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Illinois Supreme Court - The Limitation of Damages in Employment Discrimination Cases: A Case Analysis

The doctrine of "after-acquired-evidence," established by the United States Supreme Court in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995), has provided employers with an effective tool for limiting their damages in employment discrimination cases. The doctrine allows employers who later discover a dischargeable offense to cut off an employee's damages for lost wages from the time the employer discovers the violation forward. However, the doctrine of "after-acquired evidence" does not preclude a plaintiff from obtaining damages for lost wages which accrued before the plaintiff's violation was discovered.

In McKennon, the sixty-two-year-old plaintiff sued her former employer (The Nashville Banner Publishing Company) under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621, after she was terminated from her job of over thirty years. During her deposition, the plaintiff admitted copying and removing confidential information from Nashville Banner's offices and showing them to her husband, a dischargeable offense. There, the court held the plaintiff was precluded from collecting any damages for lost wages from the time the violation was discovered forward.

Prior to McKennon, the Seventh Circuit Court of Appeals and several other federal courts of appeal had barred plaintiffs' claims in cases where "after-acquired evidence" of a dischargeable offense was discovered. See, e.g., Washington v. Lake County, 969 F.2d 250 (7th Cir. 1992); See also O'Driscoll v. Hercules Inc., 12 F.3d 176, (10th Cir. 1994). The McKennon court declined to do so, however, reasoning that a complete bar would undermine the purpose behind the ADEA, which was designed to establish and further public policy against age discrimination. McKennon, 513 U.S. at 362. Instead, the court sought to craft a more appropriate remedy that would balance the ADEA's public purpose of deterring discrimination with employers' interests arising from employee misconduct. Id. at 362-63.

To date, the Illinois Supreme Court and appellate courts have not squarely addressed whether the doctrine of "after-acquired evidence" will apply to similar federal or state law claims. The Illinois appellate court's decision in Valentino v. Hilquist, 337 Ill. App. 3d 461 (1st Dist. 2003), is the only Illinois state decision to discuss the doctrine of "after-acquired evidence" thus far.In Valentino, the plaintiff asserted a claim for breach of contract against his former employer, and the employer asserted the doctrine of "after-acquired evidence" as a defense. However, the court recognized that the doctrine of after-acquired evidence had only been utilized in cases involving employment discrimination statutes like McKennon. Therefore, it held the doctrine did not apply to the plaintiff's breach of contract claim.

Valentino does not seem consistent with the Supreme Court's rationale in McKennon. Before McKennon,the doctrine of after-acquired evidence operated as a complete bar to a plaintiff's claims. As a result, what was previously an absolute defense became a partial defense. Thus, it is difficult to understand why the appellate court's determination that McKennon did not apply operated to limit rather than to expand the employer's rights in Valentino. This is especially true given the fact that Valentino involved the discrete, private interests of contracting parties rather than larger public interests regarding employment discrimination. This distinction should not be lost when trying to apply McKennon to an Illinois employment case involving a public policy claim. An example would be a retaliation claim. Retaliation is argued as being a violation of public policy, and as such, it would be similar to the claim made inMcKennon.

The fact that the Illinois Supreme Court and appellate courts have not settled the law regarding "after-acquired evidence" is surprising, given that McKennon was decided twenty years ago in 1995. Of note, the portion of Valentino that addresses after acquired evidence was authored pursuant to Illinois Supreme Court Rule 23. Therefore, it cannot be cited as precedent, leaving Illinois with no state precedent on this issue. The lack of authority in Illinois presents employers and the defense bar with a prime opportunity to set positive precedent in this area.

© 2020 Heyl, Royster, Voelker & Allen, P.C


About this Author

Doug Heise, Litigator, Corporations, Product Liability, Trucking, Heyl Royster Law Firm

Doug joined the Edwardsville office of Heyl Royster in 2004 and became a partner in 2008. With more than 25 years of litigation experience, Doug has defended a broad range of clients from individuals involved in auto accidents, to major corporations in product liability claims, trucking/motor carrier litigation, and construction litigation.

At Heyl Royster, Doug has an active practice defending healthcare professionals who provide medical services to the prison population in Illinois. These professionals are often sued by prisoners for alleged civil rights violations in state and...

Mitchell Martin, Heyl Royster, toxic tort litigation, medical malpractice attorney, labor compliance lawyer, employment law

Mitchell focuses his practice on the defense of medical malpractice and toxic tort litigation. Before joining Heyl Royster, he worked for a southern Illinois law firm, focusing on insurance defense. 

Mitchell is a native of southern Illinois. He graduated from Belleville West High School in 2004 and then earned his Bachelor's in Psychology and Biblical Studies from Harding University in 2008, graduatingsumma cum laude. Mitchell continued his education at the Southern Illinois University School of Law where he was a member of the Moot Court team. He participated in the National Moot Court Competition put on by the New York State Bar Association, and the Asylum and Refugee Moot Court Competition, where Mitchell's team won "Best Brief" and advanced to the semifinal round in 2012. He was later nominated to the Order of Barristers and received his law degree from Southern Illinois University in May of 2013, graduating cum laude.

While in law school, Mitchell interned with the United States Attorney's Office for the Southern District of Illinois, Federal District Judge, Michael J. Reagan, and Illinois Supreme Court Justice Lloyd Karmeier. He lives in Edwardsville, Illinois, and in his free time he enjoys being active in church and singing with a jazz band in Benton, Illinois.