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Intended behavior ... Looks like fix is in HCM Bundle #10
See Terminated Employees are Displayed in Manager Self Service > View Employee Personal Information [ID 1438090.1]
Thanks Hakan. I think the issue I'm having is very closely related to the one you have pointed out to me. Unfortunately we're on bundle 9 and I'm not sure when we may go to bundle 10. Maybe I can work with Oracle support for a temporary solution. Thanks again for your help!