Automated Summary
Key Facts
Plaintiff Kaitlin Lally alleges she was wrongfully terminated by Klick USA, Inc. after informing the company about her disability and requesting leave. She worked at Klick from November 30, 2021, to December 13, 2022, and was approved for time off on December 8-12, 2022. Defendants raised affirmative defenses claiming Lally violated her employment agreement by contacting former clients and making disparaging comments post-termination. The court denied the motion to strike these defenses, noting unresolved factual and legal questions regarding their validity and the applicability of the after-acquired evidence doctrine to post-termination misconduct.
Issues
- The court assessed Defendants' Eighth Affirmative Defense claiming Plaintiff violated her employment agreement by making disparaging comments about Klick after termination. The analysis focused on: (1) whether post-termination misconduct can limit ADA/FMLA recovery under the after-acquired evidence doctrine, (2) circuit split on this issue (Second Circuit has not ruled definitively), and (3) the relaxed pleading standard for affirmative defenses. The court concluded legal uncertainty and potential factual disputes warranted denial of the motion to strike.
- Plaintiff argued retaining the Seventh and Eighth Affirmative Defenses would prejudice her by increasing discovery and trial costs related to post-termination communications and the employment agreement. The court rejected this as speculative, noting it would handle overbroad discovery requests during litigation. The analysis emphasized that factually sufficient defenses should remain even if they expand litigation scope, absent clear prejudice.
- The court evaluated whether Klick's Seventh Affirmative Defense—alleging Plaintiff violated her employment agreement by contacting former clients post-termination—could withstand a motion to strike. Key considerations included: (1) factual sufficiency under Twombly given Defendants' limited access to post-termination conduct facts, (2) legal viability of applying the after-acquired evidence doctrine to post-termination misconduct, and (3) whether allowing the defense would prejudice Plaintiff by expanding discovery. The court found unresolved factual and legal questions justified retaining the defense.
Holdings
The court denied Plaintiff's motion to strike Defendants' Seventh and Eighth Affirmative Defenses, which allege post-termination violations of her employment agreement (contacting former clients and making disparaging comments). The court concluded that factual and legal questions remain regarding the applicability of the after-acquired evidence doctrine to post-termination misconduct, and that the plaintiff's speculative concerns about prejudice do not justify striking the defenses at this stage.
Remedies
The court denies plaintiff's motion to strike defendants' seventh and eighth affirmative defenses, which allege plaintiff violated her employment agreement by contacting former clients and making disparaging comments about Klick post-termination.
Legal Principles
- The after-acquired evidence doctrine allows employers to limit remedies if an employee's misconduct (pre- or post-termination) is discovered after a wrongful termination. While courts in the Southern District have typically applied this doctrine to pre-termination conduct, the Second Circuit has not definitively ruled on its applicability to post-termination actions. The court declined to strike the affirmative defenses, noting unsettled legal questions about the doctrine's scope.
- Under Rule 12(f), courts may strike insufficient defenses or immaterial matters. However, motions to strike are disfavored, and the standard is demanding. Courts apply a relaxed plausibility standard to affirmative defenses due to the limited time to plead and the need to preserve defenses that might have merit. The defense must present some question of fact or law allowing it to succeed, and the plaintiff's potential prejudice is not a basis for striking if the defense is factually and legally sufficient.
Precedent Name
- Monterey Bay Mil. Hous., LLC v. Ambac Assurance Corp.
- Rich v. Miller
- Sigmon v. Parker Chapin Flattau & Klimpl
- Sabby Volatility Warrant Master Fund Ltd. v. Safety Shot, Inc.
- McKennon v. Nashville Banner Pub. Co.
- Penberg v. HealthBridge Mgmt.
- Mugavero v. Arms Acres, Inc.
- M.C.F. Associates, Inc.
- Leibowitz
- Xu-Shen Zhou v. State Univ. of New York Polytechnic Inst.
Cited Statute
- Americans with Disabilities Act
- state law
- Family and Medical Leave Act
Judge Name
Mary Kay Vyskocil
Passage Text
- Because a motion to strike 'should not be used as an opportunity for the determination of disputed, substantial questions of law,' Rich v. Miller, 634 F. Supp. 3d 66, 72 (S.D.N.Y. 2022) (quotations omitted), the Court declines at this early stage in the litigation to strike Defendants' affirmative defenses.
- Plaintiff is correct to note that, in the absence of guidance on this issue from the Second Circuit, courts in this District have held that the after-acquired evidence doctrine applies only to pre-termination misconduct. See Sigmon v. Parker Chapin Flattau & Klimpl, 901 F. Supp. 667, 682 (S.D.N.Y. 1996) ('[t]he McKennon decision is premised on the employee's misconduct occurring during her employment') (emphasis added). As noted, the Second Circuit has not decided this question. And other Circuits have entertained the possibility that the after-acquired evidence doctrine might apply to post-termination misconduct.
- Plaintiff's concerns are purely speculative at this stage in the litigation. Plaintiff has failed to 'quantify' her discovery burden, relying instead upon 'generic speculation about potential additional discovery.'