Supreme Court Reaffirms At-Will Employment

Posted on September 9, 2011 by Liz Overton

A little over a year ago I wrote about the Court of Appeals' decision in Berry v. Liberty Holdings, Inc. In that decision the Court of Appeals determined that Iowa's comparative fault statute was a basis for a public policy exception to the at-will employment doctrine. I mentioned that, despite the Court of Appeals' decision, the case was far from over. 

Today, the Iowa Supreme Court issued its ruling in Berry v. Liberty Holdings, Inc., vacating the Court of Appeals decision and reinstating the district court's dismissal of the case. The Supreme Court disagreed that the comparative fault statute was a source of public policy. Rather, it found that the purpose of the law is to provide a framework or set of rules one must follow when assigning fault in negligence cases.

 

The Court explained that the statute being used to support a wrongful termination claim must "relate to the public health, safety or welfare and embody a clearly defined and well-recognized public policy that protects the employee's activities." The statute cannot deal merely with individual interests. The Court went on to explain the history and purpose of the comparative fault statute: 

 

Chapter 668 did not create any new causes of action. Rather, it created a set of rules under which the parties will try all tort actions when the action involved 'fault' as defined by the statute. Therefore, chapter 668 more closely resembles a statute that attempts to regulate private conduct and imposes requirements that do not implicate public policy concerns.

For this reason, the Supreme Court vacated the Court of Appeals' decision and reinstatned the district court's dismissal.  The decision reaffirms the Court's adherence to the at-will employment doctrine except in limited circumstances.

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Court of Appeals Chips Away at the "At-Will" Doctrine

Posted on August 11, 2010 by Liz Overton

Iowa adheres to the “at-will” employment doctrine, which simply states that an employee can be discharged for any lawful reason or no reason at all. A termination is wrongful when it violates public policy. In Berry v. Liberty Holdings, the Iowa Court of Appeals determined that Chapter 668 of the Iowa Code, which allows injured persons to bring a claim against the negligent individual, serves as the basis for a public policy exception to the at-will employment doctrine.

Berry was an employee for Liberty Holdings. The owner of Liberty Holdings also had an ownership interest in Premier Concrete Pumping. On his way home from work one day Berry was hit by a Premier Concrete Pumping truck and injured. Berry brought a personal injury suit against Premier to recover for his damages, which was settled. A few months later, Berry was terminated.

 

In the decision, the Court stated that “nothing could be more fundamental than the right of reasonable access to courts to protect those inalienable rights possessed by all persons and recognized by both the United States and Iowa Constitutions.” While the overall purpose of Chapter 668 is to establish a system for apportioning fault in negligence actions it also includes the state’s expressed policy that its citizens may seek legal redress for an injury caused by another’s negligence. If the Court chose not to expand the public policy exception to include Berry’s claim, it felt that employees may be forced into giving up certain well-recognized rights.

 

This is not the end of this case, however. Judge Vaitheswaran dissented stating that Chapter 668 does not define a right; therefore, cannot be the basis for the proposed public policy exception. Liberty Holdings may appeal this decision to the Supreme Court of Iowa. The Supreme Court of Iowa may agree with Judge Vaitheswaran.  

 

Further, while Berry has won this battle, he still must prove that he was terminated because he filed a claim against Premier before he can recover. This opinion contained no facts that would suggest one way or another whether Berry’s claim will be successful.  It will be interesting to see what happens in the future.

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