Appeal from the Iowa District Court for Dallas County, Randy V. Hefner, Judge. A terminated employee appeals from a district court judgment entered on a jury verdict in favor of her employer on her claim for wrongful discharge in violation of public policy.
Jill M. Zwagerman and Bryan P. O'Neill (until withdrawal) of Newkirk Zwagerman, P.L.C., Des Moines, for appellant.
Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Solicitor General, Barbara E.B. Galloway, Assistant Attorney General, and Timothy L. Vavricek (until withdrawal), Assistant Attorney General, for appellees.
APPEL, Justice. All justices concur except Wiggins and Hecht JJ., who concur in part and dissent in part. WIGGINS, Justice (concurring in part, dissenting in part).
A terminated employee appeals from a district court judgment entered on a jury verdict in favor of her employer on her claim for wrongful discharge in violation of public policy. The employee contends the district court submitted instructions to the jury that were legally erroneous and confusing, and the district court should have granted her motion for a new trial. Upon our review, we affirm the judgment of the district court.
I. Factual and Procedural Background.
In late April 2006, Woodward Resource Center (WRC) hired Terri Rivera as a residential treatment worker. WRC, operated by the Iowa Department of Human Services, provides health and rehabilitation services to children and adults with mental and physical disabilities. WRC hired Rivera as a probationary employee for a six-month period but terminated her employment within the probationary period on October 3.
On September 26, 2008, Rivera filed a wrongful discharge suit against WRC and the State. In her petition, Rivera claimed she was terminated because she made complaints to WRC regarding suspected patient abuse and asserted her discharge violated state public policy established in Iowa Code chapters 135C and 235B. WRC contended it terminated Rivera because she accrued three unscheduled absences.
After the resolution of issues related to exhaustion of administrative remedies and an appeal to this court related to the timeliness of the complaint under the applicable statute of limitations, the case was remanded to the district court for further proceedings. The case proceeded to trial on December 9, 2013.
At trial, Rivera testified she witnessed several incidents of patient abuse at WRC. She claimed to have observed one of her coworkers punch and push a patient. She also testified she saw a coworker force one patient to eat mayonnaise until he gagged and eat a meal into which he had just vomited. Rivera further told the jury that she was told the same coworker had put jalapeno peppers, known as " hot sauce," in the individual's eyes. Rivera testified she reported the abuse to her supervisor and then reported it to her supervisor's superior in September 2006.
Rivera testified that prior to her report of abuse she received good feedback from her supervisor and was told she was doing a great job. She further asserted she was given additional responsibilities as her employment progressed.
Rivera claimed her report of abuse led to her termination. She testified that when she began her employment at WRC, she was told that if she wanted to make it through her probationary period, she should not make complaints or she would be fired.
Regarding attendance, Rivera offered evidence that WRC did not have a written policy related to three unscheduled absences for probationary employees, but instead had a written policy that was distributed and applied to all employees that allowed up to ten unscheduled absences before termination and required progressive discipline. She presented numerous attendance records of individuals who were not fired after three absences during their probationary periods.
WRC offered evidence challenging Rivera's version of events, including evidence that Rivera had three unscheduled absences during her probationary period. WRC noted that during one of the unscheduled absences, Rivera was seen attending a garage sale. According to WRC administrators, WRC maintained a long-standing practice of terminating probationary employees who had three unscheduled absences during their probationary period. WRC offered evidence that attendance was very important in a facility providing around-the-clock care and that attendance was the primary factor in determining whether a probationary employee would be retained.
WRC Treatment Program Administrator John Andorf testified he determined termination was appropriate " given her three unscheduled absences" and that the termination was not because of her report of abuse. WRC also offered evidence that Rivera's only report of abuse related to the " hot sauce" incident, that the report was untimely under WRC policies, and that, in any event, WRC investigated the incident and found no abuse.
Before submitting the case to the jury, the district court crafted its proposed jury instructions. Instruction No. 13 stated that in order to recover on her claim, Rivera must prove, among other things, that her making of " reports of suspected dependent adult abuse was the determining factor in the decision to terminate her employment." There is no dispute with respect to Instruction No. 13.
Instruction No. 15 instructed the jury on the determining-factor standard and gave rise to the fighting issues in this case. Instruction No. 15 stated:
The " determining factor" need not be the main reason motivating the decision to terminate employment. The determining factor need only be the reason which tips the scales decisively one way or the other. If Woodward Resource Center would have made the decision to discharge Rivera even if she had not reported suspected dependent adult abuse, the reports were not the determining
factor in the decision to terminate her employment. The reports were not the determinative factor if Woodward Resource Center had an overriding business reason for terminating Rivera's employment.
Instruction No. 15 also addressed the issue of pretext:
You may find that Rivera's complaints were the determining factor if Rivera has proved that Woodward Resource Center's stated reasons for its actions were not the real reasons, but were pretexts to hide its motives. Pretext is a stated purpose, reason, explanation, or motive offered by an employer in order to cloak a discriminatory motive. Pretext is simply one method of proof that you may consider.
Rivera objected to Instruction No. 15, stating:
[I]f we've already proven our case that the reason her complaints of a dependent adult abuse were the determining factor in the decision to fire her, then that encompasses it. And then [WRC] get[s] to say but then they have an overriding business justification, which I think then is a burden shifting . . . . I think [the overriding business justification] needs to be treated more like as an affirmative defense . . . .
The district court stated its understanding of the objection: " Well, if I understand your objection. You're basically expressing the same concern with use of the language 'overriding business factor' as expressed by Judge Bennett in Hagen v. Siouxland Obstetrics." In that case, Judge Bennett questioned whether
an employer's lack of an overriding business justification for firing an employee is an independent element of a wrongful discharge claim, or if that element is implicit in the requirement that an employee's protected conduct be the determining factor in an employer's decision to fire the employee.
Hagen v. Siouxland Obstetrics & Gynecology, P.C. (Hagen I), 964 F.Supp.2d 951, 972 (N.D. Iowa 2013). Rivera responded " Yes" to the district court's inquiry and the district court overruled Rivera's objection to Instruction No. 15.
The case was submitted to the jury, which returned a verdict for WRC. Rivera filed a motion for a new trial, which the district court denied. Rivera appealed.
In this appeal, Rivera challenges Instruction No. 15 on two grounds. First, she claims the " overriding business reason" language in the fourth sentence of Instruction No. 15 improperly shifted the burden of proof and was confusing to the jury. Second, she claims the third sentence of Instruction No. 15 amounted to a " same decision" theory that has no place in a claim for wrongful discharge in violation of public policy.
II. Standard of Review.
" We review the denial of a motion for new trial based on the grounds asserted in the motion." Fry v. Blauvelt, 818 N.W.2d 123, 128 (Iowa 2012) (internal quotation marks omitted). If the motion is based on a legal question, our review is for correction of errors at law. Id. The basis for the motion for a new trial in this case was an alleged error in jury instructions, which we review for legal error. See Boyle v. Alum-Line, Inc., 710 N.W.2d 741, 748
(Iowa 2006). Jury instructions " must convey the applicable law in such a way that the jury has a clear understanding of the issues it must decide." Thompson v. City of Des Moines, 564 N.W.2d 839, 846 (Iowa 1997).
Instructional errors do not merit reversal unless prejudice results. DeBoom v. Raining Rose, Inc., 772 N.W.2d 1, 5 (Iowa 2009); Wells v. Whitaker, 690 N.W.2d 33, 36 (Iowa 2004). Prejudice occurs and reversal is required if jury instructions have misled the jury, or if the district court materially misstates the law. DeBoom, 772 N.W.2d at 5; Anderson v. Webster City Cmty. Sch. Dist., 620 N.W.2d 263, 268 (Iowa 2000).
III. Preservation of Error.
We first consider whether Rivera has preserved error with respect to her challenges raised on appeal. There is no question that Rivera preserved her challenge regarding the overriding-business-reason issue arising out of the fourth sentence of Instruction No. 15. On appeal, however, Rivera also challenges the third sentence of Instruction No. 15, claiming that it amounts to a same-decision defense that has no place in public-policy torts and is incorrect as a matter of law. Rivera argues that but-for causation only requires the public-policy violation to be a " tipping point" in the decision-making process, nothing more.
Based on our review of the district court record, we conclude that the same-decision challenge was not preserved. While Rivera emphasized the problems with the " overriding business reason" language in sentence four of Instruction No. 15, Rivera identified no specific problem with respect to the third sentence of the instruction beyond its relationship to the alleged overriding-business-reason flaw. See Grefe & Sidney v. Watters, 525 N.W.2d 821, 824 (Iowa 1994) ( " [An] objection must be sufficiently specific to alert the trial court to the basis for the complaint so that if error does exist the court may correct it before placing the case in the hands of the jury." ); see also Lynch v. Saddler, 656 N.W.2d 104, 110-11 (Iowa 2003) (same); cf. Iowa R. Civ. P. 1.924 (noting objections to jury instructions must specify the " matter objected to and on what grounds" ).
IV. Overview of Issues Presented on Appeal.
In her challenge to Instruction No. 15, Rivera maintains that a plaintiff seeking to prove wrongful discharge in violation of public policy does not need to prove that the employer lacked an overriding business justification. In support of her argument, Rivera cites Iowa Civil Jury Instruction 3100.1, which in turn cites Smith v. Smithway Motor Xpress, Inc., 464 N.W.2d 682 (Iowa 1990), and Springer v. Weeks & Leo Co., 429 N.W.2d 558 (Iowa 1988). Iowa State Bar Ass'n, Iowa Civil Jury Instruction 3100.1 (2012). Iowa Civil Jury Instruction 3100.1 does not contain an overriding-business-justification element. See id.
From this premise, Rivera argues the fourth sentence of the instruction improperly shifted the burden of proof to her to show the employer lacked an overriding business justification for her termination. While recognizing that the element of an overriding business justification has been referred to in some of our cases, see, e.g., Davis v. Horton, 661 N.W.2d 533, 535-36 (Iowa 2003) (citing Fitzgerald v. Salsbury Chem., Inc., 613 N.W.2d 275, 281-82 & n.2 (Iowa 2000)), Rivera argues the element is not appropriate in light of the heightened but-for burden of causation that this court has required in wrongful-discharge-in-violation-of-public-policy claims, see, e.g., Teachout v. Forest City Cmty. Sch. Dist.,
584 N.W.2d 296, 301 (Iowa 1998). Rivera traces the derivation of the overriding-business-justification element to a treatise writer, Professor Henry H. Perritt, Jr. See 2 Henry H. Perritt, Jr., Employee Dismissal Law and Practice § 7.24, at 66-67 (4th ed. 1998) [hereinafter Perritt I]. She contends Professor Perritt clarified his position in later versions of his treatise to note that the fourth element is only applicable in cases in which the employer concedes the wrongful motive played a part in the employment decision. See Henry H. Perritt, Jr., Employee Dismissal Law and Practice § 7.08, at 7-100.1 (5th ed. 2008 & Supp. 2014) [hereinafter Perritt II].
Rivera notes the issue was extensively reviewed in Hagen I. In Hagen I, the United States District Court for the Northern District of Iowa canvassed the development of Iowa law regarding wrongful discharges in violation of public policy. 964 F.Supp.2d at 972-76. The court noted that under Iowa law, the causation requirement in a wrongful-discharge-in-violation-of-public-policy claim is a heightened " determining factor" standard rather than a lower " motivating factor" standard ordinarily utilized in civil rights claims. Id. at 975-76. In light of the heightened causation standard, the court concluded the lack of legitimate business justification was not an additional element in the plaintiff's case. Id. at 976. Although the court certified the question to this court, we declined to rule because we were equally divided on the question of whether a public policy was implicated in Hagen I. See Hagen v. Siouxland Obstetrics & Gynecology, P.C. (Hagen II), 849 N.W.2d 25, 2014 WL 1884478, at *1 (Iowa 2014) (per curiam).
WRC responds by noting that under our caselaw, the plaintiff must show a lack of legitimate business reason. WRC cites a number of Iowa cases which include a business justification element. See Jasper v. H. Nizam, Inc., 764 N.W.2d 751, 761 (Iowa 2009); Fitzgerald, 613 N.W.2d at 282 n.2. In any event, WRC maintains the instruction was not reversible error because it did not misstate the law or confuse the jury.
To resolve Rivera's challenge to Instruction No. 15, we must engage in a two-step inquiry. The first question is whether, as a matter of law, the plaintiff in a wrongful-discharge-in-violation-of-public-policy case must prove the employer lacked a legitimate business justification for the termination. If a plaintiff must make such a showing, Rivera has not been harmed by the instruction. Second, if we decide a wrongful-discharge-in-violation-of-public-policy plaintiff is not required to show the employer lacked a legitimate business justification as an element of the claim, we must examine the instruction in this case to determine if it was legally flawed and, if so, whether reversible error occurred.
V. Elements of Wrongful-Discharge-in-Violation-of-Public-Policy Claim.
A. Oscillating Elements of Claim in Iowa Caselaw.
1. Elements of claim in Iowa cases through Fitzgerald and the development of Iowa Civil Jury ...