On November 23, 2016, the Iowa Court of Appeals issued a rather odd decision in a wrongful termination case, Karin Bjorseth v. Iowa Newspaper Association. The case involved a claim for wrongful termination in retaliation for an employee contacting a state agency to determine whether an employer would violate Iowa's Wage Payment Collection Law if the employer proceeded in a certain manner. The employer never followed through on what the employee believed would be a wage violation. The issue in Bjorseth was whether the employee was still protected from retaliation even though the employer never actually committed a wage violation.
Karin Bjorseth worked as an account executive for the Iowa Newspaper Association ("INA"). After exhausting her personal leave, Bjorseth asked her supervisor if she could take a day off. She was informed that the equivalent of eight hours of pay would be subtracted from her paycheck. Bjorseth contacted someone at the state to determine whether INA could take this action. She was told the company could not deduct anything from her paycheck. Bjorseth shared this information with her supervisor. Bjorseth did not take the time off and no amount was ever deducted from her wages. INA later terminated Bjorseth’s employment based on poor work performance.
Bjorseth then sued INA. She alleged wrongful termination in retaliation for contacting the state to inquire about her wage rights and for reporting the state's information to INA. Under Iowa law, it's illegal for employers to terminate or discipline employees in retaliation for asserting their rights under Iowa's Wage Payment Collection Law.
Up to that point, Bjorseth was simply a garden variety wrongful termination case. Either Bjorseth was fired in retaliation for her efforts to determine her wage rights or she wasn't. But things got strange when the judges began considering whether the fact that INA never actually withheld any of Bjorseth's wages somehow eliminated her protection from retaliation. As the court put it, the question was “whether an employee contesting a proposed reduction to their wages — without any wages actually being withheld — is afforded protection against retaliatory discharge. . . .” The court ruled that there was no such protection for fully compensated employees.
Bjorseth is a surprising decision because the court failed to differentiate between two types of situations in which an employee may assert wage retaliation even though no wages are actually due. It's one thing to refuse protection from retaliation to employees who raise a wage issue when no wages are due and the employer hasn't stated an intention to violate the wage law. Employees shouldn't be allowed to just fabricate a wage issue and then claim that they enjoy protected status as a result.
It's something else entirely to apply that principle to an employee who raises a wage issue in response to an employer's stated wage intentions that would clearly be illegal under Iowa's Wage Payment Collection Law. Employees should have the absolute right to inquire about or challenge an employer's wage practices when there's a legitimate reason for doing so. They should be protected from retaliation for doing so even if the employer doesn't follow-through on the proposed illegal wage practice. Otherwise, under the Bjorseth court's analysis, an employer can avoid any potential retaliation issues simply by canceling the proposed illegal wage practice after the employee complains and then firing the employee anyways.
Under Bjorseth, the employee would have no protection from retaliation because the employer didn't actually violate the wage law thanks to the employee's efforts to prevent that happening. In other words, Bjorseth opens the door to the penalization of employees who successfully hold off potential employer wage violations by virtue of the fact that their success in doing so means that they haven't been illegally denied wages and thus have no protection from retaliation. That can't possibly be what the Iowa Legislature and Iowa's courts intended when they deemed it illegal for employers to retaliate against employees for raising a wage concern.