from the Iowa District Court for Polk County, Michael D.
chief administrative law judge appeals grant of summary
judgment on a claim of retaliation under the whistleblower
protection statute in Iowa Code section 70A.28 and a claim of
wrongful discharge in violation of public policy.
Flynn and Michael J. Carroll of Coppola, McConville, Coppola,
Carroll, Hockenberg & Scalise, P.C., West Des Moines, for
J. Miller, Attorney General, Jeffrey Thompson, Solicitor
General, and Jeffrey C. Peterzalek, Assistant Attorney
General, for appellees.
case, we consider wrongful-termination-of-employment and
failure-to-hire claims brought by Joseph Walsh, a former
chief administrative law judge of the Unemployment Insurance
Appeals Bureau in Iowa Workforce Development (IWD), against
the then-IWD director Teresa Wahlert and against the State.
Walsh brought two claims. First, Walsh alleged retaliation
under the whistleblower protection provisions of Iowa Code
section 70A.28 (2014). The thrust of Walsh's
whistleblower claim was that he was fired because he reached
out to other government officials in an attempt to prevent
the IWD director and the State from unlawfully converting his
position from a merit into a nonmerit position. Walsh further
alleged the defendants continued to retaliate against him
when he sought other positions in state government.
Walsh's second claim alleged a common law tort of
wrongful termination in violation of public policy based upon
the same conduct.
defendants moved for summary judgment, which the district
court granted. The district court reasoned that Walsh could
not bring a claim under Iowa Code section 70A.28 because he
had failed to exhaust the administrative remedies available
to merit employees under Iowa Code section 8A.415. The
district court also granted summary judgment on the common
law public policy claim for the same reason.
appealed. For the reasons expressed below, we affirm in part
and reverse in part the judgment of the district court and
remand the case to the district court for further
Factual and Procedural Background.
Employment of Walsh by IWD. Walsh was appointed by
Governor Chet Culver to the position of Deputy Director of
IWD, a nonmerit position which Walsh held from 2007 until
early in January 2011. Effective January 7, 2011, Walsh
became chief administrative law judge of IWD, a merit
position under Iowa Code chapter 8A. As chief administrative
law judge, he reported directly to the director of IWD.
Governor Terry Branstad appointed Wahlert as director
effective January 15, 2011.
Walsh notified of reclassification of position of chief
administrative law judge as confidential nonmerit
employee. About two years after Wahlert's
appointment, in January 2013, the department of
administrative services (DAS) sent a memorandum to all
department directors regarding a change in the definition of
a "confidential employee" not subject to merit
employment. DAS identified the position of chief
administrative law judge as a confidential employee under the
new definition. On April 5, Jon Nelson, the human resources
manager of IWD, delivered a letter to Walsh stating that his
position would no longer be covered by the merit system. The
letter advised Walsh that if he believed his position did not
meet the definition of confidential employee under the new
administrative rule, he could appeal the determination.
met with Nelson. Walsh claims he informed Nelson that it was
a violation of the Social Security Act and guidance of the
United States Department of Labor (DOL) for a chief
administrative law judge to be classified as a nonmerit
employee. Walsh also asserts he provided documentation to
Nelson. According to Walsh, Nelson agreed to put the whole
matter "on hold" while he did some further
research. Specifically, Walsh states that Nelson assured him
that his status would not change without his knowledge. Walsh
then left on vacation and returned on April 21, one day after
the appeal deadline, believing the matter was placed on hold
by Nelson. Upon his return, Walsh states that Nelson informed
him on several occasions that DAS was still reviewing the
matter. Nonetheless, Walsh asserts that Nelson informed him
on May 21 that Walsh was no longer a merit employee and that
his new status became effective when he was on vacation.
Walsh's contact with United States Department of
Labor and subsequent IWD review of reclassification.
Walsh claims he contacted the DOL regional office in Chicago
on May 22, 2013, and was informed that any administrative law
judge, whether managerial or not, must be a merit employee.
Walsh maintains he opened an official "complaint"
with the DOL on that date.
informed Wahlert that he had contacted the DOL and that DAS
had made a serious legal error. Walsh subsequently met with
Wahlert and explained in detail what he saw as an error,
along with the potential federal DOL consequences. Wahlert,
who was not a lawyer, directed Walsh to contact Ryan Lamb,
general counsel for DAS, to discuss the matter.
asserts he met with Lamb on May 31. According to Walsh, Lamb
stated that he had relied upon Wahlert's representation
that Walsh did not spend much time deciding cases and that
his position was "mostly managerial." Walsh advised
Lamb that this was not the case. Walsh further asserts that
Lamb told him the change in classification was not his legal
decision but was Wahlert's policy decision. Lamb agreed
to contact DOL to get further information and reassess the
asserts that he talked with Lamb on the phone on June 11.
According to Walsh, Lamb informed him that it was not legal
and/or allowable under federal DOL guidelines to make the
chief administrative law judge a nonmerit employee as long as
the person in the position heard cases.
Change in job description of chief administrative law
judge by IWD results in more Walsh complaints. Shortly
after the June 11 conversation between Walsh and Lamb,
Wahlert called Walsh into her office for a meeting with her
and Nelson. At the meeting, Wahlert provided Walsh with a new
job description that required Walsh to cease hearing cases.
According to Walsh, Wahlert directed him to review the new
job description, think about it, and give her his input.
12, Walsh emailed Wahlert, expressing discomfort with the
proposed change. Wahlert responded by email declaring the new
job description in effect. Walsh replied that he was
processing several cases and that it was impossible for him
to begin working under the new job description in the midst
of deciding multiple cases. Wahlert responded that Walsh
could complete the cases.
emailed complaints to the office of Governor Branstad, the
DOL, and members of the IWD board on June 13. Walsh sent a
second email to DOL and contacted a state senator and a state
representative regarding his concerns. A week later, on June
20, Wahlert sent Walsh a letter rescinding efforts to make
his position nonmerit.
IWD terminates Walsh through layoff. On July 15,
Walsh received a letter advising him that he had been laid
off. According to Walsh, IWD staff escorted him out of the
office. The layoff plan that was sent to DAS characterized
the layoff as a reduction in force due to a budget shortfall.
Walsh claims that prior to July 15, neither Wahlert nor any
person in the IWD's financial management bureau had
informed him of any budget issue. Walsh asserts that the
bureau was, in fact, under budget.
Posttermination employment. After his termination,
Walsh asserts that he attempted to mitigate his damages by
seeking other employment with the State. Walsh claims that
Wahlert interfered with his effort to become employed at the
Iowa Division of Workers' Compensation because he filed
complaints against her with a state agency. On January 16,
2014, Walsh accepted the position of Deputy Workers'
Compensation Commissioner in the Division of ...