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Recently, it seems that we have seen an increase in the number of appellate cases coming down that deal with retaliatory discharge claims in Iowa. The most recent of such appellate decisions is entitled Holding v. Graham Mfg. Corp. and was issued by the Iowa Court of Appeals on October 12, 2007. In that case, there were some highly disputed facts that suggested that there were perhaps legitimate reasons for a termiantion. Ultimately, the jury found liability against the employer and awarded the employee $1,000,000.00 as damages.
Interestingly, after the jury verdict, the presiding judge at the trial reversed the jury verdict and entered judgment not withstanding the verdict on behalf of the employer. On appeal, the Iowa Court of Appeals reversed the district court and concluded that there was evidentiary support in the trial record that would justify the jury to find that the termination was retaliatory in nature and the result of the employee filing a string of worker's compensation claims.
However, as noted, we have seen perhaps an increased number of such claims recently. The most recent decision reflects that the damages that can be awarded after such causes of action can be substantial. Accordingly, it is important to stop and ponder when and under what circumstances an employer can be held liable for retaliatory discharge.
Typically, employees in Iowa are employed "at will." This means that their employer employs them with no contractual requirements or restrictions. An "at will" employee can be fired for a good business reason, a poor business reason, or for no reason at all. However, even an "at will" employee cannot be terminated for reasons contrary to public policy. For further discussion of at-will employment, I encourage you to see an interesting article posted recently by Liz Overton at Sullivan and Ward in West Des Moines, Iowa. Liz provides a very succinct explanation and beneficial explanation of the Iowa at-will employmnet doctrine. She also provides other beneficial links for those pondering the at-will doctrine and applicable legal principles.
Iowa specifically recognizes a retaliatory discharge claim if an employer terminates an employee for seeking workers' compensation benefits. See Weinzetl v. Ruan Single Source Transp. Co., 587 N.W.2d 809, 811 (Iowa Ct. App. 1998). However, it is not sufficient for an employee to simply prove that they made a worker's compensation claim and that he/she was subsequently fired.
Instead, an employee must establish by a preponderance of the evidence that the employee's pursuit of worker's compensation benefits "tipped the balance" and was a "determining factor" in the decision to terminate the employee. In other words, if there is a legitimate and compelling reason to terminate an employee, the employer is not bound to retain that employee merely because the employee has made a previous worker's compensation claim.
Of course, in practice this standard is much less clear than the stated legal principle. Often times, there will be potentially legitimate bases for termination as well as the potential that the worker's compensation claim "tipped the balance" and resulted in the termination. In those situations, it will be of vital importance that the employer has excellent documentation, pre-written and distributed employment policies, and that the company has documented and conssitently followed the employment policies now being relied upon for the termiantion.
Employers often complain about the burden that documentation and paperwork may cause. However, it cannot be reinforced enough that it is important for employers to do the following:
1. Have employment practices and policies in place and in written form;
2. Distribute those written policies via an employee handbook to their employees;
3. Perform annual/semi-annual/regular performance reviews of all employees;
4. Provide accurate and honest assessments of employee performance in all performance reviews;
5. Document and follow company policy consistently with all employees;
6. Document and ensure full compliance with company policy in any disciplinary action taken against an injured worker that is seeking or has sought worker's compensation benefits.
If an employment practice or policy is unwritten or not consistently enforced but is later enforced very strictly against an employee that is seeking work comp benefits, the lack of prior enforcement may raise a perception or inference that the current action is the result of the employee pursuing worker's compensation benefits.
Moreover, a failure to document employee performance prior to a work injury may result in an employer being unable to credibly later argue that the employee was simply not working out or that the work performed was substandard. Often times, we see employee performance reivews that document average or above average performance prior to an injury and then less than stellar performance after an injury. Such documentation is damaging, though the reality of the situation is that the employee may have been a sub-par performer prior to the injury but was never specifically documented or counseled on their sub-par performance. In the end, however, without accurate documentation, an employer may be in a precarious situation and virtually unable to terminate a sub-par employee if that employee has asserted or even recovered on a worker's compensation claim.
A debate can be had as to whether there are too many or too few retaliatory discharge claims asserted. However, from an employer's perspective, these claims seem to be arising and seem to be asserted more frequently than in the past. Employers need to be vigilant in their enforcement of employment policies and in their documentation of their enforcement of that company policy to combat and discourage such claims. Failure to adequately document personal policies and actions and to consistently enforce those policies may render an employer incapable of terminating a "problem" employee or may cost that employer a million bucks to get rid of the employee via a jury verdict. Think twice before terminating the work comp employee and document your actions three times before doing so!
Posted by William H. Grell on November 1, 2007 7:34 AM
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