Aaron Ballalatak Vs. All Iowa Agriculture Association ( 2010 )

IN THE SUPREME COURT OF IOWA
No. 08–1588
Filed April 16, 2010
AARON BALLALATAK,
Appellant,
vs.
ALL IOWA AGRICULTURE
ASSOCIATION,
Appellee.
Appeal from the Iowa District Court for Linn County, Robert E.
Sosalla, Judge.
Appellant challenges district court grant of summary judgment to
appellee on appellant’s wrongful discharge claim. DISTRICT COURT
JUDGMENT AFFIRMED.
Matthew J. Reilly of Eells & Tronvold Law Offices, P.L.C., Cedar
Rapids, for appellant.
Kelly R. Baier and Laura C. Mueller of Bradley & Riley, P.C., Cedar
Rapids, for appellee.
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STREIT, Justice.
A supervisor was fired after injecting himself into workers’
compensation claims made by other employees. The trial court found his
at-will status allowed the firing because no public policy protects an
employee who internally advocates for the workers’ compensation claim
of another employee. We affirm for the same reason.
I. Background Facts and Proceedings.
Aaron Ballalatak worked for All Iowa Agriculture Association d/b/a
Hawkeye Downs 1 as a security supervisor. 2 On September 14, 2006, two
Hawkeye Downs security employees—Matt Kirk and Austin Pavlicek—
were injured in a work-related vehicular accident. Pavlicek called
Ballalatak at home after the accident to report he and Kirk were injured.
Ballalatak drove to the scene, and after Pavlicek and Kirk were
transported to the hospital, Ballalatak filled out an accident report.
Hawkeye Downs General Manager Roy Nowers became involved in
addressing the accident. Nowers sent an email to Ballalatak and another
supervisor instructing them, as well as the injured employees, to meet
with Nowers before they returned to work. Ballalatak and Pavlicek met
with Nowers together. Ballalatak testified Nowers told Pavlicek not to
worry because his prescriptions and lost wages would be taken care of.
Eventually, the injured employees, Pavlicek and Kirk, became concerned
they would not receive workers’ compensation benefits for their injuries.
Pavlicek or Kirk told Ballalatak that they had been informed the claims
would not be covered.
1The parties refer to defendant-appellee as Hawkeye Downs, and this court will
do the same.
2Hawkeye Downs contends Ballalatak was not a supervisor and was instead a
coemployee. Because the district court granted summary judgment to Hawkeye Downs,
to the extent this is a material fact, this court must draw all inferences, including that
Ballalatak was a supervisor, in Ballalatak’s favor.
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Ballalatak called Nowers to relay these concerns. The accounts of
this conversation differ. Ballalatak claims he explained the concerns and
mentioned Nowers had previously assured Pavlicek in Ballalatak’s
presence that he shouldn’t worry about coverage for lost wages and
prescriptions. Ballalatak claims Nowers then denied making the
comment and asked whether Ballalatak was calling him a liar.
Ballalatak told Nowers that Kirk and Pavlicek could hire an attorney to
ensure they received workers’ compensation benefits, and Nowers
responded by stating, “make sure they spell my name right,” a statement
Nowers admits making “out of frustration.” Nowers contends Ballalatak
was agitated, insubordinate, and inappropriately questioned Nowers
about employees’ personal information.
It is undisputed Nowers fired Ballalatak during this phone call.
Ballalatak contends he was fired for inquiring into whether the company,
Hawkeye Downs, was fulfilling its workers’ compensation obligations to
Kirk and Pavlicek. Nowers contends Ballalatak was fired for
insubordination. Ballalatak brought suit alleging tortious discharge
against public policy. The district court held that even if Ballalatak was
fired for attempting to help Kirk and Pavlicek receive workers’
compensation benefits, Ballalatak failed to state a claim because no
public policy protects supervisors or coemployees from termination for
aiding injured employees in claiming workers’ compensation benefits.
Ballalatak appealed.
II. Scope of Review.
This court reviews a district court’s grant of summary judgment for
correction of errors at law. Campbell v. Delbridge, 670 N.W.2d 108, 110
(Iowa 2003). Summary judgment is proper only where no genuine issue
of material fact exists and the moving party is entitled to judgment as a
matter of law. Iowa R. Civ. P. 1.981(3). This court reviews the record in
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the light most favorable to the nonmoving party. Lloyd v. Drake Univ.,
686 N.W.2d 225, 228 (Iowa 2004). All legitimate inferences will be drawn
in favor of the nonmoving party. Tetzlaff v. Camp, 715 N.W.2d 256, 258
(Iowa 2006).
III. Merits.
A. Overview. Generally, an employer may fire an at-will employee
at any time. Abrisz v. Pulley Freight Lines, Inc., 270 N.W.2d 454, 455
(Iowa 1978). However, under certain circumstances we recognize a
common law claim for wrongful discharge from employment when such
employment is terminated for reasons contrary to public policy. Lloyd,
686 N.W.2d at 228. To support a claim of wrongful discharge, the
employee must show:
(1) existence of a clearly defined public policy that protects
employee activity; (2) the public policy would be jeopardized
by the discharge from employment; (3) the employee engaged
in the protected activity, and this conduct was the reason for
the employee’s discharge; and (4) there was no overriding
business justification for the termination.
Jasper v. H. Nizam, Inc., 764 N.W.2d 751, 761 (Iowa 2009).
The tort of wrongful discharge exists as a narrow exception to the
general at-will rule, id. at 762, and this court is careful to ground
recognition of such claims in “a well-recognized and defined public policy
of the state.” Springer v. Weeks & Leo Co., 429 N.W.2d 558, 560 (1988)
modified by Springer v. Weeks & Leo Co., 475 N.W.2d 630, 632–33 (Iowa
1991). Jasper explained that this court has recognized four categories of
activities protected by public policy in Iowa law: “(1) exercising a
statutory right or privilege, (2) refusing to commit an unlawful act,
(3) performing a statutory obligation, and (4) reporting a statutory
violation.” Jasper, 764 N.W.2d at 762 (citations omitted).
B. Workers’ Compensation Policy. Ballalatak claims he was
fired for raising concerns to his employer, Hawkeye Downs, about
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potential mishandling of two employees’ workers’ compensation claims.
In Springer, this court held that “discharging an employee merely for
pursuing the statutory right to compensation for work-related injuries
offends against a clearly articulated public policy of this state.” Springer,
429 N.W.2d at 559. The court relied upon Iowa Code section 85.18
(1987), which provides, “[n]o contract, rule, or device whatsoever shall
operate to relieve the employer, in whole or in part, from any liability
created by this chapter except as herein provided.” Id. at 560. This
court found the statute to be a clear expression of the public policy of the
state of Iowa. Id.
Ballalatak argues the public policy interest in allowing employees
to pursue their statutory rights to workers’ compensation benefits should
be understood to extend to supervisors who advocate on behalf of or
otherwise attempt to help those whom they supervise to receive such
benefits.
Hawkeye Downs argues there cannot be a public policy which
supports Ballalatak’s actions because he was inquiring into confidential
medical issues concerning other employees. At this point in the
proceedings, we must construe all inferences in Ballalatak’s favor.
Tetzlaff, 715 N.W.2d at 258. Even though discussing workers’
compensation claims may involve medical matters, Ballalatak does not
allege he was interested in the medical records of either Kirk or Pavlicek.
Instead, Ballalatak claims he had been told by Kirk and Pavlicek that
their workers’ compensation claims were denied and argues this was
because Hawkeye Downs had failed to process and submit important
paperwork. Ballalatak alleges he was inquiring with Nowers whether
Hawkeye Downs was failing to abide by its obligations to injured
employees, not investigating the specific medical claims of Kirk and
Pavlicek.
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Although Hawkeye Downs also contends Ballalatak was fired for
the insubordinate manner in which he injected himself into the workers’
compensation claims of other employees, for purposes of this review, we
must construe all inferences in Ballalatak’s favor. Therefore, we must
determine whether Iowa public policy protects supervisors or
coemployees who inquire about their employer’s compliance with the
worker’s compensation laws as they relate to those they supervise or to
their coemployees.
This court has repeatedly recognized public policy protection for
employees who exercise their own statutory rights. See Lara v. Thomas,
512 N.W.2d 777, 782 (Iowa 1994) (right to pursue partial unemployment
benefits); Springer, 429 N.W.2d at 559 (right to file workers’
compensation claim). This court has also recognized that public policy
protects employees who refuse to violate statutory or administrative
regulations or to commit an unlawful act. See Jasper, 764 N.W.2d at
767–68 (holding evidence supported finding that employee was
discharged because she refused to violate state daycare staff-to-child
ratio requirements); Fitzgerald v. Salsbury Chem., Inc., 613 N.W.2d 275,
286 (Iowa 2000) (finding refusal to commit perjury to be protected by
public policy). Ballalatak was not fired for attempting to secure his own
statutory rights nor was he fired for refusing to violate workers’
compensation law. Instead, taking the facts in the light most favorable
to Ballalatak, he was fired for his attempt to ensure his employer did not
violate the statutory rights of other employees.
In Jasper, this court rejected the argument that an employee can
only state a claim if a suspected violation by the employer is reported to
the proper authorities. Jasper, 764 N.W.2d at 767–68. We found a
violation of public policy when an employee was fired for her refusal to
reduce staff in violation of the department of human services regulation
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regarding daycare staff-to-child ratios. Id. Jasper noted that an
important public policy—daycare staff-to-child ratios—“would be
thwarted if an employer could discharge an employee for insisting the
ratios be followed.” Id. at 767. In Jasper, this court’s identification of
public policy was based on the employee’s refusal to engage in illegal
activity. We have not addressed, however, whether an employee may find
public policy support for internal complaints where that employee has
neither been asked to engage in the allegedly unlawful behavior nor
reported the allegedly unlawful activity to the proper authorities.
The Eighth Circuit has suggested that Iowa courts would recognize
protection for internal whistle-blowing in certain circumstances. In Kohrt
v. MidAmerican Energy Co., 364 F.3d 894, 902 (8th Cir. 2004), the court
held the Iowa Supreme Court would recognize a wrongful discharge claim
where an employee complains internally about safety issues to the
employer. The court based its holding on the Iowa Occupational and
Safety Health Act (IOSHA). Kohrt, 364 F.3d at 899. It noted that IOSHA
declares the public policy of the state is “ ‘to stimulate employers and
employees to institute new and perfect existing programs for providing
safe and healthful working conditions.’ ” Id. (quoting Iowa Code § 88.1
(2003)). The Eighth Circuit also noted Iowa Code section 88.9(3) provides
protection against discharge for any employee who files a safety
complaint under IOSHA. Id. at 899–900. The court held that although
these statutes did not expressly provide protection from discharge for
internal safety complaints, the public policy of encouraging employees “to
institute new and to perfect existing safety programs” would be
undermined if an employee could be discharged for doing what the policy
encourages. Id. at 902.
Kohrt and Jasper suggest internal whistle-blowing may be
protected in certain circumstances. However, as noted above, all
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wrongful discharge claims must be based on “a well-recognized and
defined public policy of the state.” Springer, 429 N.W.2d at 560. In all
cases recognizing a public-policy exception, this court has relied on a
statute or administrative regulation. Jasper, 764 N.W.2d at 762, 764.
The use of statutes maintains the narrow public policy exception and
“provide[s] the essential notice to employers and employees of conduct
that . . . can lead to tort liability.” Id. at 763.
Ballalatak makes two statutory arguments. First, Ballalatak
points to the general requirement that employers compensate employees
under the workers’ compensation statutory scheme, coupled with this
court’s previous protection of an employee’s right to seek such
compensation. See Springer, 429 N.W.2d at 560–61. Ballalatak relies on
Iowa Code section 85.18 (2005), cited by this court in Springer, 429
N.W.2d at 560, for the public policy supporting workers’ compensation
claims: “[n]o contract, rule, or device whatsoever shall operate to relieve
the employer, in whole or in part, from any liability created by this
chapter except as herein provided.” Employer obligations under the
workers’ compensation act can also be found in Iowa Code section
85.3(1), which states:
Every employer, not specifically excepted by the provisions of
this chapter, shall provide, secure, and pay compensation
according to the provisions of this chapter for any and all
personal injuries sustained by an employee arising out of
and in the course of the employment . . . .
Iowa’s workers’ compensation statutes provide a clear public policy
expression that employers are required to compensate employees for
injuries arising out of and in the course of employment. Hawkeye Downs
did not instruct Ballalatak to take steps to circumvent Hawkeye Downs’
obligations under these statutes. Here, we must determine whether the
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statutes provide support for internal complaints based on a concern that
the employer may not be complying with workers’ compensation laws.
Ballalatak points to other Iowa statutes prohibiting retaliation
against employees other than the one who was injured or filed a claim.
IOSHA prohibits discharge of an employee “because of the exercise by the
employee on behalf of . . . others of a right afforded by this chapter.”
Iowa Code § 88.9(3). Iowa Code section 91A.10(5) prohibits discharge for
an employee who “has cooperated in bringing any action against an
employer” relating to unpaid wages. Iowa Code section 135C.46 protects
health care facility employees who participate in a proceeding under that
chapter. Iowa Code section 216.11 protects those who lawfully oppose
discrimination in the workplace. These statutes provide no support for
Ballalatak’s argument because they demonstrate the Iowa legislature has
exercised its authority in other circumstances to prohibit retaliation
against employees who cooperate or report employer behavior by which
they are not directly impacted. We cannot infer that legislation in other
specific areas extends to the workers’ compensation code.
Ballalatak also notes that as the supervisor for Kirk and Pavlicek,
the company’s internal policy required him to “maintain an open line of
communication to his/her supervisor or the General Manager in matters
which effect All Iowa or an employee.” Ballalatak argues he was relaying
concerns that Hawkeye Downs was violating workers’ compensation laws
and was, in fact, required to relay those concerns by Hawkeye Downs’
own employee policies. We have previously held, however, that public
policy cannot be derived from internal employment policies or
agreements. See Jasper, 764 N.W.2d at 762.
This is not a case where Ballalatak refused to participate in a
scheme to prevent employees Kirk and Pavlicek from receiving deserved
workers’ compensation benefits or reported concerns to the proper
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authorities. His alleged actions here are not protected by a clearly
expressed public policy. The Iowa legislature has recognized numerous
areas in which employees must be protected for their complaints, even if
they are not personally affected by the employer’s policy, such as IOSHA,
civil rights statutes, unpaid wages, or complaints about health care
facilities. These statutes suggest the Iowa legislature understands the
public policy implications in choosing to protect employees other than
the aggrieved employee, but has chosen not to do so in the workers’
compensation arena. Although according to the facts as presented by
Ballalatak, his motives were to ensure compliance with the law and
benefits for those under his supervision, as well as comply with Hawkeye
Downs’ own employee policies, Ballalatak has not pointed to any Iowa
law which clearly expresses protection for such actions. The public
policy found in Iowa’s workers’ compensation statutes strongly protects
injured employees, but does not extend to coworkers or supervisors who
express concerns regarding whether the injured employees will be
properly compensated.
C. Right to Consult an Attorney. Ballalatak also argues he was
fired because he told Nowers that Kirk and Pavlicek might contact an
attorney to make sure they received their workers’ compensation.
Ballalatak argues public policy prevents discharge for this reason. In
support, he points to Thompto v. Coborn’s Inc., 871 F. Supp. 1097, 1120–
21 (N.D. Iowa 1994). Thompto held that the Supreme Court of Iowa
would likely recognize employee termination based on the employee’s
threat to consult an attorney as a violation of public policy. Thompto,
871 F. Supp. at 1120–21. Thompto based this conclusion on Iowa’s Code
of Professional Responsibility for Lawyers, which articulates a public
policy that citizens of the state should have access to professional legal
services. Id. at 1120. Thompto also noted protections for filing
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complaints asserting unpaid wages or civil rights violations would be
meaningless if the employees were not protected in an attorney
consultation to determine whether they had a right to file such a
complaint. Id. at 1121.
Ballalatak argues this general public policy protects his assertion
that Kirk and Pavlicek might contact an attorney as the “next step.” We
cannot accept this argument. Regardless of whether this court would
recognize a right to consult or threaten to consult one’s own attorney, no
public policy protects Ballalatak in a threat made on Kirk and Pavlicek’s
behalf. Thompto demonstrates concern that individual workers will be
unable to enforce their rights if they are prevented from consulting an
attorney. There is no suggestion here that Kirk or Pavlicek was
prevented from consulting an attorney or would have been fired had they
consulted one. Ballalatak is not Kirk or Pavlicek’s representative and
had no authority to assert their right to consult an attorney.
IV. Conclusion.
Iowa law does not protect an employee who advocates internally for
another employee’s workers’ compensation claim or internally raises
concerns about the employer’s compliance with workers’ compensation
statutes as it relates to another injured employee. Iowa law also does not
protect an employee who asserts that other employees may contact an
attorney regarding their workers’ compensation rights. For these
reasons, the district court did not err in granting summary judgment to
Hawkeye Downs.
DISTRICT COURT JUDGMENT AFFIRMED.