Opinion
No. 3-215 / 02-0871.
Filed June 25, 2003.
Appeal from the Iowa District Court for Lee (North) County, John G. Linn, Judge.
Parties appeal from the district court's ruling on a motion for directed verdict and decision to vacate an award in a claim for retaliatory discharge. REVERSED AND REMANDED.
Terry Loeschen, Burlington, for appellant.
Thomas J. Miller, Attorney General, and William Hill, Assistant Attorney General, for appellee.
Heard by Mahan, P.J., and Miller and Vaitheswaran, JJ.
A jury awarded damages to a correctional officer, after determining that the State discharged him in retaliation for filing a workers' compensation claim. The district court vacated the award and ordered a new trial. We conclude there was insufficient evidence to generate a jury question, and the State was entitled to a directed verdict. Accordingly, we reverse the district court's directed verdict ruling and remand for entry of a dismissal order.
I. Background Facts and Proceedings
The following facts, presented by John Newkirk, are essentially undisputed. Newkirk worked for the State of Iowa as a correctional officer at the Mount Pleasant Correctional Facility. In 1995, he injured himself on the job and began receiving workers' compensation benefits. On returning to work in early 1996, he was placed in a control room position that did not require inmate contact, in conformity with physician-imposed work restrictions.
After approximately six months in this position, Newkirk sustained another work-related injury and again began receiving workers' compensation benefits. In January 1997, a physician released him to return to work with identical restrictions. The physician noted that the restrictions would be in effect for a month, while Newkirk decided whether to undergo surgery to alleviate the pain.
On February 13, 1997, the physician issued another letter advising that Newkirk had elected to have surgery, the surgery would be scheduled for March 20, 1997, and he should be considered "totally disabled at least until three months following the operation." The physician noted that "[a] final decision regarding his disability status will be made at that time." The same day, a deputy superintendent at the Mount Pleasant Correctional Facility told Newkirk that, in light of his restrictions, the facility did not have a position for him as a correctional officer.
A few days later, Newkirk went to see Dana Readinger, a human resources assistant who had processed his workers' compensation claims. She suggested he apply for long-term disability benefits and provided him with paperwork to do so. She did not advise him that the consequence of receiving these benefits would be termination.
Newkirk and his physician completed the application. The physician noted that he expected Newkirk to recover sufficiently to perform his duties by June 20, 1997. Newkirk submitted the application to Readinger.
In the second week of June, Newkirk advised the personnel department that he would be leaving the state for a check-up and, if his recovery was as expected, he would be released to return to work. On his return, he discovered two letters waiting for him: one dated June 16, 1997 approving his claim for long term disability benefits, and another dated June 19, 1997 terminating his employment based on his receipt of these benefits. At the time, he was still receiving workers' compensation benefits.
Newkirk sued the State. He alleged he was terminated in retaliation for filing workers' compensation claims. A jury returned a verdict in his favor for $814,340.
The State filed a motion for new trial and a motion for judgment notwithstanding the verdict. In response, the district court vacated the verdict and granted a new trial. The court reasoned,
the verdict failed to administer substantial justice; the jury awarded excessive damages; the verdict was not sustained by sufficient evidence; and the verdict was contrary to the law.
A day after the order was issued, Newkirk moved to vacate it, contending his counsel had not been served with either of the State's post-trial motions. The district court found that Newkirk had not received the motions. However, the court declined to vacate its prior order, stating, "[n]othing plaintiff's counsel could have said in a resistance and memorandum would have convinced the Court otherwise." This appeal followed.
At the outset, Newkirk assails the district court's decision to ignore his non-receipt of the State's post-trial motions. We believe the case should have been resolved on the State's motion for directed verdict following the close of Newkirk's case. Therefore, we find it unnecessary to address Newkirk's procedural or substantive arguments concerning the court's post-trial rulings, and we proceed directly to the directed verdict ruling.
II. Motion for Directed Verdict
On cross-appeal, the State argues that the district court erred in denying its motion for directed verdict. In its view, Newkirk presented insufficient evidence to establish a prima facie case of termination in retaliation for filing workers' compensation claims. We agree.
Our review of a ruling on a motion for directed verdict is on error. Weyerhaeuser Co. v. Thermogas Co., 620 N.W.2d 819, 823 (Iowa 2000). Viewing the evidence in the light most favorable to the party against whom the motion was made, we ask whether there was sufficient evidence to submit the issue to the jury. Id . This requires a determination of whether the nonmoving party presented substantial evidence on each element of the claim. Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 391 (Iowa 2001). A directed verdict is appropriate if the evidence is not substantial. Id.
The jury was instructed that, to recover on his claim, Newkirk would have to establish the following:
1. Newkirk was an employee of the State.
2. The State discharged Newkirk from employment.
3. Newkirk's assertion of rights under the workers' compensation law was the determining factor in the State's decision to discharge Newkirk. (A "determining factor" need not be the main reason behind the decision. It need only be the reason which tips the scales decisively one way or the other).
4. The discharge was a proximate cause of damage to Newkirk.
5. The nature and extent of the damage.
We recognize that the question before us is not whether there was sufficient evidence to sustain the jury verdict but whether there was sufficient evidence to make out a prima facie case for the jury on the elements of the claim. See Valadez v. City of Des Moines, 324 N.W.2d 475, 478 (Iowa 1982). We cite the jury instruction as a clear articulation of those elements.
The State only takes issue with the third element, contending Newkirk did not present substantial evidence that his assertion of rights under the workers' compensation law was the determining factor in the State's termination decision.
Newkirk responds in part that "[p]rison officials and personnel officers knew he was receiving workers' compensation benefits." However, if knowledge of receipt of workers' compensation benefits were sufficient to give rise to a retaliatory discharge claim, no recipient of workers' compensation benefits could legally be terminated. See Yockey v. State, 540 N.W.2d 418, 422 (Iowa 1995) ( citing Duncan v. New York State Developmental Center, 63 N.Y.2d 128, 481 N.W.S.2d 22, 23, 470 N.E.2d 820, 823 (1984)). See also Weinzetl v. Ruan Single Source Transp. Co., 587 N.W.2d 809, 812 (Iowa Ct.App. 1998). It is clear there must be more than knowledge, such as 1) temporal proximity, 2) monetary impact, and 3) retaliatory motive.
1. Temporal Proximity. A factor that can generate a jury question in a retaliatory discharge case is the temporal proximity of the discharge and the assertion of rights under the workers' compensation laws. Springer v. Weeks and Leo Co., Inc., 429 N.W.2d 558, 562 (Iowa 1988). See also Arthur Larson Lex K. Larson, Larson's Workers' Compensation Law § 104.07[3] (2001). This proximity is lacking here. Newkirk first applied for workers' compensation benefits in 1995, more than two years before his termination. He admitted he received benefits without incident. He next applied for benefits in 1996 and again received them, with the State only contesting his request for treatment by an out-of-state physician. He continued to receive workers' compensation benefits after he filed his application for long-term disability benefits, following approval of his application, and after his termination in June 1997. There is simply insubstantial evidence of a temporal connection between Newkirk's workers' compensation claims and his discharge.
Newkirk testified he was still receiving workers' compensation benefits four months after he was fired.
2. Monetary Impact. In reaching this conclusion that there is insubstantial evidence of a temporal connection, we recognize that a retaliatory discharge claim may succeed even if an employer does not interfere with the receipt of workers' compensation benefits. See Smith v. Smithway Motor Xpress, Inc., 464 N.W.2d 682, 685 (Iowa 1990). However, in addition to the absence of a temporal connection, the record lacks substantial evidence of a monetary connection between Newkirk's workers' compensation claims and his discharge. Specifically, Newkirk was unable to show that his termination would affect the institution's workers' compensation obligation, a key component in successful retaliatory discharge lawsuits. See Smith, 464 N.W.2d at 684 (noting firing decision was made by insurance rather than personnel director, who conceded that the cost of paying workers' compensation benefits entered into his decision); Niblo v. Parr Mfg., Inc., 445 N.W.2d 351, 353 (Iowa 1989) (citing employer's statement that he was not going to pay workers' compensation or unemployment benefits and he did not believe employee's condition was work-related); Springer, 429 N.W.2d at 559 (noting plaintiff was informed by her manager that she could not resume working unless she signed a document stating her injury was not work-related); cf. Yockey, 540 N.W.2d at 421 (rejecting retaliatory discharge claim where employer paid all workers' compensation benefits due and there was no evidence that, at the time of termination, employer "would even suspect" she might later file for more benefits). Newkirk's receipt of long-term disability benefits did not eliminate the State's workers' compensation payments. To the contrary, the State continued to pay Newkirk workers' compensation benefits and, by statute, these benefits were used to reduce the obligation of the long-term disability insurance carrier. See Iowa Code § 70A.20. Additionally, Newkirk did not present substantial evidence that the termination would reduce the institution's premiums or have an adverse effect on its budget.
The insurance carrier's letter approving Newkirk's claim for long-term disability benefits specified that Newkirk's monthly disability payment would be reduced by his monthly workers' compensation payment, but would not be less than $50.00 per month. This is the amount Newkirk received.
3. Retaliatory Motive. In addition to the absence of a temporal or monetary connection between Newkirk's termination and his filing of workers' compensation claims, the record contains scant evidence of retaliatory motive. See Smith, 464 N.W.2d at 684; Niblo, 445 N.W.2d at 353; Springer, 429 N.W.2d at 559; Weinzetl, 587 N.W.2d at 811; cf. Chhim v. University of Houston, 76 S.W.3d 210, 218 (Tex.Ct.App. 2002) (considering expression of a negative attitude toward the employee's injured condition as a factor tending to establish causal connection);
Newkirk admitted that no one at the prison told him he might lose his job if he asserted his right to workers' compensation. Cf. Housing Authority v. Guerra, 963 S.W.2d 946, 950-51 (Tex.Ct.App. 1998) (noting supervisor told employee his job had just ended because anyone in workers' compensation is cut from the job). He even conceded that when he told Readinger and another staff person he might be cleared to return to work, "[t]hey both seemed very good, glad to hear the news, very optimistic about getting me back to work." He claims, however, that the absence of direct evidence of motive is not dispositive because, in his view, there was circumstantial evidence to support his case. Cf. Chhim, 76 S.W.3rd at 218 (retaliation claim may be proven by direct or circumstantial evidence).
The most compelling of this circumstantial evidence is Newkirk's testimony that he was told by Readinger to apply for long-term disability benefits but was not told that approval of his application would result in his termination. Newkirk contends a jury reasonably could have found that the institution used this long-term disability process as a pretext to fire him, knowing it could not fire him for filing workers' compensation claims.
While appealing at first blush, this argument fails as a matter of law. The issue of pretext arises in discrimination cases only after a plaintiff has made out a prima facie case. See Yockey, 540 N.W.2d at 422; cf. Randall v. Northern Milk Products, Inc., 519 N.W.2d 456, 459 (Minn.Ct.App. 1994). Once a prima facie case is made, the burden shifts to the defendant to state a legitimate, non-discriminatory reason for the termination. Id. The employee may respond by showing this reason is pretextual. Id.
In Yockey, our highest court was asked to apply this burden-shifting pretext analysis in a retaliatory discharge case. Id. The court declined to do so, in light of its holding that the plaintiff had failed to make out a prima facie case. We reach the same conclusion here. Newkirk has failed to make out a key element of his prima facie case: his "assertion of rights under the workers' compensation law was the determining factor in the State's decision to discharge" him. Therefore, we need not decide whether the reasons proffered by the State in support of termination were pretextual. For the same reason, the temporal proximity between Newkirk's receipt of long-term disability benefits and his termination is irrelevant.
This circumstantial evidence would be an important part of Newkirk's prima facie case if Newkirk were claiming that he was inappropriately discharged based on his receipt of long-term disability benefits. During trial, Newkirk sought to amend his petition to allege this claim. The district court summarily rejected it.
As circumstantial evidence of retaliatory motive, Newkirk also relies on the institution's decision not to accommodate him following his second injury. We are persuaded that this fact has no bearing on his retaliatory discharge claim. Although Newkirk was initially released to return to work following this injury, his physician's office notes revealed that Newkirk was considering surgery. Within a month of the initial release, the physician issued another letter stating Newkirk was to be deemed "totally disabled" for the next three months. The institution's decision not to find him work under these circumstances merely reflects the reality that Newkirk was unable to perform his job. Cf. Johnson v. Cargill, 984 S.W.2d 233, 235 (Tenn.Ct.App. 1999) (finding insufficient evidence to support the claim that workers who were permanently disabled from performing their jobs were given special accommodations or new assignments).
In sum, we note the absence of any direct evidence of retaliatory motive and we conclude the circumstantial evidence of retaliatory motive is insufficient as a matter of law to generate a jury question on the "determining factor" element.
III. Disposition
Newkirk did not present substantial evidence to support his claim that his filing of workers' compensation claims was the determining factor in the State's decision to discharge Newkirk. This was a key element of his prima facie case. Therefore, the State was entitled to a directed verdict. We reverse the district court's ruling on the State's motion for directed verdict and remand for entry of a dismissal order. In light of this disposition, we find it unnecessary to address the parties' remaining contentions.