Smith v. Smithway Motor Xpress, Inc., 89-1357

Citation464 N.W.2d 682
Decision Date19 December 1990
Docket NumberNo. 89-1357,89-1357
Parties117 Lab.Cas. P 56,528, 6 IER Cases 73 John W. SMITH, Appellee, v. SMITHWAY MOTOR XPRESS, INC., Appellant.
CourtUnited States State Supreme Court of Iowa

M. Gene Blackburn, Law Offices of M. Gene Blackburn, P.C., Fort Dodge, for appellant.

James A. McGlynn, Bottorff, Greenley & McGlynn, Webster City, for appellee.

Considered by McGIVERIN, C.J., and LARSON, SCHULTZ, CARTER, and ANDREASEN, JJ.

ANDREASEN, Justice.

This case involves the discharge of an employee in retaliation for filing a workers' compensation claim. The jury found for the employee, and awarded $33,000 compensatory and $100,000 punitive damages. This appeal and cross-appeal followed.

In June of 1985 John W. Smith (Smith) began work as a truck driver for Smithway Motor Xpress, Inc. (SMX). Smith participated in SMX's orientation program and signed for a copy of the SMX safety program. Under that program, drivers were required to report any accident as soon as possible, within two hours if physically able.

On October 3, 1985, Smith injured his back while loading his truck. Smith, who was on the road at the time, contends that he called a dispatcher at SMX within fifteen minutes and was told that no other drivers were available and that he should finish his trip if possible. SMX contends that Smith did not timely report his injury to the proper company official. According to Smith, he continued with his assigned route, reporting his injury to the dispatcher on a daily basis, until he returned home seven days later. Upon returning to his home terminal, Smith filed a formal, written report of his injury with the safety director. At that time SMX made no objection to the manner in which Smith reported the injury.

Due to his injury, Smith was hospitalized and unable to work for four months. During that time he received workers' compensation benefits. SMX did not interfere with the payment of the benefits. On February 10, 1986, Smith was released to return to work by his doctor. The next day he reported to work at SMX and was fired without explanation. When Smith subsequently applied for unemployment compensation, SMX objected, stating that Smith was terminated for failing timely to report an injury as required by the SMX safety program.

Under the SMX safety program each driver was initially credited with twelve points. For each safety violation, points were deducted according to a set schedule. Loss of all twelve points resulted in termination. Prior to his back injury, Smith had all twelve points. Despite the fact that the schedule called for a six point deduction for failure timely to report an accident, SMX claimed at the unemployment compensation hearing that it assessed twelve points against Smith for failing to report his accident to the safety director within two hours. At trial, SMX raised for the first time additional alleged reasons for firing Smith, including provisions of the Federal Motor Carriers Act and a loss of trust in Smith.

The jury found that SMX had discharged Smith in retaliation for Smith's filing of a workers' compensation claim. Both parties have appealed.

I. Trial Court's Denial of SMX's Motions.

SMX urges first that the district court erred in denying its motions for directed verdict and judgment notwithstanding the verdict. In determining this issue we view the evidence in accordance with the same principles required for review by the trial court. Slocum v. Hammond, 346 N.W.2d 485, 493 (Iowa 1984). The standard is whether there was sufficient evidence to justify submitting the question to the jury. Id. at 493. We must

view the evidence in the light most favorable to the party against whom the motions were made regardless of whether it is contradicted and every legitimate inference that may be fairly and reasonably deducted therefrom must be carried to the aid of the evidence. If ... there is substantial evidence in support of each element of plaintiff's claim, the motion ... should be denied.... Conversely, if there is no substantial evidence ... a directed verdict or judgment notwithstanding the verdict in defendant's favor is appropriate.

Id. at 494.

Here, evidence showed that Smith was fired after filing a workers' compensation claim when SMX's own safety program would call for only a deduction of six points. While Smith, as an employee at will, was subject to termination for any reason or no reason, SMX's deviation from its established program was something the jury could consider. There was also evidence that SMX's insurance director, not its personnel director, made the decision to fire Smith. There was also evidence that the personnel director advised against the discharge, predicting litigation if Smith was fired. Moreover, the insurance director conceded that the cost of paying workers' compensation benefits entered into his decision to fire Smith. This and other evidence was sufficient to justify submitting the question to the jury.

SMX claims, however, that since it did not interfere with Smith's eligibility to receive workers' compensation benefits, our previous cases dealing with retaliatory discharge do not apply. In Springer v. Weeks & Leo Co., 429 N.W.2d 558 (Iowa 1988), we first recognized that there is a cause of action for retaliatory discharge due to the filing of a workers' compensation claim. We held in Springer that if the discharge of an employee at will is in violation of public policy, the employee has a cause of action in tort against the employer. Id. at 560-61.

SMX claims that since it did not interfere with Smith's workers' compensation benefits it did not clearly violate any public policy. We disagree. The public policy involved in this case is expressed in Iowa Code section 85.18 (1985), which provides: "[n]o contract, rule, or device whatsoever shall operate to relieve the employer, in whole or in part, from any liability created by this chapter except as herein provided." We must now decide whether this policy can be violated although the employee is allowed to receive his benefits without interference. In Springer, however, we cited with approval Frampton v. Central Ind. Gas Co., 260 Ind. 249, 297 N.E.2d 425 (1973). In Frampton, the seminal case in the area of retaliatory discharge for the filing of a workers' compensation claim, the Indiana Supreme Court was faced with a situation similar to the one before us. The court, construing a statute very similar to Iowa's, stated:

[I]n order for the goals of the Act to be realized and for public policy to be effectuated, the employee must be able to exercise his right in an unfettered fashion without being subject to reprisal. If employers are permitted to penalize employees for filing workmen's compensation claims, a most important public policy will be undermined. The fear of being discharged would have a deleterious effect on the exercise of a statutory right. Employees will not file claims for justly deserved compensation--opting, instead, to continue their employment without incident. The end result, of course, is that the employer is effectively relieved of his obligation.

....

We believe the threat of discharge to be a "device" within the framework of [the statute], and hence, in clear contravention of public policy.

Id. at 252, 297 N.E.2d at 427-28.

We agree with the Indiana Supreme Court that retaliatory discharge violates public policy even if the employer does not interfere with the discharged employee's benefits. The trial court was correct in denying SMX's motions for directed verdict and judgment notwithstanding the verdict.

II. Defendant's Requested Instructions.

SMX contends that the trial court erred when it declined to give the jury certain instructions which SMX had requested. These three requested instructions all dealt with the issue of public policy. In short, they instruct that SMX had the right to fire Smith if he violated a company policy designed to protect the public. One of the requested instructions, paraphrasing 49 U.S.C.A.App. § 2505(a) (1983), specified that it is public policy to prevent motor vehicle operators from driving when the driver's ability or alertness is impaired or is likely to become so.

The trial court rejected all three instructions on the grounds that they were superfluous in light of another instruction which was as follows:

There is evidence in this case that Plaintiff was an at-will employee. An employee at-will may be terminated at any time for any reason, except if it is contrary to public policy of this state. You are instructed that it is against the public policy of the state to discharge an employee for filing a workers' compensation claim.

Under Iowa law, a court should give a requested instruction when it states a correct rule of law having application to the facts of the case and the concept is not otherwise embodied in the other instructions. Stover v. Lakeland Square Owners Ass'n, 434 N.W.2d 866, 868 (Iowa 1989). However, error in giving or refusing to give a particular instruction does not warrant reversal unless the error is prejudicial. Id.

Here the concepts expressed in SMX's requested instructions were embodied in the instructions given. While the court did not specifically instruct the jury that SMX had the right to fire Smith if Smith violated company policy, it did inform the jury that SMX could fire Smith "at any time for any reason." This obviously encompasses the situation postulated by SMX's requested instruction. We hold that SMX was not prejudiced by the court's refusal to give the requested instructions.

III. Jury Instruction on Motive.

SMX contends that the trial court erred in instructing the jury that Smith had the burden of proving that his claim for workers' compensation benefits was the "determining factor" in SMX's decision to fire Smith. SMX urges that the workers' compensation claim must be proved to be the "predominant and improper purpose" behind the firing.

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