Susan Ackerman v. State of Iowa, Iowa Workforce Development, Teresa Wahlert, Teresa Hillary, and Devon Lewis

913 N.W.2d 610
CourtSupreme Court of Iowa
DecidedJune 15, 2018
Docket16-0287
StatusPublished
Cited by12 cases

This text of 913 N.W.2d 610 (Susan Ackerman v. State of Iowa, Iowa Workforce Development, Teresa Wahlert, Teresa Hillary, and Devon Lewis) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Susan Ackerman v. State of Iowa, Iowa Workforce Development, Teresa Wahlert, Teresa Hillary, and Devon Lewis, 913 N.W.2d 610 (iowa 2018).

Opinions

CADY, Chief Justice.

*613A state administrative law judge (ALJ) was terminated shortly after giving unfavorable testimony about the director of her division to the Iowa Senate Government Oversight Committee. The ALJ, whose employment was covered by a collective bargaining agreement (CBA), brought a lawsuit against the State of Iowa, the division, and several named defendants, alleging, among other claims, wrongful termination in violation of public policy. The State moved to dismiss the claim, arguing the common law claim of wrongful discharge is reserved for at-will employees. The district court granted the State's motion. The ALJ appealed, and we transferred the case to the court of appeals. The court of appeals reversed, concluding contract employees may bring common law wrongful-discharge claims. We granted the State's application for further review. For the reasons set forth below, we find that retaliatory discharge claims are not categorically reserved for at-will employees.

I. Factual Background and Proceedings.

Under the procedural posture of this case, we accept the well-pleaded facts as the factual background to examine the legal issues presented on appeal. See Hedlund v. State , 875 N.W.2d 720, 722 (Iowa 2016).

Susan Ackerman served as an ALJ for the Iowa Workforce Development (IWD). She worked in the unemployment insurance appeals bureau. Ackerman began her service as an ALJ in 2000 and was covered by a CBA between the State of Iowa and the American Federation of State, County, and Municipal Employees. The CBA provided that employees may not be suspended, disciplined, or discharged without proper cause. The contract also protected employees from adverse employment actions taken in retaliation for whistleblowing. The agreement further provided for a grievance procedure.

In 2011, Teresa Wahlert was appointed as director of the IWD by a newly elected governor of Iowa. She subsequently terminated the bureau's chief ALJ and appointed Teresa Hillary and Devon Lewis as the lead workers of the bureau. Over time, Ackerman believed Wahlert, with the aid of Hillary and Lewis, engaged in systematic efforts to pressure the ALJs in the bureau and other employees to render decisions favorable to employers. She also believed that judges who failed to render decisions favorable to employers were subjected to harassment.

In August 2014, Ackerman was subpoenaed to testify about her beliefs and observations before the Iowa Senate Government Oversight Committee. At the hearing, she testified about a hostile work environment and the pressure she perceived by Wahlert to issue decisions in favor of employers. She said she felt powerless to stop Wahlert from improperly influencing the decisions issued by the bureau.

In December 2014, Wahlert suspended Ackerman, pending an investigation into allegations of misconduct. Ackerman believed that the allegations were baseless and that her suspension was done in retaliation for providing truthful testimony to the senate committee.

In January 2015, Ackerman was terminated from her employment. She subsequently filed a lawsuit against IWD, Wahlert, Hillary, and Lewis. In her petition, she alleged the defendants (1) retaliated against her for disclosing information to public officials in violation of Iowa Code section 70A.28 (2015); (2) defamed her; (3) intentionally interfered with contractual relations; (4) breached the State of Iowa's *614Manager and Supervisors Manual, of which she is a third-party beneficiary; (5) disclosed confidential personnel records in violation of Iowa Code section 22.7 ; (6) violated her constitutional rights under the First Amendment; (7) intentionally inflicted emotional distress, and (8) wrongfully discharged her in violation of public policy.

The defendants subsequently moved to dismiss the common law retaliatory discharge claim in count VIII. The defendants solely argued that the claim is reserved for at-will employees, and because Ackerman's employment was covered by a CBA, she could not bring the claim. The district court agreed and dismissed the claim, concluding "[t]o the extent that the agreement provides for a remedy relating to wrongful discharge, Plaintiff is not allowed to apply the narrow exception Iowa courts have reserved for at-will employment to her current situation."

Ackerman appealed and the court of appeals reversed. The court explained that although the common law action of retaliatory discharge is available to at-will employees and indeed has been recognized as an exception to the at-will employment doctrine, such availability does not categorically foreclose recognizing the tort for contract employees. The court found the tort was adopted to protect those with a compelling need for protection from wrongful or retaliatory discharge, and CBA-covered employees indeed require such protection. Accordingly, the court concluded that Ackerman's status as a CBA-covered employee did not preclude her wrongful-discharge claim. We granted defendants' application for further review.

II. Standard of Review.

We review district court orders "granting a motion to dismiss for correction of errors at law." Berry v. Liberty Holdings, Inc. , 803 N.W.2d 106, 108 (Iowa 2011). In reviewing the order, "[w]e view the petition in the light most favorable to the plaintiff, and will uphold dismissal only if the plaintiff's claim could not be sustained under any state of facts provable under the petition." Id. (alteration in original) (quoting Griffen v. State , 767 N.W.2d 633, 634 (Iowa 2009) ).

III. Analysis.

A. Development of Common Law. The resolution of this case ultimately rests upon "our duty to develop and announce the common law" when resolving disputes. Thompson v. Stearns Chem. Corp. , 345 N.W.2d 131, 134 (Iowa 1984). This body of law is derived from the principles, traditions, and practices developed by courts through the process of justice and allows the civil law to grow and change from one generation to the next in response to changes observed in the needs and values of society. In many ways, the process is part of the foundation of the work of courts in our democratic society and one of the most important components of the legal process itself.

B. Development of the Retaliatory Discharge Tort. Thirty years ago, we utilized our authority to recognize the common law tort of retaliatory discharge in violation of public policy in Springer v. Weeks & Leo Co. , 429 N.W.2d 558

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913 N.W.2d 610, Counsel Stack Legal Research, https://law.counselstack.com/opinion/susan-ackerman-v-state-of-iowa-iowa-workforce-development-teresa-iowa-2018.