Nathan Berry v. Liberty Holdings, Inc. A/K/A Liberty Ready Mix , 803 N.W.2d 106 ( 2011 )

IN THE SUPREME COURT OF IOWA
No. 10–0094
Filed September 9, 2011
NATHAN BERRY,
Appellant,
vs.
LIBERTY HOLDINGS, INC.
a/k/a LIBERTY READY MIX,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Joel D.
Novak, Judge.
An employer seeks further review of a decision by the court of
appeals reinstating a wrongful discharge claim after the district court
granted the employer’s motion to dismiss. DECISION OF COURT OF
APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.
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.
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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).
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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
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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
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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
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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
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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., 765 P.2d 373, 379 (Cal.
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 specific employment
activity from retaliation by the employer. See, e.g., Tullis v. Merrill, 584
N.W.2d 236, 239 (Iowa 1998) (finding a statute that expressly prohibited
an employer from discharging an employee for filing a claim for wages to
clearly articulate a public policy). Other statutes, although not
containing express protections, may also be a source of public policy as
long as they clearly imply the statute protects the specific employment
activity in question from employer retaliation. See, e.g., Teachout v.
Forest City Cmty. Sch. Dist., 584 N.W.2d 296, 300–01 (Iowa 1998)
(finding the forceful language of the child-abuse reporting statute
impliedly articulates a public policy); Lara v. Thomas, 512 N.W.2d 777,
782 (Iowa 1994) (finding a statute articulated a public policy such that
an employer’s retaliatory discharge conflicted with the statute’s
legislatively declared goals). Nevertheless, “legislative pronouncements
that are limited in scope may not support a public policy beyond the
specific scope of the statute.” Jasper, 764 N.W.2d at 766 (recognizing
courts cannot extend public-policy protection to areas the legislature has
not chosen to protect statutorily).
With these authorities in mind, we must determine whether Iowa’s
comparative fault statute articulates a public policy that precludes
Liberty Holdings from discharging Berry for exercising his right to file a
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personal injury lawsuit against a company under common ownership
with his employer. 1
Prior to 1982, Iowa was a contributory negligence state. See
Goetzman v. Wichern, 327 N.W.2d 742, 754 (Iowa 1982) (abandoning
contributory negligence as a complete defense to a tort claim and
adopting pure comparative negligence). In 1984 the legislature enacted
Iowa’s comparative fault statute, which codified a modified form of
comparative fault. 1984 Iowa Acts ch. 1293, §§ 1–15 (codified at Iowa
Code ch. 668); accord Reilly v. Anderson, 727 N.W.2d 102, 108 (Iowa
2006). The statute replaced the pure comparative negligence scheme we
had previously adopted. See Goetzman, 327 N.W.2d at 754.
In its description of the statute, the legislature explained the
statute’s purpose related to “liability in tort by establishing comparative
fault as the basis for liability in relation to claims for damages arising
from injury to or death of a person or harm to property.” 1984 Iowa Acts
ch. 1293 (preamble). Accordingly, the statute requires the comparison of
fault of potentially liable parties in cases of negligence, recklessness, and
strict liability. Jahn v. Hyundai Motor Co., 773 N.W.2d 550, 560 (Iowa
2009); accord Bredberg v. Pepsico, Inc., 551 N.W.2d 321, 329 (Iowa 1996)
(recognizing the comparative fault statute allows the fact finder to assign
fault to one or more parties claimed to have contributed to the plaintiff’s
injuries).
1In addition to Iowa’s comparative fault statute, the court of appeals relied on
the Iowa Constitution and court precedent to hold Berry’s right to seek judicial redress
for a wrong is a clearly defined and well-recognized public policy supporting his
wrongful discharge claim. However, at the district court and on appeal, Berry only
identified Iowa’s comparative fault statute as a source of public policy. Accordingly, the
only claim preserved for our review is whether chapter 668 articulates a public policy to
support Berry’s claim. See, e.g., Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002)
(recognizing a claim must normally be both raised and decided by the district court
before it is preserved for our review). Therefore, we will leave the question unanswered
as to whether the Iowa Constitution, other statues, rules, or our court’s precedent can
be the basis for a public policy supporting Berry’s wrongful discharge claim.
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We have said, “Iowa’s Comparative Fault Act represents a truly
comprehensive and far-ranging modification and consolidation of Iowa
tort law.” Reilly, 727 N.W.2d at 108–09 (quoting Johnson v. Junkmann,
395 N.W.2d 862, 867 (Iowa 1986)) (internal quotation marks omitted).
Chapter 668 did not create any new causes of action. Rather, it created
a set of rules under which the parties will try all tort actions when the
action involved “fault” as defined by the statute. See Iowa Code
§§ 668.1–.16. Therefore, chapter 668 more closely resembles a statute
that attempts to regulate private conduct and imposes requirements that
do not implicate public policy concerns.
The legislature did not make a policy statement in chapter 668
that implicated the health, safety, morals, or general welfare of the
citizens of this state. Cf. Teachout, 584 N.W.2d at 300–01; Lara, 512
N.W.2d at 782. The legislature also did not protect any specific activities
that indicate the presence of an underlying public policy. Cf. Teachout,
584 N.W.2d at 300–01; Lara, 512 N.W.2d at 782; Springer, 429 N.W.2d
at 560–61. Rather, by enacting chapter 668, the legislature simply
created a framework whereby the fact finder is able to assign fault to one
or more parties claimed to have contributed to a plaintiff’s injuries in
cases of negligence, recklessness, and strict liability.
Accordingly, we conclude chapter 668 does not articulate a clearly
defined and well-recognized public policy protecting the filing of a
personal injury lawsuit against an employer.
IV. Disposition.
We vacate the decision of the court of appeals and affirm the
judgment of the district court because Iowa Code chapter 668, Iowa’s
comparative fault statute, does not contain a clearly defined and well-
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recognized public policy of this state that would limit an employer’s
discretion to discharge an at-will employee.
DECISION OF COURT OF APPEALS VACATED; DISTRICT
COURT JUDGMENT AFFIRMED.
All justices concur except Mansfield, J., who takes no part.