Defendant did not violate the Iowa Civil Rights Act for discrimination it was unaware of, Iowa Supreme Court rules

By: Rox Laird on June 29th, 2018

An applicant for a firefighter position is rejected after the employer’s consulting physician concludes the applicant is medically unqualified without disclosing the reason: The applicant had recently had symptoms of multiple sclerosis (MS).

Did the employer violate the disability discrimination provision of the Iowa Civil Rights Act?

Not according to the Iowa Supreme Court in a ruling handed down June 22. The Court, in a 4-2 decision in Deeds v. City of Marion, held that since the city was not aware of Nolan Deeds’ MS diagnosis, it did not violate his rights under the Iowa Civil Rights Act.

“The City is not required to be a mind reader,” Justice Thomas Waterman wrote for the Court. The majority opinion was joined by Chief Justice Mark Cady and Justices Edward Mansfield and Bruce Zager. Justices Brent Appel and David Wiggins dissented. Justice Daryl Hecht did not participate in the case.

The Court also issued a second, one-paragraph, opinion, Deeds v. City of Cedar Rapids, which announced the same decision with the same lineup of justices. Nolan Deeds sued both cities individually after his applications were rejected by both cities for the same reasons.

In the Marion case, the physician, who was employed by UnityPoint clinic, learned of Deeds’ MS diagnosis but did not disclose it to the city, and the city did not inquire as to why the physician said he was medically unqualified.

Thus, the Court held, that meant the city did not violate the Iowa Civil Rights Act, which defines unfair discrimination as “refusing to hire” an applicant “because of” a disability.

“When the City rescinded its job offer to Deeds, the City did not know he had MS,” Waterman wrote. “The City only knew that the physician reported Deeds was not medically qualified for the firefighter position.” Thus, he added, “We conclude that Deeds cannot show the City discriminated against him ‘because of’ his disability.”

The City of Marion had no duty to inquire as to why Deeds was deemed medically unqualified, the Court said, but Deeds did have a duty to request an accommodation for his disability. It cited a ruling from the U.S. Court of Appeals for the Seventh Circuit saying that, otherwise, a disabled employee might keep the disability a secret and later sue for failure to accommodate.

The Court also rejected Deeds’ argument that the UnityPoint physician who conducted the pre-employment physical acted as an agent for the City and, as such, the City had knowledge of his disability. Rather, the Court said, the physician acted as an independent contractor hired by the City and she exercised independent judgment.

Writing in dissent, Justice Appel said a “flat-out” ban on anyone with recent MS symptoms as opposed to an individualized medical assessment “is precisely the kind of stereotyping that the disability-discrimination provisions of the Iowa Civil Rights Act (ICRA) are designed to prevent.”

In this case, the City of Marion avoided the Civil Rights Act with a “don’t ask, don’t tell” approach by contracting out the physical examination to a third party and then not following up with the physician to find out why an applicant is deemed medically unqualified for a job.

The Iowa Civil Rights Act doesn’t reach beyond the state’s borders, Iowa Supreme Court rules

By: Rox Laird on May 21st, 2018

An Iowan working for Deere & Co. in China cannot sue for employment discrimination because the Iowa Civil Rights Act does not reach beyond the borders of Iowa, the Iowa Supreme Court ruled May 18.

Matthew Jahnke was brought back to Iowa from his China assignment and demoted following an internal investigation that found his sexual relationships with two Chinese women under his span of control violated Deere’s code of conduct. Jahnke sued under the Iowa Civil Rights Act for disparate treatment arguing he was treated differently because of his age – 60 at the time of the demotion – and the fact that he is a Caucasian male while the two younger Chinese women were not similarly disciplined.

The Court, in a 5-0 decision written by Justice Bruce Zager joined by Chief Justice Mark Cady and Justices Brent Appel, David Wiggins and Thomas Waterman, rejected Jahnke’s arguments. The Court held that the Iowa Civil Rights Act does not apply extraterritorially; nor can Jahnke bring a claim under the Iowa statute because neither he nor Deere & Co. was located in Iowa for purposes of the alleged discriminatory act.

Justices Daryl Hecht and Edward Mansfield did not participate in the decision.

Jahnke, a Deere employee since 1998 last assigned to its Ankeny plant, was sent to China in 2011 as a project manager in Harbin, China, overseeing construction of a new plant and later as factory manager once production began.

In 2014 Deere officials based in China began an investigation into Jahnke’s relationships with the two Chinese women, one a financial controller assigned to assist him, and the other a contract employee hired as a language tutor. Following the investigation, Jahnke was removed from his position in China, demoted and reassigned to the company’s factory in Waterloo at a reduced salary grade.

The justices concluded that Jahnke does not have a disparate-action claim under the Iowa Civil Rights Act because, under its prior rulings, the Court presumes that a statute “lacks extraterritorial reach unless the Legislature clearly expresses otherwise.” Nothing in the Iowa Civil Rights Act expressly states or indicates that it applies outside of Iowa’s or the nation’s boundaries, the Court said.

When the Legislature intends that a statute operate extraterritorially, it has said so, as it did, for example, by extending the workers’ compensation law and the Tort Claims Act beyond the borders of Iowa, Zager wrote.

“It is telling that the Legislature has clearly indicated its intention for other Iowa statutes to apply extraterritorially by including specific language expressing this intent, yet declined to include comparable language in the ICRA,” Zager wrote. “The Iowa Legislature is aware of our presumption against extraterritoriality and has made this awareness clear in other Iowa statutes. Consequently, if the Iowa Legislature wanted the ICRA to apply extraterritorially, it would have expressly indicated this intent in the statutory text. Yet, the Iowa Legislature did not do so, and it is not for us to alter the ICRA by expanding it to apply extraterritorially.”

Moreover, the Court said applying the Iowa Civil Rights Act outside Iowa creates potential conflicts with the laws of other states and countries, and Iowa should respect the sovereignty of other states rather than impose its policy decision on the employment practices of those states. Because of such concerns for interstate harmony, Zager wrote, a majority of U.S. courts have declined to apply human-rights statutes beyond their own jurisdictions.

Jahnke argued that the Iowa Civil Rights Act nonetheless applies in his case because he is an Iowan who was working on a temporary assignment overseas, and the illegal discrimination he alleged was based on decisions made in Iowa by Iowans. The Court rejected that line of argument, as well, because all of the actions Jahnke cited occurred in either China or Illinois.

At the time of the alleged discrimination, Jahnke lived and worked in China for a Deere subsidiary that operated under the laws of that country. The investigation and recommendation that led to his disciplinary demotion and return to the U.S. was conducted by Deere employees in China and approved and carried out by Deere management based in Moline, Ill.

“Jahnke’s petition does not support his claim that Iowa, or more specifically Polk County, is the proper venue for his employment discrimination claim,” Zager wrote. “Iowa is not the principal place of business for Deere. The only connection with Polk County was that John Deere Des Moines Works was the last place that Jahnke worked prior to his expatriation to China. ”

This is not to say Jahnke had nowhere else to turn. He could have brought a federal employment-discrimination claim under Title VII and the Age Discrimination in Employment Act, Zager wrote, or he may have had a claim under the Illinois Human Rights Act, or the laws of China. But not the Iowa Civil Rights Act.

[Disclaimer: Deere & Co. was represented in this case by Nyemaster Goode attorneys Frank Harty and Debra Hulett.]

Iowa Supreme Court: Plaintiffs may sue State for damages under the Iowa Constitution

By: Rox Laird on July 7th, 2017

Iowa’s former Workers’ Compensation Commissioner has a right to sue the State for monetary damages under the Iowa Constitution, the Iowa Supreme Court ruled Friday.

The decision is the latest chapter in Christopher Godfrey’s five-year legal battle against former Gov. Terry Branstad and five other State officials over Branstad’s efforts to oust Godfrey from his job. Both men have moved to new positions – Godfrey to Washington, D.C., in a similar position in the U.S. Department of Labor, and Branstad to China as U.S. ambassador – but the suit is still being fought out in Polk County District Court and in a parallel suit in federal court.

When he returned to office in 2011, Branstad sought Godfrey’s removal based on complaints from business leaders that Godfrey had not been even-handed in handling cases involving workers’ compensation claims for job-related illnesses and injuries.

Godfrey refused to resign voluntarily, so Branstad cut the commissioner’s pay from $112,069 to $73,250, the minimum allowed by law.

Godfrey was appointed by former Gov. Tom Vilsack and re-appointed by former Gov. Chet Culver – both Democrats. He argues that Republican Governor Branstad’s campaign to force Godfrey to resign was political retribution. Godfrey, who is gay, also contends his treatment was based on his sexual orientation.

Godfrey brought his claims in Polk County District Court under the Iowa Civil Rights Act, naming the State, the governor and five other State officials individually – although the individual defendants have since been dismissed. But he also cited due process and equal protection protections of the Iowa Constitution, claiming his reputation was damaged and his property interest in his salary was violated because of partisan politics and/or his sexual orientation.

The District Court dismissed those claims, saying there is no right under the Iowa Constitution to bring a direct action against the State for monetary damages unless the Iowa General Assembly has specifically created one.

The Supreme Court disagreed in a 4-3 ruling that for the first time recognized a right to sue the State for civil damages for a violation of civil liberties under the Iowa Constitution. The seven justices were split three ways on how the decision applies specifically to Godfrey, however. The court noted that in this decision it expressed “no view whatsoever on the underlying merits of the case” in reversing the trial court and sending it back for further proceedings on two of four claims raised in Godfrey’s appeal.

The lead opinion recognizing a constitutional right of action was written by Justice Brent Appel joined by Justices Daryl Hecht and David Wiggins. In a separate concurrence, Chief Justice Mark Cady joined that opinion on Godfrey’s property interest and reputation claims but said the Civil Rights Act preempts the sexual orientation claim, thus providing the fourth vote on that issue. The Chief Justice also said punitive damages are not available to plaintiffs in such suits against the State.

Justices Edward Mansfield, Thomas Waterman and Bruce Zager dissented, arguing the majority set a dangerous precedent.

In his opinion for the majority, Justice Appel noted that the framers of the Iowa Constitution in 1857 signaled the importance of protecting individual liberties from encroachment by the State government by putting the Bill of Rights at the very beginning of the document.

“If these individual rights in the very first article of the Iowa Constitution are to be meaningful, they must be effectively enforced,” Appel wrote, and the judiciary has a duty to protect them. “It would be ironic indeed if the enforcement of individual rights and liberties in the Iowa Constitution, designed to ensure that basic rights and liberties were immune from majoritarian impulses, were dependent on legislative action for enforcement.

Appel wrote that the court has often enforced the civil rights protections under the Iowa Constitution over the years. In 2009, for example, the court in Varnum v. Brien held that a law prohibiting same-sex marriage violated equal protection. And Appel cited several other cases dating back to 1904 where the court enforced rights and privileges under the Iowa Constitution.

Appel also rejected the argument that the Iowa Civil Rights Act preempts a claim under the Iowa Constitution based on the “long-settled principle” that a constitution trumps legislative enactments. A constitution may only be amended by the people, not by the legislature.

“If we held that a statute might preempt an otherwise valid constitutional action, this would in effect grant ordinary legislation the power to cabin constitutional rights,” he wrote. “The Iowa Constitution would no longer be the supreme law of the State.”

Justice Mansfield argued in dissent that Friday’s ruling was a radical departure from the court’s tradition of requiring that damage claims require either legislative authority or a basis in common law of torts or contracts.

“In 1965, our general assembly passed the Iowa Civil Rights Act (ICRA),” Mansfield wrote. “Today, we learn that the general assembly need not have bothered. Apparently, people who believed they had a civil rights claim against Iowa State or local officials always had a money-damages cause of action, with both actual and punitive damages available. It just took from 1857 until 2017 for someone to figure it out.”

Mansfield said majority’s holding will have limited impact on Godfrey’s case but otherwise will have far-reaching implications.

“While the impact of today’s decision in [Godfrey’s] case may be limited,” he wrote, “there should be no doubt about its far-reaching effects elsewhere.” For example, he wrote, “I anticipate many claims from current and former inmates seeking damages for wrongful incarceration.”

Although a majority of the court drew the line at punitive damages assessed against the State in such cases, Mansfield said the door could eventually be opened to punitive damages based on the logic of the lead opinion.

“The lead opinion amounts to a judicial declaration of defiance,” he wrote. “The lead opinion signals that it will not be constrained by anything the legislature does and can devise any and all damage remedies it deems suitable and proper for alleged constitutional violations. This principle seems to lack any boundary.”

[Disclosure: Former Nyemaster Goode attorney and On Brief contributor Ryan Koopmans filed an amicus brief in this appeal on behalf of the Iowa League of Cities, the Iowa State Association of Counties, the Iowa Communities Assurance Pool and the Iowa Association of School Boards.]

Oral Argument Set for Two Iowa Civil Rights Act Appeals in January

By: Administrator on December 28th, 2012

By Debra Hulett

The Iowa Supreme Court’s recent Nelson v. Knight opinion is the first decision this term interpreting the Iowa Civil Rights Act. This term, the Court will likely decide at least two other appeals presenting questions regarding the Iowa Civil Rights Act. Two cases are set for oral argument in January 2013.

First, on January 23, 2013, the Court will hear argument in Stotler v. Delavan, Inc., on a certified question from the U.S. District Court for the Southern District of Iowa. In that case, the plaintiff asserts a disability-discrimination claim under the Iowa Civil Rights Act. Before trial, the federal court certified a question to the Iowa Supreme Court regarding the impact of the Americans with Disabilities Act Amendments Act of 2008 (ADAAA), Pub. L. No. 110-325, 122 Stat. 3553 (2008) on the Iowa Civil Rights Act. More specifically, the certified question is:

In the absence of any applicable amendment to the Iowa Civil Rights Act (ICRA) regarding claims of disability discrimination, will the Iowa courts adopt the structure of the revised federal law enacted by Congress in the 2008 Americans with Disabilities Act Amendment Act (ADAAA), specifically 42 U.S.C. §§ 12101 and 12102, and federal regulations promulgated thereunder, when reviewing disability discrimination claims under the ICRA?

[Disclosure: An Iowa medical center represented by the Nyemaster Goode, P.C. law firm filed an amicus brief supporting the employer’s position that the Iowa Civil Rights Act does not incorporate the ADAAA].

Second, on January 24, 2013, the Court will hear argument in Ackelson v. Manley Toy Direct, L.L.C., on an interlocutory appeal. In two cases, the plaintiffs asserted employment-related claims under the Iowa Civil Rights Act and sought remedies to include punitive damages. The defendants moved to strike the plaintiffs’ prayers for punitive damages, arguing that the Iowa Civil Rights Act does not authorize punitive damages for employment-practice claims. The district court granted the motions to strike; then the plaintiffs applied for interlocutory appeal. The defendants did not resist the application and asked the Iowa Supreme Court to grant the interlocutory appeal. In March 2012, the Iowa Supreme Court granted the applications for interlocutory appeal in both cases and later consolidated the two appeals. [Disclosure: The Nyemaster Goode, P.C. law firm represents the defendants in this appeal].

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