2014-07

Dennis L. Smith v. Iowa State University of Science and Technology and State of Iowa ( 2014 )

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IN THE SUPREME COURT OF IOWA
No. 12–1182
Filed July 18, 2014
DENNIS L. SMITH,
Appellee,
vs.
IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY and
STATE OF IOWA,
Appellants.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Story County, Kurt J.
Stoebe, Judge.
Employee and university were granted further review of court of
appeals decision affirming in part and reversing in part the district
court’s denial of the university’s posttrial motions following verdicts for
the employee on intentional infliction of emotional distress and
whistleblower claims against the university. DECISION OF COURT OF
APPEALS AFFIRMED IN PART, VACATED IN PART; DISTRICT COURT
JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND CASE
REMANDED.
William W. Graham and Aimee R. Campbell of Graham, Ervanian
& Cacciatore, LLP, Des Moines, for appellee.
2
Thomas J. Miller, Attorney General, Diane M. Stahle and
Jordan G. Esbrook, Assistant Attorneys General, for appellants.
3
MANSFIELD, Justice.
After a trial of more than two weeks, a jury and a judge awarded
Dennis Smith, a writer formerly employed by the College of Engineering
at Iowa State University (ISU), a total of $1,284,027.40 in damages
against ISU and the State of Iowa. Smith recovered $500,000 for
intentional infliction of emotional distress and an additional $784,027.40
under a whistleblowing statute for retaliation suffered because he
reported managerial misconduct to ISU’s president. ISU and the State
appealed, and the court of appeals affirmed the intentional infliction of
emotional distress award, but set aside the statutory whistleblowing
award.
On further review, for the reasons described herein, we too affirm
the jury’s emotional distress award. We also reduce, but do not set
aside, the district court’s award of damages under the whistleblowing
statute. We agree with the State that Smith’s loss of his job in a
downsizing that occurred in 2010 cannot be causally linked to any
reporting he made to ISU’s president approximately three years earlier,
and therefore we vacate $634,027.04 of his whistleblower damages. In
all other respects, we uphold the district court’s rulings.
I. Facts and Procedural History.1
Dennis Smith was born and raised in Omaha, Nebraska. After
holding a variety of jobs, getting married, and graduating from college,
Smith entered a doctoral program in English at the University of Iowa in
the late 1980s. While there, Smith established and directed a gun
control organization. Smith did not obtain his doctorate, but his spouse
1We recite the facts in the light most favorable to the plaintiff, who prevailed at
trial.
4
received a graduate degree from the university. In 1999, both of them
moved to Des Moines so she could pursue her career. In July 2000,
Smith’s spouse suffered a devastating stroke that left her homebound.
In April 2001, Smith was hired at ISU to be a Communication
Specialist III for the Engineering Communications and Marketing (ECM)
Department of the College of Engineering at ISU. Smith wrote and edited
articles for alumni magazines and other print publications. ECM’s
clients included not only the College of Engineering, but also other ISU
colleges and even some outside entities not affiliated with ISU.2 ECM’s
staff included writers like Smith, as well as web design and graphic
design specialists. As it later turned out, one advantage of this position
for Smith was that he could communicate by cell phone or video
computer link throughout the day with his disabled wife.
Smith’s boss was Pamela Reinig, the director of the ECM
department. Over the years, Smith received positive job performance
evaluations from her. Reinig’s reviews of Smith’s writing were especially
laudatory. By 2002, Smith was taking on supervisory responsibilities,
and Reinig told him she would have his job classification upgraded to
Communications Specialist IV. As part of Smith’s July 2002 evaluation,
Reinig wrote, “I will submit a reclassification request for your position in
August 2002. Since January you have been doing the work of a
Communications Specialist IV, so it is fitting to try to get you reclassified
2ECM operated on a cost-recovery basis and billed out its time, both to other ISU
departments and to outside clients. The money generated helped support the
operations of ECM but did not cover actual costs.
5
to that level.” Smith received and retained a copy of this 2002 written
evaluation of his performance.3
For the next three years, Smith did not get the promotion. Reinig
gave Smith various excuses as to why he had not received it, while
continuing to tell Smith she was submitting him annually for
reclassification. It later came to light that, despite her promises, Reinig
had not submitted Smith’s name for reclassification.
Smith finally obtained the upgraded classification in July 2005.
This occurred shortly after he notified Reinig that he was looking for
work elsewhere. Smith told Reinig at the time he was “basically fed up
with supervising people at [his] own pay grade.” In response, Reinig
begged Smith not to leave and assured him that he would not have to
supervise anyone and that she would submit him again for
reclassification. Thus, Smith received the promotion, but no longer had
to supervise anyone. Smith later wrote that he was “relieved to be free of
responsibility for supervising employees who were not qualified for their
positions and in whose hiring [he] had little apparent influence.”
Smith acknowledged that he has an “assertive personality.” As he
put it, “I’m not passive certainly. I mean I tell the people what I feel, and
I try to do it as respectfully as possible.” Smith denied that he was ever
inappropriately aggressive. He testified that Reinig was aware he had
previously headed a gun control organization. Numerous coworkers
testified that Smith never acted in an angry or threatening manner.
In 2006, Reinig began the hiring process for a Communications
Specialist IV in ECM who would have supervisory responsibilities. Reinig
3The Microsoft Word version saved on Reinig’s desktop computer was missing
the paragraph where Reinig promised to try to get Smith a promotion. Smith contends
that Reinig deleted the paragraph from her version of the evaluation as an act of fraud.
6
told Smith she wanted him to make the final decision on whom to hire
because she felt she had a conflict of interest with respect to one of the
candidates, Eric Dieterle. Dieterle had previously worked for Reinig in
the ECM department, leaving in 2000 before Smith arrived.4 After
examining the thirteen candidates, Smith rated Dieterle at the top and as
“the best person for the job,” but also told Reinig that “the pool was
weak.” In his detailed assessment of Dieterle for Reinig, Smith wrote:
[Dieterle] is clearly a talented writer and a competent (if not
particularly robust) editor, and I would not hesitate to
recommend him at the level of Communications Specialist
III. However, to support his candidacy for Communications
Specialist IV in the College of Engineering (as opposed, say,
to LAS or Business) requires evidence of accomplishment
and/or experience that he did not present in either the
application or interview process.
On a personal level, I would be surprised should Eric,
if hired, not fulfill the demands of the position and fulfill
them well. But that is an assessment based on instinct, and
instinct in the absence of objective evidence is not sufficient
for me to make a positive recommendation in this case. . . .
The bottom line: Given the lack of evidence of relevant
experience in general feature-length writing and editing,
much less in the areas of science or technology, I cannot
specifically recommend Eric for the position. However, given
his obvious talent and intelligence as a writer, coupled with
some evidence of higher-level editorial instincts and
capabilities, I would have no objection to his joining ECM.
We are desperately in need of higher-level writing skills if we
are to achieve the marketing goals of the college, as I
understand them. However, unless we reopen a
considerably expanded search process and/or raise salary
levels to compete for science and technology writers at the
highest levels, Eric may represent the best choice for the
college at this time.
Reinig conceded in an email to Smith, “What I really need is to hire
another you—but that’s probably a once-in-a-lifetime deal.”
4Dieterle
had relocated to Reno, Nevada, but for family reasons was interested in
moving back to Ames. By the time of trial, Dieterle was no longer working at ISU and
had moved to Arizona.
7
Reinig ended up hiring Dieterle later in 2006. Although another
qualified candidate had entered the pool by then, Reinig offered the job to
Dieterle before giving the other candidate an opportunity to finish her
review and application procedures. An internal investigation of the
hiring process later revealed “serious violations of policy” and
“manipulation of the process and inaccurate accounts of the process by
Ms. Reinig.”
When Reinig began the job search for the position eventually filled
by Dieterle, she announced that the person hired would not supervise
Smith. However, in January 2007, Smith’s wife fell at home and
sustained a shoulder injury. Smith took family medical leave to attend
to her, although he continued to do some work from home. The following
month, Reinig emailed Smith to notify him that Dieterle would supervise
Smith’s newsletter work.
On March 19, when Smith returned to ISU from his leave, he went
to Reinig’s office. Smith told Reinig he wanted to discuss her directive
that Dieterle would be supervising Smith’s newsletter work. Reinig cut
Smith off and said, “[T]here’s nothing to talk about really, it’s my decision
so that’s what we’re going to do.” Smith admits he “got [his] back up,”
expressed his frustrations, and criticized the Dieterle hire. Reinig
responded defensively and told Smith that if he did not like it, he could
take his concerns to the dean. Smith felt he had never been treated that
peremptorily before by Reinig. As a result of their argument, Reinig
issued Smith a “verbal warning” on March 21. Smith denied that he was
abusive or threatening during the meeting; he simply challenged Reinig
on her broken promises.
Meanwhile, just before Smith went on leave in January 2007, it
had come to his attention that ECM was not receiving payment for
8
certain work it was performing for an outside entity—the Council of
Advancement for Support of Education (CASE). Smith did not raise this
subject with Reinig in their March 19 meeting.
Following his March 19 episode with Reinig, Smith did some
research on his job-related rights and learned he might be eligible for a
retroactive pay increase if he had qualified for reclassification before
2005. He went to the ISU compensation and classification office, where
he learned Reinig had never submitted his name for reclassification
before 2005. At this point, Smith decided to act on Reinig’s invitation to
“take it to the dean.”
Smith began writing up a grievance but also consulted with an ISU
faculty member whom he trusted. The faculty member recommended to
Smith that he bring his concerns about the CASE billing to the Dean of
the College of Engineering, Dr. Mark Kushner.
On March 22, Smith emailed Dr. Kushner to request a meeting.
Smith asked that his request to meet be kept confidential. The two got
together later that day. During the meeting, Smith informed
Dr. Kushner of his intention to file a formal grievance against Reinig for
several issues relating to his employment. He also disclosed that he
believed ECM was not properly billing CASE for work performed by ECM
and that he suspected misconduct on Reinig’s part.
Dr. Kushner asked Smith to provide additional details about the
billing issue. In the conversation, Dr. Kushner agreed to maintain the
confidentiality of what Smith told him.
A week later, Smith emailed Dr. Kushner a document that showed
the hours of work ECM had completed for CASE over a six-year period,
the actual billings submitted to CASE, and the discrepancy between
hours billed and hours worked. In the main text of the email, Smith
9
added, “As per your statement, I consider my reporting obligations
fulfilled under university regulations, and leave the resolution of this
issue to your office.”
The next morning, Dr. Kushner communicated via email with the
business manager of the College of Engineering, Ellen Reints.
Dr. Kushner’s email enclosed Smith’s email and attachments.
Dr. Kushner asked Reints, “In your opinion, has there been misconduct?
What is the next step I need to take?” Reints responded, “I don’t think I
understand the situation and the numbers enough to give an opinion on
whether or not there was misconduct.” Reints added that “you can’t
always charge a customer for all of the hours worked,” but “there should
be a standard practice on how this is tracked.” She concluded that she
and Dr. Kushner should visit with Reinig to discuss the concern and
then consider whether the controller should review the billing processes
or an internal audit should be conducted. Responding to Reints’s email,
Dr. Kushner agreed that they should “meet with Pam [Reinig] to give her
a heads up.”
Dr. Kushner met with Reinig on April 2. The next day, Smith
learned from a fellow employee that Reinig was “broadcasting to people
that [Smith] had been complaining to the dean.” As a result, Smith “was
getting a number of stares and unfriendly responses from several ECM
employees” that “felt like retaliation.”
On April 9, Reinig informed Dr. Kushner in writing that she had
previously initiated disciplinary action against Smith on March 21 and
advised him of the verbal warning she had given Smith. She indicated
Smith’s behavior had been “insubordinate, abusive, and threatening.”
She noted he had a history of conflict with her and other staff members,
but she had tolerated it because she “believed it would improve” and
10
Smith was “under extreme ongoing stress.” She also stated, “In
hindsight, I could have been timelier in bringing this action to your
attention.”
In another memo to Dr. Kushner dated the same day, Reinig
disclosed plans to immediately reorganize the ECM writing staff,
specifically to reduce or eliminate Smith’s responsibilities in certain
areas while giving him all of the article-writing duties for the college’s
alumni magazine. This did not materially add to or subtract from
Smith’s overall workload, but in his view, it “effectively severed [his]
working relationships with every other member of the ECM staff.” Some
of Smith’s coworkers testified at trial that they believed this shift in
Smith’s work duties was retaliatory.
Smith informed Reinig on April 11 that he would soon be
submitting a formal grievance to her, although he did not discuss the
substance. Reinig said she was expecting a grievance and pledged they
would work through the problem together.
Yet the next day, April 12, Reinig emailed Dr. Gene Deisinger, the
commander of the Special Operations Unit of the ISU police.5 The email
was entitled “Safety concern” and read in its entirety as follows:
I’ve been referred to you by Heidi Eichorn, who
handles HR issues for the College of Engineering. I recently
gave a verbal reprimand to a member of my staff following a
confrontation in my office that I would describe as
insubordinate, abusive and threatening. This employee has
a personal situation that keeps him under high-level,
unrelenting stress. I am concerned about his potential to
become violent.
Heidi thought you might have a process for receiving a
“heads-up” on situations like this one. Please let me know
what I need to do.
5Dr. Deisinger has a Ph.D. in psychology.
11
On April 13, Smith began the formal grievance process by
submitting a thirteen-page, single-spaced statement of complaint to his
supervisor, Reinig. The complaint covered three issues: (1) Reinig’s
manner of hiring Dieterle, (2) Reinig’s inability to maintain proper
working relationships among her subordinates, and (3) Reinig’s
misrepresentations to Smith regarding his reclassification. Among other
things, Smith requested his reclassification be backdated to March 2002
and that he receive backpay with interest and benefits.
Reinig denied Smith’s grievance on April 25, but before doing so,
she again emailed Dr. Deisinger. This email stated as follows:
I wanted to let you know that I will hand-deliver to
D. Smith tomorrow a response to his grievance. He will not
be happy with it. I will be out on travel for several days so
his initial reaction will not impact me.
I remain quite concerned about this employee. I
followed the trag[edy] at V-Tech closely. So many things said
about that individual could also be said about Dennis.
Unless I hear otherwise from you, I will keep you
apprised of any developments in this situation.
Dr. Deisinger replied and asked if there had been additional concerns
raised about Smith’s behavior and instructed her to ensure that staff
knew how to call the ISU police in an emergency. Reinig responded to
Dr. Deisinger that there were “no additional concerns,” but stated, “He
remains withdrawn and generally unresponsive during staff meetings.
He spends much of his day in his office working with the door closed.”
After Reinig denied Smith’s grievance, Smith escalated the
grievance to the next level to Dr. Kushner. Following a meeting with both
Reinig and Smith, Dr. Kushner denied the grievance on May 3 without
providing written reasoning for his decision.
On May 8, Reinig contacted both Dr. Kushner and Eichorn in
human resources. She requested from Eichorn that Smith be required to
12
work at home until the grievance process was finished and mediation
was completed. She explained:
The day before our meeting with Dennis, he told
another staff member that something big was coming down
and the staff member needed to keep his eyes/ears open.
Clearly, he had an expectation for the meeting that did not
materialize. He was, I believe, both hostile and angry in the
meeting, and this explains why. His behavior since then has
been very sullen. Whatever level of anger he had going into
the meeting was exacerbated by the meeting itself.
Reinig added that Smith’s hostility and anger had made her “very
uncomfortable.” She claimed he had been verbally abusive and had
“little regard for some members of the staff.” She concluded, “There’s no
clear indication that his anger would eventually translate into something
physically abusive but there’s no guarantee that it won’t, either.”
However, Reinig’s request that Smith be required to work from home was
not granted.
Two days later, on May 10, Reinig again emailed Dr. Deisinger:
I do have [a new] concern to share with you. Dennis
[Smith] and I met with our dean last Thursday (5-3) as part
of the grievance process. I believe I shared my impressions
of the meeting with you. Earlier this week, I learned from
another member of my staff that the day before this meeting,
Dennis made a statement to this effect: Something big is
going to happen. You’d better be ready. Keep your eyes and
ears open.
I suppose the comment can be interpreted many ways.
I assume he thought that I’d be seriously reprimanded at the
. . . meeting. I wasn’t so his anger was likely exacerbated.
I’ve shared the comment with my dean and our college
HR person. I’m not sure anything can be done. However, I
want to be on record with you that my unease is growing.
Dennis and I have offices in the same suite. I no longer feel
comfortable being in the suite when others are absent.
The same day, Dr. Deisinger prepared a “Critical Incident Response
Team Threat Assessment Protocol” that named Smith as the “subject”
and Reinig as the “target.” In a list of possible threats forming the basis
13
for the assessment, “physical violence” was circled with a question mark
next to it and “harassment/intimidation” was also circled. The form
indicated that Smith’s stressors included his wife’s stroke and the loss of
support from his coworkers.
Smith once again escalated the grievance by submitting it to the
ISU’s grievance committee on May 23. Upon learning of Smith’s decision
to bring the grievance to the next level, Reinig contacted Eichorn and Dr.
Deisinger. Her email stated, “Knowing [Smith] as I do, the fact that he
feels compelled to take another step will only exacerbate his anger. If he
is denied at the Provost level, which I expect, he will become angrier
still.” She went on to indicate she was “getting increasingly
uncomfortable as this moves on,” because she knew he was “getting
angrier.”
In response, Dr. Deisinger asked Reinig, “Can you describe how
you see Dennis getting angrier? What behaviors or comments contribute
to your assessment?” Dr. Deisinger went on:
I understand your view of the likelihood of Dennis’ increased
frustration/anger if a finding is not made in his favor.
However, that he continues to utilize appropriate processes
for his grievance is a good sign. If there is any variation from
that, please let me know.” Dr. Deisinger also sent an email
to a broader group (including Reinig) seeking “any
observations of [Smith’s] recent behavior, communications
and demeanor.
His email requested that replies be routed only to him. Reinig responded
with a list of concerns similar to those she had already voiced: Smith was
withdrawn, stayed mostly in his office, and was not communicating with
her in a collegial manner.
On June 1, Reinig again contacted Dr. Deisinger with additional
concerns about Smith. This time, she indicated Dieterle had “observed
significant changes in [Smith’s] behavior over the past two weeks,
14
roughly coinciding with Dean Kushner’s decision to deny the grievance.”
She said her “greatest concern” regarding Smith was that “[u]nless he is
somehow vindicated, [Smith] will become angrier as this process
continues.” Reinig added, “[Smith] will reach a breaking point and I have
grave concerns about the way it will manifest itself.” She stated that
Dr. Kushner and supervisors on her staff were “concerned about
[Smith’s] potential to become violent.”
On June 4, Reinig provided Dr. Deisinger with a copy of a memo
authored by Dieterle to her. In it, Dieterle outlined concerns about
Smith’s “detrimental influence” within ECM. Dieterle said, “Dennis has
not been consistently hostile or consistently cooperative . . . , but the
instances of negative behavior are such that his continued presence is
generally not conducive to building an environment of professional
collegiality.” Dieterle concluded by stating:
Quite frankly, my sense of unease increases greatly
with this memo: I offer these written comments with no
small degree of hesitation, fearing the risk of becoming a
direct target of retribution. I can only hope that those in the
university’s administration will sincerely appreciate the
concern this causes for me and for my family.
Dieterle later testified he prepared the document only because Reinig had
asked him to do so.
After receiving the memo on June 6, Dr. Deisinger asked a
detective to interview Dieterle. Dieterle told the detective he did not feel
physically threatened by Smith, nor did he feel Smith was going to
physically strike out. His concern rather was with Smith’s “constant
negativity.” Dr. Deisinger passed along the interview report to
Dr. Kushner, Eichorn, Reinig, and several others. In an accompanying
email, Dr. Deisinger summarized, “[I]t does not appear that there are
concerns about any specified or imminent violence. Therefore, the
15
situation continues to be primarily a personnel issue, best handled
through appropriate personnel policies and actions.”
Reinig responded privately to Dr. Deisinger, “I agree that
performance is an issue but I remain concerned that Dennis is reaching
a breaking point. The wild fluctuations in his mood clearly indicate
problems.” She requested either separate interviews for herself and
Smith before the grievance committee, or the presence of a DPS officer,
commenting, “I grow increasingly fearful for my personal safety.”6
The grievance hearing took place on June 14. Despite Reinig’s
request for separate interviews, it was decided by the hearing committee
chair and Dr. Deisinger that there was no reason both parties should not
appear at the same time so the committee “has the opportunity to obtain
as much information as it can.”
Following the hearing, the committee issued a recommendation on
June 21. It concluded that Smith’s complaint about Dieterle’s hiring was
outside the time limit for this kind of grievance, but recommended a
review of the hiring process by human resources because “several issues
came to light with regard to the hiring of Mr. Dieterle.” The committee
also criticized Reinig’s lack of follow through in managing relationships
among her subordinates.
Regarding the failure to submit Smith’s name for reclassification,
the committee initially found as follows:
The question of whether Ms. Reinig misrepresented the
potential of the 2002 reclassification of Mr. Smith appears to
be another example of the lack of communication between
Ms. Reinig and Mr. Smith. Mr. Smith appears to have been
operating under a different understanding, one that was
6Deisinger later testified that no adverse action was ever taken against Smith by
the ISU Department of Public Safety.
16
never clarified by Ms. Reinig. Given the lack of compelling
proof that Ms. Reinig “promised” Mr. Smith a reclassification
in 2002 and the fact that Mr. Smith could have requested
the reclassification himself, the hearing committee does not
find a violation or make a remedy for this issue.
....
. . . If the misrepresentation of a reclassification in
2002 was an unfortunate misunderstanding, [Reinig] has
made no effort to discuss the misunderstanding with Mr.
Smith, nor has she sought to restore their professional
relationship. This alone is evidence of very poor supervisory
judgment. However, if the misrepresentation was
intentional, Ms. Reinig’s actions are completely unethical,
and she should be subject to disciplinary action. Based on
the evidence, we cannot conclude either way.
However, the committee made additional findings on July 23 after
receiving a copy of Smith’s 2002 performance review from Smith, a
document it did not have at the time of the hearing. As noted earlier, in
the closing paragraph of this job evaluation, Reinig had indicated she
would submit a reclassification request for Smith in August 2002. After
receiving this document, the committee reasoned:
The letter is signed by Mr. Smith and Ms. Reinig and
Ms. Reinig acknowledged the signature appeared to be hers
on the document. The 2002 evaluation that Ms. Reinig
produced and maintained on her computer was a Word
document, unsigned, and did not include the highlighted
language above but otherwise included identical content.
Ms. Reinig was unable to explain the reason for these
different versions of Mr. Smith’s 2002 performance review. A
review of [the] electronic date stamp on the version on
Ms. Reinig’s computer confirmed that this particular version
had not been modified since June 28, 2002. Unfortunately,
neither party could produce the original document in their
files or in the personnel file.
The letter presents a strong likelihood that Ms. Reinig
misrepresented the promise to reclassify Mr. Smith. Absent
a plausible explanation by Ms. Reinig, the committee is left
with another example of Ms. Reinig’s very poor supervisory
judgment and very poor record-keeping. We believe she
should be subject to disciplinary action.
Following receipt of the committee’s revised recommendation, ISU’s
Executive Vice President and Provost, Elizabeth Hoffman, accepted it.
17
She ordered disciplinary action against Reinig and directed Dr. Kushner
to report back to her “when and how that disciplinary action has been
carried out.”
On August 7, ISU’s equal opportunity and diversity office
conducted a review of Dieterle’s hiring. The reviewer concluded “that the
search was not conducted according to the policies and procedures set
forth to promote consistent and fair treatment to all candidates.” She
further noted that Reinig had “recently changed the funding for Dennis
Smith’s salary from continuous funds to grant funds.”7 Smith was the
only one of Reinig’s subordinates who had been moved to grant funds or
“soft funds.” The reviewer could see no reason for moving the funding for
Smith’s position to soft funds and discounted Reinig’s explanation for
doing so. She recommended that Reinig reverse this decision.
On August 16, Smith submitted a formal written appeal of the
provost’s acceptance of the committee’s recommendation to ISU
President Gregory Geoffroy.8 This was Smith’s first communication with
ISU’s president. In his seven-page, single-spaced appeal letter, Smith
complained about not receiving backpay despite the finding that Reinig
had acted wrongfully in not getting him reclassified. Smith also
identified several acts of retaliation on the part of Reinig, including the
removal of other staff assistance from the alumni magazine, the
withdrawal of the newsletters from Smith’s portfolio, and a pay raise well
below the average raise given to others in ECM. Smith’s letter did not
mention ECM’s failure to charge CASE for work performed.
7A position supported by grant funds was in jeopardy of being eliminated,
should the funds no longer be available.
8Smith never met with President Geoffroy.
18
On August 28, Smith met with President Geoffroy’s executive
assistant. Along with his grievance issues, Smith brought up his
complaints about Reinig’s alleged financial improprieties.
President Geoffroy sent Smith a letter regarding his appeal on
September 7. His letter directed that Smith be compensated for the loss
of salary resulting from Reinig’s failure to seek a reclassification in 2002.
In the same letter, President Geoffroy noted:
Your appeal has raised other important issues that do
not fall within the scope of a grievance, such as hiring
practices and use of funds. I have decided to order an
internal audit of ECM to review compliance with law and
policy in ECM.
Smith wrote back to President Geoffroy on approximately
September 12. While his letter criticized President Geoffroy’s resolution
of his appeal as inadequate, it did not mention the allegations of financial
improprieties.9
Provost Hoffman calculated the amount of retroactive salary and
benefits with interest due to Smith at $30,033.66. This money was then
paid to Smith. Provost Hoffman further expressed concerns about
Smith’s raise for fiscal year 2007–2008. The original recommendation
had been for Smith to receive a 1.43% raise, but he had actually received
a two percent raise. Provost Hoffman noted that Reinig had received a
3.41% pay increase, and the average increase for the rest of the staff was
4.32%. Provost Hoffman indicated Dr. Kushner should “be prepared to
offer written justification for the salary increase determination for
Mr. Smith.”
9Smith sent additional letters to President Geoffroy on December 10 and
December 14 regarding his grievances, neither of which mentioned the alleged financial
improprieties.
19
Smith filed a further appeal to the board of regents on October 10,
challenging the adequacy of the remedies provided by President
Geoffroy’s ruling. In the meantime, Smith also had initiated another
grievance.10 In his appeal to the regents, Smith noted the president’s
ruling did not address his requests for separation from supervision by
Reinig, reversal of the acts of retaliation taken by Reinig during the
grievance process, and the restoration of his working relationships.
Smith also alleged Reinig had participated in fraud and forgery by
altering documents submitted during the grievance process, and he
further objected to the method of determining his 2007–2008 pay
increase. On November 21, Reinig emailed to Dieterle, “I will reiterate to
[Dr. Kushner] that [Smith’s] not just a cancer, he’s a very real threat to
personal safety.”
Around Thanksgiving, Dieterle and Dr. Kushner had a meeting in
which concerns related to Smith were discussed. Following that meeting,
Dieterle wrote a memo to Dr. Kushner that he asked to be kept
confidential. In the memo, Dieterle spoke of
[n]umerous expressions (to me personally) by two
other ECM employees of their fear of physical retaliation by
Dennis. Specifically, I recently consoled a tearful employee
who feared that the Omaha mall shootings were an example
of what could happen in ECM, referring directly to a fear of
Dennis.
Why I am concerned
Dennis has never explicitly or implicitly threatened me
or anyone else in my presence. He does, in my opinion,
consistently appear to be sullen, if not angry, and does not,
through his demeanor or actions, invite collegiality or
collaboration.
10Smith ultimately filed five grievances, which he characterized as “like Russian
nesting dolls.”
20
I have a limited degree of training (intermediate levels
of two martial arts and qualification for a concealed weapons
permit in another state) that emphasized self-defense
awareness. Based on that training, and on what I observe
here daily, I would like to be clear that I make myself
consistently aware of Dennis’ physical location in this office
and of his demeanor, and I have mentally rehearsed my
alternatives if he were to become openly threatening. How
many times have these words appeared in a news story? “He
was a loner who felt unappreciated, and was angry at his
supervisor and coworkers.” I do not intend to become the
next unwitting victim.
Dieterle acknowledged that, when he wrote this memo, Reinig was
contemplating becoming the advancement director full-time. This would
leave open the directorship of ECM. Dieterle also admitted that he and
Smith would be two logical internal candidates for the ECM director
position. Dieterle further admitted that when he wrote the memo, Reinig
was telling him that she was considering Dieterle’s wife for a stay-at-
home, free-lance, part-time position.
On December 4, Reinig again communicated with Dr. Deisinger.
This time she wrote:
The situation with Dennis Smith continues and he has
become noticeably more agitated. He spends much of his
time with his door closed engaged in loud discussions with
another colleague and, I believe, his attorney. Snatches of
these conversations are often overheard by Eric Dieterle,
whose own office is separated from Dennis’ office by a wall.
Eric believes (and will tell you so) that Dennis is obsessed to
the point of near complete irrationality. Of course, this
heightens my personal safety concerns.
I have been advised to develop a personal safety plan,
e.g., keeping pepper spray in my desk or purse, in case
Dennis confronts me in a threatening manner. I’ve also been
advised to contact your office for the quickest and most
efficient procedure to follow in the event of an emergency.
Dr. Deisinger’s handwritten note indicates that he left Reinig a phone
message warning against keeping pepper spray as a “possible violation of
[ISU] policy.”
21
In January 2008, Dr. Kushner put Reinig on administrative leave.
The internal audit revealed that improper payments had been made by
CASE to Reinig personally and that Reinig had lied about the CASE
billings. On January 16, President Geoffroy wrote Smith, informing him
that Reinig was no longer directing ECM and that Smith would not report
to her in the future. Reinig ultimately resigned in March 2008 under
threat of immediate termination. Dieterle was named interim director of
ECM, with Smith reporting to him. In July 2008, Dieterle became
permanent director of ECM.11
Smith testified that after Reinig was put on administrative leave,
“My work conditions gradually improved. The atmosphere in ECM was
much, much better.” Some but not all of Smith’s former newsletter
duties were restored. Yet he still felt the workplace was “dysfunctional.”
On April 25, Smith filed another grievance that alleged misconduct by
Dr. Kushner and Provost Hoffman. That grievance eventually escalated
to another committee hearing. The committee found no retaliation by the
dean or the provost in relation to Smith’s reporting of alleged financial
11An audit later conducted by the state auditor revealed that ECM had not
received $92,495.06 in outside payments it was due. At the same time, the state
auditor found that $58,505.08 had been improperly routed to Reinig personally and
deposited in her personal bank account.
The State argues that this audit shows a different type of irregularity than Smith
had reported. Smith’s complaint was that ECM had performed work that was not being
billed. The state auditor found that Smith’s allegation described a common practice:
“Various Departments within the University routinely provide administrative services to
professional organizations at little to no charge in order to further the cause of the
profession.” From the state auditor’s perspective, what was objectionable was that
billings had actually been generated but not sent. Even worse, Reinig had diverted
payments that should have gone to ECM to herself to the tune of $58,505.08.
However, Iowa Code section 70A.28 (2007) merely requires that “the employee
reasonably believes the information evidences a violation of law or rule,
mismanagement, [or] a gross abuse of funds.” The State does not contest that Smith
had such a reasonable belief. Nor does the State dispute that Smith’s reporting
ultimately resulted in the ISU’s uncovering Reinig’s improper receipt of outside funds.
22
misconduct or his filing of grievances. The committee also recommended
a draft of a negative 2007 performance evaluation of Smith prepared by
Reinig be removed from his file and his 2008 raise be elevated to 4.32%
to match the ECM unit average. The findings of the committee were
adopted by President Geoffroy on August 21, and the recommended
actions took place. Smith’s source of compensation was also changed
back from soft funds to hard funds.
Smith filed a further grievance on September 5. In it, he alleged
that Dieterle and others had falsely made accusations that Smith had
made threats of physical violence against his coworkers. He requested
that the ISU Department of Public Safety be ordered to look into the
allegations and that those who made false claims be disciplined
appropriately. Though he escalated the grievance, Smith was denied a
hearing because President Geoffroy determined it was “not an
appropriate matter for the grievance process,” as Smith was merely
seeking the discipline of other employees and asking for information that
had been provided by other employees with an expectation of
confidentiality.
On April 16, 2009, Smith filed a claim with the state appeal board
and, on April 17, he filed suit against ISU, the board of regents, Reinig,
Dieterle, and Dr. Kushner. The petition alleged the three named
employees had committed defamation; wrongful interference with
employment, business, and professional relationships; intentional
infliction of emotional distress; violations of Iowa Code § 70A.28(2) (2007)
(whistleblower protection statute); and conspiracy to engage in the
wrongful acts. It further alleged a breach of contract by ISU and the
board of regents.
23
In August 2008, Dr. Kushner left ISU. An interim dean took over
for a period of time. In July 2009, Dr. Jonathan Wickert became the new
dean of the College of Engineering. At the time of his appointment,
Dr. Wickert was advised of Smith’s grievance history and Smith’s
pending lawsuit against ISU and the other defendants. Shortly
thereafter, in October 2009, the College of Engineering was forced to cut
$2 million from its budget (a ten percent cut) because of midyear
deappropriations by the State. Dr. Wickert testified that he did not want
the budget cuts to affect the academic programs, and therefore he
decided the administrative units of the college would absorb the required
budget cuts. All administrative units were affected, and a total of
twenty-two positions were eliminated from the College of Engineering.
Dr. Wickert decided the ECM unit would be reduced from eleven
employees to four employees, would no longer perform outside work, and
would be retitled Engineering Communications Relations (ECR).
Dr. Wickert’s research indicated that ECM was quite large relative to the
communications departments at other comparable engineering colleges
such as Penn State, Ohio State, Texas, Illinois, and Purdue, which
typically had two, three, or four employees. He determined that the
communications unit should focus in the future exclusively on promoting
the mission of the College of Engineering. Dr. Wickert’s vision for ECR
entailed an emphasis on new types of media, branding and public
relations, and materials that would be a light and fast read.
Dieterle was kept on as the head of the new department, the other
ten positions were eliminated, and three new positions with new job
descriptions were created: web designer, digital media specialist, and
communications specialist. The existing employees, including Smith,
received a notice on May 10, 2010, that their positions would be
24
eliminated effective in August as part of a budget plan including
reorganization. All were allowed to apply for the new positions. Smith
filed an additional grievance in response to the notification he received
on May 10 that his job was being eliminated.
Dieterle worked with the human relations department in drafting
the job descriptions for the three positions in the new unit. The
communications specialist job description indicated that a majority of
the work would involve developing digital communications and web
content. A master’s degree and experience with graphic design software
were listed as “preferred” qualifications.
Dieterle, however, was not involved in the hiring decisions.
Dr. Wickert did not want him interviewing and considering people with
whom he had previously worked. Therefore, Dr. Wickert appointed a
search committee. Originally, there were fifteen candidates for the
communications specialist hire. Smith and Jessica Strawn, a coworker
in ECM, were the two finalists. The committee’s report to Dr. Wickert
praised both candidates, indicated that the committee had received very
positive references on both candidates, and noted some limitations of
each candidate. The committee observed that Strawn, unlike Smith, had
an advanced degree (an M.A. from ISU), more aptitude and experience
with web-page building and related software, and more ideas and original
thinking in her interview for advancing the College of Engineering’s
mission. Dr. Wickert ultimately decided to hire Strawn and testified he
did so because of the points cited in the search committee’s report.
Several former coworkers of Smith testified at trial that the
reorganization of ECM seemed retaliatory because that department
suffered the largest personnel reductions even though it had operated on
a cost-recovery basis. Smith testified that he did not believe the
25
reorganization was conducted as part of a good-faith effort by the college.
Smith also maintained that, although he had the minimum qualifications
for the new position, he felt the preferred qualifications were written so
as to disadvantage his candidacy. Another former coworker felt that the
reference to graphic design in the job description was intended to
disadvantage Smith, although the search committee actually listed
graphic design as a “weakness” for Strawn, the successful candidate.
Smith also believed he was more qualified than Strawn even under
the job description as written, at least “to the extent I was aware of
[Strawn’s] qualifications.” As he put it:
I certainly have infinitely—not infinitely, but considerably
more experience, not only in writing and editing, but—in
both large and smaller formats, but I’d been doing video
production for several years. I’d been working in content
management systems. And I didn’t know what her design
qualifications were. Mine are rudimentary, but as far as I
knew, so were hers.
Several months before the reorganization occurred at ECM, there
had been a January meeting attended by Dr. Wickert, Dieterle, Eichorn,
and three others concerning ECM. At the meeting, according to
handwritten notes produced at trial (Exhibit 130), there may have been
discussion of “who stays.” Six names were listed thereunder, including
Dieterle, a person who was identified as a web designer, a person who
was identified as a digital media specialist, two persons identified as
graphic designers, and a “communications specialist—Adobe products,
content management—Jessi Strawn.” On the next page, Smith and two
other employees were listed as individuals who “would consider” an early
retirement incentive program. When later questioned, Dr. Wickert did
not recall the meeting.
26
At the time of trial, Smith was still unemployed despite numerous
job applications. Because of what happened to him at ISU, Smith had to
see a psychologist starting in August 2007. Smith was diagnosed as
suffering from extreme stress and anxiety that significantly impaired his
ability to live his life happily. Smith became physically ill and light-
headed. He was not sleeping and lost weight.
Smith withdrew his claim from the state appeal board, as there
had been no action on it within six months, and filed a second lawsuit
against ISU, the board of regents, Reinig, Dieterle, and Dr. Kushner on
September 10. The second lawsuit reiterated the emotional distress and
statutory whistleblower claims and recited the state appeal board’s
failure to act. The court later consolidated the two actions.
The attorney general certified that Dieterle and Dr. Kushner were
acting within the scope of their employment with ISU and asked that the
State be substituted for them as a defendant. See

Iowa Code § 669.5

(2)(a). ISU and the board of regents also filed a motion to dismiss
the breach of contract claim, which was granted on the basis that Smith
had failed to exhaust his administrative remedies related to that claim.
Smith agreed to dismiss the individual claims against Dieterle and
Dr. Kushner and to have the State substituted for them. This resulted in
the elimination of the defamation claim and the intentional interference
with contract rights claim with respect to the actions of those two
individual defendants. See

id.

§ 669.14(4).
Prior to trial, the district court determined the whistleblower claim
under Iowa Code section 70A.28(2) was equitable in nature. However, at
the close of evidence, the parties stipulated that the jury would decide
liability on the section 70A.28(2) claim, with the court determining only
27
damages.12 Additionally, at the close of evidence, the parties stipulated
that Reinig—in addition to Dieterle and Dr. Kushner—was acting within
the scope of employment, resulting in the elimination of the defamation
and interference claims against her as well and the State’s assumption of
her remaining liability. Thus, by the time the case went to the jury, the
State was effectively the only defendant.13
The jury found for Smith on both the intentional infliction of
emotional distress and the statutory whistleblower claims. It awarded
Smith $500,000 in damages on the emotional distress claim. The court
then awarded additional damages of $784,027 on the section 70A.28(2)
claim.14 The court overruled the State’s motions for directed verdict, on
which it had reserved a ruling, as well as the State’s posttrial motions.
12In its posttrial findings of fact and conclusions of law, the district court
specifically referred to this stipulation. The State now denies there was such a
stipulation, and we have been unable to find it in the record. However, the question of
the State’s liability on the whistleblower claim was submitted to the jury, and the State
did not object to this verdict form. Also, nothing in the record indicates the verdict
would be only advisory.
Most salient to us is the dialogue that occurred when the jury sent back a
question, asking why it was not being asked to decide damages on the whistleblower
claim. The district court proposed to inform the jury that it could not provide any
additional instructions. Counsel for the State thereupon objected as follows:
I would object to providing that direction to the jury because I think they
are confused about damages and that they should be given some
guidance. My proposal is that after question number three on the
special verdict form that language be inserted to say if your answer to
question number three is yes comma, the amount of damages will be
determined by the Court.
The foregoing makes clear that the State understood the jury’s role was to determine
liability on the whistleblower claim, and the court’s was to determine damages.
13Also, the conspiracy claim had been eliminated because only one defendant
(the State) was remaining and a party cannot conspire with itself. See Basic Chems.,
Inc. v. Benson,

251 N.W.2d 220

, 233 (Iowa 1977).
14The  district court entered findings of fact and conclusions of law that were
largely taken verbatim from Smith’s submission. See Soults Farms, Inc. v. Schafer,

797 N.W.2d 92

, 97 (Iowa 2011) (discussing this practice).
28
The State appealed, challenging both recoveries. With respect to
the emotional distress claim, it argued: (1) Smith’s exclusive remedy was
in workers’ compensation, (2) the claim was the functional equivalent of
defamation and thus barred by Iowa Code section 669.14(4), (3) Smith
failed to present sufficient evidence of “outrageous” conduct to support a
jury verdict, (4) Smith failed to present sufficient evidence of severe or
extreme emotional distress, and (5) the damages awarded by the jury
were excessive. Regarding the statutory whistleblower claim, the State
urged: (1) Smith did not engage in protected conduct or, at most, the
protected conduct was limited to his communications with President
Geoffroy; (2) Smith did not lose his job or suffer other adverse work
consequences in reprisal for his communications with President
Geoffroy; (3) damages for emotional distress and harm to reputation are
not recoverable under the whistleblower statute; and (4) the award of
frontpay was speculative and inappropriate. We transferred the case to
the court of appeals.
The court of appeals upheld the intentional infliction of emotional
distress award in favor of Smith but set aside the whistleblower award.
It rejected the State’s argument that the workers’ compensation statute
foreclosed an emotional distress claim.    It further found the conduct
underlying the emotional distress claim went beyond defamation, and
therefore, that claim was not “functionally equivalent” to defamation.
The court of appeals also concluded substantial evidence supported a
finding of outrageous conduct, a rational jury could find that Smith had
experienced severe emotional distress, and the award of damages was
not excessive. However, turning to the whistleblower claim, the court of
appeals found that Smith had failed to prove a causal relationship
between his disclosures to President Geoffroy and any actions of reprisal
29
taken against him. The court stressed the wrongful conduct predated
the report to Geoffroy and continued after it, but did “not support an
inference the wrongful conduct was ‘as a reprisal for’ Smith’s disclosure
of Reinig’s possible violation of the law and ISU’s policies to Geoffroy,
especially since the ‘retaliation’ began months before Smith’s disclosure.”
Both ISU and Smith sought further review, and we granted their
applications.
II. Standard of Review.
The State contends the evidence was insufficient to support the
jury findings that it was liable for intentional infliction of emotional
distress and violations of Iowa Code section 70A.28(2).       We review a
district court’s ruling on a motion for judgment notwithstanding the
verdict for errors at law. Iowa R. App. P. 6.907; Lee v. State,

815 N.W.2d 731

, 736 (Iowa 2012). “Our role is to decide whether there was sufficient
evidence to justify submitting the case to the jury when viewing the
evidence in the light most favorable to the nonmoving party.” Van Sickle
Constr. Co. v. Wachovia Commercial Mortg., Inc.,

783 N.W.2d 684

, 687
(Iowa 2010).    To justify submitting the case to the jury, substantial
evidence must support each element of the plaintiff’s claim.

Dennis L. Smith v. Iowa State University of Science and Technology and State of Iowa ( 2014 )

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