Tennessee Supreme Court rules on “after-acquired evidence” of Internet misuse by employee

Here’s an interesting employment law question arising from the misuse of Internet access by an employee during work hours:

Employee won’t agree to the terms in a new proposed employment contract offered to him as part of a corporate restructuring. As a result, he is terminated. Under the terms of the original employment agreement, Employer begins paying severance to (the now former) Employee. Sometime after the termination, upon a forensic examination of the Employee’s computer, Employer discovers that Employee had been visiting adult websites while at work. The employment agreement had provided that severance would be paid unless Employee was terminated for “gross misconduct.” Can Employer get out of paying severance to Employee based on this after-acquired evidence of gross misconduct?

The answer, at least in Tennessee, is yes. That state’s supreme court has held that after-acquired evidence of this sort can be a defense to breach of contract so long as the employer can show by a preponderance of the evidence that it would have terminated the employee had it known of the misconduct.

Teter v. Republic Parking System, Inc., —S.W.3d —, 2005 WL 316518 (Tenn., November 29, 2005)