UPDATES & ANALYSIS

Iowa Supreme Court sets new standard in employment discrimination cases

by Rox Laird | June 12, 2019

The Iowa Supreme Court on June 7 reversed a $4.5 million jury verdict in an employment discrimination suit, and sent the case back for retrial with a new standard to be used in jury instructions that could give the defendant a new defense.

Gregory Hawkins, a 39-year employee of the Grinnell Regional Medical Center, sued the hospital after he claimed he was fired based on his age and having had cancer surgery and treatment. The hospital responded that Hawkins was terminated due to poor work performance.

The jury returned a verdict for Hawkins, awarding $4.5 million in back pay and for emotional distress, and the judge, upon Hawkins’ later motion, added $856,954 in front pay and attorney fees.

In its unanimous decision in Hawkins v. Grinnell Regional Medical Center written by Justice David Wiggins, the Court held that the trial court erred in admitting hearsay evidence, which the justices said was introduced without foundation, was not subject to cross-examination, and was “inflammatory and prejudicial.” Finding the hearsay issue dispositive, the Court did not address the other issues the hospital raised on appeal, such as impermissible and prejudicial closing argument, and excessiveness of the verdict for emotional distress damages.

The Court, however, did address a specific jury instruction issue, noting it could come up upon retrial. The Court adopted a new standard for cases where an employee claims discrimination was a motivating factor in his or her firing, allowing the employer to offer evidence that it would have made the same decision to terminate the employee, even if discrimination was not a motivating factor.

The decision brings Iowa more in line with the federal Civil Rights Act, which permits an employer to argue that it would have made the same decision to fire an employee “in the absence of the impermissible motivating factor” of illegal discrimination.

Although Iowa’s Civil Rights Act does not contain the same language, Wiggins wrote, and the Iowa Supreme Court has not previously read the Iowa Act as “alleviating liability from an employer that engages in the prohibited conduct but demonstrates it would have made the same decision in the absence of the impermissible motivating factor.”

“We have mentioned the same-decision defense in dicta” in a number of decisions, Wiggins wrote. But, “In none of those cases did we actually apply the same-decision defense.” And, in a footnote, he added: “That we mentioned the same-decision defense in these cases could be seen as an endorsement of the defense. However, that we never actually applied the defense under the ICRA is telling.”

The Court, however, recently adopted a lower standard of proof for a plaintiff in employment discrimination cases, moving from discrimination as a “determining factor” to a “motivating factor,” in Haskenhoff v. Homeland Energy Solutions (2017). It now has taken the next step in providing employer defendants an additional defense.

“Although we have said it only in dicta, we believe that under the [Iowa Civil Rights Act] an employer should be entitled to the same-decision affirmative defense because we have adopted the motivating-factor test for causation in ICRA discrimination cases,” Wiggins wrote. “This will allow an employer to avoid damages liability when the employee proves by a preponderance of the evidence that the discrimination was a motivating factor in the employer’s actions.”

Nyemaster Goode, P.C. attorneys Randall E. Armentrout, Mary E. Funk, Debra Hulett, and David Bower represented Appellants Grinnell Regional Medical Center and Debra Nowachek on appeal.

Tags: Iowa Supreme Court, Iowa Supreme Court 2018-19, Iowa Supreme Court Opinions