case had not been decided at the time of the lower court's ruling in the O'Day case. After McKennon was decided, the appellate court reversed the lower court's findings in the O'Day case.

According to the McKennon decision, O'Day may be eligible to receive back pay if McDonnell Douglas is found guilty of discrimination. Additional damages could be awarded, however, because the Supreme Court decision left district courts the power to expand or limit damages. (Dennis O'Day v. McDonnell Douglas Helicopter Company, United States Court of Appeals for the Ninth Circuit, No. 92-15625, 1996)

Premises liability. A recent federal appellate court decision upheld a jury verdict granting a landowner "innocent owner" status even though the landlord knew about illegal activity occurring on his property. The plaintiffs property had been seized by the federal government because it was used to facilitate the illegal sale and purchase of drugs.

In 1973, Stanley Tucker commissioned the construction of an apartment building in the Frog Hollow neighborhood in Hartford, Connecticut. In 1983, a fire destroyed a portion of the building. It was closed for renovations until 1988. During the five-year interim, the criminal activity around Tucker's building escalated. After the building reopened, the problems continued. Hartford police responded to 368 calls between January 1989 and August 1991. Undercover Hartford police made three purchases of cocaine in the building and arrested sixteen people for possession of narcotics during the same time period.

In August 1991, the federal government filed a complaint seeking forfeiture of the building on the grounds that it was used to commit crimes involving illegal substances. Tucker objected to the forfeiture by filing an "innocent owner" defense - which can be used if the owner lacked knowledge of or failed to consent to the illegal activity.

The government filed a motion for summary judgment - a hearing about the facts of a case without a trial. The judge denied the request, agreeing that there was indisputable evidence that Tucker knew about the illegal activity but questioning whether Tucker consented to it.

The jury found for Tucker, but the judge in the case overturned the verdict, finding for the government. The judge found that in the issues of building conditions and security, screening and eviction of drug-using tenants, and investigation of illegal drug activities Tucker had taken "virtually no reasonable steps" to prevent the drug activity. Tucker appealed the ruling.

In reviewing the original trial testimony, the appellate court overturned the district court's finding and reinstated the original jury verdict. The court noted witness testimony that the building was in disrepair and that exterior building locks were broken. However, additional evidence was presented indicating that Tucker hired maintenance workers to repair locks, windows, and broken hall lights.

Tucker also testified that he had attempted to screen tenants and evict those who committed drug-related offenses. The lease specifically prohibited drug use on the property, and Tucker required all tenants to sign a release allowing him to obtain background information on them from the police, social service agencies, and former landlords. (Tucker tried to use these forms to obtain criminal background checks on several occasions but was turned away by the police.) Evidence indicated that Tucker did reject those tenants whose background checks signaled prior drug abuse.

The appellate court judge noted that while the trial court may have disagreed with the jury's decision, it did not have the right to overturn the case in the light of "substantial efforts by the owner of the property to prevent its use for drug trafficking."

According to Tucker's attorney, John R. Williams of New Haven, Connecticut, the case indicates that landowners do not have to take extraordinary measures to combat crime as a way to indicate their disapproval. The case, according to Williams, also sends a message about the strength of a jury verdict in similar cases. As long as the property owner has a right to a jury trial, says Williams, juries retain the right to administer what they feel is justice despite contrary government opinions. (United States v. One Parcel of Property, United States Court of Appeals for the Second Circuit, No. 94-6242, 1996)
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Title Annotation:court decisions on discriminatory firing and liability for criminal activities
Author:Anderson, Teresa
Publication:Security Management
Date:Aug 1, 1996
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