Hiring Candidates Who’ve Sued You

There are legal considerations and ramifications when it comes to hiring individuals who have a legally problematic past with your company.

Article main image
Apr 27, 2023

“I’m sorry, we can’t hire you because you’re involved in litigation with your former employer.”

This situation plays itself out repeatedly in business after business. When an individual sues their former employer, that litigation becomes and remains public information. It could become a scarlet letter for that individual — an employer just might not want to take the risk of hiring a litigious employee.

Sometimes an employer is overt with this reason, but more often than not, a job applicant is left to wonder why they weren’t hired and if it was because of prior litigation.

In Cline v. BWXT Y-12, LLC, the employer was overt with its reason. The company declined to hire Royal Cline, a former employee, for an open position because the company was “in litigation with Mr. Cline and that he may not be the best person…because of the litigation factor.” Because that litigation involved a claim of age discrimination, Cline argued that the decision not to hire him was retaliatory.

The decision-makers, however, testified that while they knew of the litigation, they did not know that it involved allegations of age discrimination. Thus, they argued, their lack of knowledge of the underlying facts of the litigation precluded any finding of litigation.

The district court agreed with the employer and threw out the retaliation claim on summary judgment, finding that because the decision-makers did not have “any knowledge of the substance of Cline’s present suit,” they could not have known that he had engaged in protected activity.

The appellate court, though, disagreed, and found that because the decision-makers “knew that Cline was involved in litigation with the company…the evidence permits the inference that the decision makers were unwilling to hire someone in litigation with the company.” That inference “creates a triable issue of fact over whether the decision makers knew of Cline’s protected activity [the age discrimination allegations].”

Wait a second, you might think. There can be all kinds of litigation in which Cline could have been involved. Just because he sued his former (and no prospective) employer doesn’t mean that he was engaged in statutorily protected activity. And, even if he was, can’t a company have a neutral policy against hiring anyone who has sued the company, regardless of the cause.

The Court hears your protests, explaining:

“Something more is required, the company says, because Cline’s evidence still does not show that the decision makers knew that the litigation involved an age-discrimination claim…. In one sense the company has a point. Cline’s evidence permits the inference that [the company] would not hire someone—anyone—“in litigation” with the company, and that view might suggest unbiased neutrality. It thus might have made no difference … whether the litigation involved age discrimination if they preferred not to hire anyone in litigation with the company without regard to the subject matter of the lawsuit…. But such an across-the-board explanation—that any litigation with the company precludes any individual from being hired (or for that matter being retained as a current employee)—would necessarily sweep up protected civil rights claims and non-protected claims. And if such an explanation suffices for one hiring decision, why couldn’t an employer adopt a company-wide policy against hiring or retaining anyone in litigation with the company? As long as the policy were consistently followed, the employer would rarely have reason to obtain knowledge about the substance of the litigation, and at any rate it could always fairly say that it was the ruthlessly neutral policy, not the protected activity, that caused the adverse action.”

Thus, to prove a retaliation claim based on knowledge of prior litigation, an applicant or employee will have to prove two facts:

  • That the company knew about the content of his claim and
  • That the company did not have a policy against hiring (or retaining) anyone with litigation against the company

This case poses the age-old question: What does “because of” mean in an employment lawsuit?

The answer, as with most things, is, “It depends.” Cline presents a rational and common sense understanding that not all employment decisions that look retaliatory are retaliatory. I would never counsel someone to provide “engaged in litigation” as a reason for termination, because of the negative inferences that one can draw. But if the decision-maker does not know of the reason for the litigation, and the company can prove that it has a policy (written or unwritten) against hiring (or for firing) anyone who is in litigation against it, then the company genuinely has not engaged in retaliation.

Get articles like this
in your inbox
Subscribe to our mailing list and get interesting articles about talent acquisition emailed weekly!