Iowa's Status As A Right To Work State Probably Doesn't Mean What You Think It Means

By harley erbe

Iowa's status as a "right to work" state with a "right to work" law can be an unfortunate description unless people understand what "right to work" refers to. "Right to work" laws concern union membership, nothing more. Iowa's right to work statute, Iowa Code 731.1, merely states: "It is declared to be the policy of the state of Iowa that no person within its boundaries shall be deprived of the right to work at the person’s chosen occupation for any employer because of membership in, affiliation with, withdrawal or expulsion from, or refusal to join, any labor union, organization, or association, and any contract which contravenes this policy is illegal and void." 

In other words, it's illegal for employers to discriminate against an employee because of the employee's choice to join or not join a union. That's all Iowa Code Chapter 731, Iowa's right to work law, covers. It has nothing else to do with any aspect of employment relationships in Iowa. But Chapter 731 description as a "right to work" law can cause problems for employees who misunderstand the law. At a minimum, such misunderstandings can cause employees to believe that their employment rights are greater than they actually are. But in the worst case, a misunderstanding of the effect of Iowa's right to work law can cause employee's to make business decisions that later get them into trouble.

One situation in which the misunderstanding of "right to work" shows up is employment terminations. Iowa's right to work law is not a general guarantee of a job or of continued employment in a job. There is no Iowa law that guarantees someone employment or continued employment, certainly not Iowa Code Chapter 731. 

Rather, Iowa's right to work law is like many other employment laws in Iowa -- There are certain things, such as union membership or the lack thereof, that employers are prohibited from considering when making employment decisions. But the right to work law doesn't take precedence over Iowa's general principle of at-will employment. Regardless of Iowa's status as a right to work state, employers can always fire employees at any time without warning for any lawful reason or for no reason at all, no matter how unfair that termination may be. So when employees are fired and lose their job and income, that's not a violation of Iowa's right to work law unless the termination had something to do with a union.  

Now, that first type of misunderstanding isn't that big of a deal. At most, it creates disappointment or unrealized expectations when people learn after being fired that Iowa's status as an at-will employment state is more important than its status as a right to work state and that in most instances employers can legally fire employees in Iowa without legal consequences, other than perhaps an unemployment benefits claim. No, the real danger is when former employees assume that Iowa's right to work law invalidates their noncompete agreement. That's when a lot of people find themselves in for a rude awakening.

Iowa's right to work law has no impact on the validity of noncompete agreements. Under Iowa law, noncompete agreements are generally valid, enforceable, and upheld by the courts. Iowa Code Chapter 731 has nothing to do with the analysis of whether a noncompete agreement is valid and enforceable. In fact, Iowa Code Chapter 731, which has existed since 1947, has never been mentioned in any Iowa appellate case involving a noncompete agreement.

Unfortunately, people sometimes mistakenly believe that Iowa's right to work law prohibits and invalidates noncompete agreements. That misapprehension can cause a former employee governed by a noncompete agreement to make a bad decision to start a competing business in violation of the noncompete agreement under the mistaken assumption that there's no need to worry about the noncompete agreement. But once that bell's rung, it can be difficult to unring it without costing the former employee money. The employee may have to shutter the competing business, thus perhaps losing any money that's been invested in it. The former employer could also sue for violation of the noncompete agreement and seek injunctive relief against the former employee. Then the former employee's facing the prospect of financial expenditures for attorney fees and perhaps paying money damages as well.       

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