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Many employees believe that once they leave a job, old skeletons in their workplace closet will never come back to haunt them. They are often mistaken. Increasingly, employers are relying on information they discover following an employee's departure, in a variety of different ways. How and when can employers utilize such information?

Defence of lawsuits

Allegations of misconduct, even if first coming to light subsequent to an employee's departure, can still be used by employers as a defence to any claims or complaints.

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Recently, the British Columbia Court of Appeal dismissed the case of a senior manager who sued his former company over a severance disagreement. The employee, who was responsible for safety and the company's anti-drug policies, was terminated "without cause" and offered a severance package that he later chose to challenge in court. But after turning over his company cellphone following his termination, the company read through his text messages and learned that he was buying illegal drugs from one of the employees that he supervised.

Armed with the discovery of this information that it did not have before the employee was dismissed, the company fought back against his lawsuit by successfully arguing that, had this information been known before, it would have fired him for misconduct and never offered him any severance.

Both the trial judge and Court of Appeal agreed, finding that information coming to light after an employee leaves the workplace can be used to argue the employee should have been dismissed for misconduct, even if he or she was initially let go for any other reason.

This precedent does not mean that employees faced with an unacceptable severance offer should fear negotiating or even suing for more. Courts will frown on any improper attempt to leverage an unproven or untrue allegation as a tactic to avoid paying more severance. But for those employees with a skeleton in their workplace closet, here is some practical advice. If yours is so bad you can't risk it being exposed, then do not challenge your employer's decision to discipline or dismiss you, however unfair. Some workplace skeletons will ultimately be harmful to both your case and your career.

Suing ex-employees

Employers are increasingly motivated to look for "dirt" on ex-employees who resigned to join competitors, start competing business or just those who are causing them some form of trouble in one way or another. This can include reviewing the employee's old e-mails and documents. If they find anything suspicious, employers can threaten to sue or even initiate lawsuits against former employees (and their new employers). In one recent case, an employer successfully obtained an injunction preventing a competitor from employing one of its former employees because it discovered evidence that the individual inadvertently disclosed confidential information through a writing sample used at his job interview.

Violation of settlements

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Employers can try to rescind signed and completed severance agreements if they discover information that was not readily apparent when the employee first left the workplace. If that severance agreement was based on facts that are later seriously questioned by evidence of misconduct that was not available before, employers may be able to cease making further payments or even sue to recover the amounts already paid.

Criminal and regulatory investigations

In one of my cases, an individual resigned shortly after receiving a $25,000 annual bonus payment, based on his perceived performance. Months later, the company discovered evidence that the employee was secretly taking kickbacks from a supplier. In addition to a civil lawsuit to recover the bonus and any other damages it suffered, employers have an obligation to report allegations of criminal wrongdoing to the police or in the case of certain professionals, to their regulatory bodies.

In spite of what seems like a never-ending threat, not every ex-employee with something to hide has to always sleep with one eye open. For an employer to try to rely in any way on alleged misconduct that it claimed to discover only after an employee left, that information must not have been known before, it must legitimate and not tactical and it must be seriously incompatible with an employee's proper workplace behaviour. Minor or insignificant grievances brought up long after an employee's departure will get absolutely no deference from the courts.

Daniel A. Lublin is a partner at Whitten & Lublin, Employment Lawyers, representing both employers and employees in workplace legal disputes. E-mail: Dan@canadaemploymentlawyer.com

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