After-Acquired Evidence: Limiting Remedies in California Employment Claims
Introduction
California’s Fair Employment and Housing Act (FEHA) protects employees from wrongful termination, discrimination, and retaliation. However, when an employer discovers serious employee misconduct only after a discharge or refusal to hire, it can invoke the “after-acquired evidence” doctrine to limit the remedies available—even if the original employment action was unlawful (Salas v. Sierra Chemical Co., 59 Cal.4th 407, 428–31 (2014); Gov. Code, § 12940 (West 2025)).
What Is After-Acquired Evidence?
After-acquired evidence refers to information uncovered after an allegedly wrongful employment action, such as termination or refusal to hire, that would independently justify discharge or refusal. This typically involves on-the-job misconduct or significant misrepresentations in application materials (Camp v. Jeffer, Mangels, Butler & Marmaro, 35 Cal.App.4th 620, 632 (1995)).
The doctrine does not erase liability for the original violation but can reduce or eliminate remedies like backpay, reinstatement, or promotion if the employer would have made the same employment decision solely on the later-discovered facts (McKennon v. Nashville Banner Publ’g Co., 513 U.S. 352, 362–63 (1995); Murillo v. Rite Stuff Foods, Inc., 65 Cal.App.4th 833, 842, 845–46 (1998)).
What Employers Must Prove
To prevail, the employer must establish all three elements:
The employee actually committed significant misconduct (e.g., resume fraud, theft, or other severe wrongs).
The misconduct was sufficiently serious that the employer would have discharged or refused to hire the employee for that reason alone.
Such discharge or refusal would have been required by settled company policy (Murillo, 65 Cal.App.4th at 842, 845–46).
If proved, remedies in a FEHA claim are limited to damages up to the date the misconduct was discovered (Salas, 59 Cal.4th at 430–31).
How After-Acquired Evidence Affects Claims
This limitation applies only to employee misconduct unknown to the employer at the time of the original adverse action. The employer bears the burden of proof, and must show not just the existence of later-discovered misconduct, but its impact under company policy (Murillo, 65 Cal.App.4th at 845–46).
After-acquired evidence does not provide a complete defense—it does not erase liability for discrimination or retaliation before the date of discovery (Salas, 59 Cal.4th at 430). Remedies like reinstatement or front pay may be unavailable; damages such as back pay will be limited.
Employers should distinguish after-acquired evidence cases from “mixed motive” claims where decisionmakers had both lawful and unlawful reasons (Salas, 59 Cal.4th at 430).
Guidance for California Employers
Uphold and document clear, consistently applied company policies regarding hiring and termination.
Address employee misconduct promptly and in line with established procedures.
If facing a FEHA lawsuit and discovering serious misconduct after the fact, gather and document all relevant evidence.
Work with legal counsel to evaluate how after-acquired evidence may affect liability and available remedies.
Remember: this doctrine may protect against excessive remedies, but will not eliminate liability for conduct violating FEHA prior to discovery.
Bottom Line
The after-acquired evidence doctrine helps California employers balance fair workplace standards with the realities of post-termination discoveries. By proving the seriousness and policy impact of hidden misconduct, employers can limit awards in employment litigation, but should also focus on consistent, equitable workplace management up front.
Citations
Gov. Code, § 12940 (West 2025); Salas v. Sierra Chemical Co., 59 Cal.4th 407, 428–31 (2014); Camp v. Jeffer, Mangels, Butler & Marmaro, 35 Cal.App.4th 620, 632 (1995); Murillo v. Rite Stuff Foods, Inc., 65 Cal.App.4th 833, 842, 845–46 (1998); McKennon v. Nashville Banner Publ’g Co., 513 U.S. 352, 362–63 (1995).
