Iowa Court Of Appeals Issues New Whistleblower Retaliation Decision

By harley erbe

Financial Stress

On October 14, 2015 the Iowa Court of Appeals issued an interesting wrongful termination decision, Jacob Hackman v. New Hampton Municipal Light Plant, concerning alleged retaliation against a public employee whistleblower. Jacob Hackman worked for the New Hampton Municipal Light Plant. The city of New Hampton owned the plant.  Hackman discovered a scheme in which some employees sold the plant’s scrap metal for cash. The scrap metal belonged to the plant and, by extension, its owner, the city of New Hampton, but the employees would retain the sale proceeds and use the money for purposes unrelated to the plant's operation.

Hackman reported this scheme to a member of the plant's board of trustees. He also cooperated in a law enforcement investigation into the cash-for-scrap-metal scheme. After those events occurred, the plant terminated Hackman's employment, supposedly for lack of available work.

Hackman then sued. He asserted claims for for retaliatory wrongful discharge and a violation of Iowa’s public employee whistleblower statute, Iowa Code 70A.29. A jury returned a verdict in his favor. The New Hampton Municipal Light Plant appealed.

The plant’s first two claims on appeal maintained that Hackman should not be protected either as a whistleblower pursuant to Iowa Code 70A.29 or under the public-policy exception to the plant’s right to discharge an employee at will. The plant predicated its challenge on the fact that Hackman purportedly blew the whistle on his own misconduct (he had accepted $1,000 cash that he knew came from one of the illegal scrap sales), thus placing him outside the scope of the intended protections for whistleblowers. The Court of Appeals noted that the plant's argument might have merit if Hackman had not reported the misconduct of others regarding the illegal sales of scrap. Consequently Hackman could be protected as a whistleblower, notwithstanding his acceptance of cash derived from an illegal scrap sale, because he reported the wrongdoing of other both internally within the plant and externally to law enforcement.

The plant also contended that Hackman did not "disclose" any information when he reported the scrap metal scheme because the pertinent information had already been disclosed by a co-worker. The plant argued that the term "disclose" could only mean the revelation of otherwise hidden information for the first time. Therefore, Hackman could not have disclosed the misconduct because his co-worker had already done so. The court rejected that argument, not only because it found the argument inapplicable to the specific circumstances in the case, but also because the co-worker's earlier disclosure lacked meaningful specificity and did not include all of the information and evidence that Hackman later disclosed.

The plant final argument on appeal was that it had proved that Hackman's disclosures were not the determining factor in the plant's decision to terminate his employment. Under Iowa law, a wrongful termination plaintiff must prove that the protected conduct was the "determining factor" in the employer's termination decision. A "determining factor" in a decision to discharge an employee is a reason that tips the scales decisively one way or the other, even if it is not the predominant reason behind the employer’s decision.

The plant alleged several facts to support its "determining factor" argument. First, though the other whistleblowing co-worker eventually left the plant, that employee was not terminated. Second, Hackman’s termination occurred seven months after his disclosure. Third, the decision to discharge Hackman was the new plant manager's alone, was preceded by “discipline incidents,” and was purportedly due to a lack of work. The Court of Appeals rejected that argument to because it determined that there was competing evidence in Hackman's favor that a jury could use in deciding that Hackman's whistleblowing was a determining factor in the plant's decision to terminate him.

Please feel free to contact us if you need the assistance of a Des Moines employment lawyer.

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