At-Will Employment - IOWA

The Supreme Court of Iowa recently carved out a new public policy exception to at-will employment. The case arose over a dispute over the payment of health insurance premiums. A job applicant was told that he would be entitled to health insurance at the company’s expense. Based upon the employer’s representations, this individual left another job to come to work for the employer as an at-will employee.

Beginning with the fifth pay period, the employer started deducting health insurance premiums from the employee’s checks. The employee complained to the company and insisted that something be worked out regarding the premiums. The employer‘s response was to summarily discharge the "troublemaker." The discharged employee sued for retaliatory discharge based on a violation of public policy. A jury agreed with the employee and found the employer liable for $5,484.00 in unpaid wages, $60,000.00 in past lost earnings and $40,000.00 in punitive damages!

On appeal the court held that Iowa Law regarding demand for wages plainly articulates a public policy prohibiting the retaliatory firing of an employee in response to a good faith complaint or demand for wages due under an agreement with the employer.