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Camp v. Jeffer, Mangels, Butler & Marmaro

California Court of Appeal
41 Cal. Rptr. 2d 329, 35 Cal.App.4th 620, 95 Daily Journal DAR 7143 (1995)
ELI5:

Rule of Law:

The after-acquired evidence doctrine will bar a wrongful termination claim completely, under the theory of unclean hands, when an employee's misrepresentation on a job application conceals a government-imposed qualification that legally disqualifies the employee from the job.


Facts:

  • In 1984, Kendra and Ronald Camp were convicted of federal felonies related to defrauding a federally insured bank.
  • After being released from prison in 1987, the Camps were hired as legal secretaries by the law firm Jeffer, Mangels, Butler & Marmaro (Jeffer Mangels) in 1989 and 1990.
  • On their job applications, both Camps falsely answered “no” to the question of whether they had ever been convicted of a felony.
  • In 1990, Jeffer Mangels became a contractor for the Resolution Trust Corporation (RTC), a federal agency.
  • The RTC contract and federal regulations required Jeffer Mangels to certify that none of its employees had ever been convicted of a felony.
  • To comply, Mrs. Camp signed a form under penalty of perjury, stating she had not been convicted of a felony, as a condition of her employment.
  • Mrs. Camp reported to the firm's management that she believed a partner was engaged in illegal insider trading.
  • In March 1991, Jeffer Mangels terminated Mrs. Camp, citing poor work performance, and Mr. Camp, citing misuse of company time.

Procedural Posture:

  • In March 1992, Kendra and Ronald Camp filed suit against Jeffer Mangels in a California trial court, alleging wrongful termination and other claims.
  • During the discovery phase of the lawsuit, Jeffer Mangels learned for the first time that the Camps had prior felony convictions.
  • Jeffer Mangels filed a motion for summary judgment, arguing the Camps' claims were barred by the after-acquired evidence doctrine.
  • The trial court granted summary judgment in favor of Jeffer Mangels.
  • The Camps, as appellants, appealed the trial court's judgment to the California Court of Appeal.

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Issue:

Does the after-acquired evidence of employees' fraudulent concealment of their felony convictions, which legally disqualified them from employment under a federal government contract, bar their claims for wrongful termination in violation of public policy?


Opinions:

Majority - Masterson, J.

Yes, the after-acquired evidence of the employees' fraudulent concealment of their disqualifying felony convictions completely bars their wrongful termination claims. While the general rule is that after-acquired evidence of misconduct only limits remedies, this case is different because the misrepresentation went to a qualification imposed by the federal government, not merely by the employer. The RTC contract legally required Jeffer Mangels to ensure none of its employees were convicted felons. The Camps were therefore not lawfully qualified for their jobs. Their misrepresentations put the firm at risk of losing its government contract and facing accusations of making false statements. The court applied the doctrine of unclean hands, reasoning that the misconduct (lying about the felony convictions) was directly related to the subject of the complaint (the employment). Because the Camps were never lawfully qualified for their jobs, they cannot be heard to complain that they improperly lost them.



Analysis:

This decision establishes a significant exception to the general rule articulated in cases like McKennon v. Nashville Banner, where after-acquired evidence typically limits damages rather than barring liability entirely. The court draws a critical distinction between resume fraud that violates an employer's internal, self-imposed policies and fraud that conceals a lack of a government-mandated, legal qualification for the job. By applying the unclean hands doctrine as a complete bar in the latter situation, the holding provides employers who are subject to such external requirements a powerful defense. This case underscores that the source and nature of a job qualification are paramount in determining the legal effect of an employee's misrepresentation.

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