Addressing a matter of first impression, the Iowa Supreme Court determined that “when a civil cause of action is provided by the legislature in the same statute that creates the public policy to be enforced, the civil cause of action is the exclusive remedy for violation of that statute.” Ferguson v. Exide Technologies, Inc., et al, Case No. 18-1600 (Iowa Dec. 13, 2019). Therefore, a plaintiff who brings a claim for a violation of the Iowa drug testing statute cannot also bring a wrongful discharge claim based on the same conduct.

The employee, a wet formation operator (who was required to lift up to 2300 car and tractor batteries in a single shift), sustained workplace injuries associated with repetitive lifting. After the employee was diagnosed with “tennis elbow” in both arms, the employer requested that she submit to a drug test pursuant to the employer’s drug testing policy. The employee refused to take the test. The employer terminated the employee’s employment the next day.

The employee subsequently filed a lawsuit alleging violation of the Iowa drug testing statute and a claim for wrongful discharge in violation of public policy. The employer admitted violating the drug testing statute but denied liability (the employee was reinstated). On summary judgment, the employer argued that the wrongful discharge claim was preempted by the Iowa drug testing statute. The district court disagreed, and granted summary judgment in favor of the employee on both claims. The case proceeded to a jury trial on damages.

A jury awarded the employee nearly $46,000 in back pay, $12,000 in emotional distress, and $35,000 in attorneys’ fees (associated only with the Iowa drug testing statute claim), which we blogged about here. Under the Iowa drug testing statute, an aggrieved employee only can recover back pay and attorneys’ fees. The employee could not have recovered emotional distress without the wrongful discharge claim.

On appeal, the Iowa Supreme Court reversed the district court, holding that the drug testing statute could not serve as the basis for a wrongful discharge claim. The Court analyzed its prior decisions involving wrongful discharge claims based on statutes that provide a remedy. The Court made a distinction between statutes that provide for administrative remedies and those that provide civil remedies, reasoning that administrative remedies “do not provide the level of protection, control and the right to process involved in the court system.”

The Court explained that the original purpose of the common law claim for wrongful discharge was to “provide a court remedy to enforce legislatively declared public policy.” If the legislature has already “weighed in on the issue” by providing a civil remedy in a statute, the wrongful discharge claim becomes “unnecessary.”

The Court affirmed the district court’s award of attorneys’ fees, but remanded the case with a direction to enter judgment in favor of the employer on the employee’s wrongful discharge claim, vacate the portions of the jury’s damage award that would be available under a common law tort theory, and uphold those portions authorized by the Iowa drug testing statute.

The Court’s decision is significant for Iowa employers. Wrongful discharge claims can expose an employer to back pay, emotional distress and punitive damages. An employee can also request a jury trial on a wrongful discharge claim, which is not available under some statutes, such as the drug testing law. This combination can have a tremendous impact on employers in Iowa, as six-figure emotional distress jury awards have become more commonplace throughout the state.

It is now clear that employees cannot double dip — when a statute provides for civil remedies, those remedies are exclusive. And, an employer’s risk under the notoriously complex Iowa drug testing law will not include emotional distress or punitive damages.