Supreme Court Restricts Advocacy By Third Party of a Workers' Compensation Claimant

On April 16, 2010, the Supreme Court issued a decision in Ballalatak v. All Iowa Agriculture Association, 2010 WL 1507635, No. 08-1588 (Iowa April 16, 2010) http://www.iowacourts.gov/Supreme_Court/Recent_Opinions/20100416/08-1588.pdf. Ballalatak involved a supervisor who was fired for advocating to two injured workers that they hire an attorney to ensure they received workers' compensation benefits. The district court held that even if the supervisor was fired for attempting to help the injured workers receive workers' compensation benefits, plaintiff failed to state a claim because there was no public policy that protected supervisors or coemployees from termination for aiding injured employees in collecting workers' compensation benefits.

In affirming the decision of the district court, the Supreme Court noted that employers may generally fire an at-will employee at any time. In order for the public policy exception to the at-will rule to apply, said the court, there must be a clearly defined public policy that protected employee activity, this policy would be jeopardized by the discharge from employment, the conduct was the reason for the employee's discharge and there was no overriding business justification for the termination. The court never went beyond step one of this analysis, holding that there was no clearly defined public policy that protected Mr. Ballalatak.

The court distinguished Springer v. Weeks & Leo Co., 429 N.W.2d 558 (Iowa 1988), which had established a claim for wrongful termination where an employee was fired for pursuing workers' compensation benefits. Springer, according to the court, had relied on section 85.18 of the Iowa Code, which provided that no contract, rule or device shall operate to relieve the employer from the liability created by this chapter. The court noted that plaintiff was not raising his own claims, but the claims of others, which the court found was not clearly protected by the statute. Had plaintiff been instructed by the employer to circumvent the employees' rights under the statute, there might have been a claim under the public policy exception, but an internal concern about whether the employer was correctly applying the workers' compensation laws was not sufficient. The court concluded that "the public policy found in Iowa's workers' compensation statutes strongly protects injured employees, but does not extend to coworkers or supervisors who express concerns regarding whether the injured employees will be properly compensated." The decision of the court was unanimous.

In the short term, the Ballalatak decision creates serious problems for co-employees and supervisors of injured workers who make an attempt to go to bat for the injured worker.  The implication of the Ballalatak  decision is that unless the employer specifically encourages a supervisor to violate the law, there will be no protection for that worker.  For example, the decision specifically allows for the discharge of an employee who urges an injured worker to file a workers' compensation claim, to find an attorney, or to take certain actions in support of the workers' compensation claim.  It is difficult to determine how firings in these situations would not violate the public policy of the state, as expressed in section 85.18 of the Code.  Allowing the employer to fire an employee who assists another employee in filing a claim certainly appears to be a device that operates to relieve the employer from liability under the workers' compensation law.

In the long term, a legislative solution is needed to address the problems created by the Ballalatak decision.  Although the public policy would seem to protect those who are attempting to assist those who are using the workers' compensation system, the Supreme Court saw things differently, and without a legislative solution, assisting employees who have workers' compensation claims is likely to become more fraught with peril.