In Dorshkind v. Oak Park Place of Dubuque II, LLC, the Iowa Supreme Court found that terminating an employee after the employee’s internal complaint regarding violation of Iowa administration rules violated public policy and constituted a wrongful termination.
The Facts:
Oak Park is an assisted living facility in Dubuque. It is certified as a dementia-specific assisted living program, which requires it to comply with certain provisions of the Iowa Code and Iowa Administration Rules. One such rule requires direct care staff to complete dementia-specific training. In July 2008, the Department of Inspection and Appeals (the department in charge of enforcing the rules and regulations) did an unannounced inspection of the facility. During the inspection, the Dorshkind witnessed what she believed to be certain supervisors falsifying state-mandated training documents for the dementia program.
Another co-worker, Denise Schiltz, was a witness to the forgery and immediately quit her employment with Oak Park. After her separation, she lodged an anonymous complaint with the DIA, which commenced an additional investigation into Oak Park resulting in fines and penalties.
Dorshkind, on the other hand, continued working at the facility. Six weeks after the forgery she informed a former supervisor of the suspected forgery. An investigation was initiated by Oak Park after Dorshkind’s allegations. After the investigation, Dorshkind was terminated. Oak Park specifically stated she was terminated for making “malicious statements regarding forging of documents”. Dorshkind filed suit against Oak Park for wrongful termination in violation of a public policy.
The Decision
Iowa is an at-will employment state, but certain exceptions exist, including terminations in violation of a stated public policy. To be successful in such a claim the employee must show (1) a clearly defined public policy that protects the employee’s activity; (2) termination of the employee undermines the public policy; (3) the employee engaged in the protected activity and it was the reason for termination; and (4) no other overriding business justification for the discharge exists.
The court found that a clearly defined public policy protecting the “health, safety, and welfare of dementia patients in assisted living facilities” existed within the statutes and administrative rules relative to dementia certified facilities. It then concluded that a clearly-defined and well recognized public policy existed which protects “whistle-blowing” by employees regarding the “health, safety, and welfare of dementia patients in assisted living facilities”.
The fighting issue in this case was whether internal reporting or whistleblowing constituted activity protected by a clearly defined public policy. The majority opinion found that even though internal reporting was not expressly protected by statute, it was impliedly protected for a number of reasons. The court found that whether the complaint was external or internal did not change the public-policy considerations and discharging an employee for internal reporting still undermines public policy. The dissenting opinion disagreed with the majority’s logic declaring that it was necessary that internal reporting be expressly protected by the statute or rules and regulations and citing previous case law to support its opinion.
The Take-Away
Regardless of the dissenting opinion, it is clear that employers must be aware that internal whistle-blowing arising from statute or administrative law (not business practices or policies) may be protected under the public policy exception to the at-will doctrine. As with any termination, documentation is important as well as careful consideration of any protected activity. Before terminating an employee (or taking any adverse action), an employer should now be considering whether the employee has lodged any internal complaints that could be construed as whistle-blowing.