Berry v. Liberty Holdings Inc. A/K/A Liberty Ready Mix

• Decision Date: 09 September 2011
• Docket Number: No. 10–0094.,10–0094.
• Citation: 32 IER Cases 1511,803 N.W.2d 106
• Parties: Nathan BERRY, Appellant,v.LIBERTY HOLDINGS, INC. a/k/a Liberty Ready Mix, Appellee.
• Court: Iowa Supreme Court

803 N.W.2d 106

32 IER Cases 1511

Nathan BERRY, Appellant,

v.LIBERTY HOLDINGS, INC. a/k/a Liberty Ready Mix, Appellee.

No. 10–0094.

Supreme Court of Iowa.

Sept. 9, 2011.

Kenneth R. Munro of Munro Law Office, P.C., Des Moines, for appellant.Kerrie M. Murphy and Julie L. Tomka of Gonzalez Saggio & Harlan LLP, West Des Moines, for appellee.WIGGINS, Justice.

The sole issue in this appeal is whether Iowa Code chapter 668 (2007), Iowa's comparative fault statute, contains a clearly defined and well-recognized public policy of this state limiting an employer's discretion to discharge an at-will employee. The district court sustained an employer's motion to dismiss a wrongful discharge claim, where the employee based the wrongful discharge claim on the allegation that the employer discharged him for filing a personal injury lawsuit against a company under common ownership with his employer. Our court of appeals reversed. Because chapter 668 does not express a clearly defined and well-recognized public policy of this state that would limit an employer's discretion to discharge an at-will employee, we vacate the decision of the court of appeals and affirm the judgment of the district court.

I. Scope of Review.

We review a district court's order granting a motion to dismiss for correction of errors at law. U.S. Bank v. Barbour, 770 N.W.2d 350, 353 (Iowa 2009). In conducting our review, “[w]e view the petition in the light most favorable to the plaintiff, and will uphold dismissal only if the plaintiff's claim could not be sustained under any state of facts provable under the petition.” Griffen v. State, 767 N.W.2d 633, 634 (Iowa 2009) (quoting Sanford v. Manternach, 601 N.W.2d 360, 363 (Iowa 1999)) (internal quotation marks omitted). In testing the legal sufficiency of the petition, we accept the facts alleged in the petition as true. McGill v. Fish, 790 N.W.2d 113, 116 (Iowa 2010); Geisler v. City Council of Cedar Falls, 769 N.W.2d 162, 165 (Iowa 2009).

II. Background Facts and Proceedings.

From the facts pled in the petition, we find the following facts as true. Brent Voss is a partial owner of two companies, Liberty Holdings, Inc. and Premier Concrete Pumping, L.L.C. In 2004, Nathan Berry began working for Liberty Holdings. On June 5, 2006, a concrete pumper truck owned by Premier struck and injured Berry, who was on his way home from work. Berry filed a personal injury lawsuit against Premier for the injuries he sustained in the collision. Berry ultimately settled this claim within the policy limits of Premier's insurance coverage.

Approximately nine months after the settlement, on May 1, 2009, Liberty Holdings terminated Berry's employment. Subsequently, Berry filed suit against Liberty Holdings asserting an intentional tort claim for wrongful termination in violation of public policy. Berry alleged Liberty Holdings terminated his employment “because he engaged in the protected activity of bringing a claim for personal injury” against Premier.

In response, Liberty Holdings filed a motion to dismiss for failure to state a claim upon which relief could be granted. Liberty Holdings argued Berry failed to identify a clearly defined public policy that “protects an employee's right to file a civil lawsuit against someone other than his or her employer.” Liberty Holdings also claimed Berry failed to plead all the ultimate facts necessary to support his wrongful termination claim because Berry failed to allege in his petition that Liberty Holdings terminated him in violation of a clearly defined public policy.

In his resistance to Liberty Holdings' motion to dismiss, Berry clarified that it is clearly public policy in Iowa “to protect people from termination when they bring actions pursuant to Iowa Code chapter 668 to seek redress for personal injuries caused by the negligence of another.” In response, Liberty Holdings again argued that Berry failed to allege in his petition that he had a statutory right to file a personal injury lawsuit, and even if so pled, this right would not have qualified as a clearly defined public policy.

The district court granted Liberty Holdings' motion to dismiss. Berry filed a notice of appeal and we transferred the case to the court of appeals. The court of appeals reversed the district court's ruling and remanded the case for further proceedings. Liberty Holdings filed an application for further review, which we granted.

III. Discussion and Analysis.

A. The Intentional Tort of Wrongful Discharge. Iowa is an at-will employment state. This means that, absent a valid contract of employment, “the employment relationship is terminable by either party ‘at any time, for any reason, or no reason at all.’ ” Fitzgerald v. Salsbury Chem., Inc., 613 N.W.2d 275, 280 (Iowa 2000) (quoting Phipps v. IASD Health Servs. Corp., 558 N.W.2d 198, 202 (Iowa 1997)). Nevertheless, we have adopted a narrow public-policy exception to the general rule of at-will employment. Springer v. Weeks & Leo Co., 429 N.W.2d 558, 560 (Iowa 1988). The public-policy exception to the at-will employment doctrine limits an employer's discretion to discharge an at-will employee when the discharge would undermine a clearly defined and well-recognized public policy of the state. Jasper v. H. Nizam, Inc., 764 N.W.2d 751, 763 (Iowa 2009); accord Thompto v. Coborn's Inc., 871 F.Supp. 1097, 1112–13 (N.D.Iowa 1994) (recognizing the public-policy exception is based on the theory “that the law should not allow employees to be fired for reasons that violate public policy”). Accordingly, an at-will employee has a cause of action for wrongful discharge when the reasons for the discharge violate a clearly defined and well-recognized public policy. Jasper, 764 N.W.2d at 761.

To prevail on an intentional tort claim of wrongful discharge from employment in violation of public policy, an at-will employee must establish the following elements: (1) the existence of a clearly defined and well-recognized public policy that protects the employee's activity; (2) this public policy would be undermined by the employee's discharge from employment; (3) the employee engaged in the protected activity, and this conduct was the reason the employer discharged the employee; and (4) the employer had no overriding business justification for the discharge. Lloyd v. Drake Univ., 686 N.W.2d 225, 228 (Iowa 2004); Davis v. Horton, 661 N.W.2d 533, 535–36 (Iowa 2003). If the employee succeeds in establishing the claim, he or she is entitled to recover both personal injury and property damage. Jasper, 764 N.W.2d at 769–70.

B. Presence of a Clearly Defined and Well–Recognized Public Policy. For Berry to succeed on his claim of wrongful discharge, he must identify a clearly defined and well-recognized public policy that would be undermined by his termination from employment. See Lloyd, 686 N.W.2d at 229; Fitzgerald, 613 N.W.2d at 282. Berry identifies chapter 668, Iowa's comparative fault statute, which he claims serves as a source for the public policy of protecting employees from termination when they seek legal redress for personal injuries caused by the negligence of another. See, e.g., Jasper, 764 N.W.2d at 762 (recognizing one category of cases where we have found a violation of public policy to support a wrongful discharge claim is where the employee is discharged for exercising a statutory right or privilege).

Though difficult to define, we have stated the concept of public policy “generally captures the communal conscience and common sense of our state in matters of public health, safety, morals, and general welfare.” Id. at 761; accord Thompto, 871 F.Supp. at 1117 (recognizing public policy consists of matters that are fundamental to citizens' social rights, duties, and responsibilities). Statutes are the main sources we have relied upon when identifying public policies to support a wrongful discharge claim. Jasper, 764 N.W.2d at 762; Harvey v. Care Initiatives, Inc., 634 N.W.2d 681, 685 (Iowa 2001). We have also recognized that our constitution and administrative regulations may serve as proper sources of public policy. Jasper, 764 N.W.2d at 763–64. Conversely, we have consistently refused to recognize the existence of alleged public policies based in general and vague concepts of socially desirable conduct, internal employment policies, or private interests. Id. at 762, 765; Lloyd, 686 N.W.2d at 230.

The statute relied upon must relate to the public health, safety, or welfare and embody a clearly defined and well-recognized public policy that protects the employee's activity. Jasper, 764 N.W.2d at 763–64; see also Davis, 661 N.W.2d at 536 (recognizing, when identifying public policy, “we proceed cautiously and will only extend such recognition to those policies that are well-recognized and clearly defined”). Stated another way, the source from which an employee seeks to derive a public policy “must affect a public interest so that the tort advances general social policies, not ... individual interests.” Jasper, 764 N.W.2d at 766.

Even if an employee identifies a statute as an alleged source of public policy, it does not necessarily follow that the statute supports a wrongful discharge claim. Id. at 765. We have recognized that

“many statutes simply regulate conduct between private individuals, or impose requirements whose fulfillment does not implicate fundamental public policy concerns.” The difficult task for courts is to determine which claims involve public policy and which claims involve private disputes between employers and employees governed by the at-will employment doctrine.

Id. (quoting Foley v. Interactive Data Corp., 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373, 379 (1988)).

In making this determination, we examine whether the claimed policy deals with a clear and well-recognized public interest, as opposed to mere individual interests. Id. Some statutes serve as fundamental sources of public policy by expressly protecting a...