Tina Lee v. State of Iowa, Polk County Clerk of Court

IN THE SUPREME COURT OF IOWA
No. 07–1879
Filed May 25, 2012
TINA LEE,
Appellee,
vs.
STATE OF IOWA, POLK COUNTY CLERK OF COURT,
Appellant.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, James M.
Richardson, Judge.
Further review of a decision by the court of appeals rejecting a
claim of sovereign immunity and affirming a district court judgment on a
jury verdict based on a claim under the Federal Family and Medical
Leave Act by an employee against the State. DECISION OF COURT OF
APPEALS VACATED; JUDGMENT OF DISTRICT COURT REVERSED;
CASE REMANDED FOR FURTHER PROCEEDINGS.
Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Deputy
Attorney General, and Grant K. Dugdale, Assistant Attorney General, for
appellant.
Paige E. Fiedler and Brooke C. Timmer of Fiedler & Timmer,
P.L.L.C., Urbandale, for appellee.
2
CADY, Chief Justice.
In this employment case, we must primarily decide whether the
State of Iowa is immune from claims under the self-care provision of the
Family and Medical Leave Act (FMLA) in state court. The district court
denied the State’s posttrial motions for a judgment notwithstanding the
verdict or a new trial asserting Eleventh Amendment sovereign immunity
after a jury awarded damages to a state employee based on a claim for
violating the Act. The Iowa Court of Appeals affirmed. On further review,
we vacate the decision of the court of appeals, reverse the judgment of
the district court, and remand for further proceedings.
I. Background Facts and Prior Proceedings.
Tina Lee worked in the office of the Polk County Clerk of Court as a
state employee. She began working for the clerk’s office in 1981 as a
full-time employee in the traffic division. Lee received positive yearly
performance evaluations throughout much of her employment and was
promoted numerous times. At the time of her termination, she held the
position of lead worker in the records department.
The employee policy handbook distributed by the office of the state
court administrator contained a section governing the various forms of
leave available to employees, including a section on family and medical
leave under the FMLA. The policy read in part:
Employees who have worked at least 12 months and at least
1,250 hours during the previous 12 months may request up
to 12 weeks of job protected leave in a fiscal year, pursuant
to provisions of the federal Family and Medical Leave Act
(FMLA) of 1993.
(Emphasis added.)
The provisions also required employees approved for FMLA leave
“due to the employee’s own serious health condition (including childbirth
3
and recovery) . . . to exhaust all paid sick leave, vacation, and comp time
before unpaid leave” would be granted. Throughout the section of the
handbook entitled “Family and Medical Leave Act (FMLA),” the leave was
described as “FMLA leave,” and the provisions repeatedly identified the
FMLA as the source of the leave. The FMLA leave provisions were in
place at all relevant times to this case.
In 1997, Lee was diagnosed with anxiety disorder.1 She
periodically took time away from work when her anxiety disorder would
lead to bouts of depression. In the fall of 2004, Lee requested FMLA
leave to cope with stress-induced anxiety brought about by family
turmoil. She submitted a completed FMLA request form on October 20,
2004, after visiting with her treating physician. The form included her
physician’s signature indicating Lee was experiencing a serious health
condition that was expected to last until November. Lee believed this
form enabled her to take time off work during the next month when she
felt it was necessary until she recovered. As a result, she left work
throughout the remainder of the month when she was unable to work
due to her medical condition. Lee previously used FMLA leave while
working at the clerk’s office to recover from neck surgery, care for her
daughter, and for surgery on both of her feet.
On November 3, 2004, Lee returned to work after having been gone
for several days. Following a meeting with her supervisor, Lee was
demoted for failing to follow absentee policies by calling in to work each
day she was absent. She was suspended for three days and asked to
surrender her key to the office. On November 8, Lee called her
supervisor because she was again unable to come to work. The following
1The parties have stipulated that Lee suffers from a serious health condition.
4
day, Lee did not report to work and did not call. On November 10, Lee’s
supervisor sent her a letter terminating her employment for job
abandonment.
Lee filed a petition against the State of Iowa in the Polk County
District Court under 29 U.S.C. § 2612(a)(1)(D) (2000), the self-care
provision of the FMLA. In its answer, the State asserted the affirmative
defense of sovereign immunity under the Eleventh Amendment of the
United States Constitution and filed a motion for summary judgment on
the same grounds. In addition to claiming its constitutionally based
immunity was not abrogated by Congress in enacting the self-care
provision of the FMLA, the State asserted summary judgment was proper
because it did not otherwise expressly waive its immunity and did not
impliedly waive its immunity by placing the FMLA provisions in its
handbook. Relying on the United States Supreme Court decision in
Nevada Department of Human Resources v. Hibbs, 538 U.S. 721, 726,
123 S. Ct. 1972, 1976, 155 L. Ed. 2d 953, 962 (2003), and the overall
purpose of the FMLA, the district court found Congress abrogated the
State’s sovereign immunity in state court by enacting the self-care leave
provisions. Consequently, the district court did not address the issue of
express or implied waiver.
The case was tried and submitted to a jury on two legal theories.
Lee claimed wrongful termination and retaliatory discharge for exercising
her rights under the FMLA. The jury ultimately returned a verdict in
favor of Lee for $165,122.
The State filed a motion requesting the court either enter a
judgment notwithstanding the verdict or grant a new trial. Lee also filed
several posttrial motions, including a motion for reinstatement of her
5
employment and other relief in the form of liquidated damages, front pay,
and attorney fees.
In the motion for judgment notwithstanding the verdict, the State
reiterated its position that Lee’s claims were barred by the State’s
constitutionally based sovereign immunity. It also argued that it neither
expressly nor constructively waived its immunity by placing the FMLA
provisions in its employee handbook and notices around the workplace.
Lee asserted the State constructively waived its immunity by failing to
inform its employees that it was retaining its immunity. Lee also argued
the State waived its immunity through its conduct in implementing the
FMLA provisions with knowledge that they were enforceable. Lee argued
that her FMLA rights would be lost without a right to sue for money
damages.
The district court denied the motion for judgment notwithstanding
the verdict. It again held Congress abrogated the State’s immunity.
Additionally, it found the State constructively waived its immunity by
placing the FMLA provisions in the handbook and posting notice of the
right to take FMLA leave. It stated:
The FMLA is explained in their personnel policies handbook
and posted in the Clerk of Court’s office. Employees are
aware that they have the right under the FMLA to take leave
for their own illnesses. Nowhere did Defendants indicate
that one specific type of leave, self-care leave, is not
permitted or that employees would have no recourse if they
were terminated or retaliated against for taking self-care
leave. Furthermore, the state employees testified they knew
it was illegal to terminate or retaliate against someone for
using FMLA leave. Thus, the State has waived any immunity
through its conduct.
The district court entered judgment against the State for the back-pay
damages as determined by the jury, in addition to reinstatement of
6
employment and benefits, front pay, liquidated damages, attorney fees,
and educational training for supervisors.
The State appealed. In a separate proceeding, we granted the
State’s motion to stay the judgment pending this appeal. We transferred
the case to the court of appeals. The court of appeals determined that
Congress validly exercised its power in Section Five of the Fourteenth
Amendment to abrogate the State’s immunity to suit under the self-care
provision of the FMLA. It further found the State impliedly waived its
immunity to suit through the actions of the executive branch in allowing
State employees FMLA leave.
The State requested further review, which we granted. We
subsequently held the case in abeyance pending a decision by the
Supreme Court of the United States in Coleman v. Court of Appeals of
Maryland, ___ U.S. ___, 132 S. Ct. 1327, ___ L. Ed. 2d ___ (2012).
II. Standard of Review.
We review a district court’s decision to deny a motion for judgment
notwithstanding the verdict for errors at law. Van Sickle Constr. Co. v.
Wachovia Commercial Mortg., Inc., 783 N.W.2d 684, 687 (Iowa 2010). In
reviewing the court’s decision, we must determine whether sufficient
evidence existed to justify submitting the case to the jury at the
conclusion of the trial. Id. We view the evidence in the light most
favorable to the nonmoving party. Id.
III. Discussion.
The Family and Medical Leave Act was enacted by Congress in
1993. Family and Medical Leave Act of 1993, Pub. L. No. 103–3, 107
Stat. 6 (1993) (codified at 29 U.S.C. ch. 28). It entitles eligible employees
to take unpaid leave from their jobs for a number of qualifying reasons
for a period of up to twelve work weeks each year with guaranteed job
7
protection. 29 U.S.C.A. § 2612(a)(1) (West, Westlaw through P.L. 112–
104 (excluding P.L. 112–96 and 112–102)).2 The first three reasons that
permit leave are typically collectively referred to as the “family-care
provisions.” They authorize a worker to take leave to care for family
members during the birth and care of a child, adoption of or foster care
of a child, or care of a spouse, child, or parent who has a “serious health
condition.” The fourth reason is referred to as the “self-care provision.”
It allows an employee to take leave due to the employee’s own “serious
health condition” that makes the employee unable to perform the
functions of his or her job.
The Act also creates a private right of action for employees to sue
employers in court for violating the law. Id. § 2617(a)(2). Both equitable
relief and money damages are available against employers who interfere
with the exercise of the rights of employees. Id. Moreover, Congress
expressly authorized employees to bring suit against any employer,
including a state or public agency, in state or federal court. Id.
2The qualifying reasons include:
(A) Because of the birth of a son or daughter of the employee and in
order to care for such son or daughter.
(B) Because of the placement of a son or daughter with the employee for
adoption or foster care.
(C) In order to care for the spouse, or a son, daughter, or parent, of the
employee, if such spouse, son, daughter, or parent has a serious health
condition.
(D) Because of a serious health condition that makes the employee
unable to perform the functions of the position of such employee.
(E) Because of any qualifying exigency (as the Secretary shall, by
regulation, determine) arising out of the fact that the spouse, or a son,
daughter, or parent of the employee is on covered active duty (or has
been notified of an impending call or order to covered active duty) in the
Armed Forces.
29 U.S.C.A. § 2612(a)(1).
8
The portion of the Act that authorizes employees to bring suit
against a state gives rise to the issues presented in this case. The
Eleventh Amendment to the United States Constitution, in part, protects
nonconsenting states from private suit in their own courts over federal
law claims. This principle is a component of the broader doctrine of
sovereign immunity. Bd. of Trs. of the Univ. of Ala. v. Garrett, 531 U.S.
356, 363, 121 S. Ct. 955, 962, 148 L. Ed. 2d 866, 877 (2001). Yet, such
immunity can be waived by consent of the state or may be abrogated by
a valid act of Congress. Id. Both doctrines are raised in this case to
support the claim brought by Lee against the State.
The parties dispute whether the State’s waiver or consent to being
sued under the FMLA can be implied from the judicial branch policies
that allow FMLA leave and whether Congress properly abrogated the
State’s immunity. The State argues it is immune from private suit in
state court unless it expressly consents. Lee acknowledges the State’s
general immunity, but asserts it waived its immunity by its conduct in
this case.
The question of sovereign immunity involves the jurisdiction of the
court to resolve disputes between private citizens and their state. See
Caleb Nelson, Sovereign Immunity as a Doctrine of Personal Jurisdiction,
115 Harv. L. Rev. 1559, 1609 (2002) (recognizing the United States
Supreme Court’s sovereign immunity jurisprudence is composed of a
hybrid of personal and subject matter jurisdiction principles). If the
State is cloaked with immunity from suit in state court from claims
under the self-care provision, injured employees are precluded from
suing for monetary relief. See Coleman, ___ U.S. at ___, 132 S. Ct. at
1350, ___ L. Ed. 2d at ___ (Ginsburg, J., dissenting).
9
A. Sovereign Immunity.
1. History and origin. At the outset, we note the current state of
the principle of sovereign immunity is complex and overall controversial.
See Jesse H. Choper & John C. Yoo, Who’s Afraid of the Eleventh
Amendment? The Limited Impact of the Court’s Sovereign Immunity
Rulings, 106 Colum. L. Rev. 213, 214 (2006) (noting “[t]he Court’s
Eleventh Amendment jurisprudence has come in for heavy scholarly
criticism”). The general notion of sovereign immunity originated from the
sixteenth-century English maxim that “the king can do no wrong.” Note,
Separation of Powers and the Discretionary Function Exception: Political
Question in Tort Litigation Against the Government, 56 Iowa L. Rev. 930,
933 (1971). In the absence of a monarchy, the principle of governmental
immunity was adopted by American courts using a different rationale,
“[T]hat there could be no legal right against the sovereign authority that
makes the law on which the right depends.” Id.
Early cases applying sovereign immunity in our country were
generally in tort. See State v. Sharp, 189 P. 631, 632 (Ariz. 1920)
(dismissing claim against state of Arizona for injuries sustained by state
employee doing construction), overruled by Stone v. Ariz. Highway
Comm’n, 381 P.2d 107, 109, 112 (Ariz. 1963); Mower v. Inhabitants of
Leicester, 9 Mass. 247, 250 (1812) (dismissing claim of private citizen
against city for injuries on city bridge). Iowa courts recognized and
applied the rule of immunity as early as 1855. Chance v. Temple, 1 Iowa
179, 201 (1855). The doctrine departed from its absolute terms in 1973,
when we determined sovereign immunity may be impliedly waived by the
State in certain cases. Kersten Co. v. Dep’t of Soc. Servs., 207 N.W.2d
117, 119 (Iowa 1973). We recognized immunity in our state courts was
“judicially created,” and as a result, the rule could be “judicially
10
renounce[ed].” Id. at 118. We subsequently affirmed the principle that
“consent to suit or waiver of sovereign immunity need not always be
restricted to legislative enactment.” State v. Dvorak, 261 N.W.2d 486,
489 (Iowa 1978). In both instances, the rule of immunity was waived
because the State had voluntarily created legal relationships with private
citizens that subjected it to liability. Id. (concluding, since the State
voluntarily became a landowner, it must accept the obligations of any
other landowner); Kersten, 207 N.W.2d at 120 (“[T]he State, by entering
into a contract, agrees to be answerable for its breach and waives its
immunity from suit to that extent.”).
Iowa was not the only state to advance the notion of government
liability for common law claims in state courts. See Backus v. State, 203
P.3d 499, 502 (Ariz. 2009) (recognizing the legislature’s intent to enact a
presumption against general governmental immunity); see also Hargrove
v. Town of Cocoa Beach, 96 So. 2d 130, 133 (Fla. 1957) (holding
municipality could be liable for negligent acts of its police officers); Pierce
v. Yakima Valley Mem’l Hosp. Ass’n, 260 P.2d 765, 774 (Wash. 1953).
Yet, until the United States Supreme Court’s decision in Alden v. Maine,
527 U.S. 706, 119 S. Ct. 2240, 144 L. Ed. 2d 636 (1999), the issue of
whether a state could be sued without its consent in its own courts for
the enforcement of federal rights was not broadly discussed. Roger C.
Hartley, Alden Trilogy: Praise and Protest, 23 Harv. J.L. & Pub. Pol’y 323,
337 (2000) [hereinafter Hartley]. In Alden, the Court recognized states
obtained their immunity from suit under federal statutes from the
structure of the Federal Constitution. Alden, 527 U.S. at 749–50, 119
S. Ct. at 2264, 144 L. Ed. 2d at 675. It reasoned the rule of immunity
was built into the Constitution to prevent “ ‘the indignity of subjecting a
State to the coercive process of judicial tribunals at the instance of
11
private parties’ . . . regardless of the forum.” Id. at 749, 119 S. Ct. at
2264, 144 L. Ed. 2d at 675 (quoting In re Ayers, 123 U.S. 443, 505, 8
S. Ct. 164, 183, 31 L. Ed. 216, 229 (1887)). The Court’s interpretation
cited historical evidence to support its focus on the importance of “state
autonomy, fiscal predictability, and political accountability” and its
corresponding disapproval of “individuals’ ability to influence the course
of government through litigation.” Hartley, 23 Harv. J.L. & Pub. Pol’y at
350. On the same day, the Court rejected the principle of constructive
waiver of sovereign immunity in federal courts as unconstitutional. Coll.
Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S.
666, 682, 119 S. Ct. 2219, 2229, 144 L. Ed. 2d 605, 620 (1999). This
backdrop frames the substantive issues presented on appeal.
2. Preservation of error. Before addressing the substantive issues,
we first consider the argument by Lee that the State failed to preserve
error because it did not allege Tenth Amendment sovereign immunity in
district court. Instead, the State alleged only Eleventh Amendment
sovereign immunity, which it asserts applies equally in state court and
federal court. Even though the district court recognized the State’s
argument as an assertion of immunity, Lee argues it was not properly
raised, and as a result, it is not preserved for our review.
In addressing the source of states’ sovereign immunity to suit
under federal statutes in state court, the United States Supreme Court
has said:
We have . . . sometimes referred to the States’ immunity
from suit as “Eleventh Amendment immunity.” The phrase
is convenient shorthand but something of a misnomer, for
the sovereign immunity of the States neither derives from,
nor is limited by, the terms of the Eleventh Amendment.
Rather, as the Constitution’s structure, its history, and the
authoritative interpretations by this Court make clear, the
States’ immunity from suit is a fundamental aspect of the
12
sovereignty which the States enjoyed before the ratification
of the Constitution, and which they retain today . . . except
as altered by the plan of the Convention or certain
constitutional Amendments.
Alden, 527 U.S. at 713, 119 S. Ct. at 2246–47, 144 L. Ed. 2d at 652. In
Alden, suit was commenced against the State of Maine in its own state
court under the Federal Fair Labor Standards Act. Id. at 711–12, 119
S. Ct. at 2246, 144 L. Ed. 2d at 651–52. The State of Maine declared it
was immune from suit under the Eleventh Amendment. Id. The United
States Supreme Court found the general principle of sovereign immunity
applied in state courts as reflected in the Eleventh Amendment. Id. at
733, 119 S. Ct. at 2256, 144 L. Ed. 2d at 665.
In this case, the argument by the State identifies the Eleventh
Amendment as the source of its defense. The substance of the State’s
argument is generally that it is immune from claims against it under the
self-care provision of the FMLA in state court. This argument is identical
to the argument made by the State of Maine in Alden, in which the
United States Supreme Court decided the Eleventh Amendment reflected
a broad constitutional principle of sovereignty that should apply both in
state and federal courts. Id.
We recognize the fundamental doctrine of appellate review that
issues must be raised in the district court before we may review them on
appeal. Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002). Yet, the
underlying purpose of our error preservation rule provides guidance to
us in determining whether an issue has been raised and decided prior to
appeal. State v. Mann, 602 N.W.2d 785, 790 (Iowa 1999). In particular,
“ ‘the requirement of error preservation gives opposing counsel notice
and an opportunity to be heard on the issue and a chance to take proper
corrective measures or pursue alternatives in the event of an adverse
13
ruling.’ ” Id. (quoting State v. Tobin, 333 N.W.2d 842, 844 (Iowa 1983)).
We will not exalt form over substance when the objectives of our error
preservation rules have been met. Id. at 791.
We find the State preserved its sovereign immunity argument. The
State generally argued it is immune from suit in its own court for claims
under the FMLA. Lee disputed this argument by asserting implied
waiver of immunity and congressional abrogation. The district court
considered both arguments in its ruling and found the State was
generally immune, but that its immunity had been abrogated by
Congress under the self-care provision of the FMLA. Nothing in the
proceedings would have been altered had the State argued the source of
its immunity differently. Because we find the objectives of the error
preservation rules are met, we proceed with merits of the appeal. We
first consider whether or not Congress abrogated sovereign immunity of
states when it enacted the self-care provision of the FMLA.
B. Congressional Abrogation of Immunity. The district court
denied the State’s claim of immunity based on its finding that Congress
abrogated the sovereign immunity of states when it enacted the self-care
provision of the FMLA and entered judgment against the State based on
the jury verdict. The State argues the judgment must be reversed
because Congress did not act pursuant to a proper grant of power under
the Federal Constitution to abrogate the State’s immunity under the
FMLA self-care provision.
The Supreme Court of the United States recently held that suits
against states under the self-care provision of the FMLA are barred by
sovereign immunity because Congress failed to validly abrogate the
states’ immunity from suit. Coleman, ___ U.S. at ___, 132 S. Ct. at 1332–
33, ___ L. Ed. 2d at ___. The Court found there was insufficient evidence
14
to show Congress enacted the self-care provision of the FMLA to enforce
the constitutional guarantees of equal protection by remedying or
preventing sex discrimination or sex stereotyping. Id. at ___, 132 S. Ct.
at 1335, ___ L. Ed. 2d at ___. Consequently, Congress has not abrogated
Iowa’s immunity from suit under the self-care provision of the FMLA, and
we turn to consider whether the State has waived that defense.
B. Consent or Waiver of Immunity. The State argues the district
court erred by finding it constructively waived immunity under the FMLA
self-care provision by informing its employees of the availability of FMLA
leave. Lee responds by further asserting the State expressly waived suit
under the self-care provision of the FMLA by enacting Iowa Code chapter
97B governing the Iowa Public Employees’ Retirement System. We
decline to address the issue of express waiver because it was not
presented to or ruled upon by the district court. See Meier, 641 N.W.2d
at 537 (“[I]ssues must ordinarily be both raised and decided by the
district court before we will decide them on appeal.”). As a result, we
proceed to address the constructive waiver arguments.
We first recognized constructive waiver of sovereign immunity in
Kersten, a case in which the State appealed from a district court decision
refusing to grant its special appearance asserting the defense of
sovereign immunity in a suit based on the alleged breach of contract
between the department of social services and a private corporation. 207
N.W.2d at 118. We departed from our prior precedent that declared only
the legislature, through an express statute, could give consent for the
State to be sued. Id. at 119. We recognized that contracts impose
corresponding obligations on parties, and we were unwilling to permit
the State to maintain it was immune from suit for breach of its
obligations. See id. at 119–20. Our court reasoned that allowing the
15
State to avoid liability for breaching a contract would ascribe “bad faith
and shoddy dealing” to a sovereign. Id. at 120. Thus, we concluded the
State waives its immunity from breach-of-contract suits by entering into
a contract. Id. at 122. Additionally, following Kersten, we held sovereign
immunity could not prevent the State from being called into state court
to accept the legal obligations and duties attendant to voluntarily
becoming a landowner. Dvorak, 261 N.W.2d at 489. The two cases
reflected our belief that the State is answerable for the legal relationships
it voluntarily creates. See Swanger v. State, 445 N.W.2d 344, 349 (Iowa
1989) (recognizing Kersten and Dvorak were premised on the State
voluntarily undertaking legal relationships). If the legislature has
developed an exclusive and comprehensive system for private suit on
particular types of claims, we have made it clear that we strictly follow
the statutory guidelines waiving the State’s immunity. Id.
Ten years after we decided Swanger, the United States Supreme
Court decided College Savings Bank, which held that conduct by a state
was insufficient to waive its constitutional right to be sovereign. 527
U.S. at 682, 119 S. Ct. at 2229, 144 L. Ed. 2d at 620. In College Savings
Bank, an agency of the State of Florida was sued by a bank in federal
court under the Lanham Act. Id. at 671, 119 S. Ct. at 2223–24, 144
L. Ed. 2d at 613. The Act provided a private cause of action for conduct
by a state involving interstate marketing and administration of a
program. Id. at 670, 119 S. Ct. at 2223, 144 L. Ed. 2d at 613. The
Court found the effort by Congress to define the conduct by states that
would constitute waiver of immunity ineffective. Id. at 681, 119 S. Ct. at
2228, 144 L. Ed. 2d at 619. The Court emphasized that sovereign
immunity was grounded in the Constitution and that the “classic
description of an effective waiver of a constitutional right is the
16
‘intentional relinquishment or abandonment of a known right or
privilege.’ ” Id. at 682, 119 S. Ct. at 2229, 144 L. Ed. 2d at 620 (quoting
Johnson v. Zerbst, 304 U.S. 458, 464, 58 S. Ct. 1019, 1023, 82 L. Ed.
1461, 1466 (1938)). Thus, the test for whether a state has waived its
sovereign immunity in federal court requires evidence of express consent
to suit, a “clear declaration” that the state intends to submit itself to
federal court jurisdiction. Id. at 676, 119 S. Ct. at 2226, 144 L. Ed. 2d at
616. Implied or constructive waiver is insufficient to waive the state’s
constitutional right. Id. at 680, 119 S. Ct. at 2228, 144 L. Ed. 2d at 619.
We applied the express waiver standard in Anthony v. State, 632
N.W.2d 897, 900 (Iowa 2001). In Anthony, state employees sued the
department of public safety for overtime pay requirements under the Fair
Labor Standards Act (FLSA). 632 N.W.2d at 899. In noting the strong
presumption of state sovereignty expressed by the Constitution, we
examined post-Alden decisions from other state courts that found
express waiver sufficient to waive immunity. Id. at 900. We applied the
broad understanding of constitutionally protected immunity reflected by
the Eleventh Amendment and confirmed by the Tenth Amendment to our
analysis and ultimately found the Iowa Wage Payment Collection Law
expressly waived the state’s immunity under the FLSA. Id. at 901–02.
We subsequently affirmed the application of these principles in Raper v.
State, 688 N.W.2d 29, 54 (Iowa 2004).
The State argues the development of our law since Kersten and
Dvorak reveals constructive waiver of sovereign immunity could not apply
under the FMLA because it was acting to implement a comprehensive
federal mandate. Instead, the State argues only express waiver could
apply under the FMLA, which Lee failed to raise.
17
We reject the argument by the State that we no longer recognize
constructive waiver of immunity. We adopted the doctrine of
constructive waiver in Kersten based on the public policy that it would be
abhorrent to permit the State to enter into contracts with no
corresponding obligation to perform its promises under the contract. The
same public policy grounds that supported the adoption of the doctrine
at that time exist today, and our constructive-waiver doctrine similarly
remains viable today despite the federal approach to limit waiver of
sovereign immunity to express waiver. Thus, we turn to examine if the
district court was correct to find constructive waiver of immunity in this
case.
The district court in this case found the judicial branch
constructively waived the State’s immunity “through its conduct.” This
conduct was identified in three ways. First, the judicial branch used its
employee handbook to inform employees of their right to take self-care
leave under the FMLA. Second, the judicial branch failed to inform the
employees they could not sue the State for money damages if they were
terminated for taking self-care leave. Third, supervising employees of the
judicial branch knew it was illegal to terminate employees for taking self-
care leave.
As to the first type of conduct identified by the district court, our
law recognizes that provisions contained in state employee handbooks
can support constructive waiver of sovereign immunity. Employee
handbooks can create contracts between employers and employees.
Anderson v. Douglas & Lomason Co., 540 N.W.2d 277, 283 (Iowa 1995).
Although the State is generally immune from suits for money damages,
see Montandon v. Hargrave Constr. Co., 256 Iowa 1297, 1299, 130
N.W.2d 659, 660 (Iowa 1964) (recognizing the general common law rule
18
of immunity), the State may constructively waive its immunity by
entering into a contract. Kersten, 207 N.W.2d at 120. Thus, if a state
employee handbook creates a contract, the State constructively waives
its immunity from suit over that contract.
Yet, Lee did not bring a breach-of-contract claim, and she never
sought to establish that the handbook created a contract.3 Thus, this
case is distinguished from Kersten because the State in that case did not
dispute the existence of a contract, but only asserted it should be
immune from suit for breach of contract.
Nevertheless, we have not confined the constructive waiver of
immunity doctrine to contracts entered into by the State, but have
applied it in other circumstances where the State voluntarily assumes
legal consequences. See Dvorak, 261 N.W.2d at 489. Thus, in addition
to conduct by the State in entering into a contract, other conduct of the
State can give rise to constructive waiver of immunity. Therefore, we
must review the findings of the district court to determine if they support
3The summary judgment record and trial record show this case was tried and
submitted to the fact finder on Lee’s claims of interference with FMLA rights and
retaliatory discharge for taking FMLA leave. The verdict, accordingly, revealed no
finding the FMLA leave provisions of the handbook created a contract. Additionally, the
district court made no such separate finding. The district court made no such finding
because the issue was never presented. Instead, the focus of the underlying claims
litigated at trial was the FMLA constituted federal law that state employers were
required to follow. The issue of implied waiver of immunity was only raised by Lee as
an alternative legal argument in response to the State’s legal defense that it was
immune from suit because Congress never intended to abrogate states’ immunity in
enacting the FMLA.
Consequently, the district court addressed Lee’s implied-waiver argument and
accepted it by concluding the conduct of the State in putting the FMLA leave provisions
in the handbook constituted implied waiver of immunity. Thus, we can only review
whether this legal conclusion by the district court was legal error based on the issues
presented by the parties. We therefore do not consider the issue of whether the
handbook was an implied contract under Iowa law, a claim not presented to the district
court.
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the legal conclusion that the State constructively waived its immunity
based on the conduct identified by the district court.
We begin our review of the district court decision with two
important legal considerations. First, under 29 C.F.R. § 825.300–
.301(a)(1) (2003), employers covered by the FMLA were required to post
notice of employees’ rights under the Act in prominent places on the
premises and in employee handbooks. Second, under the FMLA,
Congress exercised its federal supremacy powers over the states to
provide self-care leave to state employees. Thus, the states were not only
required to provide self-care leave to their employees under the FMLA, 29
U.S.C. § 2612(a)(1)(D), they were also directed to inform employees about
the self-care provisions by placing notice of the provisions in employee
handbooks. 29 C.F.R. § 825.300–.301(a)(1). Yet, Lee presented no
evidence to suggest that the inclusion of the self-care leave provisions in
the handbook was for any purpose other than to comply with the federal
regulation implementing the FMLA. It was incumbent on Lee to produce
evidence to show the State did not place the provisions in its handbook
to comply with federal law. See Race v. Iowa Elec. Light & Power Co., 257
Iowa 701, 706, 134 N.W.2d 335, 338 (Iowa 1965) (“A party having the
affirmative of a proposition is always required to prove it.”).
The district court also supported its decision by finding the State,
in implementing the FMLA through the employee handbook, failed to
inform workers that its immunity would be retained. Lee, however, had
the burden to show that the exclusion of the language was designed to
waive sovereign immunity. Again, Lee failed to produce any such
evidence.
Likewise, knowledge by judicial branch employees that it would be
illegal to terminate an employee for using FMLA leave does not tend to
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make the conduct of implementing the federal mandate voluntary.
Knowledge of the federal supremacy doctrine does not make
implementation of a federal statute prima facie proof of a voluntary offer
to pay money damages for the statute’s violation.
We conclude the district court erred as a matter of law in
concluding the State constructively waived its immunity by placing FMLA
leave provisions in its employee handbook. The circumstances of this
case are vastly different from Kersten and Dvorak and cannot support
constructive waiver of immunity protected under the constitution.
IV. Conclusion.
The cloak of immunity granted to the State precludes state
employees from suing the state for monetary relief when denied self-care
leave under the FMLA. Coleman, ___ U.S. at ___, 132 S. Ct. at 1350, ___
L. Ed. 2d at ___ (Ginsburg, dissenting). Nevertheless, states are bound to
follow the self-care provisions of the FMLA, and state employees who are
wrongfully denied self-care leave are still permitted to seek injunctive
relief against the responsible state official. Id. (citing Ex parte Young, 209
U.S. 123, 155–56, 28 S. Ct. 441, 452, 52 L. Ed. 714, 727 (1908)
(establishing proposition that suit for injunctive relief against state
official does not offend sovereign immunity)). Additionally, the U.S.
Department of Labor may bring actions for damages or an injunction on
behalf of an employee against a state for violating the self-care
provisions. See 29 U.S.C.A. § 2617(b)(2)–(3), (d).
In this case, the judgment entered by the district court was
predicated on legal error. Accordingly, the noninjunctive relief granted in
the judgment cannot stand, and we must reverse the district court. We
remand the case to the district court to determine what relief granted in
its judgment is still available to Lee within the framework of this lawsuit,
21
findings of the jury at trial, and the cloak of immunity protecting the
State. The district court shall permit the parties to be heard on this
issue and enter a new final judgment for such relief. We do not retain
jurisdiction. Costs are assessed to Lee.
DECISION OF COURT OF APPEALS VACATED; JUDGMENT OF
DISTRICT COURT REVERSED; CASE REMANDED FOR FURTHER
PROCEEDINGS.
All justices concur except Mansfield, J., who takes no part.