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Myers v. Hog Slat, Inc.

United States District Court, N.D. Iowa, Central Division

October 24, 2014

HOG SLAT, INC., Defendant

For John Denton Myers, Plaintiff: Katie Anne Ervin Carlson, Thomas W Foley, LEAD ATTORNEYS, Babich Goldman, P.C., Des Moines, IA.

For Hog Slat, Inc, Defendant: Angel Anna West, LEAD ATTORNEY, Nyemaster, Goode, Voigts, West, Hansell & O'Brien, PC, Des Moines, IA; Benjamin Patrick Roach, LEAD ATTORNEY, Nyemaster, Goode, West, Hansell & O'Brien PC, Des Moines, IA; Randall D Armentrout, LEAD ATTORNEY, Nyemaster, Goode, West, Hansell & O'Brien, Des Moines, IA.


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1. Causal Connection

2. Pretext


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This case is before me on a motion (Doc. No. 19) for partial summary judgment filed by defendant Hog Slat, Inc. (Hog Slat). Plaintiff John Denton Myers (Myers) has filed a resistance (Doc. No. 22) and Hog Slat has filed a reply (Doc. No. 29). I heard oral arguments on September 30, 2014. Thomas W. Foley and Katie Ervin Carlson appeared for Myers. Benjamin P. Roach appeared for Hog Slat. The motion is fully submitted and ready for decision.


Myers filed his complaint and jury demand (Doc. No. 2) on June 20, 2013. He contends that he was employed by Hog Slat from 1998 until January 25, 2013, when he was discharged. He further contends that his discharge was motivated by one or both of the following unlawful factors: (a) Hog Slat's desire to avoid exposure to significant health care expenses resulting from his daughter's medical condition and (b) his demand for payment of commissions owed to him. He asserts the following causes of action:

Count I: Associational discrimination in violation of the Americans with Disabilities Act (ADA)
Count II: Interference with employee benefits in violation of the Employee Retirement Income Security Act (ERISA)
Count III: Violation of the Iowa Wage Payment Collection Act
Count IV: Wrongful termination in violation of public policy
Count V: Breach of contract

Doc. No. 2.

Hog Slat filed an answer (Doc. No. 7) in which it denied Myers' operative factual allegations, denied liability as to all claims and asserted various affirmative defenses. This case was referred to me after the parties unanimously consented to trial, disposition and judgment by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c)(3). Doc. No. 12. Trial is scheduled to begin December 8, 2014. Doc. No. 13.

Hog Slat filed its motion for partial summary judgment on August 8, 2014. Hog Slat seeks entry of judgment as a matter of law on all counts except Count IV (wrongful termination in violation of public policy). Myers filed his resistance on September 8, 2014. Myers does not resist entry of summary judgment on Count III (Iowa Wage Payment Collection Act) or Count V (breach of contract). However, Myers contends genuine issues of material fact exist that preclude entry of summary judgment for Hog Slat on Count I (ADA) and Count II (ERISA).


The following facts are not in dispute for purposes of Hog Slat's motion for partial summary judgment. Additional facts will be discussed as necessary during the discussion of specific claims.

Hog Slat.

Hog Slat is a North Carolina company that manufactures and distributes equipment for hog and poultry operations. Its business includes retail distribution and the construction of hog and chicken barns. One service Hog Slat provides is turnkey construction, whereby it contracts to provide all (or nearly all) of the construction services that are necessary to run a hog barn. Hog Slat has approximately 1,000 employees and operates in states with large hog or chicken populations, including Iowa. During all relevant events, Tom Herring was Hog Slat's President, Doug Westfall was its Chief Financial

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Officer and Fritz Richards was its National Sales Manager.

Myers' Employment.

Myers resides in Hardy, Iowa, and was employed as a salesperson for Hog Slat from January 21, 1998, until January 25, 2013. During all relevant times, Myers worked out of Hog Slat's Midwest Regional Office in Humboldt, Iowa. Beginning in approximately 2000 or 2001, he worked primarily as a sales representative for Hog Slat's turnkey hog barns in the Central Iowa territory.

Starting in 2006 or 2007, Myers' direct supervisor was Dale Kenne, the Sales Manager for the Midwest Region. Kenne reported to Richards. As of September or October 2012, Myers was the most productive, in terms of dollars sold, out of the seven salesmen who reported to Kenne. Kenne considered Myers' work performance to be the best of the seven. He never gave Myers a poor performance evaluation and Myers exceeded his expectations as a salesperson.

In March 2010, Myers and Hog Slat entered into a written Sales Compensation Agreement (Agreement) with an effective date of April 1, 2010. The Agreement provided that Myers would be paid a base salary plus a sales commission of " 1% on all Turnkey Accounts (Total Contract Amount)." The Agreement included a cap on annual commissions per customer: " Commission is limited to $100,000.00 per Customer per year on Turnkey Accounts." The same cap had been in place under a prior agreement since 2008.


Prestage is a pork producer that is a significant customer of Hog Slat. The relationship between Hog Slat and Prestage began in North Carolina. Before 2003, Prestage did not build barns in Iowa. When Prestage began remodeling barns in Iowa in 2003, Hog Slat assigned Myers to the account. In 2006, Prestage started building turnkey hog barns in Iowa and used both Hog Slat and another company for those projects.

In late 2007, Richards advised Myers that he was going to become " the Prestage guy" for Hog Slat, meaning he should focus his efforts on Prestage projects. This caused Myers to transfer some customers to other Hog Slat sales representatives. In 2008, Prestage elected to build barns exclusively with Hog Slat. Hog Slat agrees that this was due, at least in part, to Myers' efforts. Hog Slat's projects for Prestage included hog barns that would be either (a) owned by Prestage itself or (b) owned and operated by Prestage's contract growers. During 2012, the number of Prestage barns built by Hog Slat increased significantly.

Myers understood that projects built for Prestage's contract growers did not count against the commission cap for Prestage itself. In 2008, Hog Slat included a contract grower's project in the Prestage commission cap but Myers disputed that inclusion. Hog Slat then agreed that the contract grower would not be included in the Prestage cap.

However, in 2012 Westfall developed some concern about the commission cap calculations. He apparently came to the conclusion that commissions on all Prestage projects, whether company-owned or grower-owned, should count toward the $100,000 Prestage cap. Westfall directed Richards to contact Myers and clarify the issue.

According to Hog Slat, Richards contacted Myers in July 2012 and advised him that Hog Slat intended to count contract growers toward the Prestage cap. Myers denies that this discussion took place. Instead, he states that he heard nothing about the cap issue until October 2012, when he talked to Richards and told him of his understanding that projects for contract

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growers did not count toward the $100,000 Prestage cap. Myers contends that Richards responded by stating that he would have to think about the issue and promised to get back to Myers, but never did.

Ava Myers.

Myers' daughter Ava was born October 14, 2008. Unfortunately, she has suffered from medical issues that started at a very early age. She had to be hospitalized at the University of Iowa in the fall of 2009 and again at the Mayo Clinic in December 2011. In the fall of 2009, she was diagnosed with a chromosome 22 micro duplication and was later diagnosed with a mitochondrial disorder. In January 2012, she became very ill and was admitted to St. Mary's Hospital in Rochester, Minnesota, due to bronchiolitis and RSV. She was ultimately transferred to the Pediatric Intensive Care Unit where she was placed on a ventilator to help her breathe. On March 21, 2012, Ava underwent surgery to remove her major salivary glands because she could not swallow correctly and was at a high risk for catching pneumonia. She was discharged from the hospital in April 2012.

As a result of her medical condition, Ava cannot walk, sit, run, eat, roll over or hold her head up on her own. Nor she can move without assistance. She cannot verbalize more than 10 words because of her low muscle tone. Thus, she communicates with her eyes, hands or a computerized communication device.

Hog Slat's Health Insurance Plan.

In 2012, Ava Myers was insured under Hog Slat's health insurance plan, which was self-funded for up to $138,000 per year, per participant. Hog Slat had a reinsurance policy through BlueCross BlueShield of North Carolina (BCBS) that entitled Hog Slat to be reimbursed for any claims over $138,000 per participant. There was also an aggregate cap on the amount Hog Slat would be required to pay out of its own pocket each year. In general, then, Hog Slat's health insurance expenses consisted of both (a) paying claims of up to $138,000 per participant and (b) paying a reinsurance premium to BCBS.

Denise Holland was Hog Slat's Director of Employee Healthcare during the relevant events. She first found out about Ava's disability during a phone call from Myers, who was at a doctor's office and told Holland that Ava had just received a disturbing diagnosis. He called to express concern about whether Hog Slat's insurance would cover Ava's disability. Based on this communication, Holland understood that Ava had very serious medical issues and would require substantial health care coverage.

In June 2012, Holland received a telephone call from BCBS alerting her that a significant claim -- nearing $1 million -- was about to appear on Hog Slat's bill. The representative told Holland that the claim was for Ava Myers. Holland had never received a call of this nature during her employment with Hog Slat. She sent an email message to Westfall, Hog Slat's CFO, to advise him that " we have a very high claim about to hit." [1] She explained that " we have a dependent child (one with MS[2] ) that ...

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