CHARLOTTE STEVENS, f/k/a CHARLOTTE JOHNSON, Plaintiff-Appellant, vs. RACING ASSOCIATION OF CENTRAL IOWA, d/b/a PRAIRIE MEADOWS, Defendant-Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 9-693 / 08-1899
Filed November 25, 2009
CHARLOTTE STEVENS, f/k/a
CHARLOTTE JOHNSON,
Plaintiff-Appellant,
vs.
RACING ASSOCIATION OF CENTRAL IOWA,
d/b/a PRAIRIE MEADOWS,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Robert J. Blink,
Judge.
Plaintiff appeals the district court‟s grant of summary judgment to
defendant on her claim of wrongful discharge. AFFIRMED.
Thomas A. Newkirk and Katie Ervin Carlson of Newkirk Law Firm, P.L.C.,
Des Moines, for appellant.
Mark McCormick, James R. Swanger, Michael R. Reck, William B.
Ortman, and Kelsie Knowles of Belin Lamson McCormick Zumbach Flynn, P.C.,
Des Moines, for appellee.
Heard by Vaitheswaran, P.J., Potterfield, J., and Mahan, S.J.*
*Senior Judge assigned by order pursuant to Iowa Code section 602.9206 (2009).
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MAHAN, S.J.
I.
Background Facts & Proceedings
Charlotte Stevens was employed at Prairie Meadows Racetrack and
Casino as a surveillance agent. On June 15, 2005, she sent the following e-mail
to the Internal Audit Director for Prairie Meadows, Rick Gilson:
I think you should check out some things that are going on
from the Surveillance Department.
The Surv. SOPs [Standard Operating Procedures] were
copied from Lakeside Casino, Lakeside said it was theft. John
Titus was given a dual rate position, and a few of us didn‟t even see
it posted on the board. I think it was a Bribe.
Gilson responded by asking Stevens for additional details about the
alleged bribe. Stevens e-mailed back:
Rick, I do know some, but that is why I contacted you to find
out all the details. I was hoping that you or DCI [Division of
Criminal Investigation] would look into the whole incident. I relies
[sic] that everyone can take it in a different way. In my opinion it
was Ray Maurer, Director of Surveillance, that made the offer, and
John excepted [sic] it. He wanted John to KEEP QUIT [sic] about
the incident, and he is trying to cover it up. Our HR [Human
Resources] department will not help any of us. I wanted to give you
one last chance to investigate this, because I thought you wanted
to keep the integrity of Prairie Meadows clear of Corruption,
because it was part of your job, and this is just one of many.
Gilson contacted Lakeside Casino, subsequently known as Terrible‟s
Casino. He was informed Terrible‟s was aware Prairie Meadows had their SOPs
and was not concerned about it. Gilson was unable to determine how Prairie
Meadows obtained the SOPs, but pointed out they may very well have been
given voluntarily. He found no evidence of theft.
Gilson determined Titus had been promoted to a dual rate employee in
March 2005. This meant that when all other supervisors were absent, Titus
3
would act as a supervisor and receive a pay increase for that time. When Gilson
checked in June 2005, Titus had never actually acted as a supervisor. Titus had
previously been in a disagreement with a supervisor about the grammar in a
report. He stated his promotion to a dual rate position was completely separate
from the grammar dispute, and he had not received a bribe.
The Director of Human Resources, Dan Byers, asked Stevens to his office
to discuss her accusation of bribery. Stevens refused to answer any questions.
Byers told her she needed to cooperate with the investigation or she would be
terminated, and gave her until the next day to comply. According to Stevens‟s
notes taken at the time, she replied as follows:
I heard about John‟s promotion from other Agents in the
Surveillance room. Todd & Dell were discussing the fact that John
T. had been promoted to Dual Rate Leads on day. And then I said
that Ray & George were talking about it in the smoke side of the
Break room, and that several other employees from different
departments were in there. I said they talk alot in the smoke room.
Dan asked if I had asked Nora or Ray or George or Todd why John
had been promoted. I said NO. I hadn‟t seen much of Nora and
that Ray never talked to me, and Todd and swing shift had asked
each other why? Did John get this promotion. But I never came
right out and asked him. Dan, why not? Todd told every body that
he didn‟t understand and he didn‟t know why. Dan asked why I
would use the word Bribe. I said maybe that wasn‟t the right word
to use but I couldn‟t think of any other word. Me to Dan, what word
would you have used? He didn‟t answer me. But why would I just
assume that it was a bribe? I said I listened to every body talk
about it and I just thought it sounded like a bribe to me.
Byers was convinced there was no evidence of a bribe.
Stevens was discharged from her employment with Prairie Meadows for
violating the mutual respect policy and the conduct policy by these actions: (1)
making false statements; (2) spreading false, embarrassing, or harmful
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information about another employee; (3) careless or negligent behavior that
could cause harm to another employee; and (4) conduct contrary to accepted
standards of morality or decency.
Stevens filed a claim of wrongful discharge in violation of public policy.
She asserts that under gaming regulations she was required to immediately
report to the Iowa Racing and Gaming Commission any known irregularities
involving racing and gaming. She claimed she was engaged in protected activity
that furthered an important public policy—maintaining the integrity of the gaming
industry.
Prairie Meadows filed a motion for summary judgment. The district court
determined the National Labor Relations Act did not apply, and the action could
be heard in Iowa.1
The court also found Stevens “failed to show a well
recognized and clearly defined public policy exists for the reporting of
wrongdoing, irregularities, and other violations in the racing and gaming
industry.” The court concluded Stevens could not show her termination violated
public policy. The court granted Prairie Meadows‟ motion for summary judgment.
Stevens appeals.
II.
Standard of Review
We review the district court‟s ruling on a motion for summary judgment for
the correction of errors at law. See Iowa R. App. P. 6.4. Summary judgment is
appropriate only when there are no genuine issues of material fact and the
1
On appeal, Prairie Meadow argues the district court and this court lack jurisdiction
because Stevens‟s state-law claim is preempted by the National Labor Relations Act,
and should have been filed before the National Labor Relations Board. Based on our
resolution of the issues in this case, we do not need to address this issue.
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moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 1.981(3);
Kistler v. City of Perry, 719 N.W.2d 804, 805 (Iowa 2006). A court should view
the record in the light most favorable to the non-moving party. Kern v. Palmer
College of Chiropractic, 757 N.W.2d 651, 657 (Iowa 2008).
In determining
whether there is a genuine issue of material fact, the court affords the nonmoving party every legitimate inference the record will bear. Id.
III.
Merits
Generally, an at-will employee may be discharged for any lawful reason,
or for no reason at all. Lloyd v. Drake Univ., 686 N.W.2d 225, 228 (Iowa 2004).
An at-will employee, however, may not be discharged for reasons contrary to
public policy. Teachout v. Forest City Cmty. Sch. Dist., 584 N.W.2d 296, 299
(Iowa 1998).
An action for the tort of wrongful discharge exists when a protected
activity has been recognized through the implementation of an
underlying public policy that would be undermined if an employee
were discharged from employment for engaging in that activity.
Davis v. Horton, 661 N.W.2d 533, 535 (Iowa 2003).
A party bringing an action for wrongful discharge based on public policy
must establish the following factors:
1.
The existence of a clearly defined public policy that protects
an activity.
2.
This policy would be undermined by a discharge from
employment.
3.
The challenged discharge was the result of participating in
the protected activity.
4.
There was a lack of other justification for the termination.
Jasper v. H. Nizam, Inc., 764 N.W.2d 751, 761 (Iowa 2009).
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The issue of the existence of a clearly defined public policy is a question
of law for the court to resolve. Lloyd, 686 N.W.2d at 229. This issue is generally
capable of being resolved through a motion for summary judgment. Fitzgerald v.
Salsbury Chem., Inc., 613 N.W.2d 275, 282 (Iowa 2000).
The district court
granted summary judgment to Prairie Meadows, finding Stevens had failed to
establish the first factor, “a clearly defined public policy that protects an activity.”
A plaintiff must show he or she was discharged for engaging in a wellrecognized and defined public policy of the state. Teachout, 584 N.W.2d at 300.
“The concept of public policy generally captures the communal conscience and
common sense of our state in matters of public health, safety, morals, and
general welfare.”
Jasper, 764 N.W.2d at 761.
Public policies that are too
generalized will not support an exception to the at-will doctrine.
Lloyd, 686
N.W.2d 230.
The court proceeds cautiously in recognizing public policies that provide
such an exception.
Davis, 661 N.W.2d at 536.
The public policy must be
“weighty enough „to overcome the employer‟s interest in operating its business in
the manner it sees fit,‟ which we have long and vigorously protected.” Lloyd, 686
N.W.2d at 229 (citation omitted).
We must carefully balance the competing
interests of the employee, employer, and society. Fitzgerald, 613 N.W.2d at 283.
A statute or administrative regulation may provide the source of public
policy. Jasper, 764 N.W.2d at 764. “The administrative regulation must not only
relate to public health, safety, or welfare, but the regulation must also express a
substantial public policy in a way that furthers a specific legislative expression of
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the policy.” Id. Protected activities include: (1) exercising a statutory right or
privilege, (2) refusing to commit an unlawful act, (3) performing a statutory
obligation, or (4) reporting a statutory obligation. Id. at 762.
Iowa Code sections 99D.7 and 99F.4 (2007) authorize the Iowa Racing
and Gaming Commission to adopt administrative rules. Stevens‟s public policy
claims are based on these administrative rules. All employees of a racing and
gaming facility are required to be licensed by the Iowa Racing and Gaming
Commission. Iowa Admin. Code r. 491-6.2. A licensee must “report immediately
to the commission representative any known irregularities or wrongdoing
involving racing or gaming and to cooperate in subsequent investigations.” Iowa
Admin. Code r. 491-6.4(2). An employee‟s license may be subject to revocation
if the employee has been involved in any fraudulent or corrupt practices. Iowa
Admin. Code r. 491-6.5(3).
Stevens asserts she was required under these administrative rules to
report all fraudulent or corrupt practices, and should not have been terminated for
reporting alleged incidents of bribery and theft. The district court found, “There is
no express language in any of the authority offered by Plaintiff that shows a clear
public policy in favor of reporting wrongdoing, irregularities, and other violations
in the racing and gaming industry.” The court pointed out that there were no
sanctions in the administrative rules for failure to make a report.
The court
concluded the administrative rules did not provide a clear and distinct public
policy.
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We find no error in the district court‟s assessment.
In Teachout, 584
N.W.2d at 300, an employee claimed she was terminated in violation of public
policy for reporting child abuse. The Iowa Supreme Court noted that section
232.73 provided immunity to a person making a child abuse report in good faith,
and that failure to report suspected child abuse is a simple misdemeanor under
section 232.75.
Teachout, 584 N.W.2d at 300.
The court concluded, “the
forceful language of the statute articulates a well-recognized and defined public
policy of Iowa from which such protection can be implied.” Id. at 301.
Similarly, in George, 762 N.W.2d at 866, an employee claimed his
discharge violated public policy because he had been discharged for reporting
the employer‟s failure to follow the Iowa Occupation Safety and Health Act,
chapter 88. The court found a clear and defined public policy, noting, “[t]he first
factor is satisfied by the public policy set forth in Iowa Code section 88.9(3),
which states, „[a] person shall not discharge . . . an employee because the
employee has filed a complaint . . . under . . . this chapter.‟” George, 762 N.W.2d
at 871-72.
Also, in a wrongful discharge action involving the refusal to violate
administrative regulations setting staff-to-child ratios in day-care facilities, the
Iowa Supreme Court noted the statute authorizing regulations on this subject
provided the regulations were necessary “to assure the health, safety, and
welfare of children” in day-care facilities. Jasper, 764 N.W.2d at 766. The court
then determined “the staff-to-child ratios demonstrate an important public policy
in Iowa.” Id.
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This case is different. Stevens can point to no similar language in the
applicable statutes regulating gambling, chapters 99D and 99F, giving immunity
to a person who makes a report, or providing a penalty for failure to make a
report, or prohibiting the discharge of a person making a report. Furthermore,
the statute authorizing the adoption of rules contains no language giving a
specific legislative expression for a substantial public policy.
See id. at 764
(noting a “regulation must also express a substantial public policy in a way that
furthers a specific legislative expression of the policy”).
Stevens has not
provided a basis for finding a public policy exception to the at-will doctrine in
either statutes or administrative rules.
We conclude the district court did not err in finding Stevens had not shown
a well-recognized and clearly defined public policy. See Lloyd, 686 N.W.2d at
231 (finding no public policy exception “[i]n the absence of any statutory,
constitutional, or other expression”); Fitzgerald, 613 N.W.2d at 283 (stating the
public policy exception does not extend to generalized concepts of fairness and
justice).
Although it is not needed for our resolution of this appeal, there is another
reason Stevens‟s claim must fail. Her claim relies heavily on administrative rule
491-6.4(2). She claims above that her actions were protected under this rule.
However,
this
rule
requires
a
licensee
to
“cooperate
in
subsequent
investigations.” Iowa Admin. Code r. 491-6.4(2). It is clear from the record that
Stevens refused to cooperate with the internal investigation that resulted from her
complaints. Indeed, she even admitted such a refusal:
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Q. You refused to answer the question, didn‟t you? A. Yes.
Q. And this is the second time you have done that with Mr.
Byers, isn‟t it? A. Yes.
This is a situation where Stevens made a vague and general reports
alleging bribery and theft, and then refused to cooperate in the investigation of
her reports. She cannot be now heard to claim she was “advanc[ing] a wellrecognized and clearly defined public policy of the state.” See Teachout, 584
N.W.2d at 300.
We affirm the decision of the district court granting summary judgment to
Prairie Meadows.
AFFIRMED.
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