Iowa Employment Law Blog : Iowa Employment Lawyer & Attorney : Patrick Smith : Bradshaw Fowler Proctor & Fairgrave Law Firm : Des Moines, Central IA Discrimination & Labor Law

Last week the Iowa Supreme Court issued a ruling in a pregnancy discrimination case that decided three issues significant to employers and employment litigators.  

The first issue in DeBoom v. Raining Rose, Inc. involved whether an employee must actually be pregnant at the time of a termination to be protected by the Iowa Civil Rights Act's prohibition against pregnancy discrimination.   The Plaintiff in DeBoom was terminated one week after returning from maternity leave, allegedly because of poor performance.  The Iowa Supreme Court held in a case of first impression that the ICRA's express protection of employees disabled by pregnancy extends to women "affected by pregnancy, childbirth, and other related conditions."  This includes women who have recently returned to the workplace after maternity leave.  In so ruling,  the Court followed the interpretation by many courts of the federal Pregnancy Discrimination Act (PDA), even though the language of the ICRA is different than that of the PDA.  The Court reasoned that such a broad interpretation was "necessary to effectuate the purpose of the statute." 

The crucial issue, therefore, is not whether the employee is pregnant at the time of the termination, but whether the employer was motivated by the fact of her pregnancy.  Interestingly, however, the Court cautioned that if the employer's reason for terminating plaintiff was because she decided after returning from leave to prioritize family over work, it would not constitute discrimination because of pregnancy under the ICRA.  According to the Court, "such a decision can be made by men as well as women and, therefore, is not based on the unique capacity of women to bear children so as to fall within the scope of Iowa's statute."   This is a notable distinction, especially given the fact that, under federal law, discrimination against caregivers is sometimes viewed as discrimination on the basis of sex.   (See this post for discussion of caregiver discrimination).  Employers should not interpret this cautionary note as giving them a free reign to take adverse action against new mothers returning from leave.

The second significant issue in DeBoom was whether a plaintiff is entitled to a "pretext" instruction under the ICRA.  Such an instruction tells the jury they may find that unlawful discrimination occurred if the plaintiff proves the employer's stated reason for the adverse action was not the real reason, but merely a pretext to hide discrimination.    The Court held that a pretext instruction "is required where, as here, a rational finder of fact could reasonably find the defendant's explanation false and could infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose."

While the employer's proffered reason for an adverse action is always an important issue in employment litigation, this ruling makes it more likely courts will submit these claims to the jury, even if there is little evidence of discriminatory intent beyond the supposedly false reason.  

The third important ruling in DeBoom concerns whether the jury must find that the employer's unlawful reason was "a motivating factor" in the employment decision, or "a determining factor".   While on the surface these two terms are very similar, the key is how they are defined under Iowa law.    In cases where an employee alleges wrongful discharge against public policy, the Iowa Supreme Court requires that the wrongful reason be a "determining" factor in the discharge.    A "determining" factor is a reason that tips the scales decisively one way or the other.  However, most federal courts use the term "motivating" factor in discrimination claims, which is generally defined to mean the unlawful reason played a part in the decision, but was not necessarily the only reason.    The Iowa Supreme Court ruled that "motivating" factor is the correct standard by which to instruct the jury.  

One potential side effect of the Court's ruling on the "motivating" versus "determining" factor issue is that it will encourage age discrimination plaintiffs to file in State court under the ICRA, and avoid asserting a claim under the federal Age Discrimination in Employment Act (ADEA).  Because of the U.S. Supreme Court's decision in Gross v. FBL Financial Services (discussed in a previous post here), claims under the ADEA will no longer instruct on "a motivating factor".   Under the ADEA after Gross, plaintiffs must prove age was the determining factor in the adverse action, not merely a motivating factor.

The jury in DeBoom ruled in favor of the employer, but the Iowa Supreme Court reversed and remanded for a new trial based upon the faulty jury instructions.   It will be interesting to see if the new instructions change the result when the case is tried again.

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Conventional wisdom in the world of layoffs and reductions in force has held that older workers are more at risk for layoff because they generally earn higher salaries than their younger colleagues.  However, in this downturn, employers' concern about the high cost of age bias claims may have put the jobs of younger workers more at risk. According to recent Department of Labor figures, the unemployment rate among the 24-35 age group was 9.7% in April 2009, compared with a rate of 6.4% for workers over age 55.   One year ago, those figures were 5.1% and 3.1% respectively. 

The federal Age Discrimination in Employment Act (ADEA) prohibits an employer from treating employees over the age of forty less favorably than younger employees because of their age.   To effectively defend against a claim of age bias, an employer making a lay off decision must rely upon non-age related criteria.   Using compensation as a factor is generally not advisable because pay selecting higher paid employees for lay off will generally result in more workers over forty being in the lay off pool.    For better or for worse, it appears many employers have concluded it is easier to defend an age bias claim when the last employees hired are the first ones who are let go as part of a reduction in force.

Age bias claims are little more complicated under Iowa law.  The Iowa Civil Rights Act protects any employee from age discrimination who is 18 or older.    Therefore, under Iowa law, employers must be especially vigilant to avoid using factors that are related to age when making lay off decisions--whether the age is younger or older.  

According to a recent Wall Street Journal Article ("With Jobs Scarce, Age Becomes an Issue"), older employees might also be favored because of personal circumstances that are not likely to affect as many  younger, single employees, such as children in college or a spouse's health problems. Another potential factor favoring older employees, as discussed in a a recent post here, is that the EEOC has recently issued guidelines for avoiding discrimination against employees who are caregivers.

To avoid age bias claims, or at least make them more defensible, employers may want to consider some of the following criteria when identifying employees for lay off:

1.  Use as many objective criteria as possible when evaluating employees;

2.  Avoid using salary or benefit levels as a criteria; some courts have held that the use of such criteria creates an inference of age discrimination;

3.   If performance criteria are used, determine whether existing performance data is current and relevant; consider risks and benefits of updating performance evaluations (e.g., a sudden downward change in performance might be viewed as a pretext for age discrimination)

 4.  If performance reviews are updated prior to the RIF, it is better if the reviewing manager has little or no knowledge concerning the RIF;

 5.   Consider who will make the decisions based upon the established criteria;

 6.  Stick to the criteria;

 7.  Be aware of the presence in the RIF group of “whistle-blowers” or persons about to vest pension or retiree health benefits;

 8.  Consider obligations under collective bargaining agreement or seniority system;

 9.  Consider whether “bumping” will be permitted, and if so, how it will be administered.

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An update on H1N1--the confirmed number of cases in Iowa is now 60, and perhaps growing.   That is up 17 cases since our last post on this subject two days ago.   In addition to the existing public health and employer challenges this disease presents, will a potential pandemic provide the impetus for Congress to mandate paid leave for employees? 

There are reports that Senator Edward Kennedy (D., Mass.) plans to reintroduce next month the "Healthy Families Act".  The bill would require employers with fifteen or more employees to provide at least seven paid sick days per year to full time employees.  According to The Des Moines Register, Iowa's Senators and Representatives are divided on the proposed law, which was first introduced, but not enacted, in 2007.    Existing federal law requires private employers with 50 or more employees and all public employers to provide up to twelve weeks of unpaid leave because of a serious health condition of the employee or a close family member.   However, there is no law that requires paid time off because of illness.

Opponents of the law in Iowa's delegation are concerned about the impact of another employer mandate on small business.   While no reasonable employer wants its employees to be harmed in the event of an illness, the law as it was proposed in the last Congress not only imposes the obligation of paid leave, but also provides that employees may enforce the act with a civil lawsuit. 

Interested parties should contact their Senator or Representative and let them know your views.

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As of a couple of day ago, there were 43 reported cases of swine flu--what is now being called "H1N1"--in Iowa.   

Given the continued spread of this virus, employers would be wise to develop plans to deal with H1N1 issues that could affect their employees and their workplace.   The Des Moines Register published an article today  (link here) about the choice many employees make between staying home or going to work when they are sick.    The article suggests that employees who lack paid sick leave are more likely to show up at work when they are sick, thus raising the risk of infection by co-workers and customers.

What should an employer do to protect the health of its employees and customers, while at the same time making sure to comply with employment laws?  The first step is to be informed.  The website pandemicflu.gov provides lots of helpful information and tips to stay abreast of the virus and its spread.

In addition, the EEOC has recently published two articles to assist employers in dealing with H1N1 issues.  The first, ADA Compliant Employer Preparedness for the H1N1 Flu Virus provides guidance on dealing with employee absenteeism and infection control in ways the comply with the disability discrimination laws.    According to the EEOC publication, employers are permitted to gather personal information from employees in connection with pandemic preparation so long as the employer asks broad questions that are not limited to disability related inquiries.   The EEOC even provides a sample questionnaire that complies with the ADA.   In addition, employers may implement common sense infection control procedures without implicating the ADA.

The second EEOC document, entitled Employment Discrimination and the 2009 H1N1 Flu Virus (Swine Flu), cautions employers about national origin discrimination in light of the fact that the h1N1 virus is believed to have originated in Mexico.   The publication also provided helpful links concerning pre-employment physical exams and disability related questions to employees.

We will continue to keep you posted on developments in this area.

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