Board of Regents of the University of Wisconsin System v. State

DIANE S. SYKES, J.

¶ 56. (dissenting). I respectfully dissent. I read nothing in Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985,) or State ex rel. Tracy v. Henry, 219 Wis. 53, 262 N.W 222 (1935), that precludes application of the after-acquired evidence doctrine of McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995), in a remedy hearing under the civil service code in order to determine the proper measure of back pay damages for wrongful termination.

¶ 57. The McKennon after-acquired evidence rule allows later-discovered evidence of employee misconduct supplying independent justification for termination to he admitted on the issue of remedy for an earlier wrongful termination. McKennon, 513 U.S. at 360-61. "The employee's wrongdoing must be taken into account ... lest the employer's legitimate concerns be ignored." Id. at 361. Accordingly, in determining a back pay remedy for an illegal employment termination — in McKennon it was a termination in violation of the Age Discrimination in Employment Act — the after-acquired evidence rule allows admission of evidence that the *181employee would have been terminated on separate, later-discovered grounds. Id. at 363.

¶ 58. As the majority notes, Loudermill held that due process requires notice and an opportunity for " 'some kind of hearing' prior to the discharge of an employee who has a constitutionally protected property interest in his employment." Loudermill, 470 U.S. at 542. However, "the pretermination 'hearing,' though necessary, need not be elaborate." Id. at 545. "The essential requirements of due process ... are notice and an opportunity to respond." Id. at 546. There is no reason why the notice and hearing requirements of due process cannot be satisfied within the context of a remedy hearing. As long as the employee has notice and an adequate opportunity to respond on the after-acquired evidence issue, there can be no due process violation.

¶ 59. As the circuit court in this case held, applying the after-acquired evidence rule is fully consistent with Tracy. There, this court was concerned with the issue of whether a subsequent legal discharge could operate retroactively to the date of a prior illegal discharge. Tracy, 219 Wis. at 54. The court said no; a civil service employee illegally discharged is entitled to recovery from the time of the illegal discharge up until the subsequent legal discharge as if he had been reinstated during that time period. Id. at 62.

¶ 60. Application of the after-acquired evidence rule here does not operate to make a subsequent legal discharge retroactive to the date of the illegal discharge. UWM seeks only to limit Brenon's back pay recovery to damages from the date of the original wrongful discharge to the date that it says it could validly have discharged him on the independent, newly-discovered grounds. This does not run afoul of Tracy. Indeed, the *182public employees in Tracy were limited to a back pay recovery "as of the date of their original illegal discharge, as employees in the state civil service ... up to the time of a valid discharge." Id. at 62.

¶ 61. The real question here is whether Brenon was "ambushed" with the after-acquired evidence issue at the remedy hearing.1 That UWM considered the "purloined documents" as serious misconduct certainly came as a surprise to no one. The parties had been waging a pitched battle over the return of the documents ever since the issue arose in Brenon's June 1996 deposition. The documents were the subject of a re-plevin action initially filed in 1997 and re-filed in 1998, which Brenon resisted. As the majority notes, Brenon had originally returned a single box of UWM documents upon demand after his deposition; very shortly after the Commission's decision in this matter, Brenon capitulated on the replevin action and disgorged ten more boxes of UWM documents. Majority op. at ¶¶ 17, 22 n.8. In addition, as the majority also notes, in arguing against any reinstatement order in this matter, UWM put Brenon on notice that if reinstated, he would immediately face disciplinary action for unauthorized possession of university property. Majority op. at ¶ 20 n.7.

*183¶ 62. It may well be that Brenon assumed the dispute over the documents would be litigated outside the forum of the remedy hearing, and was therefore surprised when the matter came up at that hearing as after-acquired evidence for purposes of limiting his back pay recovery. As the circuit court noted, however, exclusion of evidence as remedy for unfair surprise is usually appropriate only if the alternative of a continuance would cause undue delay or if the surprise results in a danger of prejudice or confusion of issues. Magyar v. Wisconsin Health Care Liability Ins. Plan, 211 Wis. 2d 296, 303, 564 N.W.2d 766 (1997).

¶ 63. Ordinarily, "the drastic measure of excluding a witness should be avoided by giving the surprised party more time to prepare, if possible." Id. at 303-04. Magyar held that "continuance is usually the more appropriate remedy for surprise; exclusion should be considered only if a continuance would result in a long delay." Id. at 304. The determination of whether to exclude evidence or grant a continuance to allow the surprised party to prepare is made by evaluating "whether the surprise was unfair, and, if so, whether the unfair surprise outweighed the probative value of the evidence." Id. Here, neither the hearing examiner nor the Commission applied this balancing test or considered the alternative of a continuance.

¶ 64.. I would conclude that any unfair surprise on Brenon's part does not outweigh the probative value of the after-acquired evidence in this case. The after-acquired evidence relating to Brenon's unauthorized possession of confidential university documents is highly probative of the proper measure of Brenon's back pay damages, provided UWM can prove that it could and would have validly terminated him on these independent grounds. Despite the lengthy and convoluted *184procedural history of this matter, there is no allegation that UWM's failure to disclose its after-acquired evidence theory violated any scheduling order or discovery rule. A short continuance to allow Brenon to prepare to address the issue would have accomplished the dual purpose of giving him his due process notice and opportunity to respond, and would have mitigated any unfair surprise.

¶ 65. I agree completely with the majority's resolution of the second issue in the case regarding the denial of Brenon's costs and fees, which is consistent with the circuit court's analysis. I would affirm the circuit court's decision in its entirety.

I do not understand the majority to have created a rule that the after-acquired evidence doctrine can never be applied in the context of civil service or other public employment. Rather, the majority has upheld the Commission's decision to exclude the evidence in this case as a proper exercise of discretion. Majority op. at ¶ 40. For an example of the application of the McKennon after-acquired evidence rule in the context of a protected civil service employee, see Brogdon v. City of Klawock, 930 P.2d 989 (Alaska 1997). McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995).