UPDATES & ANALYSIS

Iowa Supreme Court reaffirms that unfair terminations based on personal relationships are not illegal

by Ryan Koopmans | July 12, 2013

By Ryan Koopmans

The  outcome of the “irresistible employee” case remains the same.  This morning, in Nelson v. James H. Knight DDS, P.C. the Iowa Supreme Court unanimously reaffirmed that an unfair termination is not illegal (Iowa is an at-will employment state), and that terminating an employee based on  a consensual, personal relationship (even if based on sexual attraction) does not amount to gender discrimination.

The majority opinion, written by Justice Mansfield and joined by Justices Appel, Waterman, and Zager, remains mostly unchanged (though there are additions and alterations).  But this time around, Chief Justice Cady wrote a concurring opinion to further explain his reasoning.  Perhaps responding to the media coverage of the Court’s earlier decision, Chief Justice Cady (joined by Justices Wiggins and Hecht) wrote that “challenges to defining sex discrimination in the workplace have, at times, created controversy and divisiveness, especially when decisions by courts are not fully explained or when court decisions are not fairly read and interpreted or accepted.”

And with that, the Chief Justice explained himself.   Dr. James Knight terminated long-time employee Melissa Nelson, after Knight’s wife asked him to do so.  Knight and Nelson had a developed a consensual personal relationship that extended beyond the workplace, and Knight was admittedly attracted to Nelson.  Because of that, Knight’s wife and Knight both feared that Nelson’s continued employment posed a threat to their marriage. That may be unfair, but it’s not illegal.  Chief Justice Cady summed it up this way:

The complexity of such cases is not necessarily tied to the complexity of the law as much as the complexity of human relationships and interactions with others. Nevertheless, the law does not escape some blame for the difficult nature of the issue in light of the countervailing employment-at-will doctrine, which permits employers to terminate employees for reasons personal to them, so long as the will of the employer is not discriminatory or otherwise against public policy.  This is our law in Iowa.  Thus, while the loss of a job is often devastating to an employee, and at times unfair, these considerations do not play a role under our employment-at-will doctrine, and our exceptions to this law, such as sex discrimination, are only based on the underlying discriminatory.  Of course, the unfairness is enhanced for employees when the termination results from a personal relationship with the employer because only the employee suffers the loss of a job, while the other participant in the relationship does not.  This result can make acceptance of the law even more difficult.

But as difficult (or unfair) as Nelson’s termination may seem, Chief Justice Cady ended by making clear that legislative policy (and general decisions of fairness) are not for the courts but for the legislature:

If, in fact, Congress or our legislature intended for adverse employment consequences from consensual personal relationships between employers and employees to be protected as sex discrimination, these legislative bodies can clarify or change the law to reflect such intent. In the meantime, our law and this court remains devoted to carrying out the important legislative goal of eradicating discrimination from society, but this case simply lacked the facts to establish discrimination. Without proof of sex discrimination, the employment-at-will doctrine followed in Iowa guides the outcome.

[UPDATE: For more analysis of Friday’s decision, see this post by Amanda Atherton on Nyemaster Goode’s Labor & Employment blog.]

Tags: Iowa Supreme Court Opinions