Lara v. Thomas, 92-1936

Citation512 N.W.2d 777
Decision Date23 February 1994
Docket NumberNo. 92-1936,92-1936
Parties127 Lab.Cas. P 33,066, 1 Wage & Hour Cas.2d (BNA) 1475 Rebecca LARA, Appellee, v. Charles THOMAS, d/b/a Fort Dodge Animal Hospital, Appellant.
CourtUnited States State Supreme Court of Iowa

Christopher R. Pose of Connolly, O'Malley, Lillis, Hansen & Olson, Des Moines, for appellant.

Richard M. LaJeunesse of Hansel & LaJeunesse, Des Moines, for appellee.



Plaintiff brought suit against former employer claiming violations of state and federal wage payment laws and employment discrimination laws, tortious discharge, fraudulent misrepresentation, and slander. Following a jury trial, judgments were entered by the court awarding compensatory and punitive damages based on wage payment violations, tortious discharge, misrepresentation, and slander. Upon the filing of posttrial motions, the court modified the judgments. Defendant appeals and plaintiff cross-appeals.

On appeal defendant claims that (1) the trial court erred in recognizing a cause of action for tortious discharge in violation of public policy; (2) the damages awarded for tortious discharge and misrepresentation were duplicative and excessive; (3) the court erred in awarding punitive damages; (4) the defendant's statements were not slanderous per se and defendant established his defense of privilege; (5) the damages for slander were unsupported by the evidence; and (6) the attorney fee award was excessive.

Plaintiff cross-appeals claiming that the court erred in (1) determining the damages for tortious discharge and misrepresentation were duplicative; (2) failing to find defendant discriminated on the basis of sex; (3) concluding defendant did not misrepresent an agreement for increased wages and benefits; and (4) denying the full award of attorney fees. We affirm.

I. Background.

Rebecca Lara (Lara) was employed by the defendant, Charles Thomas d/b/a Fort Dodge Animal Hospital (Thomas), between April 1984 and March 24, 1990. At the commencement of her employment Lara's duties consisted of caring for animals in the kennels and helping at the reception desk. Later Lara learned and began to perform many of the duties of a veterinary assistant. While her duties increased, her wages did not. Lara was initially paid a wage of $3.00 per hour and received no overtime pay or other benefits. Her wages at all times were less than the minimum wage. From late 1989 until the termination of her employment in March of 1990, she received $3.35 per hour with no overtime pay or benefits. Other female employees were paid the same salary.

During the years Lara worked for Thomas, he employed just two men. Jim McGaffin, a veterinary technician, was paid $6.25 per hour with overtime pay and other benefits. A short-term employee, Matt Zabel, who broke horses and did odd jobs was paid over $4.00 per hour.

In 1987 Lara asked Thomas for an increase in wages and benefits. Lara alleged that in 1989 Thomas agreed to double her salary of $3.35 per hour and to provide her with insurance benefits and paid vacations. She also alleged he promised her continued employment until his retirement. According to Lara the increase was to begin January 1, 1990; however, Thomas failed to honor the agreement. Instead, she stated he reduced her hours in early January.

As a result of the reduction in work hours, Lara applied for partial unemployment benefits in early February. Shortly after she began receiving benefits, Lara claimed Thomas began committing various acts of retaliation. Thomas discharged Lara on March 24, 1990. After her termination Lara alleged the retaliation continued.

In July 1990 Lara filed this action claiming violations of the federal Fair Labor Standards Act and the Iowa wage payment laws, violations of the federal Equal Pay Act and the Iowa Unfair Employment Practices Act, fraudulent misrepresentation of wage obligations, misrepresentation of an agreement for higher wages and benefits, misrepresentation of an agreement for continued employment, tortious discharge for filing of an unemployment benefit claim, and damages from certain slanderous statements.

The jury found that Thomas had violated minimum wage and overtime laws and awarded Lara actual damages in the amount of the underpayment. The jury further found that Thomas misrepresented the conditions of employment and awarded compensatory damages as well as punitive damages of $7,500. On the tortious discharge claim the jury determined Thomas had wrongfully discharged Lara in violation of public policy and awarded $10,000 actual damages and $15,000 punitive damages. The jury also found in Lara's favor on the slander claim and awarded $10,000 general damages and $7,500 punitive damages. Finally, the jury rejected Lara's claims of equal pay violations and misrepresentation of an agreement for wages and benefits.

Thomas subsequently filed a motion for a judgment notwithstanding the verdict and a new trial. See Iowa R.Civ.P. 243, 244. In his motion Thomas raised a variety of challenges to the damage awards. He also challenged the recognition of a new cause of action for tortious discharge and the sufficiency of evidence on the misrepresentation and slander claims.

In its ruling on the motion the court held that the discharge of an employee based on the filing of a partial unemployment benefit claim was in violation of a recognized public policy. However, the court set aside the punitive damage award of $15,000 because retaliatory discharge for filing an unemployment claim had not been previously recognized in Iowa. The court determined the awards for tortious discharge and misrepresentation of employment conditions were duplicative and set aside the $6,500 award for actual damages on the misrepresentation claims. The court also upheld the jury awards for general and punitive damages on the slander claims.

Following the court's order on Thomas' motion for a judgment n.o.v. and a new trial, Lara filed a motion to reconsider its order and a motion to amend its findings and conclusions and to modify its decree. See Iowa R.Civ.P. 179(b). The court rejected Lara's claims of equal pay violations and reaffirmed its conclusion that the damage awards for tortious discharge and fraudulent misrepresentation were duplicative. The court then entered its judgment, awarded Lara statutory liquidated damages equal to the wage underpayment, and attorney fees in the amount of $14,560. See Iowa Code §§ 91A.2(6), 91A.8 (1989); 29 U.S.C. § 216(b) (1965). Lara then filed a second motion to reconsider the amount of the attorney fee award and her claim of sex discrimination. The court overruled the motion and this appeal followed.

Our review is for correction of errors at law. Iowa R.App.P. 4. We view the evidence in the light most favorable to the jury's verdict. Snipes v. Chicago Cent. & Pac. R.R. Co., 484 N.W.2d 162, 165 (Iowa 1992). In reviewing rulings made on a motion for judgment n.o.v. we simply ask if there is substantial evidence to generate a jury question. Jackson v. State Bank of Wapello, 488 N.W.2d 151, 155 (Iowa 1992). When ruling upon a motion for a new trial, the trial court has broad but not unlimited discretion in determining whether the verdict does substantial justice between the parties. Cowan v. Flannery, 461 N.W.2d 155, 157 (Iowa 1990).

II. Tortious Discharge.

The jury concluded Thomas discharged Lara in retaliation for her claim for partial unemployment benefits. See Iowa Code § 96.15. On appeal Thomas argues that such a discharge, even if retaliatory, does not fall within the narrow exceptions to the employment at-will doctrine.

We have recognized two exceptions to the common law doctrine that an employer may discharge an at-will employee at any time for any reason or no reason. French v Foods, Inc., 495 N.W.2d 768, 769-70 (Iowa 1993). This case involves one of the exceptions, tortious discharge in violation of public policy. An employer may be liable in tort for the retaliatory discharge of an employee when the discharge violates a clearly expressed public policy of this state. Springer v. Weeks & Leo Co., 429 N.W.2d 558, 560-61 (Iowa 1988).

Under the public policy exception we have recognized causes of action for tortious discharge where an employer's retaliatory discharge would conflict with certain legislatively declared goals. In Springer, for example, we held the discharge of an employee who sought workers' compensation benefits violated public policy as set forth in the statutory scheme. Id.; see also Smith v. Smithway Motor Xpress, Inc., 464 N.W.2d 682, 686 (Iowa 1990) (retaliatory discharge violates public policy even if employer does not interfere with employee's receipt of workers' compensation benefits); Wilcox v. Hy-Vee Food Stores, Inc., 458 N.W.2d 870, 872 (Iowa App.1990) (retaliatory discharge of employee who refused to take a polygraph test violates public policy).

In the area of employment security the legislature has declared that "[e]conomic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state." Iowa Code § 96.2. Iowa Code section 96.15(1) provides:

Any agreement by an individual to waive, release, or commute the individual's rights to benefits or any other rights under this chapter shall be void. Any agreement by any individual in the employ of any person or concern to pay all or any portion of an employer's contributions ... shall be void. No employer shall directly or indirectly make or require or accept any deduction from wages to finance the employer's contributions ... or require or accept any waiver of any right hereunder by any individual in the employer's employ. Any employer or officer or agent of an employer who violates any provision of this subsection shall, for each offense, be guilty of a serious misdemeanor.

The record contains substantial evidence from which the jury found that...

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