Ashley Lynn Koester v. Eyerly-Ball Community Mental Health Services, Rebecca Parker, and Monica Van Horn

Supreme Court of Iowa·Decided December 13, 2024·No. 23-0300·Published

Opinion

In the Iowa Supreme Court No. 23–0300

Submitted November 14, 2024—Filed December 13, 2024 Ashley Lynn Koester,

Appellant,

vs.

Eyerly-Ball Community Mental Health Services, Rebecca Parker, and Monica Van Horn,

Appellees.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Polk County, Samantha Gronewald, judge.

An employer seeks further review of a court of appeals decision reversing in part and affirming in part the dismissal of an employee’s wrongful-termination claims. Decision of Court of Appeals Vacated; District Court Judgment Affirmed.

Mansfield, J., delivered the opinion of the court, in which all participating justices joined. May, J., took no part in the consideration or decision of the case.

Bruce H. Stoltze, Jr., (argued) and Breanne A. Gilpatrick (until withdrawal)

of Stoltze Law Group, PLC, Des Moines, for appellant.

Ryan Stefani (argued), Frank B. Hardy, and Leslie Behaunek of Nyemaster Goode, P.C., Des Moines, for appellees.

Mansfield, Justice.

I. Introduction.

Chapter 91A of the Iowa Code, “The Iowa Wage Payment Collection Law,”

provides remedies to employees who are owed wages by their employer for work performed. This case involves an employee who sued her former employer both under that statute and under the public policy embodied in that statute. According to her petition, she worked as a nonexempt employee and believed in good faith that she was entitled to overtime compensation. She filled out timesheets on that basis, the timesheets were approved by her supervisor, and her employer paid the overtime compensation. Later, though, her employer objected to what the employee had done and terminated the employee’s employment.

We conclude, as did the district court, that these facts do not state a claim for relief. The employee does not have a claim either under chapter 91A directly or indirectly through the common law tort of wrongful discharge in violation of public policy. Chapter 91A is not a generalized fair practices law or an Iowa version of the Federal Fair Labor Standards Act; it is a wage collection law. Because the employee never had a claim for unpaid wages, she is not entitled to relief in her lawsuit. Therefore, we affirm the district court’s order of dismissal and vacate the decision of the court of appeals that had reversed that order in part.

II. Facts and Procedural History.

A. Koester’s Employment at Eyerly-Ball. On July 22, 2019, Ashley Koester began working for Eyerly-Ball Community Health Services in Des Moines as a mobile crisis counselor. Koester was hired as a per diem nurse. This meant her hours varied. She would work intermittent shifts as the need arose.

Koester was a nonexempt employee and therefore eligible to receive overtime pay. See 29 U.S.C.A. § 213; id. § 207(a)(1). Her hourly rate varied depending on the type of work performed. Eyerly-Ball divided pay rates into three categories. There was a “dispatch rate” or “response rate” for time spent responding to crisis calls, including driving to and from the crisis location and documenting matters related to the call. There was an “administrative rate” for time spent in meetings and training. Finally, there was an “on call” rate of between $3 and $10 per hour for time spent being available to respond to potential dispatch calls. During her on-call time, Koester was expected to answer the phone within ten minutes, not carry weapons on her person or in her vehicle, not consume drugs or alcohol, and remain within a one-hour response time of the service area. Eyerly-Ball did not consider on-call time to be hours worked for purposes of benefits eligibility or overtime.

Koester used an Eyerly-Ball software program to sign up for on-call work shifts. Her supervisors regularly encouraged per diem nurses to sign up for more shifts, and Koester was approved for every shift she signed up for. Although Eyerly-Ball’s employee handbook advised nonexempt employees that “[o]vertime work must be approved before it is performed,” in practice Eyerly-Ball did not disapprove any shift that Koester signed up for.

During her time working for Eyerly-Ball, Koester at one point contacted the United States Department of Labor to ask if she should be receiving compensation for drive time to the office. Later, she contacted the Department of Labor regarding her on-call hours and was told that based on Eyerly-Ball’s on-call requirements, those hours should count toward the forty-hour threshold for overtime pay.

Employees at Eyerly-Ball record their own hours on an electronic timesheet. After the employee signs off on their hours worked, the timesheet is forwarded to a supervisor for review and approval and then sent to Eyerly-Ball’s human resource department to finalize payment. The time sheets where Koester claimed overtime were always approved and Koester “always received her overtime pay for the hours she worked.”

B. Eyerly-Ball’s Termination of Koester’s Employment. After speaking with a coworker, Koester realized she was the only one being paid overtime based on on-call hours. One coworker told her that they weren’t paid overtime for their holiday on-call hours but instead were paid $10 an hour—the hourly on-call rate for holidays as stated in the employee handbook. Following the discussion with Koester, the coworker informed other employees that Koester was receiving overtime pay but they were not.

At some point, Eyerly-Ball management discovered that Koester was being paid overtime. On January 7, 2020, about six months after Koester had been hired, she was called into a meeting with her supervisor, Monica Van Horn; the director of human resources, Rebecca Parker; and head supervisor, Krystina Engle. At the meeting, Parker asked Koester “if she was aware she was being overpaid.” Koester responded that “she [had] called the Department of Labor and they said because her On-Call rate is so restrictive, the hours on-call are considered hours worked and are eligible for overtime.”

Parker asked Koester why she did not come to them about this issue earlier. Koester answered that “she was afraid she would be terminated if she brought it up.” Parker told Koester she “consider[ed] this to be stealing from the company and lacking integrity.” According to Koester, “Parker then terminated [Koester] for receiving overtime payments.” Koester also alleges that the

defendants “seemed to terminate [her] for discussing her wages with her coworkers and giving them the idea for additional wages as well.”

C. Koester’s Lawsuit. On June 2, 2022, roughly two and a half years after her termination, Koester filed an action in the Polk County District Court against Eyerly-Ball, Van Horn, and Parker. Initially, she included only a common law claim for wrongful discharge in violation of public policy. After the defendants moved to dismiss this claim, Koester amended her petition to add a statutory claim for wrongful termination and retaliation in violation of Iowa Code section 91A.10 (2022). The gist of both claims was that Koester was terminated for having asserted a right to receive overtime pay.

The defendants countered with a new motion to dismiss both claims. They argued that both the statutory and public policy claims failed because Koester had been paid in full, including for the overtime hours she had claimed. In addition, they argued that the section 91A.10 claim was time-barred under Iowa Code section 614.1(8), which provides a two-year statute of limitations for actions “founded on claims for wages or for a liability or penalty for failure to pay wages.”

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Ashley Lynn Koester v. Eyerly-Ball Community Mental Health Services, Rebecca Parker, and Monica Van Horn, (iowa 2024).

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