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Kelly Sarbacher, An Individual v. Americold Realty Trust

June 20, 2011


The opinion of the court was delivered by: Honorable Candy W. Dale Chief United States Magistrate Judge



Before the Court is Defendants' Motion to Compel, filed on May 18, 2011. (Dkt. 25.) The Court expedited the briefing schedule, and conducted a telephonic hearing on June 8, 2011. The matter is now fully briefed and ripe for the Court's review. Based upon the analysis below, the Court will deny the motion.


Plaintiff Kelly Sarbacher filed a complaint on July 12, 2010, against his former employer, Americold, alleging he was owed severance pay under a written employment agreement. Plaintiff asserts that his employment agreement entitled him to severance pay upon termination if his employment was terminated without his consent and not for "cause" as defined under the agreement. Plaintiff claims he is owed "wages" in the form of unpaid but owed severance pay under Idaho's Wage Claim Act, Idaho Code § 45-601.

Defendants deny that they terminated Plaintiff's employment improperly under the agreement, and instead contend that Plaintiff's employment was terminated for cause, thereby not entitling Plaintiff to severance pay. Defendants contend that the decision to terminate the employment relationship was based upon Plaintiff's deliberate falsification of inventory statistics at one of the two facilities he managed.

Defendants also contend that, during their investigation before finalizing the termination decision, there were rumors that while clocked in on company time, Plaintiff was not actually at work. However, the investigation did not result in verification of these rumors, other than employees indicating that Plaintiff was at the facility only one or two days each week, and available solely by e-mail. Defendants assert that their investigation was unable to verify Plaintiff's whereabouts because they did not have access to Plaintiff's personal records.

Defendants seek production of Plaintiff's personal financial records, which include debit, bank, and credit card expenditures, between June 2, 2007, up through the date his employment was terminated on June 2, 2010. Defendants claim that this information is relevant to their claim that Plaintiff spent the majority of his working days golfing or attending to personal matters. Defendants acknowledge that debit, bank, and credit card expenditures may not be posted to the cardholder's account on the day the transaction occurred, but claim the information would be relevant during depositions to enable them to question Plaintiff as to his whereabouts, and it would either confirm or deny their suspicions that Plaintiff was attending to personal business rather than managing the inventory at Defendants' warehouse facility.

Plaintiff objects to production of the requested records, his primary argument being that the information is not related to the after-acquired evidence defense that Defendants have alleged. Plaintiff asserts that his employment was terminated for his role in allegedly falsifying inventory records, not for his failure to be present at the facility. Therefore, he contends the information Defendants seek to discvover is not relevant. And, Plaintiff contends that the after-acquired evidence defense is applicable only when the information was unknown at the time of the termination decision, contrary to the situation here, where Defendants were aware of rumors Plaintiff attended to personal business while clocked in on company time. Further, Plaintiff objects on the grounds that the request is overbroad, as there is no method to determine whether the charges were incurred during authorized breaks, and Defendants seek three years of such records.


Discovery is permitted "regarding any non-privileged matter that is relevant to any party's claim or defense." Fed. R. Civ. P. 26(b)(1). "Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. 26(b)(1). Evidence is relevant if the evidence has any tendency to "make the existence of any fact that is of consequence to the determination of the action more probable or less probable that it would be without the evidence." Fed. R. Evid. 401. Although parties are not given unfettered license to obtain all information, no matter how tangentially relevant it might be, Rule 26(b)(1) is construed broadly to "encompass any matter that bears on, or that reasonably could lead to other matter that bears on, any issue that is or may be in the case." Oppenheimer Fund, Ind. v. Sanders, 437 U.S. 340, 350 (1978).

The "after-acquired evidence" doctrine precludes or limits an employee from receiving remedies for wrongful discharge if the employer later "discovers" evidence of wrongdoing that would have led to the employee's termination from employment had the employer known of the misconduct. McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 360-63, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995). Under such circumstances, "[a]n employer can avoid backpay and other remedies by coming forward with after-acquired evidence of an employee's misconduct, but only if it can prove by a preponderance of the evidence that it would have fired the employee for that misconduct." O'Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756, 761 (9th Cir.1996). The doctrine can be used to limit damages by preventing an award of front pay and reinstatement. Rivera v. NIBCO, Inc., 364 F.3d 1057, 1071 (9th Cir. 2004).

In the instant case, the after-acquired evidence doctrine does not apply as a basis for permitting the requested discovery. The legal principal is available to limit remedies for wrongful discharge brought under the civil rights laws or other laws which permit claims for back and front pay as damages. In this case, Plaintiff asserts a wage claim under state law premised on breach of a written employment agreement. In addition, the after-acquired evidence doctrine is forward looking, limiting damages for front pay and reinstatement, whereas the damages in this case are limited to severance pay allegedly due upon separation from employment. Therefore, the doctrine does not apply under the facts before the Court.

As for relevance, the Court agrees that the evidence may be relevant in the context of Defendants' claim that Plaintiff engaged in fraudulent activity by misrepresenting inventory levels. Defendants assert the motive behind Plaintiff's falsification of the records was because he was not on site and was otherwise engaged in personal pursuits on company time. One of Defendants' theories is that Plaintiff had no time to devote to correcting the problem, because he was not at Defendants' warehouse facility working. Defendants seek to prove their theory by questioning ...

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